What are critical capital resources?
Assessing Your Critical Capital Resources
Leadership requires marshalling resources cooperatively toward a goal while simultaneously preserving and encouraging a strategic vision. To successfully execute a business plan, in order to translate the business concept into a reality, entrepreneurs have to surround themselves with the right mix of resources, which includes people, capital, and partners.
But they first need to assess the resources that the venture will require, and they are often required to do more with less. In fact, many successful entrepreneurs pursued their new business opportunities relentlessly, without becoming deterred by the limited resources that they initially controlled.
Simply put, by definition, entrepreneurs are attempting to achieve goals that will require considerably more resources than they currently control. One of the key skills of entrepreneurial success lies in distinguishing between those resources that are absolutely critical and those that would be nice to have but are not so critical. The other skills are knowing how to get the resources, and knowing how to manage or allocate them.
Resources are scarce because people want more than they currently have or more than what other humans can produce. Henry Ford found that humans on an automotive assembly line have limits to their outputs. And the world itself has a limited supply of resources. Such resources that immediately come to mind are the natural resources that have not been modified by man—land, water, oil, metals, minerals, and wildlife. The central theme of new business venturing is one of understanding this scarcity because many start-ups fail due to circumstances relating to resources.
Because resources are scarce, entrepreneurs must make clear choices as to which resources they must obtain, and in what time period they are needed. There are five basic types of capital resources that are absolutely critical to the entrepreneurial process.
These are critical capital resources for an entrepreneur:
– human capital–the people you need to run and manage the business
– opportunity capital–doing something that no else is doing right now
– economic capital–the supplies and equipment needed to run the business
– financial capital–the cash, the line of credit
– entrepreneurial capital–the domain expertise and the lead entreprenuer who knows what to do in the new business venture