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"I've developed this really cool product and I have applied for a patent."

"I want to show you this awesome app that I helped design."

"We've got a great idea for a website."

Those of us who work with entrepreneurs hear these types of introductions all the time when people come to meet with us.  Whether it is a result of years of development and research, or a sudden inspiration that leads to a "eureka moment," these aspiring entrepreneurs have come up with what they hope to be the next big thing.

The problem is that many of these entrepreneurs have gotten the design of their business models backwards.  

Rather than look to the market to tell them where opportunities are, they have come up with an idea and are trying to run full speed into the market with it.  

Starting a business by trying to find a market for an already developed product usually leads to a long and often futile launch of the new venture.  It results in a very expensive start-up process, as revenues tend to be very slow to materialize.  Expenses just keep piling up as the entrepreneur tries to find a target market with customers who need the product.

The approach to starting a business that has the best chance of success is to look to the markets for ideas.  

Start by looking at markets you already are familiar with from your knowledge, skills, and experiences.  The best business opportunities come from solving everyday problems that you have observed from your previous work experiences, your hobbies, or things you see in your everyday life.   

Look for groups of customers who share a common dissatisfaction with how they are being treated or who cannot find what they really want.  It may be something as simple as a market that has not been given good customer service.

Look for markets that are ready to try a new product to replace the old ones they now using.  That is what has led to the success of the Nashville-based app company Aloompa.  Much of their growth has come in the music festival market, where their apps replace outdated printed programs.

Look for markets where something that has worked in other similar markets has not been tried in your market.  That is what inspired Bob Bernstein to open Bongo Java, a neighborhood coffee shop in Nashville, that was like the ones he loved in his home town of Chicago.  

Look for markets with "pain" and then develop a product or service that takes care of that "pain."  

My favorite meeting with an aspiring entrepreneur is when they come to my office and say, "I have found a market that needs...."  

I know they are starting down the right path to develop a business model that has a good chance of success.

While entrepreneurial success is tied to careful feasibility assessment, business modeling and planning, never underestimate the role that luck plays in an entrepreneurial journey.

I am not suggesting that aspiring entrepreneurs just sit and wait for an opportunity to come to them like a bolt of lightning out of the blue. As the Roman philosopher Seneca pointed out long ago, luck is the crossroad of preparation and opportunity.

Preparation comes from the development of what I call the process skills.

Entrepreneurs have a better chance of success if they learn fundamental business skills, such as accounting, marketing and managing people.

They also benefit from learning specific process skills tied to starting and growing a business, such as how to assess opportunities and translate them into business models.

Opportunities come from the development of content skills that come from our experiences in life. The best ideas for possible businesses most often come from jobs we have held, from our hobbies and interests and from our social network.

If we pay close attention, it is out of these experiences that we'll notice customers who aren't getting what they want or who are missing the service they expect. This is what creates the gaps and pain in the market that entrepreneurs can capitalize on with a new business.

There is one important caution regarding the opportunities that come from our experiences, though. Don't become a slave to the status quo. Be ready to be surprised.

Luck is not the only element that leads to entrepreneurship. We also need to be ready for serendipity, which is when we find opportunity not by plan, but by accident.

The examples of the role of serendipity in entrepreneurial success are many.

For instance, the original plan for PayPal was to build a payment platform for the old hand-held Palm Pilot devices.

And 3M sticky notes came from an adhesive that did not work as well as it should have.

The key was that in both of these examples, while the original plan did not work, an entrepreneur was willing to pursue a surprising new direction that did work very well.

Entrepreneurial success can be the result of a path we did not expect.

While our experiences are important, we have to be careful not to get stuck in the old, traditional ways of thinking. And we must never become a slave to our original ideas.

So, the formula for success is quite often a combination of hard work and preparation, of the experiences we have in life and more than a few surprises.

Never underestimate the role of luck and serendipity in entrepreneurship.

One of the biggest mistakes I made during my days as an entrepreneur was raising too much money.

Because our business was successful, we had investors eager to offer us money. But by taking money when we really did not need it, we found that it created more problems than benefits.

When taking money from outside investors, you give up part of the control over your business.

"One of the reasons most people start a company is so they don't have a boss," says Jake Jorgovan, co-founder of Rabbit Hole Creative, a high-tech graphics and marketing firm. "If you take out funding, then you have an investor looking over your shoulder at every decision you make."

Taking outside money can also lead to building overhead and creating an infrastructure that can lock you into a specific business model as you attempt to make good on the things you have committed to in your business plan.

Michael Brody-Waite, CEO of InQuickER LLC, prefers to keep his company lean and adaptable even though it has grown to annual revenue of seven figures.

"We chose to stay agile and not lock ourselves into a rigid trajectory unnecessarily," Brody-Waite says. "The cost of taking money in terms of distraction and complexity is well-documented. Our company is built on maintaining less mass, agility and out-simplifying our competition."

Too much funding can also propel a company into a level of growth for which it is not prepared.

"Bootstrapping your growth allows you to grow at a pace that is comfortable for you," Jorgovan says. "Investors will want to see rapid returns on investment regardless of what that means for you. When you bootstrap a company, you can build it into the company that you want to work in. You can build it into a business that you enjoy going to work at every day."

Like many entrepreneurs, both Jorgovan and Brody-Waite have felt the pressure to consider taking funding from investors. It seems to be part of the entrepreneurial culture, especially in businesses that have the potential for significant growth. There seems to be an expectation that seeking investment capital is a standard part of starting such a venture.

Although both businesses have seen successful growth through bootstrapping rather than fundraising, there may come a time when bringing investment money into each company makes sense.

"I expect us to take money eventually," Brody-Waite says. "However, the cost in time, agility, complexity and mass would have to be significantly lower than the tangible benefit to our company."

When it comes to seeking investor money for an entrepreneurial business, the goal should never be to raise as much as you can.

Instead, your goal should be to raise money only if you truly need it. And even then only take as much funding as is absolutely necessary to reach the goals of the business.

A student come up to me before class the week before their business plans were due this past semester looking very dejected.  

"My concept just can't work," she said.  The more she tried to pivot the business model, the more she uncovered evidence that convinced her that she had reached a dead end.

This is what is known as a teachable moment.

Aspiring entrepreneurs go through an arduous process between the initial spark of an idea to the eventual launch of a business.  

They start by sifting through the various ideas they have to find the one that has the most promise.  Many ideas may appear promising at a first glance, but careful assessment helps to sort out those that have little promise. Eventually, the entrepreneur selects a product or service they hope will be accepted by the market.

The next step is for the entrepreneur to take the idea and begin to build a business model.   

The primary goal of business modeling is not to try and rationalize starting a business based on your idea.  Instead, the objective is to discover all of the challenges, flaws, and gaps that need to be addressed if you have any hope of moving from a good idea to a successful business.  Business modeling is a process of finding problems and fixing them by altering and expanding the operating framework needed to launch the business and, when necessary, pivoting the concept based on what is learned about your customers and what they really want.   

When developing a business model, you may reach a point where you realize that no matter what you do, it just won't work.  This realization can happen very late in the process even at the point when you are developing a written business plan based on the business model.  If that happens, no matter how much time and effort you have put into the project, you need to be decisive and abandon it.  

But this is much easier said than done.  You have spent countless hours talking about the business with friends and family.  You have shared your idea with advisors and mentors.  You may have even pitched the idea in business plan competitions and to investor groups.  It feels like your reputation is riding on getting the business launched.  There is a sense of inevitability that launching the business is what you are going to do.

But do not ignore the evidence.  Have the fortitude to walk away.  The fact that you have spent countless hours getting your idea to this point is not a reason to keep moving ahead.  

So back to that teachable moment....  

As class started that morning I asked the student to share her story with her classmates. I then looked her in the eyes and emphatically said, "You did a great job!  You stayed true to the process and had the courage to acknowledge that your concept just won't work.  Congratulations!"

The end of this story is that while her initial idea did not work out, the process helped her discover several new ideas and gave her the opportunity to make several new connections with people to add to her network.  She learned the lesson that while her idea may have failed, she was successful.

In May of this year, Peter Thiel, a co-founder of PayPal and an early investor in Facebook, awarded 24 young, aspiring entrepreneurs $100,000 to "drop out of school and become world-changing visionaries."

Now that the publicity has settled down, I thought it would be a good time to offer the perspective of three entrepreneurs who dropped out of Belmont's entrepreneurship program.

None of them was part of Thiel's program, but each dropped out to chase his entrepreneurial dreams. However, all three eventually decided to return to school to finish their degrees.

John Price and Sam Dryden dropped out of the entrepreneurship program to pursue their photography and video-related businesses.

"I have never been a typical student, and I often found myself frustrated with classwork," Dryden said. "When it looked like my business was going to be a success, I jumped at the opportunity to pursue something that at the time I decided was more important than a degree.

"We are told to study hard so you can get a degree and then a job. Hey, I already had income, so why waste time in school, right?"

Both of them saw a choice: stay in school and be a student, or pursue their careers as entrepreneurs.

"I knew that I wouldn't be able to reach my business goals while attending a university and splitting the time," Price said.

Timothy Weber left the Belmont entrepreneurship program to pursue his Web-based business, GoodMusicAllDay, full time. However, it wasn't long before he decided leaving school might not have been a wise choice.

"After just one year out of college, I realized how little of a business background I had and how many 'lessons' I could have learned in a classroom instead of after they had already negatively impacted my business," Weber said.

All three entrepreneurs believe the business experience they gained while out of school enhanced their learning curve when they returned.

"Leaving school gave me crucial experience that in my opinion made the return to Belmont more valuable than if I had never left," Dryden said. "My experiences out in the 'real world' gave my professors leverage to turn class time into very meaningful time for me. It was no longer homework, and it was instead a focused business workshop that had actual repercussions in life."

At Belmont, as in many other entrepreneurship programs across the country, professors encourage students to start ventures while in school to enhance what the course work offers them.

"The entrepreneurship program allowed me to understand my business before spending all my money and time pursuing it," Price said. "The time in college provided me with the opportunity to focus on the bones of my business before I applied it to the real world.

"The time I would spend talking through my business ideas with other students was some of best feedback I could have gathered."

These three entrepreneurs learned an important lesson when they dropped out of college. It does not have to become a choice between pursuing your dreams and advancing your education, as both work better when pursued hand in hand.

In the rush to start a new business, the simple act of keeping records often gets put on the back burner. But poor record keeping has been the demise of many otherwise successful businesses.

The entrepreneur needs clear and accurate records to help manage the challenges of the startup. These records can help manage cash flow and will provide financial statements that can help monitor the progress of the new venture.

The IRS expects even the smallest of businesses to document deductible expenses and support all items reported on tax returns.

Also, bankers monitor the progress of their business customers using financial information. If you cannot supply timely and accurate financial statements and other required information to your banker, it will hurt your ability to get loans when your business is at the stage where it could otherwise qualify.

The first step in establishing a record keeping system is setting up a separate checking account for the business. The deposits into this account should include any initial investment you make to start your business, the proceeds from any startup loans or investments, and all revenue from customers.

This checking account should be used to pay all expenses for the business, but not any personal expenses. As an owner you can draw money from this account, which can be deposited into a personal checking account to pay personal bills and living expenses.

Carefully document every expense paid from the business account. If paid by check, make careful notation of the check number, date of the check and purpose of the expense for each purchase. If paying with business debit or credit cards, keep detailed notes on each expense. Writing this on the back of each receipt is a good habit.

Set up a filing system, which can be either hard paper copies or scanned records, to track all documentation on receipts and expenses. Think ahead when setting up the filing system so it can accommodate the business as it grows. Use separate files for each vendor and customer and organize these files by type of expense or receipt.

Accounting software, such as QuickBooks, can help organize financial information. But remember that no system runs itself. Any system for record keeping relies on proper and timely input of information from you.

One lesson that many entrepreneurs learn the hard way is that you should not delegate financial record keeping to employees too quickly. Sadly, fraud is common in small startup businesses, and it often leads to the failure of an otherwise healthy business. Keep a close eye on financial records and put in systems of checks and balances. For example, never let the same person who handles revenues from customers also pay the bills, as this makes stealing money easier to cover up.

Record keeping may seem mundane compared with the other aspects of starting a business, but it is a critical step to ensure a healthy business. Record keeping systems should be simple to use. The job of the entrepreneur is to use this system to keep accurate, timely, consistent and compete records of all activity in the business.

With the continued weak economy and little hope of recovery anytime soon, we can expect to see even more "accidental entrepreneurs" emerge. These are unemployed people whose best hope of generating income is to become self-employed or to start a business.

Ami Kassar is a typical accidental entrepreneur. Kassar had spent a decade in senior management with a large, national credit card company based in Philadelphia. When the recession hit in 2008, he suddenly found himself unemployed. His employer did not survive the recession-induced shakeout in the financial industry.

Finding a new job that was similar to his old one did not look very promising, so Kassar decided to launch a business. He started Multifunding, which helps small businesses find debt financing.

Like most entrepreneurs, Kassar faced challenges in the startup of his venture. However, many of his missteps can be traced back to habits and expectations that came directly from his years of working in a corporate setting.

So let me offer a brief job description of an entrepreneur to help those of you who, like Kassar, are facing a career transition:

1. Do everything. The temptation when you start a business is to continue to concentrate on what you did well in the corporate world and bring others in to take care of the rest. However, to build a successful business you need to learn every aspect of your business and perform every job. You need to know the business inside and out, from top to bottom.

2. Become a financial wizard. Set up a sound record-keeping system. Be your own bookkeeper for as long as you can. Just as you need to know every aspect of the operation of the business, you also need to know the numbers. The best way to do this is to make the financial aspects of the business a major part of your job.

3. Minimize overhead. The temptation is to surround yourself with the comforts you had in the corporate world -- a nice desk, a new car, a big office, support staff, and the newest and best gadgets. However, paying for all that overhead is what stands in the way of your bringing home a paycheck. So start lean, bootstrap whenever possible and make operating frugally a part of the culture of your business as it grows.

4. Watch your cash flow. As the old saying goes, "The leading cause of business failure is running out of cash." Learn the rhythm of your cash flow. Watch every expense like a hawk. Treat every dollar as iff it might be your last.

5. Schedule balance. Startups quickly become all-consuming. They can take up every waking moment if you let them. Build time in your life for those things that really matter -- your family and your friends.

Fortunately, Ami Kassar is an accidental entrepreneur who is making a successful transition out of a corporate career. Multifunding is now growing and doing well.

To be successful, accidental entrepreneurs have to develop new work habits and an understanding of what the job of an entrepreneur is really all about.

Business models are developed by visualizing all of the "working parts" that make up a business.  A traditional business plan, on the other hand, is most often a formal, written document that provides details about how an entrepreneur intends the business to operate. 

Learning to develop a sound business model helps ensure that everything that is critical to the success of the business is in place and working in harmony. 

Developing the business model depends fundamentally on engaging real customers very early in the creation of the business so we have a better chance of offering what the market really wants. 

One of the biggest benefits I have seen from using business modeling over writing a traditional business plan is that it allows for adaptation.  We use what we learn from the very beginning of the start-up to make changes in our business model as we uncover who our customers really are, what they really want, and how best to put everything in place to ensure that we deliver what we promise to them.

This process is known as "pivoting" the business model. 

We all start with a clear plan in mind of what our business will be.  The problem is, most of the time our plan is either only partially right or just plain wrong.  Successful start-ups become a series of pivots to the business model we started with as we learn more and more about where our business really fits best in the marketplace.

"As a founder, keeping your company alive requires you to think creatively and independently because more often than not, conditions on the ground will change so rapidly that any original well-thought-out plan quickly becomes irrelevant," explains business model guru Steve Blanks.

A note of caution: Pivot with purpose

One of the flaws of the old business planning approach to start-ups was that many entrepreneurs got so wrapped up in the process of developing the "perfect business plan" that they never got to the point where they were able to pull the trigger and actually start the business.  This became known as "paralysis by analysis."

I am beginning to see a similar problem surface when using the business modeling approach to guiding business creation.

It seems that people are beginning to believe that since pivoting is good for a start-up, more pivoting is somehow better.  When they follow this logic, we see many entrepreneurs get so wrapped up with pivoting that they forget the goal is to get the business model right so that you can move forward.

Adjustments to the business model are important, but once the market tells us that we are finally offering the right product to the right customer, it is time to slow down the pivoting and focus on growing the business.

Never forget that the ultimate goal is not to develop the perfect business plan or the most elegant business model, it is to identify a need in the market and build a profitable business that meets this need.  Business plans and business models are just tools that help entrepreneurs achieve success. 

"I'm sorry the delivery is late, but...."

"I know this didn't turn out the way you ordered it, but...."

As entrepreneurs, we have all been in situations when we have been unable to meet our customers' expectations.  

You may have been counting on suppliers who did not deliver to you on time or with the products you ordered.  Maybe your workers did not show up on time or quit in the middle of a job.  Or maybe you may have had a sudden influx of business or an unusually big job that you just did not expect and you and your employees just can't keep up.  

However, it is important to remember that you are the one who picked those suppliers.  You hired and trained those workers.  You accepted all of that extra work.  

Explaining why you did not meet the expectations of your customers with excuses does not build trust and confidence with customers.  While there may be reasons behind your failure to meet their expectations, customers generally do not want to hear about your problems.  What they want is for you to do what you have said you would do, and do it when you said you would.  If you can't, they expect you to make it right.

Think of it from the customer's perspective.  Blaming bad customer service on your supplier or your employees communicates to your customers that you are less than competent.  It is your business, so whatever goes on within it ultimately reflects on you.

Even worse, telling a customer that the reason you could not deliver as promised is due to taking care of another customer, communicates that their business is less important to you.

The importance of taking full responsibility and acting with integrity with your customers is important any time, but it has become critical during the ongoing Great Recession.  

Recent surveys conducted by the National Federation of Independent Business suggest that weak sales are is the single biggest challenge facing small business owners during the recession.  Since the forecasts of most economists call for a continuing sluggish economy for some time to come, taking steps to attract and keep will continue to be a significant challenge for entrepreneurs.  Not meeting customers' expectations or telling them that their business is less important certainly is not wise when operating in an economy where customers and the revenues they create are increasingly hard to come by.

Taking full responsibility with customers builds confidence in you and your business.  Making each customer feel like their business is always the most important builds loyalty.  Building confidence and loyalty in customers is essential for surviving the continuing recession and thriving when the economy finally does recover.

When things go wrong with a customer offer no "but's" and no excuses.  Be honest, take full responsibility, and tell what you intend to do to make it right.

"Culture is one of the most precious things a company has," said Herb Kelleher, Founder, Southwest Airlines.  "So you must work harder on it than anything else."

For the entrepreneurial business, its culture begins from day one.  The culture is a reflection of the values the entrepreneur brings into the business.

Culture is important for an entrepreneurial venture because it is the mechanism that institutionalizes the values of its founders.  Culture serves to socialize new employees.  It helps them understand how they should treat the customers, how they should treat each other, how they should act in their jobs, and how to generally fit in and be successful within the business.

If managed properly, culture also improves the performance of the business.  Culture is an important part of the overall strategy of the business and helps ensure a growing organization will continue to meet the expectations of customers that were established by the entrepreneur during the early start-up of the venture.

For many businesses their success has been built on the entrepreneurial nature of the business.  Since it is important to keep the entrepreneurial nature of the business, as that is what has gotten the business this far, it is important to create a culture of entrepreneurship.

"Building a culture that encourages autonomy, risk-taking, and entrepreneurial behavior is challenging," said Jennifer Prosek, CEO of CJP Communications and the author of Army of Entrepreneurs: Create an Engaged and Empowered Workforce for Exceptional Business Growth.  "For companies that want to out-think and out-pace the competition, an entrepreneurial culture isn't optional: it's an absolute necessity."

According to Prosek, the key to unleashing that creative energy is to create an entrepreneurial culture based on four pillars.

1. Authenticity -- Demonstrate your sincerity by being enthusiastic about entrepreneurial strategies and actions pursued by the business.
2. Commitment to People - "An entrepreneurial culture is based on the idea that each individual can be a powerful force for change in the organization," said Prosek.  Support the professional development of your staff, celebrate exceptional work, and don't forget to have fun.
3. Commitment to the Business -- Align an individual's interests with those of the business. "At my firm, we have a program called Commission for Life™," explains Prosek, "Which encourages new-business generation: Anyone who books a meeting that results in a new client gets 5 percent of the revenue for the life of the business."
4. Continuous Effort -- The work of building a company's culture never ends.  

Sustaining an entrepreneurial culture starts with who you hire.  It is essential to carefully screen prospective employees to ensure that they will fit within your culture.  An entrepreneurial culture is also sustained by your reward system, by the autonomy and respect you give to your employees, and by consistent communication about your ongoing entrepreneurial vision for the company.

Creating an entrepreneurial culture creates a business that will continue to grow by adapting to change and by actively pursuing new opportunities in the market.