Litmus Test for Entrepreneurial Success

If you were asked by a reporter what are the top 3 or 4 things you look for to decide whether a start-up company will succeed, what would you say?

Compare your answer with that of someone who makes this type of decision and then writes checks to support/acquire those businesses that are likely to grow significantly.

Robert Fox, president of RAF Industries and the namesake of Temple's Fox School of Business, shared some interesting insights at their annual business plan competition luncheon run by Temple's Institute for Entrepreneurship and Innovation.

Bob said that the five things he and his partners look for in a business seeking funding include:

1. It has to be a great idea. The idea has to be something original, rather than a "me too" or "I'll win on quality and service" model. Zany Brainy wasn't just another toy store -- it defined a new niche, he explained.
   
2. The entrepreneur has to be committed to succeeding both short and long term. The founder has to have a clear vision for the company and be abele to accomplish his or her top priorities each day.
   
3. The business plan has to be well-researched. Businesses seeking funding need a business plan, and the more details that show a thorough understanding of the customer, market, industry, and operating environment, the more an investor is likely to want to support the company.
   
4. The business has to be cash positive. At $1 million, the company has sufficient "capital proof" of concept. As an exception, Bob related how SmartWool went from $400,000 to over $45 million in a few short years.
   
5. The entrepreneur has to be a great sales person. When it comes down to it, selling speaks louder than words and someone has to be responsible for brining in orders.

No matter what size business you're growing, this advice can help you build a stronger business.