Fitness First. The secret to start up success.

Mike Balfour, founder of Fitness First, is an entrepreneur who risked everything, but gained fortunes by believing in the success of his new venture. Born to a poor British family, Mike Balfour, did not have a good education. However, he was able to gain an accounting degree and had worked as an accountant for twenty years in various companies.

At the age of 42, Balfour has come up with an idea to open “dry gym”, a gym without swimming pool, squash courts and cafeteria. Back in 1992 the idea was unique as such gym-only concepts did not exist then.

The idea of creating a gym came to Balfour after experiencing a need for such gyms himself. ‘Working long hours in the office, traveling, not exercising, he came to the fitness industry as a customer, rather than a fitness expert.’ As a customer, seeking for a good place to exercise, Balfour understood the prospective of opening a “dry-gym”. The idea and concept of Fitness First was born.

Nevertheless, the beginning of Fitness First was not easy. Shockingly, Mike Balfour had to invest all his savings and assets into his new venture. He sold his house and risked financial ruin in order to open the first club. Moreover, convincing banks to give loans, guaranteeing his all assets to the banks as a payback, even borrowing money from relatives and friends were not easy tasks, but Balfour managed to get through. He believed in the success, because otherwise he would be a bankrupt. In Balfour’s own words” I had personal guarantees going out to everybody and it had to work, if it didn’t I’d be ruined. That’s how you do it.”

However, Fitness First was not only the one venture of Mike Balfour. After selling Fitness First Plc., he launched two new business ventures. One is a chain of health clubs, another one is related to luxury properties and hospitality.

The experience of Mike Balfour is very inspiring. The most amazing fact of his story, in my opinion, is the fact that he had risked all he had in order to make his ideas come true. Undoubtedly, not every entrepreneur has such absolute believe in the success of his new venture. On the other hand, when all your life depends on the outcome of a new business, it motivates you to work harder and try another plan, if the existent one does not work. According to Balfour ”The key is giving it everything, adapting as you go and having a Plan B.” 

All in all, Balfour suggests for any new entrepreneur to pick one good idea and make it work, to be prepared to take risks and to have an unconditional believe in the success, or else, no one will believe either.

 

 

 

 

References:

“The Secret to Start Up Success” by Annie Maul, Global Citizen magazine, May/June 2012, Reach Media

Mumzworld

                                              

An entrepreneur Mona Attaya has launched a new online business Mumzworld.com last June, after experiencing a shortage of qualified help for the new parents in terms of quality products and lack of a one-stop destination, where parents can find all the products they need. The concept of Mumzworld.com is that parents can search for products online, compare prices and arrange for delivery of products ranging from diapers to toys to strollers.

The idea of delivering the products to the doorstep, in my opinion, was brilliant, as busy parents do not have much time for shopping, especially if one product they need is sold in one shop and another somewhere else. The hassle of shopping with a newborn can be very stressful as well. Moreover, as e-commerce is not fully supplying products for mother or parent target market; there is a niche in the market that Mona Attaya has perceived.

Though the idea was simple and demand high, Attaya admits that the start was not easy. Reaching out for distributors, convincing them to sell their products through Mumzworld.com and relying on them without keeping the track record, all provided a valuable experience for Mona Attaya. As a result, within six weeks there were 25000 products offered on the web-site, and today it offers 40000. The team of Mumzworld.com has grown from just four people to twenty and has plans to expand further.

Mumzworld.com is good evidence that often a new idea strikes during a process of solving a problem. As a new mother, Mona Attaya found that a market lacks of  one-stop shopping destination for quality products and used the opportunity to fulfill that gap in the market by creating Mumzworld.com

 The story of launching Mumzworld.com and Mona Attaya’s experience can be very educative for a young entrepreneur, as, by studying how Attaya created an online business, they can be prepared for the challenges and avoid making mistakes that Attaya did.

 

 

References:

“Ruling Mumzworld” by Sara Hamdan, Global Citizen magazine, May/June 2012, Reach Media

"Steve Jobs and the seven rules of success" article

“Steve Jobs and the seven rules of success” (Carmine Gallo, October 2011) article discussion

Steve Jobs, an entrepreneur and inventor, the person who had revolutionized the world of personal computers. Apple’s products such as the iPod, iPad and iPhone are now dictating the evolution of current technology. Innovative technologies which Jobs and Wozniak (co-founder of Apple Computers) were credited for, have transformed the known-before computer industry by creating smaller, more advanced and user-friendly devices.

According to Gallo (October, 2011) there are seven major factors that led Steve Jobs to a success and that any entrepreneurs-to-be can adopt:

1.      Do what you love. Undoubtedly, do what you love and you won’t have a single day of working, but, instead, a full-time of joyful hobby. Moreover, it is a well-known fact that a person who does what he/she loves would gain greater success compared to a person who does job for the purpose of collecting his salary.

2.      Put a dent in the universe. In other words, have a big perspective on what you do and that may lead you to become legendary.

3.      Have diversified skills, you never know when you may need those abilities. As an example, Jobs  took calligraphy classes that didn't have any practical use in his life -- until he built the Macintosh’.

4.      Concentrate on few good ideas, rather than spread million ideas that will occupy all your time and concentration. Also, one extraordinary product is better than ten average ones.

5.      Create a product or service that would enrich your customer’s life. Whether it’s an innovative customer’s service concept or super-efficient delivery service, or maybe an in-store experience that was never implied by any stores before, whatever it is, it should be unique; it should build an emotional connection with the brand and create loyalty.

6.      Be a good communicator.  It is critical in the business world to be able to deliver message in an easy, understandable by many way and to be interpreted properly. As misunderstanding will lead to loss of opportunities. Being clearly understood is especially important in the modern globalized business arena with many cultures, languages and customs.

7.      Sell dreams, not products. Once you help your customers reach their dreams and ambitions, it is the moment that you win those customers forever.

All in all, Steve Jobs had strongly influenced a life of a modern citizen. He had received many honors and recognitions. He was legendary innovative genius. Indeed, “gone too soon”.

 

 

 

 

References:

Carmine Gallo, “Steve Jobs and the seven rules of success”, October 2011, www.entrepreneur.com/article/220515

Oprah Winfrey

                                                      Oprah Winfrey

Oprah Winfrey, for sure, is the most recognized African-American women in the world. Her success is both fascinating and inspiring. A talk-show host, an entrepreneur, actress, she is undoubtedly, one the America’s most influential women.

Her childhood was not easy, but Oprah had an absolute belief that her life would change. And today’s Oprah has shown the world that no matter what beginning in life you have had, is who you’ll become later in life that counts the most.

And today Oprah is not only a successful business woman, producer and actress, founder of the”O, the Oprah magazine”, but also a philanthropist.

Oprah has succeeded in several areas, but she is widely known as a host of a day-time talk-show. What makes her show so popular and loved not only across America but around the world? On her shows Oprah talks about days or ordinary people, their problems, conflicts and personal achievements and that touches hearts of millions of viewers.

Curiously,. while Oprah Winfrey was co-anchoring the evening news in Baltimore, an assistant news director decided that her hair was "too thick" and sent her to an expensive New York City salon for a makeover-with disastrous results. A botched permanent left her completely but temporarily bald, and she was forced to cover her scalp with a scarf. Although she cried "constantly," she found in the ordeal an opportunity for self-discovery, admitting in a Ms. magazine interview, "You learn a lot about yourself when you're bald."

Her advice to young entrepreneurs is to "Follow your instincts," as she says in a Ladies Home Journal magazine article. As well, she advises to take every conflict and every experience and learn from it.

 

 

 

References:

www.entrepreneur.com

www.oprah.com

Richard Branson

RICHARD BRANSON

 

Sir Richard Charles Nicholas Branson, better known as Richard Branson, the owner of the Virgin Group with more than 400 companies most notably the Virgin Record Company is a well-respected and recognized entrepreneur who has devoted his life to work and growth of his business empire.

He best explains his life and efforts in his autobiography as “My interest in life comes from setting myself huge, apparently unachievable challenges and trying to rise above them,….from the perspective of wanting to live life to the full, I had to attempt it”

His initial business venture was to start a magazine called the “Student” in 1966. Within four years of starting his magazine, Richard Branson had set his sight on the music industry and used his magazine as a tool to advertise popular records and sold them, under the name of Virgin, at a considerable discount compared to the main street record dealers.

At the time he had seen a flaw in a marketing agreement which limited the discount of products due to a stringent restrictive marketing agreement between the material producers and the marketing companies which basically limited the marketing of products to a limited number of outlets that lead to limited marketing competition and increase of product price. In effect, he had seen the potential of being able to market products outside such restrictive regulations.  By doing this, Richard Branson had started a trend which would lead to large scale discounting of recorded music a few decades later.

He had also seen the potential of recording music and for this reason he set up his own recording studio which would be leased out to any aspiring artist. This in turn allowed him to be able to sign record deals with many chart topping artists such as the Sex Pistols and Culture Club.

As one of the pioneers of the budget airline, Virgin Group acquired a short haul European airline and rebranded it to Virgin Express. This was in addition to the Virgin Atlantic airline which he had setup in 1984 and years later when he had to financially support this airline he was forced to sell off his Virgin Records to EMI for 500 Million Dollars. He was later quoted as saying “I cried when the final sale documents were signed”.

The potential of air travel has lead Virgin Group owning and operating companies such as Virgin Australia, Virgin Nigeria and Virgin America.

During the 90’s and as mobile telecommunication was growing, Virgin Mobile was setup in 1999 as the world’s first mobile Virtual Network Operator. This meant that Virgin Mobile had no specific mobile network and had contracts to use “everything, everywhere”.

Richard Branson had later sold Virgin Mobile UK to NTL:Telewest  for One Billion Euro in 2006 only to have NTL:Telewest rebrand itself to Virgin Media in 2007. All together Virgin Mobile currently operates in 8 countries out of the initial 10. Virgin Mobile ventures with QTEL (Qatar) and Singtel (Singapore) has so far been closed down due to disputes with Vodaphone in Qatar and lack of business in Singapore.

Richard Branson now heads approximately 400 companies ranging from airlines to telecommunication, media, entertainment, health and space tourism.

In order to increase his assets and eventually decrease his personal expenses he has setup a complicated network of offshore trusts and companies and he is estimated to be worth five billion dollars. Such a network of companies would effectively exempt him of most taxes if he ever sells his shares in his companies.

Tony Fernandez and creation of AirAsia

                                    Tony Fernandez

                               and creation of AirAsia

                                                                                                       “Now everyone can fly”

Dato Anthony Francis Fernandez, better known as Tony Fernandez is a Malaysian entrepreneur and founder of AirAsia. The story of AirAsia began in September 2001, undoubtedly the worst month in the history of commercial aviation. It is then Tony Fernandez has decided to create a low-cost, short haul airline. Everyone thought that  Fernandes had gone "crazy", predicting that the company would fail miserably as September 11,2001 tragedy has created fear of flying among people, nobody wanted to fly then, many airlines were experiencing large financial  losses. Yet, Tony Fernandez believed in the success of his ideas. As he said himself: "It really was a little bit of stick your finger in the air and hope for the best. But we were good marketing people from the music business… we just went out there and felt the market and said if you halve the fare, there's a huge enormous untapped market." This statement is evidence that a successful entrepreneur should “feel” the market and have financial or marketing knowledge.

At the beginning AirAsia had large debts, but after just one year it started to grow rapidly and expanded ‘from just two airplanes in 2002 to 86 aircrafts flying 30 million people around the world.’ In fact the timing of formation of AirAsia was perfect because the consequences of September 11, 2001, created decline of the aircraft leasing costs by 40%. Also, airline lay-offs mean experienced staff were readily available. The learning point for any entrepreneur is that even worst predictions about company’s future could turn out to be wrong.

Mr Fernandez believes that the secret of success is to be single-minded. He also believes that efficiency is the key to profits. As to the managers, Mr Fernandez advises to get involved in the day-to-day operations in order to gain a better understanding of procedures. Mr Fernandez himself adopts this strategy and work as a crew member or during operations on the ground. For any young entrepreneurs is a good example and advise, as by getting involved in a company’s daily activities an entrepreneur gains a valuable experience as well as ideas of expansion or how the service could be improved.

Another strategy that is believed to retain the success of AirAsia is a strategy when employees come number one and customers come number two’. In words of Mr Fernandez:” If you have a happy workforce they'll look after your customers anyway." It is an interesting strategy as usually service providers try to convince its customers that customers’ interests are main concern of a company. However, the strategy of Tony Fernandez has created a loyalty among customers of AirAsia, thus this strategy is a success and can be implied into other firms.

In a conclusion, according to the story of a successful creation of AirAsia, there are few keys to success. Firstly, you have to have an absolute believe in the success of your new venture. Secondly, get involved in the everyday processes of your new company. Lastly, construct a most suitable managerial strategy taking into consideration a culture, location , workforce and customers’ expectations and other factors. 

 

 

References:

‘How Air Asia founder Tony Fernandes' dream came true’, November 2010, http://www.bbc.co.uk/news/business-11647205

What do entrepreneurs actually do?

An entrepreneur is a person who actively forms or leads its own business (UITM Entrepreneurship Study Group, 2012). It is a person who converts a business idea into a new venture. Even though changes in economic and political situation, technological advances, social networks and assisting organizations may play a significant role in creation of a new venture, however it is entirely an entrepreneur’s decisions that will lead a new venture to the success or failure.

    It is believed that a potential entrepreneur must have a set of personal characteristics, such as self-confidence, creativity, ability to see and use an opportunity, ability to persuade, lead and give inspiration to others, etc. ‘Since entrepreneur’s behavior is crucial to the creation and development of new ventures,…attaining a better understanding on what entrepreneurs actually do would greatly benefit the growing discipline of entrepreneurship’(S. Mueller, T. Volery &  Bjorn von Siemens, 2012).

Numerous studies have been conducted in order to study organizational behavior of individuals. However the majority of such studies were focused on the organizational behavior of managers of existing companies, thus the findings of such studies do not reflect the behavior of entrepreneurs as entrepreneurs do not take part in routine activities that managers do. Neither an entrepreneur’s activities involved in creation of a new company possess any similarities with activities involved in operating an existing company.

The previous research on entrepreneur’s behavior have identified that an entrepreneur’s behavior changes over time, depending on the stage of a company and the set of tasks performed by an entrepreneur in early stages of establishing a new venture differ from those that are performed during the later stages (Hambrick & Crozier, 1985; McCarthy, Krueger, & Schoenecker, 1990, cited in S. Muller).

The activities that an entrepreneur performs in the early stages usually involve writing a business plan, searching for a location, completing legal formalities, hiring a first employee, etc. According to Lichtenstein et al. (2006) research’ typical start-up behaviours include investing personal capital, developing a prototype, defining an opportunity, organizing a founding team, forming a legal entity, installing a business phone, purchasing major equipment, opening a bank account, and asking for funding’(S .Muller et al.,2012).

 

As stated above, an entrepreneur performs different set of activities in the growth stage of a business that in the early establishing stage. As their business grows, entrepreneurs may experience a need of restructuring their responsibilities as well as expectation from others. Moreover, obviously, the entrepreneurs in later stages have higher level of education and experience, work harder and were more involved in the decision making processes of a company. At this stages, as sales grow, the production of outputs become larger, it is becoming difficult (unlike in the early stages of a business) for an entrepreneur to control the entire structure by him/herself, consequently such responsibilities are being transferred to managers. Instead, an entrepreneur focuses on creating a sufficient structure, controls and organizes system’s activities. The tasks are shifting from entrepreneurial to more managerial. Furthermore, numerous studies have shown that ‘the start-up entrepreneurs had longer working hours than growth-stage entrepreneurs: on average, 11.8 hours per day for the former and 10.6 hours for the latter. On average, start-up entrepreneurs performed 90.6 actions per day, whereas growth entrepreneurs performed 94.8 actions per day. For both groups, most actions lasted less than 5 minutes. For start-up entrepreneurs, 63% of all activities took 5 minutes or less (accounting for 19% of their working time). The percentage was even higher for later stage entrepreneurs (with 70% of their actions lasting 5 minutes or less, accounting for 24% of their working time)’(S. Muller et al., 2012).Interestingly, it was found that entrepreneurs in early stages of business spend more time on exchanging information and opinions and working analytically and conceptually. The sum of both these activities is totalling more than 60% of working time. On the other hand, entrepreneurs in the later stages spend much less of their time on working analytically and conceptually about half that early entrepreneurs do. In addition, both start-up and growth entrepreneurs concentrate their actions mainly on three functions -human resources and employee relations; marketing, sales, and PR; and administration. By comparison, start-up entrepreneurs spend significantly more time on environmental observation( as early stages of business still require a search for an opportunity), whereas later stage entrepreneurs spend significantly more time on business development, in order to expand.

In terms of communication, both entrepreneurs in early stages and growth entrepreneurs spend significant amount of their working time on communicating with others. But, in the growth stages entrepreneurs spend much more time than early stage entrepreneurs do. This could be due to expanding network of customers and business partners.

In conclusion, as the majority of research and studies about entrepreneur’s behaviour were performed on a small sample of population, many findings were generalised. As well, as entrepreneur’s actions in business are related to his/her personal characteristics, each entrepreneur has its own way of establishing, organising, leading and expanding a new venture. As well in different stages entrepreneurs perform different tasks. However, among differences, many commonalities were found too. And the data collected from numerous researches and studies will help new entrepreneurs to acknowledge and be prepared to tasks awaiting them on their way of creating a new venture.

 

 

 

 

References:

Hambrick, D.C. & Crozier, L.M. ,1985.  Stumblers and stars in the management of rapid growth. Journal of Business Venturing, 1(1), 31–45.

McCarthy, A.M., Krueger, D.A., & Schoenecker, T.S.,1990. Changes in the time allocation patterns of entrepreneurs. Entrepreneurship Theory and Practice, 15(2), 7–18.

Lichtenstein, B., Dooley, K., & Lumpkin, G. (2006). Measuring emergence in the dynamics of new venture creation. Journal of Business Venturing, 21(2), 153–175.