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entrepreneurial process by: jeziel maeh

Entrepreneurship = Paradox

 

 “The greater the organization, orderliness, disciplines, and control, the less you will control your ultimate destiny.” It may sound good to others and others may not. It is from the impact inherent in this contradiction that value is shaped.

Today, the world of entrepreneurship is inconsistent, in the sense that no one knows what would be or might be happen for the future. A business, industry, or an organization with more regulation, limit, and authority doesn’t necessarily mean that it will be succeed methodically. As an industrialist, it requires the ability, initiative, elasticity and agility to find and control resources, in order to achieve organization’s goals and objectives.

Honestly, I don’t know if there are organizations existed these days having the same principle of the paradox. That’s why I can’t give any example that will describe the paradox.

 

 

 

Timmons Model: the Organization’s  Success                   

There are three visible crucial components for a successful new business as depicted in the model above: the opportunity, the entrepreneur (management team) and the resources needed to start the venture and make it grow. Out of these three crucial components the Timmons Model of the Entrepreneurial Process starts with an opportunity. The shape, size and depth of this opportunity form the shape, size and depth of both the team and there sources as per model.

 

 

Timmons’ Entrepreneurial Process

The key aspects in Timmons model are the entrepreneur and the founding team, the opportunity, and the resources that are gathered together to establish the new business. If the entrepreneur has the right stuff he or she will deliberately seek for an opportunity, and upon finding it, shape it so that it has the potential to be commercial success, or what Timmons call s a high potential venture. The entrepreneur then gathers the resources that are necessary to start a business to capitalize on his or her opportunity. A prospective entrepreneur will assess what resources are crucial for the company’s success in the market-place. The bidirectional arrow between the genuine opportunity and resources in the model, clearly stipulate that a realistic business plan can be an answer to the constant failure in obtaining finance. It is well understood today that the entrepreneurial team is a key to the success of a higher potential venture. This calls for a lead entrepreneur with an ability to lead and communicate effectively so as to build an effective entrepreneurial team.

 

Opportunity

At the heart of the entrepreneurial process is the opportunity. An opportunity is a gap left in the market by those who currently serve it. It represents the potential to serve customers better than they are being served at present.

Resources

Resources play a very important role creation of a successful new business venture. An   entrepreneur must determine the minimum set of essential resources. The first thing that an entrepreneur should do is to assess what resources are crucial for the company’s success in the market-place. Once this is done, an entrepreneur will be able to determine where he or she should put a disproportionate share of scarce resources.

Team

A team is a key to the success of a higher potential venture. This calls for a lead entrepreneur with an ability to lead and communicate effectively so as to build an effective entrepreneurial team. Teams should be formed and led by a capable lead entrepreneur, because the lead entrepreneur will always be central to the team as both player and coach. 

 

What does Entrepreneurship means?

Entrepreneurship is the emergence and growth of new businesses. 

Metaphor:

Entrepreneurship is a seed.

Paradox:

Entrepreneurial opportunities are subjective and objective; discovered and created.

 

Sources of Success and Failure in New Business

 In these tough economic times, many businesses are struggling to stay above water. These are some factors why business succeeds while others fail.

Assessment of the Direct and Indirect Competition

When getting ready to implement a new business, one important factor for success or failure is the nature of the direct and indirect competition for the same product or service. For instance, when doing the research the group should ask: who is the competition? What products and services do they offer? Gaining a firm grasp of the competition can definitely make the difference between staying alive long-term or filing for bankruptcy.

Availability of Financing

The current economic crisis has made venture capital difficult to find. Of course, if a company can manage to avoid using credit altogether then this is not a problem. Still, most new businesses need some kind of seed money to get them up to speed and thus the ability to secure working capital is critical to keeping the doors open.

Solid Customer Relations Management

This seems like a no brainer, but the better an organization handles their client base the more apt it will be to stay in business. Enterprises that take time to think out common and uncommon situations before they encounter them will be more likely to keep customers coming back. Those groups that merely define their customer relationships on the fly or in the heat of the moment are doomed to fail.

Well-Managed Supply Chain

Another reason for business success or failure is how a company manages its inventory. in order to keep the right mix of products on the shelves, an enterprise needs to think through its supply chain processes. Too much inventory can tie up working capital, but too little inventory can lead to shortages and lower customer satisfaction.

Proper Timing

Another reason for business success or failure is timing. Part of learning about an industry is getting a good feel for its business cycle; although trying to time the market can lead to indecision.

Government Regulatory Measures

 Another reason for the business success or failure is how much the owners of an enterprise have a good grasp on the rules and regulations governing their sector of the economy; this includes having a clear understanding of the tax structure. Many would-be entrepreneurs charge into a good idea not knowing what restrictions apply to the execution of the idea.

 

 

Characteristics to become an Entrepreneur

The characteristics of an entrepreneur are the importance of what they do, not personality traits they might or might not posses. Some of the entrepreneurial characteristics are:

Risk Taking

The consensus of the research on risk-taking in entrepreneurs is that they are not big risk takers. Instead they are moderate calculated risk takers who define the risks inherent in any venture and continuously attempt to minimize them or manage them while focused on opportunity. Not being a big risk taker is certainly not a deterrent to entrepreneurship.

Need for Achievement

Entrepreneurs tend to have a high desire to be personally responsible for solving problems and setting and reaching goals. This means they have a need for achievement. They are also innately driven to make things happen and are not generally daunted by failure but tend to persevere until they succeed. To them the exploitation of an opportunity provides a stimulating environment for achievement.

A sense of Independence

Entrepreneurs also seem to purposely seek independence by being their own boss. This allows them to assume a higher degree of personal responsibility for their decisions and achievements. This need of independence often makes it difficult for entrepreneurs to delegate authority. The latter is often referred to as the dark side of entrepreneurs.

Internal Locus of Control

Locus of control describes the source to which human beings attribute the things that happen to them. Those who believe they have control over aspects of their environment and destiny are said to have an internal locus of control. Entrepreneurs have a strong internal locus of control and this gives them a level of confidence in their ability to manage the entrepreneurial process.

Tolerance for Ambiguity

Starting a business is by its nature dynamic, uncertain, complex and ambiguous. Entrepreneurs seem to cope well in this type of environment. This can be attributable to the fact that it is a challenging and exciting environment that offers more opportunities, as compared to a structured environment. Intense research conducted by researchers reveals that entrepreneurs have a greater tolerance for ambiguity.

 

 

 

REFERENCE LISTS:

 

Allen, K.R. 2003.Launching New Ventures: An Entrepreneurial Approach 

(3rd ed).NY. Houghton Mifflin

 

South Africa: Global Economic Climate Affecting Tourism Industry 

 

:http://allafrica.com/stories/200811040015.html (accessed: 22 July 2009).

 

Barrow, C. 1993.

The Essence of Small Business. NY: Prentice Hall.

 

http://organizationsandmarkets.com/2010/11/02/enrepreneurial-paradoxes/

 

 

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