Entrepreneurship has witnessed remarkable growth recently, but many creative ideas have remained imprisoned in their owners’ minds, despite constant attempts to get an opportunity to finance them through various methods and means.

Financing entrepreneurial ideas is one of the main obstacles facing emerging projects. It is the main pillar for turning it into a project, but fortunately, obtaining financing is available from many sources. Still, all of them require that the entrepreneurial idea be distinguished to get it, making it more challenging to compete in entrepreneurship.

The Entrepreneurial Idea, what is it?

An entrepreneurial idea means any new idea that aims to provide a solution to a customer’s problem or to innovate a new mechanism to implement an existing solution that enables its owner to penetrate the market and build a replicable and scalable business model by offering a serious product or a familiar but innovative product.

Sources of Entrepreneurial Ideas Development

There are many beneficial ways to help you develop new entrepreneurial ideas, in which you address the customer’s basic problems and make your idea of ​​particular importance. As a result of sticking to the customer and addressing real problems.

You can use one of these resources to come up with successful entrepreneurial ideas:

1- Client

The customer is the main compass for any project. The client presents these ideas through needs and requirements expressed directly or indirectly. The problems reflect the market’s need and even ensure that you are successful as an entrepreneur if you provide the appropriate solution to your customer’s real problem. Still, you need to consider the following points:

• Monitor the market in terms of solutions and alternatives available and their strengths and weaknesses from the customer’s point of view.
• Determine the most urgent needs that have high and persistent demand.
• Intersect that with your skills and experience.

2- Distribution channels

You can also turn to distributors as an essential source of creative ideas because they know the market’s needs and requirements. That confirms the active role of distribution channels in supporting and succeeding your entrepreneurial project in terms of new proposals that help develop services.

3- Imitation

One of the most common mistakes is thinking you need a genius idea to start your startup. People wait for this genius idea to come and waste a lifetime before starting anything! You may look at Google or Facebook and say, “Wow, these ideas work, and these are the kind of ideas I must have to start my project”. What you don’t realize is that when Google started, it started like any search engine in that period, and Facebook started after many social media platforms were born at that time, but what brought them to this stage is not a genius idea, rather an idea which is good enough to start a project in addition to daily perseverance and a sense of urgency every day to do what needs to be done without boredom or delay and excellent implementation! There may be an idea that has succeeded in a market, so you can reproduce it after making the necessary adjustments to suit your customers’ problems and needs and the competitive market situation in which you operate. Even Instagram copied TikTok in the Reel feature, and Google copied the idea of paying when clicking Pay Per Click from the search engine GOTO.com

Types of entrepreneurship and entrepreneurs

Entrepreneurship refers to pursuing opportunities without having all production resources and the ability to control them. It also can be defined as the ability to establish a particular business project and do everything necessary to provide the missing resources and ingredients it needs, with the ability to face potential crises to generate financial profits ultimately.

The difference between entrepreneurial and small projects

Entrepreneurship is divided into the following types:

1- Small Projects

Today, most businesses are small projects (groceries, barbershops, livestock breeding). In developed countries such as America and Japan, small projects contribute 60-80% of the GDP, and their employment accounts for about 70-80% of the total workforce. There are no precise statistics in our Arab world. However, in a country like Syria, 80% of young people prefer a permanent job, and 60% accept it only. This indicator reflects young people’s tendency to settle down rather than venture into their own enterprises. This type of company’s profit return is small, making it difficult to attract investment capital to finance it. It is limited to small civil society or small commercial loans or supporting government development programs for small projects in some countries. These projects are traditional and have nothing distinguishing except for a few minor differences.

2- Entrepreneurship in large enterprises

Some believe that the term entrepreneurship is linked to startups, but many giant companies have adopted entrepreneurship as one of the values ​driving their work. They promote entrepreneurship within the institution’s boundaries, allowing its employees to create, launch and test ideas by providing them with space for freedom, independence, and administrative and financial support for these pilot programs. This type is characterized by constant innovation, as large companies continuously develop and provide unique services based on customer preferences to meet the constantly changing market need. Furthermore, well-established companies allocate respectful budgets for research and development purposes so that financing their entrepreneurial projects is internal according to the budgets allocated each year.

3- Scalable Entrepreneurship

It is the stereotype of entrepreneurship, where founders start from their entrepreneurial idea and fund it themselves or through relatives and friends in the early stages of experimentation. These projects are supported by incubation programs that provide seed funding (Seed fund) whose goal is to develop a product with minimal benefits (MVP) that puts their idea into practice and tests it in the market. If it succeeds, they become more confident to go to (Angel Investors) or investment funds (Venture Capital) to obtain seed financing to build their company. Entrepreneurs not only benefit from the value of financing, but they also benefit from the investors’ experiences, their guidance, their relationship network, and the specialists employed to improve the quality of work. And thus gain customers’ trust through the creative ideas they provide to reach the required expansion, then make profits and increase revenues. Unfortunately, this type of entrepreneurship constitutes a small percentage of our Arab world due to the immaturity of the integrated entrepreneurial system (Eco System) and the tendency of Arab business people to refrain from significant capital risks and to favor investment in traditional areas. However, there are still successful examples in our Arab world, such as Souq.com, Talabat, Karim, and other projects that have proved that this sector deserves support, investment, and belief.

4- Social Entrepreneurship

They are entrepreneurial projects in which profit is not the only motive for the project’s launch but aims to impact society positively. Collecting profits remains an essential factor in these projects but raising the quality of life of the community and the surrounding environment to be a better place to live is the primary driver of these projects. We have to differentiate between social entrepreneurship and the work of non-profit NGOs that seek no profits or wealth but community service and achieve purely humanitarian goals.

However, this difference in the types of entrepreneurship raises a question about the patterns in which different entrepreneurs are divided into the way they carry out business, their skills, their goals and their lifestyle.

Types of entrepreneurs

Five main types of entrepreneurs can be distinguished:

1- Innovators

Entrepreneurs who always come up with new ideas and turn them into real projects that change the world’s view and how to do things, like Steve jobs, founder of Apple.

2- Strugglers

They continuously work hard to develop and improve, start small businesses, and turn them into large projects. In this point, they differ from the first type, which considers capital the most important means of growth. For example, the founder of AudioNet. Mark Cuban, who started the business with small businesses.

3- Imitators

This type of entrepreneur has a high level of self-confidence, taking specific entrepreneurial ideas, then developing and modifying them to fit the market and meet their customers’ needs. Thus, they combine innovators and strugglers.

4- Researchers (idealists)

This type does not stop at finding an idea. Instead, they search, trying to capture everything related to their idea. They don’t accept that their idea will fail and want to launch it in the best possible way. Therefore, they take a long time to launch their products and make decisions.

5- Buyers

This type of entrepreneur is wealthy. They buy promising projects after they study them well and evaluate the possibility of their success, but they assign their management to others and continue to supervise them.

How to turn entrepreneurial ideas into entrepreneurial project opportunities

When we face a problem or challenge, we think of solutions to get out of it, but 97% of those with ideas take no steps to implement them.

Here are the steps to turn your idea into an actual project and solution:

1- Studying the project idea – (building assumptions) 

Any project starts from certain assumptions. You assume that a particular segment of potential customers has a specific real problem and you can develop a product or provide a service that solves this problem. You assume that they are able to pay you an appropriate amount of money that covers the costs of making this product or service with a sufficient profit margin to continue and expand. You assume that you are aware of all your costs and challenges and that you can have all the resources needed to implement your project, including the cost of financing to start your project. The business model and the value proposition will help you build these assumptions.

2- Information Gathering – Assumptions verification

The common mistake among entrepreneurs is starting from preliminary information they consider certain rather than arguable preliminary assumptions. At this stage, you must approach the target segment and design questionnaires to elicit their opinions to find out the real problem to which they are seeking a solution. First, you must understand their problem with existing products and services, their preferences, and why they prefer this product over that. Next, you must explore the circumstances that drive them to buy and their financial capabilities. You have to practice it all like you are playing the role of an investigator who wants to search for real information rather than, as is common, a seller trying to sell his solution, the product he will manufacture, or the service he will provide. Don’t be driven by your feelings; don’t take your previous assumptions, asking questions that lead to the answer you like. Instead, ask the right questions that lead you to find out what information you lack.

3- Building Prototypes

You move from the ideas to the implementation here. You will build the first version of the product with minimal benefits, which is not ideal but has a minimum of the benefit involved that drives the segment of the first customers to pay you money to get this product that solves a specific problem. This product aims to test the initial assumptions on the ground, take customers’ opinions to develop the second version of the product, reduce the risk to the minimum limits, and go to investors with a product that is not ideal but it is a trial motivates them to invest in you because you have an existing product and proven information, not just ideas on paper and assumptions in mind. Mostly you need to pay out of your own pocket or get support from friends and family to build this prototype. It is difficult to convince anyone of the feasibility of your project if it is just words and ideas without something tangible on the ground.

4- Work Team Formation

It is easy to start your own business alone but difficult to continue and grow unless you have the right partner. We appreciate the difficulty of partnership in our Arab world for many reasons, including the lack of professionalism in choosing a partner and the deep-rooted culture of preferring to work without a partner. Still, partners have a significant role in accelerating the pace of work and overcoming the stages if they are chosen on a sound basis. To convince investors to invest in your project, you have to build a work team from the expertise that complements you, and you have to choose partners carefully who can fill a real gap that you do not have. We rarely find someone who can focus on building internal operations, has effective communication and business development skills and knows about programming, software and applications development. Even if he exists, it would be difficult for him to manage his time among all that. You must persuade investors that you have the right partners and team to do the right things.

5- Funding

The idea needs financing to become an existing project. Doing the previous four steps well ensures you get this funding, as they play a key role in convincing external financiers of the feasibility of your project and thus investing in it.

Factors of Start-up Success

Success for your entrepreneurial project is not possible by simply having the entrepreneurial idea and making an effort. Unfortunately, many entrepreneurial projects fail despite having all the success elements from their owner’s point of view. This failure is due to neglecting a set of factors that help reduce the risk rate and raise the success rate, summarized as follows:

1- Motivation 

Your primary motive for launching your new project is to make a profit, but having profit as the only motive for your project may cause it to fail after a short time. When you have a lot of frustration and boredom, evoke the beginnings and the main goal that prompted you to start your project to motivate you to continue and face challenges. To be an entrepreneur, it is not necessary to be passionate about something. Passion is excellent if it exists, but your project will likely succeed if you find a real problem you can solve and take money for it. There is often a strong motivation for entrepreneurs to start their projects. These motives vary from one person to another because they are linked in one way or another to the system of values ​​that a person adopts, his great mission, and the meaning of his existence in this life.

2- Strategy

What is the best strategy to make your idea special? What should you do to outperform your competitors and attract customers when launching your project? Again, you have to start with your deep understanding of the potential customer’s image and know his real pain for which he is seeking a solution. Be very careful of choosing price-based competition to penetrate the market. Price reduction is an advantage for large enterprises with mass production, not for start-ups still swimming on a spectrum of the unknown to discover a replicable and scalable business model.

3- Realistic Vision

 An insufficient budget is the third most important reason for the failure of many startups due to miscalculation of costs or overestimation of sales revenue. Therefore, it is preferable to allocate a larger budget and lower expectations for sales. Remember that collecting the amounts due from your customers takes precedence over completing the deals. Do not be dragged into your ambition and accept an agreement that does not guarantee you will collect your money from the customer. Managing cash flows is one of the most important things you should delve into.

4- Successful Leadership

 It’s not enough to be skilled in technical skills. You have to excel in leadership skills that enable you to ask the right questions in order to get the right answers. The project always needs a leader who can see the big picture and move with it in conjunction with engaging in the small details that ensure the success of the implementation of operations. Suppose you are an excellent technician and do not have the full administrative competence to lead the team. In that case, you should turn to certified mentors who can foresee and analyze matters to shorten many steps for you and provide you with many appropriate management tools.

Challenges to Entrepreneurial Ideas

The biggest challenge for Arab entrepreneurs is the immaturity of the entrepreneurial system, which lies in the:

1- Weak Government Support

 Entrepreneurship remains non-institutionalized and individual efforts the government does not support. Decision-makers must inculcate entrepreneurship concepts from a young age in the minds and hearts of students. They must also build their own positioning on the global entrepreneurship network by answering the question: What is the future of entrepreneurship in our country? Some countries may want to create entrepreneurs, so their role is to instill entrepreneurship concepts and support entrepreneurs from a young age through governmental, private and civil competitions. In contrast, other countries may see their role as attracting entrepreneurs through a set of legal and legislative procedures and real privileges. 

2- Cowardly Capital

Many wealthy Arabs still prefer to store their money in banks and invest in traditional investments, while they are reluctant to support young people who could be important figures in the entrepreneurial network if they get the appropriate support.

3- Weak Executive Solvency

Many entrepreneurs lack sufficient experience to conduct their business properly. For the success of a start-up, you must have technical, management, and soft skills. As we said earlier, it is difficult to get acquainted with all that, so the option of partnership in proportionate proportions and the benefit provided by the partners may be the perfect solution to cover all these matters. Guidance and mentoring remain among the necessities to enter the world of entrepreneurship.

4- Wrong Societal Culture

 Many believe that the entrepreneur is a miniature copy of the businessman, and the startup is a mini version of the well-established company. This perception is completely wrong and contributes to the failure of many startups. The startup is still groping its way and still in the process of discovery and experimentation, discovering the pains and needs of customers, discovering the appropriate customer segment, discovering the appropriate product form for this segment and its needs, discovering competitors and their reaction to the entry of a new company into the market, discovering the appropriate pricing model and discovering the best way to make profits and other missing information that entrepreneurs initially seek to discover. The lack of awareness and general culture associated with misconceptions about entrepreneurs and entrepreneurship is an obstacle to properly implementing entrepreneurial ideas.

5- Not Updating the Legal Environment

Legal legislation is the greatest challenge facing entrepreneurship and emerging markets. Laws In many Arab countries are still treating start-ups as well-established companies, while the requirements for the success of startups are completely different from established companies in terms of the need to lunch a start-up from home or without a physical office, the need to attract foreign investment, crowdfunding, etc.

6- Not Keeping up with Technological Development and the Development of Artificial Intelligence 

The first threat and danger facing entrepreneurial projects is insufficient knowledge of artificial intelligence techniques, not keeping pace with technological development, and not knowing how to use them in developing emerging entrepreneurial projects to achieve continuity, especially for professional projects.

Tips on financing entrepreneurial ideas

During your search for funding for your idea, you should bear in mind many key points:

1- An idea without implementation is worthless

 don’t fall into the trap that most entrepreneurs fall into thinking their idea will change the world and stop there. No matter how unique the idea is, it loses its value if not applied to the ground. As an entrepreneur, you should always think about the practical side of your idea to transfer it to the market by validating your idea by getting close to your potential customers, extracting their opinions, discovering their problems, and coming up with a product with minimal benefits to test the idea in a practical way in the market.

Before you launch your project, it is necessary to ask yourself: Does anyone want my service, and is there anyone willing to pay for it? The main pillar of turning the idea into a startup is being successful in acquiring customers.

2- Determine initial returns

 In the early stages of your project, family and friends are the first options for financing. To obtain support from investors, you must prove to them your idea’s importance, acceptance and popularity. You also must prove to them three basic things represented in the following points:

• Client’s willingness and readiness to pay for it.
• Your ability to generate margins, specifically distribution margins, refer to the net amount that remains after deducting raw material costs and customer acquisition costs.

3- Find an investment in the project’s early stages

Once the validity of your idea is confirmed, you can resort to business incubators that have spread in many Arab countries, especially in Gulf countries, such as Saudi Arabia, the UAE and Qatar to obtain seed funding. This funding will allow you to launch your product with minimal benefits as quickly as possible to test your idea practically.

4- Build your team of talented and suitable individuals

 The company’s success comes from the personnel; Therefore, be sure to search for talent and include them if you want to expand your company to compete in the market, but as a startup, you do not have the option and ability to pay these individuals high salaries. Therefore, you can resort to:

• Expand your network of personal relationships as much as possible.
• Give the person a share of the capital if what he will offer you is related to the essence of the value proposition that you provide to your customers and is complementary to your experience and knowledge.

5- Business accelerators

 In the early stages of your project, after you have built the product with minimal benefits, formed the appropriate team and started attracting customers, consider resorting to acceleration programs in business incubators that provide you with an environment designed for this purpose, through which you can develop your business. Acceleration programs end with financial support presented as a prize or a sum of money in exchange for a percentage of participation. In some cases, it may require you to waive a percentage of your company (up to 10%); The percentage may seem high for a startup project, but this option is still better than the idea remaining unimplemented. The incubator offers you free workplaces, care and guidance in addition to the creative atmosphere.

Key strategies for financing entrepreneurial ideas and small projects

The issue concerns many entrepreneurs: they need funding for their idea. In this paragraph we talk about the most prominent strategies for obtaining financing for your entrepreneurial idea:

1- Family and friends

 The most common source of funding for startups; Many entrepreneurs prefer not to share the project with a lender, and resort to family and friends, although the value of financing is less but relatively sufficient to start. This way, he does not entail paying high amounts as interest and does not keep the entrepreneur under constant pressure to satisfy the shareholders. On the other hand, the absence of pressures does not mean that dealing with this type is not serious. To avoid disputes, write a contract stating the value of the borrowed amount, the number of monthly instalments, and the profit returns if any.

2- Financing platforms

These platforms present the project to the public to collect the required funding from the platform’s members. As an entrepreneur, in this strategy, you have the greatest responsibility to convince customers of your idea’s importance to invest in.

3- Accelerators and Incubators

Incubators maintain entrepreneurial businesses for a long period exceeding six months to a full year; It chooses small projects that need continuous development and experiments to reach success. The role of these incubators is to:

• Provide simple financing in certain aspects of the project, including launching and testing a minimum viable product (MVP).
• Provide new office workspaces for startups that need a workplace.
• Provide consultancy and professional services for these projects to accelerate their maturity and achieve initial profits.

4- Angel Investors

 They are people who love innovation and new ideas. They are passionate about experimenting with everything new in commerce and business and looking for entrepreneurs with winning ideas. If you can prove the importance and feasibility of your idea on a small level, you can convince them to support you and fund your idea. Venture capitalists are an essential lever that helps your idea succeed and turn it into an internationally successful project. Fortunately, there are also venture capital firms that invest in individuals by providing entrepreneurship grants that not only provide financial financing but also provide networking opportunities with experts in the field and communicating with an expert who will be a trainer for you: That means that you will launch your project and implement it under the supervision and guidance of an expert in the field.

5- Philanthropic investors

They support a startup in its early stages, aiming for success in exchange for equity in the company. This type differs from venture capitalists in that they aspire to more than quick profits, and most of their interest is concentrated in the technology sector. But their interests may be attracted by other projects unrelated to technology if they find it worth attention. As an idea owner, you can convince them of the ability of your idea to grow and succeed. This type is predominantly individualized; therefore, the amount of financing you may obtain is less than that other sources provide.

6- Support funds and loans for small projects

In the case of start-ups, it is very difficult to obtain financing from traditional banks, but in some Arab countries, entrepreneurs resort to government-supported banks, which have programs to finance startups. Qatar Development Bank, the Public Investment Fund in Saudi Arabia, and the National Bank for Microfinance in Jordan are examples of national institutions with programs to support entrepreneurs and localize technology in exchange for minimal profit rates compared to traditional banks.

Start-up funding sites and platforms

These platforms have multiple and different ways of financing. From these platforms:

• IndieGoGo Platform It is a platform that is not specialized in a specific field or industry and provides its services to entrepreneurs in various fields and without preconditions. The platform receives 5% of the financing value after the success of each campaign. What distinguishes this platform is that it gives the entrepreneur everything he gets from the campaign, whether small or large amounts, unlike other platforms that give profits only after achieving the ultimate goal.
• Zoomaal Platform It is an Arab platform that aims to help entrepreneurs in the Arab world finance their small projects. This platform seeks to provide financial support for productive youth projects. If the entrepreneur cannot achieve his project’s goals on time, the money will be returned to the shareholders. The platform gets 5% of the profits if the project succeeds, but if the project fails, neither the client nor the platform will get any sums of money.
• Eureeca Platform: The first global crowdfunding platform for online equity acts as a link between small and medium-sized companies and public investors to raise funds in exchange for financiers obtaining shares in these companies.

To sum up, it can be said that obtaining financing for your entrepreneurial idea is a journey of seeking capital. Therefore, as an entrepreneur, you should prepare a detailed report on the idea that you want to implement and identify its most prominent strengths, making it easier for you to obtain financing that will help you establish your emerging project and constant communication with investors and institutions interested in entrepreneurship.