ENT 600 Week 3 Topic – Building social and financial capital
“Building social and financial capital” (p. 47, The Founder’s Dilemmas)
It would definitely make any business venture much easier to get started if you have access to financial capital, and human/social capital. That would be the ultimate leg up if you have opportunity and access to these types of capital. For the rest of us how do you gain such capital? I can only think of working a full time job and saving until you have enough extra to open a business. With all regular life expenses this proves very difficult and slow going. For social and human capital it is always who you know, if you know the right people that are willing to help you, that kind of capital is immeasurable. The only way to obtain this is through networking. When you find some great people that could really make a difference for your company, if you offered them a portion of the ownership of the company it would motivate them to do their best to improve the company because they would benefit from it as well as you.
My strategy for gaining financial capital is by slowing building on the business, selling items through an online store and saving that money to go towards making more items and saving for a warehouse and/or store front. This will be a slow process, but my plan is to do it this way so I don’t have to take a loan or find investors. Once I get it started and see it running successfully building on itself then I might be able to find investors by having something successful to show to them that they would be able to get a return on their investment.
Social and human capital seems like it would be more difficult to obtain. To find people who want to help your company succeed as much as you do. I think it would be more difficult to find these people before you have a business up and running. It almost seems like you need to have a tangible business before you can ask people to help you with it. So that you can show them this is what it is and this is what I need help with. Once you have an established business then you could be a part of things like the areas Chamber of Commerce, Rotary Club, or small business meetings. Through being involved in things like that in the community you could network and gain social capital. It would be easier to be a part of those things if you already have a business to tell people about. If it is just a thought and you aren’t actually producing anything people might think it’s just a pipe dream. I would like to be a part of such things but I think even to go to meetings you have to have a registered business.
Without financial capital and social/human capital it is very difficult to start from the ground up. For a successful start of a business you need support from people to help with their input and also spreading the word of your business. You need financial support in order to start producing a product and hiring employees. And you need to find good employees that would be invested in your company to care enough about it to make it better.