Food Truck - Developing New Venture for an Entrepreneur - Term Paper Example

Reflective Learning Essay: Developing New Venture for an Entrepreneur Table of Contents Executive Summary The purpose of this reflective essay is to provide the writer’s own reflection on the theory and practice of entrepreneurship based on the business venture plan established for the entrepreneur. This will be essential for the writer’s learning and development process. The essay is structured in several parts including introduction, significance of reflection in entrepreneurial learning, reflection on the interview with the entrepreneur, reflection on the new venture planning and the reflection on new business venture plan. In introduction, the writer will introduce his experiences with the module – entrepreneurship theory and practice. In this case, the main focus is on the effectuation entrepreneurial approach which was the key theme of the module. The significance of reflection in entrepreneurial learning will also be highlighted in order to establish whether this reflection is justifiable or not. The writer also reflects on the interview of the entrepreneur so that it will be clear whether the entrepreneur benefited from the new business venture plan or not; and how the entrepreneur views the business venture plan. In terms of reflection on the real business venture plan, the writer focuses on various aspects including his role in the team, his role in the team, the lessons he learnt from the team, areas of concern, challenges and other pertinent entrepreneurial issues experienced during the business venture plan write-up. 1. Introduction Entrepreneurship has gained prominence in business studies across the world, and has been identified as a full area of study on itself. Entrepreneurship theory and practice has become applicable in real business firms, both startups and medium and large enterprises. Entrepreneurship has been identified as a quality or property of the firm (Krackhardt, 1995). Other researchers consider entrepreneurship as a behavioural characteristic of managers or employees of a firm. This module of entrepreneurship theory and practice has given me a good insight into the issue of effectuation entrepreneurship that has essentially become a key learning area in terms of new venture creation. Because effectuation in entrepreneurship entails identifying opportunities and developing a new business venture, a business plan becomes a key success factor. A business plan for an effectuation entrepreneur enables him to find a specific direction for his business so that he does not lose focus at any stage of business development. In learning, effectuation entrepreneurship has enabled me to develop key insights in the field of entrepreneurship, especially in terms of business startups. It has enabled to think critically about the things that make a difference between a failing business and a successful business. I have always been asking myself why some startups fail within three years of their life, while others like Facebook grow to become large multinational organisations operating and making a lot of money across the world. Through the module, I have realised that it takes the behavioural characteristic of an effectuation entrepreneur and the use of a good business plan to propel a firm to great heights of success. This reflective essay will provide some of the learning experiences I have gained from business plan for the entrepreneur and the module of theory and practice. 2. Importance of reflection in entrepreneurial learning Essentially, reflection is part of learning. It is important for the learning and development process of a learner in various ways. First, reflection enables me as a learner of entrepreneurship to think critically about where I have come from, where I am, and where I am going in entrepreneurial learning process (Campbell & Zazkis, 2002). As I progress towards an optimistically successful career in entrepreneurship and business in future, it is important for me to reflect on what I have learnt and where I am currently. This will enable me to prepare for the future. Reflection in entrepreneurial learning is important for me now as a student and in future as a professional or career master in the field of entrepreneurship. As a student, it enables me to identify the challenges that I have faced in the past while learning about entrepreneurship. This prepares me for similar challenges in future. Furthermore, it enables me to identify my strengths so that I can use them in future to enhance my learning and development process as a student of entrepreneurship (Nash, 2011). Reflection in entrepreneurial topics such as effectuation entrepreneurship as a student also enables me to prepare well for assignments and examinations which test the level of understanding on the theory and practice of entrepreneurship. As a result, it enables me to develop key skills and knowledge of effectuation entrepreneurship while I am still a student. Outside school, my future will be greatly determined by what I learn in school (Kohl, 2003). Therefore, reflecting on what I learn in school will also enable me to develop a good career in future. Reflecting on the things I learn gives me a deeper understanding of entrepreneurship topics. For instance, reflecting on the business plan that we developed will enable me to understand all the successes and failures that may result from the business plan. As a result, the reflection will prepare me for a real business plan write up in future. This will be important for me either as an entrepreneur or as a business consultant helping my clients to develop their own business plan. 3. Reflection on the Entrepreneurial learning process The entire entrepreneurial journey was guided by the key aspect of business venture plan which was constructed around a sequence of events within our team. In a group of five students, we set out on our entrepreneurial journey to develop a business plan for our entrepreneur. The model of the business was based on food truck and we named it Tullee’s restaurant. The process involved in developing the business plan can be seen in the flow chart below. 3.1. Planning The five members of our team were actively involved in the planning process. As we interacted with each other for the first time since this was the initial stage of the business plan, we seemingly failed to remain cohesive for a short period during the planning stage. I remember one incident in which we remained stuck, just staring at each other. I had read in entrepreneurship books that a business plan is not an easy task if you do not know where to start. Our project was a bit complicated to all of us because we did not even have clear process of how to start the new business venture planning. We did not even have a clue on what business model to pursue and how to generate the idea. Despite the initial challenges we encountered, we were all determined to develop our business and make it successful. So we gathered all our entrepreneurial knowledge to identify the best ways to develop a successful business plan. Indeed, this practical way of learning entrepreneurship gave us a big challenge to face the real business world. The concept of effectuation from our module gave me an opportunity to understand that an entrepreneur identifies and creates a business venture. This was our starting point – to start from somewhere (Pinson, 2008). Although we did not have sufficient information, our entrepreneurial theory knowledge enabled us to come up with something. Effectuation is all about uncertainty as opposed to causation which focuses only on things that are predictable. We do not know about the future but according to the affordable loss principle of effectuation entrepreneurship, entrepreneurs are expected to use minimum resources to reach the market (Sarasvathy, 2001). From this perspective, I interpreted that due to the minimum resources principle, the team should use what they have to start the business venture planning. we had to begin with what we had – the knowledge, books, and friends. Through a comprehensive discussion, we eventually came up with our business venture planning. In order to develop the new venture plan effectively, we established a series of activities based on the five principles of effectuation to develop the business plan. This is shown below. I. Bird in hand theory – Environmental Analysis/Scan II. The affordable loss principle – Risk identification III. Crazy Quilt Principle – formation of partnerships IV. The Lemonade Principle – identifying market niches V. The Pilot in the plane principle –Assessment and Evaluation 3.2. Environmental analysis/scan After establishing a way forward from the planning stage, our team proceeded to identify internal and external factors affecting the business venture. This step was considered necessary based on the bird in hand theory. In this stage, I experienced an incident in which most members of the group were not willing to identify their weaknesses in front of all other members. I was also reluctant to expose my weaknesses at first, but after one of our team members highlighted the importance of assessing strengths and weaknesses of each member at this stage, we all finally agreed to mention our strengths and weaknesses. The entrepreneurial implication of this aspect is that effectuation entrepreneurs identify who they are (Sarasvathy, 2001). In order to enter the market successfully, we had to identify our strengths, resources and weaknesses. Some of the internal and external factors that were identified in this stage were tastes, experience, and education of members. Sarasvathy (2001) has also identified 3Fs that entrepreneurs may consider in their new ventures: friends, family and fools (Sarasvathy, 2003). Each of our team members agreed to highlight all these factors in order to help us proceed into the market successfully. It was quite interesting when one member suggested that his fool was his friend. I had not seen the aspect of a “fool” in effectuation entrepreneurship from his perspective. From then, I learnt that a fool is not necessary an enemy of a person from a personal basis, but an enemy of entrepreneurship (Sarasvathy, 2003). He argued that his friend always reminds him that entrepreneurs and leaders are born, and if he is not naturally talented with entrepreneurship then he cannot succeed in any business venture. I realised that a friend or family can also be a fool if he sees things from a negative side. We all examined our abilities before defining our business model because the effectuation theory of entrepreneurship argues that an entrepreneur does not define his goal first, but identifies the tools in his possession first. From the abilities and weaknesses, we were able to come up with a business model in which we have the most abilities and minimum weaknesses, and an area with minimum threats and highest opportunities. In the meetings we held, we identified each other’s abilities and listed them. From the lists we developed, we realised that three of the five members had experience in hotel and restaurant businesses. So we developed Tullee’s restaurant, a business offering food as the basic product. The following is a list of the abilities of each of our members. Wei Fei – Fluent communicator and well established network Jinlei Zhang – Experience in hotel catering, good customer service skills, good time manager Samir Muhammed – Experience in restaurant business and a coordinator Yuan Pu – skilled in many computer software and applications and exceptional writing skills Xuding Huang – Experienced in Hotel business and research skills I can arguably reflect that the diversity of our group in terms of experience and abilities enabled us to create an integrated team that worked cohesively towards the establishment of the business venture. This is based on the entrepreneurship understanding that entrepreneurial ability, whether qualified or unqualified in terms of resources, have a positive impact on business effectiveness. 3.3. Risk identification Based on the affordable loss theory of effectuation entrepreneurship, our group also came up with a mechanism of identifying risks. In the first meeting in which we discussed about risks, one of our members informed us that he did not have enough courage to face risks, so he was reluctant to discuss about risks. Together with other members, I reminded him that the higher the risks one takes, the more the returns he receives. Unlike causation which relies on the expected returns or profits of a venture, effectuation focuses on affordable loss brought about by uncertainties and risks in the market. Abrams (2003) classified risks into financial, social, time and performance risks. In the new venture plan, our group discussed each of these risks in relation to our food truck business model. Financial risk The members who had experience in hotel and restaurant operations said that hospitality business of any kind has significant financial risks. However, they understood that if such risks are managed well, the effectuation returns will be enormous. They suggested a low cost strategy of entering the market in order to reduce financial risks. Social risk In terms of social risk, we identified two key aspects: rejection and failure. However, we agreed in the group that rejection and failure should not be considered as the end of our business but as lessons to be learnt for the future prosperity of the business. Time risk Our group also faced risks associated with time. In this case, we realised that the time we were given to complete the business venture plan was limited. This was worsened by the fact that each of us had several other semester activities. With the effectiveness of Jinlei Zhang, we all ensured that we attended meetings on time and followed our time schedule effectively despite the challenge of mounting semester activities. Effort risks Sarasvathy (2001) calls it effort risk, but other researchers and writers call it performance risk. Our team found it quite challenging to engage in this practical activity. The efforts we put in the project would impact on our grades and the success of the business. We decided to work hard in order to reap the fruits of our activities both in the business and the semester activities. Our efforts of putting entrepreneurial theory into practice were tested, and we all committed ourselves to achieving success in application of theory into practice. 3.4. Formation of partnerships This is based on the crazy quilt principle which advocates for the cooperation between entrepreneurs and other parties that can be trusted by the entrepreneurs (Read, 2010). There was an incident in which convincing our partners proved to be difficult due to some conflicts between two of the group’s main presenters. Both of them eloquent in both written and oral presentations, they disagreed on the best mode to make the presentations in order to attract the cooperation of partners. As a remedy to the above problem, we relied to a large extent on the theory we learnt about effectuation entrepreneurship. One member reminded us that we can avoid the affordable losses or risks of the business by obtaining pre-commitment from our target partners (Hamilton and Harper, 1994). Therefore, engaging in unending conflicts on processes and procedures would lead to poor results that counter our efforts to win beneficial partners. 3.5. Identifying market niches Based on the effectuation theory of the Lemonade, our group proceeded to identify market niches (opportunities) in on the field of hospitality and food trucking. Throughout the discussions and meetings for this part, I was more active than any other stage of the new business venture plan. One incident that I was applauded for mentioning that we can make lemonade out of lemon by identifying food products that consumers do not like and improving their taste in our entrepreneur’s restaurant by using a secret recipe to win their loyalty forever. This reflects the proposition of Sarasvathy (2001) that under the causation approach, a hotel chef will rely on the menu provided to him by the customer. In this case, the customer offers his menu and the chef prepares the menu. Under effectuation, the client does not ask for the menu. The chef prepares something with the ingredients he has. Arguing on this basis, I suggested to the group members that we can use the same ingredients that other chefs use to prepare food that customers do not like. However, on our part we would make lemonade out of them by mixing the ingredients with other good ingredients in such a way that the features disliked by customers disappear. 3.6. Assessment and evaluation This approach is concerned with the pilot on the plane principle which sums up all the other effectuation principles. This approach is based on the argument that the future is unpredictable but humans can change some factors influencing the future. Our team relied on this approach to establish an appropriate evaluation and assessment of the other stages of the business venture plan. In this case, the team agreed that we will go back to each stage and find out whether the outcome of our business plan corresponds with the desired outcome established at each level of the plan (Andersson, 2011). In this case, a good measurement approach is based on the ability of each stage to change the future. Initially, we forecasted that we would change the future in order to avoid the contingencies that we would most likely to face. This is based on the lemonade principle which we relied to turn out challenges in the restaurant and food business into opportunities. The group members agreed that we would evaluate the effectiveness of this stage by seeing whether the lemons of restaurant business have actually been turned into lemonade. In this case, lemonade will be measured in terms of the number of meals that our entrepreneur can sell using the secret recipe. In this stage I learnt that I can evaluate a business goals and objectives successfully by focusing on the results of the business based on predetermined contingencies. 4. Meeting the entrepreneur Sincerely, I was very nervous at this stage. I knew that everything was set for us to speak to the entrepreneur. I first expected the other eloquent speakers of the group to interview the entrepreneur, but as we later agreed on majority vote, all members would participate in the interview. One of my teammates challenged me when he asked me what I would do if I was hired by a consultancy firm and I was to face one of the company’s clients to make an important presentation. Initially, I brushed off that question and suggested that I would cross the bridge when I get there. However, as the time to face the entrepreneur was approaching the question came back into my memory regularly and I gathered courage to face the entrepreneur and interview him. We developed 15 questions structured into five different sections. Each section had three questions to be asked by one member of our team. Therefore, each of us asked three questions from one section of the interview. The five sections in which we derived questions are: Entrepreneurial experience of the entrepreneur Entrepreneurial abilities of the entrepreneur Situation of the business Goals and objectives of the business stakeholders’ role in the business The entrepreneur cooperated well with us from the beginning to the end of the interview. He considered our approach as a viable opportunity and he was ready to give all his efforts to the business. Specifically, he appreciated the idea of making lemonade out of lemon; arguing that he will be killing two birds with one stone. In this case, he meant that he would minimise costs by using ingredients that people neglect because they think they do not carry good value while at the same time achieving customer satisfaction by manipulating such ingredients to make desirable food. We realised that the entrepreneur had five years of experience in different departments of various hotel businesses. He also suggested that he had good time management skills and coordination abilities. He also said that his current business is doing well with a plan of expansion into two cities in the next two years. He also said that he currently has a lot of customers but he wants to improve by going into a new business line. His business’s objective is to achieve an increase of annual sales by at least 15% in the next five years. Roberts (2007) suggests that a successful entrepreneur is the one who sets objectives and visualizes his business in times of turbulence in the business environment. Therefore, the entrepreneur in our case is going to be success if he uses our proposals objectively. Conclusion Indeed, this whole experience has enhanced great heights in my learning and development process, and it will be helpful to me for a long period in future. Through interaction with five committed group members and a serious no-nonsense entrepreneur, I learnt a lot of lessons that will be very crucial for me in my entire entrepreneurial life. I have realised that effectuation entrepreneurship is a more important way of developing entrepreneurial abilities than the causation. I have also learnt that entrepreneurs are not born. Through learning, experience and networking, an entrepreneur can just be made. References list Abrams, R. M. 2003. The successful business plan: Secrets & strategies. 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