All businesses have assets, but many don’t know how to fully utilise their assets to gain a business advantage. As a former freelance business adviser with Business Link I have seen a wealth of examples where micro-business founders weren't doing this, or didn't even know what they were missing. For example, a freelance photographer had been interviewed by the BBC and featured on TV as an expert. However, she did not integrate this experience and acknowledgement of her expertise into her social media, advertising or the website. A missed opportunity!
As an academic researcher, I learned to differentiate between different types of business assets with a concept I call “entrepreneurial capitals” (Hill, 2018). These are assets that are brought into business for start-up or venture development and made relevant to doing business. I discovered that there are at least four types of entrepreneurial capitals:
economic assets or capital (buildings, machinery, land, cash and other financial assets),
cultural capital (including education, accreditations, qualifications, and sector knowledge),
social capital (access to networks, influencers etc., direct contacts), and
Symbolic capital is least known and sums up all means that increase the entrepreneur’s credibility and authority in the market and within the industry. For start-ups, this capital type might be least developed and needs building up. Examples are winning or being runner-up to a start-up award, being a judge on a panel for assessing competition participants, sitting on a panel at a conference discussing a topic, invited keynote speaker etc. This capital type is the most flexible and can be converted into other capitals most easily.
For microbusinesses, these entrepreneurial capitals are often closely related to the founder(s) personal and work experiences, but can also include leisure related activities and successes.
To take full advantage of what a microbusiness founder or team has, here are some tips on how to identify these entrepreneurial capitals and then how to transform existing ones and leverage them for the benefit of the business, based on a simple example.
How to identify entrepreneurial capitals and use them
Take stock of what you have done and achieved, in your previous work, leisure and your business. What are your strengths / skills and hobbies? Check with the above list of indicative examples of capitals. Can you bring them into the business to turn them into entrepreneurial capitals? Do you have examples from each entrepreneurial capital type?
Check whether your business communication materials are referring to these entrepreneurial capitals in your value proposition to clients and your self-presentation. If not, it is a task to do as soon as possible. You might want to get some help from a copywriter or social media expert to choose the most appropriate wording.
How to transform entrepreneurial capitals to gain business advantage
Steven, an IT specialist with an IT consultancy (3 staff members) had not previously regarded membership and active contributions to the committee in a rugby club, where he holds the role of treasurer, as relevant for the business. However, it is useful personal information to add to his profile on all media and advertising. It allows others to identify with him, if they are also interested in Rugby, or at least start a conversation with him about rugby. Similarly, the rugby club has over 200 members, who only know Steven as the rugby fan and diligent trustworthy committee member and treasurer.
Steven’s committee role carries a number of credits he could refer to in his business activities: the role of treasurer comes with a package of trust in the person to manage finances well, thus, trustworthiness is implied with it. He could use this explicitly in his marketing communications, turning the rugby treasurer role into entrepreneurial symbolic capital - he is accredited to be trustworthy through the position in a treasurer role. This gives him credibility he can transfer to being a trustworthy professional.
Similarly, through committee membership he has strategic influence on the organisation. This type of influence and organisational understanding is worth integrating into his communications about himself as a professional. This demonstrates how he can use his strategic actions and influence to add value to his business understanding, which is also valuable for advising businesses on IT issues.
Steven could also start talking about his IT business at rugby committee and social meetings when appropriate, as word of mouth is the most effective marketing channel and communication. As club members know and trust him, he could use this trust and insight to gain more leads for the IT business. Research has shown that more people are willing to pass on the word about an acquaintance’s work than usually assumed.
And finally, other business professionals, who are also rugby fans, can only find a common shared interest if Steve raises their awareness of his sports activity in his marketing communications. Shared interests are a great way to start conversations. This is an example of how to transfer social capital to entrepreneurial symbolic capital.
To conclude, all entrepreneurial capitals are only as relevant and impactful as they are referred to by the founder(s) and the team in doing business. They need to be freshly integrated into doing business daily to create a business advantage.
Dr. Inge Hill is an expert in organisational strategic process management and Senior Lecturer Business Strategy, Coventry University Business School.