Entrepreneurs, Expectations and Business Expansion - Coursework Example

AN ANALYSIS OF AN ENTREPRENEUR’S JOURNEY TASK: EVALUATING ENTREPRENEURIAL JOURNEY The Entrepreneur: Timothy Johnson Timothy was born in 1975 in Alabama. His family had a long history made up of bankers, and as such, he was cut for banking from a tender age. He worked very hard to join Harvard business school and graduated with first class honours. He was immediately absorbed into the job market by a reputable financial institution called City Bank where he started his banking career. Timothy was very hard working and within three years, he had risen to the managerial position. While at the bank, he discovered that he had a talent for marketing and customer service. He went back to school for masters and majored in these fields. He was very visionary and developed innovative money transfer solutions that gave his bank a competitive advantage over its competitors (Glinskiy, 2011). Despite this success, Timothy felt restrained by the many procedures and policies that hindered him to freely use his creative mind. Furthermore, the bank failed to implement many of his projects because of the bureaucracy involved in approving a project. He didn’t get the personal independence that he required to pursue his own interests in the financial industry. He came from a poor community and he wanted to elevate lives through affordable financial solutions, but the bank denied him this chance. Therefore, after working for 5 years, he quit employment to start his own financial firm, called Equity Trust Bank (Ahmed, Hasan & Haneef 2011). According to Burns (2011), entrepreneurs can be born or made. People are born with certain business traits while some traits are shaped by experience, history, and the environment of growth. In some cases, situational factors can influence a person’s entrepreneurial orientation. The personal factors that influenced Timothy to start his firm included need for independence and achievement. He yearned to be free from restrictive policies and procedures at City Bank so that he could create innovative solutions to help his poor community. He needed to achieve in implementing his projects that the previous employer failed to implement. Timothy also had the ability to live with uncertainties and take risks. At City Bank, he took various risks in introducing mobile banking services concept that achieved great success in the market (Burns 2011). Furthermore, he was a confident, innovative, self-motivated and visionary in his work. This was demonstrated by his journey that had humble beginning yet he worked hard to join the best schools and work his way up the ladder in a short time. The situational factor that influenced his start up was the need to elevate economic situation of his poor community. He had a desire to create affordable financial loans to improve the economic status of his society but City Bank, which was a corporate bank refused to approve his projects (Lucky 2011). The antecedent influences included high education achievement that enhanced his creativity and innovativeness. His previous employment gave him the necessary skills and experience. Through City Bank, he discovered that he was great at marketing, customer services great ability to think, take risks and lead others. These attributes were needed for the growth and development of his new business. His poor background influenced his desire to start a company that would bring financial freedom to his people (Carland 2010). Burns (2011) argues that many start-ups fail within the first three years. However, this was different for Timothy who broke even within the first year and started to enjoy superfluous profits in the second year of operations. He attained growth and success by using innovation to turn opportunities into business. He used the strategy of taking banking services to the poor clientele. Major Banks dealt with corporate clients who could maintain high minimum operating balances. Low income earners such as farmers, teaches and sole traders didn’t operate bank accounts and Timothy wanted to seize this uncovered market. To achieve success he established six factors to turn this new opportunity into business. First, he concentrated on the ideal of offering affordable financial services to the low income earners (Burns 2012). In doing this, he came up with different accounts for different categories of people .For example, he developed business accounts for farmers in agribusiness, current accounts for traders and salaried accounts. Through these accounts, clients could obtain affordable loan facilities and pledge their businesses or salaries as collateral. He also eliminated banking charges such as minimum balances and monthly charges to allow all low income earners to own an account and operate it whenever they get funds. Second, he acquired resources he needed to implement his ideas through the networks he had established at City Bank and Harvard Business School. He worked with his former school mate who was working with the Banks Regulatory Authority to obtain a licence to start operation. He contracted the IT team from his previous employment to establish a banking system and products such as accounts and basic loan facilities (Filion 2010). Third, he had knowledge of his customers such as their perceptions, moods, financial status, and economic activities. The knowledge was gained from in-depth involvement in his community when he was growing up. It enabled him to create affordable products that were tailored to his customers’ needs and financial ability. For example, he understood that his customers couldn’t maintain minimum account balances and eliminated them. Moreover, he introduced loans that didn’t require collateral as security because he knew that his low income clients didn’t have valuable collateral. Timothy agreed with Burns that knowledge of customers is a key success factor in turning opportunities into businesses (Gibb 2009) Knowledge of competitors is a factor that Timothy used to transform his opportunity into a successful business. He realised that the competitors focused on corporate banking and ignored the low income earning masses. He saw this niche an opportunity to create innovative affordable products that would revolutionize the banking sector (Williams & Nadin 2013). He used a visionary and outstanding marketing strategy to reach his customer base. He analysed the banking industry and realised that financial institutions cut the low income earners out of banking services by charging high minimum account balances and monthly charges. He eliminated these charges in his products and services so that he could capture everyone who wanted to operate a bank account. Starting a new firm required a lot of funds, therefore, Timothy started small and enlarged his business with Time. He obtained funds from his savings, family contribution, grants, borrowing from friends and medium sized loans that he obtained by pledging his personal property as collateral. After operating for a year, Timothy met Wedner Kay, a former colleague and owner of KP&G Consultancy firm. Wedner helped Timothy to streamline his operations and attain efficiency and cost effectiveness (Neck 2014). Timothy faced many challenges in starting his business and sustaining its growth. Insufficiency of funds slowed his development and growth. When he started, he used his savings and loans from friends. These were not enough because he needed huge capital to start the firm (Storey 2012). To solve the challenge, he used his personal property to obtain loans from banks. He used small-scale operations and grew with time by ploughing back profits and increasing his employees’ salaries and benefits with time. He contacted his former influential colleagues such as Wedner and used their goodwill to obtain huge loans. He faced challenges in obtaining an operating licence because he was introducing a new concept into the market (Aidis & Mickiewicz 2006). The regulators were reluctant to give him the licence because they had difficulties understanding how he would succeed in offering affordable financial services to the poor. They doubted the success of his business idea and were afraid that he would tarnish the name of the profession. To overcome this challenge, Timothy wrote a clear business plan that explained his idea in an easy to understand and conceptualize way. He presented his plan to the regulators and made them understand the logic of the plan. Furthermore, he used his colleague who was working with the regulatory authorities to speed up his licence application. It was challenging to introduce his products to the market. He faced a lot of opposition from his competitors who doubted the success of his initiatives. It was difficult to convince the people to open accounts in his bank because most of the poor believed that banking was meant for the rich. He ignored the negative comments from his competitors and used community leaders to convince the poor to open accounts in the bank that was meant for them (Sulliva & Branicki 2011). He conducted personal marketing in social gathering such as churches and public squares to sell his products and services. Another challenge involved teaching the people how to operate banking facilities since they had low literacy levels. He employed additional technical stuff to assist customers operate facilities such as money transfer and ATM services. In summary, creating a successful business entity requires strong entrepreneurial traits such as self-confidence, hard work, and innovation, risk taking attitude, commitment, and positive thinking. A strong business culture of integrity, cooperation, honesty, creativity and visionary leadership steers a business to success. To turn opportunities into successful business requires an entrepreneur to make sound business decisions by focusing on competitive advantage, resource availability and knowledge of customers (Burns 2012). Establishing company strengths such as networks, commitment to service delivery, efficiency of management and sound financial control enables a firm to survive and achieve sustainable growth. Success of any firm depends on visionary leadership that uses innovation to convert opportunities into viable enterprises. Furthermore businesses that offer valuable and differentiated value proposition like Timothy’s succeed because they can withstand and beat external competition. References Ahmed, T., Hasan, S., & Haneef, R. 2011. Entrepreneurial Characteristics of the Agripreneurs under the Scheme of Agriclinics & Agri-buisness Centres.Journal of Community Mobilization and Sustainable Development, 6(2), 145-149. Aidis, R., & Mickiewicz, T. 2006. Entrepreneurs, expectations and business expansion: Lessons from Lithuania. Europe-Asia Studies, 58(6), 855-880. Burns, P. (2011). Entrepreneurship and small business. Palgrave Macmillan. Burns, P. 2012. Corporate Entrepreneurship: Innovation and Strategy in Large Organizations. Palgrave Macmillan Carland, J. W., Hoy, F., Boulton, W. R., & Carland, J. A. C. 2010. 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M., & Wilson, D. 2002. Essentials of entrepreneurship and small business management. Upper Saddle River, NJ: Prentice Hall. Read More