Process of Development of a New Business Venture - Coursework Example

Managing a new venture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date 23rd February, 2012 Introduction There exist various definitions of an entrepreneur but the most commonly accepted definition is an individual who sees a new idea and take measures to fulfill the unmet needs of the society. According to various authors most entrepreneurs have certain common traits which are: ambitious, risk taker and goal oriented (Burns & Stalker, 1961). Entrepreneurs are either made or born. The family, environment and upbringing influence ones perception or awareness of being an entrepreneur. Also the culture of the people that one interacts with makes one to be an entrepreneur. In the current business world owning and operating a business venture pertains substantial dangers and hard work so as to prevail over the inertia aligned with the formation a new business venture. The establishment of a new venture necessitates well directed efforts put forth over some period of time. That is hard work and perseverance over time is key determinants of the success of the business or venture. The formation of a new venture is a multifaceted and multidimensional incident. Based on the aspects of the motivation theory, a person is motivated into been an entrepreneur or to a certain career and the satisfaction associated with the career is a vital factor in motivating ones behavior (Gartner, bird & Starr, 1992). Therefore the growth and initiation of a new business venture necessitate a substantial level of research and scrupulous preparation so as to make it a success. Creation of a new venture The path towards the starting up of a new venture does not take a common direction and most entrepreneurs may use different route to achieve the same objective that is the creation of a new business venture (Gartner, 1985). The creation or generation of a new venture is defined as been a multidimensional event and each variable illustrates single dimension of the occurrence and none of the elements can exist alone. A new business venture is consequently a blend of multifaceted and several elements that distinguish one entrepreneurial state from the others. Entrepreneurs have significant tasks in generating new businesses that foster growth in most societies around the globe. Most entrepreneurs apply modernism and technology to promote a constructive impact and action in all aspects of life. Most competent entrepreneur over time learns to recognize, choose, illustrate, and converse the fundamental nature of a business opportunity that is attractive and has great potential of becoming a worthwhile business venture in the future. Entrepreneurs in most cases are able to identify the possible benefits of a new venture and generate a business model design that can design that can bring a bout a competitive advantage. An entrepreneur with a clear and concise strategy is able to effectively introduce a new product in the market. Process of development of a new business venture According to various researchers there exists a wide catalog of a number of actions that an entrepreneur has to undertake so as to generate a new business venture. The development of starting a new business enterprise is embodied in entrepreneurial procedure and it encompasses more than just dilemma resolving. Therefore an entrepreneur must discover, assess and expand an opportunity by defeating the forces that hinder the development of something new. The process of development of a new business venture has certain dissimilar phases with the common ones been: recognition and assessment of the opportunity, a clear and concise development of the venture business plan, and budget of the required resources and administration of the resultant business. Even though these stages advance increasingly, every stage is solely dependent on each stage other. Identification and evaluation of the opportunity The recognition and assessment of the business opportunity is the first stage in the start up of a new business venture. Opportunity recognition and assessment seems to be a major hard task to a great number of entrepreneurs. Most flourishing and competent business opportunities are as a result of an entrepreneur’s attentiveness to possibilities and in certain case the establishment of mechanism that discovers possible business opportunities. An entrepreneur for example may request individuals if the products that they are currently using or which they have used are satisfying its planned purpose. From the list provided the entrepreneur may come up with an idea to fulfill the unmet needs of the individuals. In this case the entrepreneur may be seen as searching for a want and at the same time at an opportunity to develop a better product. Another group of entrepreneurs opt to monitor a certain group of individual requires for example the youth and based on the information obtained the entrepreneur can be able to develop an exclusive product in the niche market (Timmons, 1999). There exist no formal steps of identifying new business ventures though some sources are frequently productive. Most individuals as well as consumers complain that certain products which are provider do not meet or fulfill their needs this in one way offers a generation of a new business idea. Based on the close relationship that exist between the consumers, distributors there is a high possibility of identification of new needs in the market. For example an entrepreneur may over hear individuals complaining of the high cost which is charged for certain products and may opt to produce similar products at a lower cost. Another lot of entrepreneurs have generated business ventures through discussions with a seller, wholesaler or producer of certain products. Every opportunity ought to be cautiously screened and assessed with no reference to who identified the opportunity. The assessment of the business opportunity is seen as an essential element in the entrepreneurial process since it enables entrepreneurs to determine the precise product or service has the income required evaluated to the resources required. The evaluation phase of the new venture development mainly encompasses the determination of the lengths of the business opportunity, the actual and apparent value of the opportunity, the threats and income, whether it fits with the entrepreneurs goals and skills, and the uniqueness of the opportunity as compared to other opportunities. In conclusion, the most new business opportunity must align with the entrepreneur’s personal skills and goals. It is predominantly significant that the entrepreneur to be able to outline the time required and attempt that is required top ensure the success of the business. Even though many entrepreneurs experience the longing to develop along with the business venture, characteristically it does not materialize. Developing a Business Plan Development of the business plan is another important phase in the development of anew business venture. The business plan will go along way in exploiting the distinct business opportunity. The development of a business plan consumes a lot of time and an entrepreneur with no business plan is at risk since the business has a greater possibility of failing. Thus an effective business plan is required so as to determine the required resources, ways of acquiring the resources and productively managing the resultant venture. Determine the Resources Required The other phase of development of a new venture is the establishment of the amount of resources required. This may at times be in terms of money, machines and personnel. Also the dangers that are connected with inadequate or inappropriate resources ought to also be determined. Acquisition of all necessary resources in time will be a major benefit the next phase of the entrepreneurial process. A greater amount of funds is required as the business venture develops thus necessitating more ownership to be surrendered. Manage the Enterprise After acquisition of the resources that are required for the business there ought to be a well planned business plan which will be implemented using that business plan. The outfitted challenge that may affect the expanding business also needs to be examined. This will mainly encompass the implementation of a good management style which will be a major determinant to the success of the venture. New venture ought to have control system; this will ensure that any issues are noted early and dealt with at the right time. Challenges associated with new ventures It has been observed that about half of most new business ventures endure thus there is a pressing necessity to be aware of the challenges that are likely to face new business ventures. This part will mainly focus on five factors that are likely to face these new business ventures they include aspects such as finance, management, marketing, technology and fiscal motivation. Finance Finance plays an important role in the establishment of a new venture. A clear and concise consideration of business finance, access to resources and association with lenders are vital to the success of most businesses. The major problems affecting most new ventures are the cash flow, having inadequate sales amount, money and cost of goods and services. Management Most entrepreneurs are faced with management problems since most of them are not trained in some aspects related to the management of a business. Most new entrepreneurs experience a diverse range of problems when starting business venture. One of the major problems that are likely to face entrepreneurs in a new venture is the retention of skillful and trained employees. Most new ventures are not able to pay high salaries to their employees, a new venture may initially have qualified and skilled employees but may not be able to retain them and these qualified employees may opt to work in organizations with a better pay as compared to their current employers. Thus depriving the new business venture an opportunity to retain the skilled and qualified employees. Another major problem facing a new venture is the setting and gauging of performance. This seems to be major problem facing most new business ventures. Employee turnover is also a major problem facing an organization. Another problem that faces new business ventures is the time management and right job placement and it remains a significant problem that is facing new ventures and entrepreneurs. Marketing Every new business venture comes along with a well explored marketing plan. Most new ventures and businesses find marketing and advertising their products and services to their prospective consumers hard. There exist certain common problems associated with marketing that is to market their products to their prospective customer one of which is the how advertising will be carried out, actual selling of the products and the capability to price the products and services accordingly. For venture to bear fruits, tehr ought to be an effective marketing campaign aid at turning the target customers into buying customers. Also coupled with the marketing campaign is the budget. An individual ought to the identify advertisements to be used, the cost associated with the advertisement and the number o targeted customers. Therefore entrepreneurs should choose a marketing strategy that offers more as compared to the others. Thus a poor marketing strategy is one of the major problems facing new ventures. Technology Technology in another major factor that is affecting the development of new business ventures in the current business world. With the recent advancements in technology most business finds it hard to incorporate technology in their business. Thus technology is posing a new challenge to most new business ventures. Entrepreneurs ought to have skills in technology related aspect so as to achieve much in terms of profits Wrong fiscal motivation Certain aspects ought to be considered when developing a new venture. For example prior to the establishment of the venture, one ought to consider the consumers been targeted, the business location and best product. A large number of entrepreneurs face common problems one of them been taking huge amounts of risks and in most aces for the wrong reason. Most entrepreneurs are motivated to start up a new venture by the wrong reasons such as been bored by their current jobs or the urge to have more free time. Entrepreneurs should be motivated by the right factors such us the urge to make money when starting up new ventures though at times this is not achieved in the first few months after the establishment of the new business venture (Locke & Latham, 1980). Conclusion Entrepreneurs should therefore aim ate identifying unique opportunities that exist in that market prior to deciding on the business to venture into. Entrepreneurs also need to have a clear and concise knowledge of the process involved in the development of a new venture. It is also vital to take into consideration the problems that are likely to face new ventures (Blau & Schoenherr, 1971). Bibliography Blau, P., & Schoenherr, R. 1971. The Structure of Organizations. New York: Basic Books. Burns, T., & Stalker, B. M. 1961. The Management of Innovation. London: Tavistock. Gartner, W., 1985. A conceptual framework of describing the phenomenon of a new venture creation. Academy of management review, 10: 696-706. Gartner, w., Bird, B., & Starr, J 1992. Acting as if: Differentiating entrepreneurial from organizational behavior. Entrepreneurship theory and practice, 16(3): 13-32. Locke, E & Latham, G 1980. The theory of goal setting and task performance. Eaglewood cliffs, NJ: prentice hall. Timmons, J., 1999. New Venture Creation. Entrepreneurship for the 21st Century. 5th Edition. Boston, Irwin McGraw-Hill. Read More