The Hardships of Entrepreneurship - Essay Example

Entrepreneurship (Authors Name) (Institutional Affiliation) 1. Introduction Entrepreneurship is defined as the willingness and ability to structure, organize and manage a profit oriented business regardless of the risks associated with the venture. The purpose of the report The purpose of this report is to be able to understand the elements of establishing and maintaining a good entrepreneurship. This report aims at achieving this by examining an interview of the journey of the life of a self-made Saudi entrepreneur Hasan Alqahtani. The report assesses the life of Hasan from his education life to the start of his hotel business, his wedding and event service business and eventually when he opened a football academy. The entrepreneur: Hasan Alqahtani was born in Riyadhi, 4th December 1973 to a very influential family that is respected for its role in the unification of modern Saudi Arabia with the founder King Abdulaziz. Hasan has been married since 1996 to Professor Muneerah Alsulaim and they have been blessed by four daughters. Professor Muneerah comes from an influential company known for their well-cultivated and educational background The following is a summary of events that shaped Hasan’s career as a successful entrepreneur. 1990: He dined with his brother in a traditional Italian restaurant called ‘vika roma’ and admired the dream of franchising the restaurant in Saudi Arabia. He realized that there is no Italian restaurant in Riyadh and Italian delicacies are only served in five star hotels. He started his restaurants in this year. 1999: He established Floora wedding and event services that had a guaranteed customer base due to its success advertising in marketing. This business targeted the wealthy people of Riyadh. 2006: He was appointed as the general manager of the marketing department at King Fahad Hospital for National Guard Hasan over the years mediated and organized many events that saw him earn a lot of money through commissions and also earn great recognition 2005: Managed the Footballer Yousif Althunayan testimonial committee. He was the first negotiator with the Spanish football team ‘Valencia’ to attend the friendly match to honor the retired player. 2008: Organized a testimonial match between Al-Hilal football team and Manchester United for footballer Sami Al-Jaber. 2009: Organized the Riyadh international championship that was friendly matches between 12 teams. He earned $3 million worth of commissions. 2010: He organized a match between Alhilal and Inter Milan in honor of middle fielder Nawaf Altumyat. 2012: He organized a farewell match between Alhilal and Juventus to honor goal keeper Mohammed Aldaye. In the same year he was head of the negotiation team with the Spanish football league which resulted in 3 years agreement with the Saudi authority of pro-league to establish a football academy 2. The opportunity Shane (2003) defined opportunities in entrepreneurial as those situations where new products and services are introduced in the markets with the aim of making profit. Hasan had many opportunities throughout his life. His first opportunity was the influential nature of his family. Hasan’s father Shikh Abdullah Algahtani had been a mayor of Riyadh city, the capital city of Saudi Arabia for 12 years and one of King Abdullah first consultants. This was advantageous to Hasan as it facilitated the removal of governmental barriers and legislations. Hasan was also fortunate enough to attend Al-tarbiah private school that was popular amongst sons of princes, government officials and government officials. This meant that Hasan had well-established relationships with influential people. Hasan also had the opportunity to travel to Italy where, through his brothers’ influence and a loan from his father he was able to secure a deal to start his hotel business in Riyadh. Lack of local Italian restaurants in Riyadh also enabled Hasan hotel business to be a success. Hasan married Muneerah who came from a well-established family. Hasan wedding and event service business thrived through the help of her wife. She was at that time lecturing at Prince Noorah University and was also an interior designer during her free time. Hasan was also had well-established relationships with the royal family which introduced him to wealthy people who were his target audience. Hasan’s long love and history for football is also considered as an opportunity that enabled him to set up a football academy. In 1998 was appointed Vice President of the youth footballers in Al-hilal football club, later in 2005 he was appointed a board member of the same team. In the same year he managed Yousif Althunayan and through this he was able to build relationships with the Spanish football team Valencia. His influence enabled him to convince Manchester United to play a friendly game against Al-hilal. Hasan was able to make up to $5 million from commissions he earned from Al-hilal through adverts, tickets and sponsors. In 2012 he participated in organizing award ceremonies for the international statistics in Barcelona where he build relationships with Spanish league officials which resulted in a three year deal with the Saudi authority to establish a football academy. 3. Analysis of how the entrepreneur “Hasan” became successful 4.1 Burns start-up influences Paul Burns (2001) developed a framework that evaluates the relationship of the factors that make a successful entrepreneur. He suggested that personal traits are not the only factors that make up a good entrepreneur they are also influenced by their history and life experiences. These factors include antecedent influences such as family, ethnic group work and education. All these factors influence the entrepreneur’s decision to start up a business. Opportunistic Entrepreneurs have the ability to see and exploit opportunities that are not evident to every person (Halcombe 2003). Hasan is an opportunistic individual. He took opportunity of lack of prestigious hotels in Saudi Arabia in 1990 when he introduced a chain of Italian restaurants throughout the cities in Saudi Arabia. He also identified the lack of professional wedding and events companies that carted for the needs of the wealthy people in Saudi Arabia and thus in 1999 he started the Floora wedding and events services company. Hasan also used his connections to earn more than $5 million through commissions from the football team Al-hilal by inviting top football clubs like Manchester United and Valencia to play with the local team. In 2012 he successfully saw the signing of a three year agreement between Spanish football league and Saudi authorities to establish a football academy. Innovative Entrepreneurs have the ability to come up with new and better solutions that address social and environmental problems (George 2011). Hasan’s innovative capabilities are seen by his ability to identify an opportunity and creating a successful business from it. He was also able to earn and benefit from high commissions from his local team without having to invest capital or Equity. Self-confident Self-confidence can be defined as the ability of an entrepreneur to have self-belief and to also believe in his/her employees to achieve the vision of the business (Bessant 2011). Hasan at only 17 years old had the confidence to start up a chain of restaurants in his country. He approached the Management ‘Vika Roma’ at a very tender age and was able to secure a deal to franchise the hotel in Saudi Arabia. He also had the confidence to ask his father for a $100,000 loan to startup his business. Motivation Motivation is an integral factor in entrepreneurship. Motivation is the driving force to success (Murphy 2009). Hasan is a highly motivated individual and has a high sense of achievement. This can be attributed by the great success of his businesses and his ability to turn his home football team into a success. He was also able to see the signing of a deal that saw the formation of a football academy Antecedent influences Burns (2003) suggested that as much as an entrepreneur has the necessary character traits, the success of an entrepreneur is also influenced by environmental factors such as family, ethnic group and education. These antecedent factors greatly affect the values, behaviors and even the attitudes of the entrepreneur. Education Hatala (2005) stated that there is a positive relationship between education and entrepreneurship. Education significantly reduces the barriers that are associated with starting up an entrepreneurship. Growing up Hasan went to Al-tarbiah private school where he studied from the reception until he finished school. In 1991 he Joined King Khalid military college and graduated in 1994 with a Bachelors degree in military science and Management. He was assigned to work in the health affairs of the Saudi National Guard in the Medicine field. In 1999 he undertook a medical course in the United States for a year. Hasan’s good educational background helped him in his success of his business. Family Stewart (2003) suggested that the family is an important social capital to an entrepreneur. Family is considered to be a strong tie in terms of commitment, tactic knowledge, reliability and the willingness to sacrifice their time and money to support the entrepreneur. Hasan has been married since 1996 to a supportive wife Professor Muneerah Alsulaim and they have been blessed by four daughters. Professor Muneerah comes from an influential company known for their well-cultivated and educational background. She has received various patents and published papers in various International Universities. 4.2 The Timmons Model Jeffery Timmons (2004) developed the Timmons as a doctorate thesis in Harvard University as a guide to entrepreneurs to help them increase their success in starting and developing their business The Timmons model states that there are three factors that are important to starting a successful business. They include opportunities, teams and available resources. This model is centered at the entrepreneur as the founder of the company. The entrepreneur identifies the opportunity that is available and shapes it into an opportunity of a high venture. The entrepreneur sets up a team and mobilizes the resources that are necessary to capitalize the on the opportunity. Hasan saw the opportunity to start a business was not ventured into by any other entrepreneur. He then developed a plan to capitalize on this opportunity. His first approach was to use his brothers’ good relations with the Italian officials to begin the talks of opening a franchise in Riyadh. He then went ahead to acquire resources by requesting for a $100,000 loan from his father. Hasan’s well-established relationships with the wealthy community and his fathers’ current status as the mayor of Riyadh removed the various government restrictions and enabled his business to thrive. This model shows how Hasan the founder, identified the opportunity, created a plan and used his time and influence to derive success for his business. 3.3 Opportunity business model Jones (2003) stated that small businesses experience when trying to seek competitive advantage. The reason for this lack of poorly managed activities due to lack of proper business models. Jones thus implies the importance of business models. A business model is used to define the way in which a business organizes and delivers value in the economic, social and cultural setting with the aim of creating value. In this section we will analyze the business model for RPM sports management. The opportunity business model is divided into two parts which are dimensions and drivers. Dimensions define the different components of the business and are used in analyzing the business. They include the propositions, the people, the place, the process and the profit. RPM Core value propositions to the customers and are expressed as the company’s mission statement. RPM’s proposition is to empower and enhance the world through sport. They believe that sport can be a catalyst of good and positive change. RPM is located in Riyadh, the capital city of Saudi Arabia. The company targets individuals who are interested in developing a sport, playing it or reaching someone through it. RPM has a large client base that includes associations, leagues and federations, Brands, Clubs, The fans and players. The company offers various services that are profitable, this services include consultancy. They offer consultants to brands and companies looking to build and enhance their brand properties through its close knit connections. the various services offered under consultancy include strategic initiatives, sponsorships, event management and hospitality and financial support and funding. The company also offers development services, they offer empower brands and companies looking to build and enhance their brand property. RPM also offers commercial management in media rights, naming rights, licensing, merchandising, media production and distribution, ticketing and endorsements. The drivers of a company are described as underlying imperatives that drive an opportunity. They include societal drivers, commercial drivers, legal drivers and technological drivers. RPM is mainly influenced by societal drivers which include social, political and environmental factors. This is because the company is people centered and also such factors as football matches depend on weather conditions. 3.4 The role of luck Scharfstein (2009) defined luck as the unexpected component of performance. Through careful assessment of Hasan’s life we can say that luck also played a role in his success as an entrepreneur. For example, Hasan was lucky enough to have the opportunity to travel frequently out of the country to watch football matches. It is due to this that he was able to compare his country to Italy and thus see the opportunity to start Italian hotels in the country. Hasan was relatively young at time he started his businesses, he was only 17 years old. Thus we can say that he was lucky to have an affluent father who easily loaned him $100,000 to start his business. Hasan was also lucky to have interacted with the royal family who might have supported his endeavors. 4. Personal entrepreneurial capability analysis Hasan’s overall GET2 result score of 80% suggests that he has strengths in the overall enterprising characteristics. Hasan can also be successful in employment. This is evident by the fact that he was able to earn high commissions from his employment. Hasan also portrays a high need for achievements. This is evident by the success of the various ventures he has started that is the Floora weeding and events services, his chain of Italian restaurants and the football academy. Hasan however displays a high rate of autonomy meaning that he prefers to work alone. Hasan also displays a high creative tendency. He is imaginative, inventive and interested in new ideas. This is portrayed by his ability to invite top football teams to play with his home team and his ability to earn commissions without capital investment. Hasan’s test however implies that he has low self confidence. SWOT Analysis Strengths Highly Motivated High creative tendency Weaknesses Low self confidence Need for autonomy Opportunities Well-established relationships can help in business growth Affluent family can provide for capital and necessary resources Threats Autonomous means he prefers to be in leadership positions where he is in control 5.4 Recommendations After careful examination of the report, it is important for an individual who is pursuing entrepreneurship to be open-minded, creative and innovative. The individual should also have a high affiliation to achievement. I therefore recommend that individuals be engaged in activities that enhance their decision making processes and team work such as engaging in various sporting activities and participating in debates. 5.5 References Shane, S. (2003). A general theory of entrepreneurship: The individual-opportunity nexus. Northampton, MA: Edward Elgar Publishing, Inc. Hatala, J.P. (2005). Identifying barriers to self-employment: The development and validation of the barriers to entrepreneurship success tool. Performance Improvement Quarterly, 18(4), 50–70 Stewart, A. (2003). Help one another, use one another: Toward an anthropology of Family business. Entrepreneurship Theory and practice Scott Andrew Shane (2003). A General Theory of Entrepreneurship: the Individual-Opportunity Nexus. Edward Elgar Publishing Halcombe, R. (2003). The origins of entrepreneurial opportunities, Review of Australian Economics, 16: 25-43. Gompers, Paul, Anna Kovner, Josh Lerner, and David Scharfstein, (2009), Performance Persistence in Entrepreneurship, Journal of Financial Economics forthcoming Timmons, J., Zacharakis, A., and Spinelli, S. (2004). Business plans that work: A guide for small business. McGraw-Hill. George,G and Bock AJ. (2011). The business model in practice and its implications for entrepreneurship research. Entrepreneurship Theory and Practice, Joseph A. Schumpeter (2012). Capitalism, Socialism and Democracy. Routledge Bessant, J. & Tid, J. (2011). Innovation and entrepreneurship. West Sussex: John Wiley & Sons Ltd. Murphy, Jim (2009), Inner Excellence, McGraw-Hill, Jones, O. (2003). Competitive advantage in SMEs: towards a conceptual framework. In Jones, O. and Tilley, F. (Eds.), Competitive Advantage in SMEs: Organising for Innovation and Change: 15–33. Chichester: John Wiley and Sons. Read More