Nature of Entrepreneurship and Its Role in Business - Essay Example

Name Class 6349 ASSIGNMENT 2 Introduction Entrepreneurship plays a significant part in economic development. An entrepreneur profits from taking risks and uncertainty. It involves controlling and deploying the available resources in order to come up with an organisation that will grow under uncertainty. Though most people associate entrepreneurship with starting a business, it's more than that (Kuratko, 2013). The paper is a comprehensive self-help guide on how to become an entrepreneur in the 21st century. The guide is based on the nature of entrepreneurship, important elements to consider in the entrepreneurial business plan, managing rapid growth and overcoming obstacles and significant sources of information for entrepreneurs. The guide is based on the global audience. Nature of entrepreneurship and its role in business To be an entrepreneur, one has to conduct a self-evaluation. This evaluation ensures that the business idea is analyzed based on its probability to succeed (Australian Government, 2015). This ensures that one is able to foresee problems that may arise. Analysing the business idea involves looking whether there is a market for the goods or services. This is determining who the consumer, who are the competitors is and is the market sustainable. In this stage, one has to determine the products or services that will be used in the business. Ideas must be protected in order to gain a competitive advantage. Protecting ideas involves using copyrights or trade secret (Baum, Frese & Baron, 2014). An entrepreneur must ask themselves about the impact they will bring to the market. This is the stage where one is supposed to determine their financial capabilities. To become an entrepreneur, there are factors that one has to consider. These factors are the nature of the entrepreneur and define their behaviour. One has to understand that entrepreneurs vary in education, gender race, age and income levels. Despite these disparities, there are common attributes that successful entrepreneurs share. Successful entrepreneurs are creative, dedicated, determined, have passion, smart, have leadership skills and a high level of self-confidence (Baum, Frese & Baron, 2014). For one to succeed in entrepreneurship, they must be creative. Creativity can be defined as the spark that motivates one to come up with new products or services. Creativity drives innovation. To be creative, one is supposed to question, think and engage in continuous learning. It involves thinking beyond the prescribed formulas (Drucker, 2014).To become a successful entrepreneur, it requires one to be dedicated. Through dedication, one can work hard with an aim of getting the business running. Dedication is the key to motivation. This implies that one is expected to dedicate more time to the business for it to succeed. The initial idea and the planning are supported by hard work for one to succeed. Venturing into entrepreneurship requires determination to succeed. This is through being persistence even when the business is not performing well. One has to keep trying hard even when the efforts are not yielding (Hatten, 2015). This is due to the fact that entrepreneurship is not just about money. Money should be looked at as a reward while success should be the motivator (Schaper, 2012). Flexibility is about being fast to accommodate changes. When the market needs changes, one has to respond quickly. An entrepreneur should not risk losing a customer due to market changes (Schaper, 2012). Flexibility involves the ability to accommodate changing needs. The business plan drafted is supposed to be capable to accommodate these changes. This is due to the fact that business planning is an ongoing practice. As an entrepreneur, leadership is required. This is the ability to come up with rules and set the goals. Being a leader in entrepreneurship involves making sure one can follow the rules and attain the set goals. An entrepreneur is supposed to be passionate. This is what gets the entrepreneurs started and helps in maintaining them in the business. Using passion, it becomes possible to make other people believe in the idea (Baum, Frese & Baron, 2014). Though passion cannot substitute planning, it helps in making sure that the entrepreneur is focused as they come up with the plan. Another important aspect that an entrepreneur should have is self-confidence. Self-confidence comes from being able to plan. Through appropriate planning, it is possible to reduce risk and uncertainty. Also being an expertise can help a lot in boosting confidence. One has to listen without being swayed by others. Their level of confidence will determine this. Venturing into entrepreneurship involves being able to balance decisiveness with caution. An entrepreneur must be fast in seizing an opportunity without procrastinating. This should be done after carrying out all preparatory work and ensuring that risks are minimised (Schaper, 2012). The preparatory work involves evaluating the market, coming up with the product and writing a business plan. Important elements in formulating and evaluating an entrepreneurial business plan for a start-up organisation or a new project in an established organisation Successful enterprise involves organizing thoughts on a possible business venture to come up with a business plan. A good business plan should describe the business and how it intends to be carried out. Writing a business plan involves bringing an idea into reality. A business plan helps one to look deep at the idea and determine how to turn it into a business (Australian Government, 2015). The process helps in identifying the ideas that require more analysis. The need for a business plan cannot be underrated. The business plan helps the entrepreneur in determining their business position and where they want it to go. It helps one to think about future. Once a business venture starts, competitors are bound to be attracted (Hatten, 2015). A well-drafted business plan has ways of dealing with the competitors. A business plan provides a way of communicating with potential investors, employees and other stakeholders. The length of the business plan will depend on the audience. For example, writing a business plan that will be used to look for investors may be more detailed. A business plan for internal use is less detailed hence shorter. The content of a business plan matters more than its length. Making a careful consideration in all areas of the plan is vital than just looking at the length. When formulating and evaluating a business, there are important elements that one has to consider. One of the most important areas is the business description. This is the section that is expected to give an overview of the proposed business and its goals. Those reading the business plan should be able to understand the business and its roles (Australian Government, 2015). This section becomes more elaborate when a mission statement is included. Market analysis involves being able to discuss the market and expected approach to it. This element is very vital as one can analyse and determine the characteristics of the target market. The analysis gives the level of competition and ways in which one can gain a competitive advantage. At this stage, one looks at the venture as part of an industry. The industry is described in such a way that the reader can understand the market. This involves looking at the level of competition, history, and threats that may arise (Australian Government, 2015). This helps in coming up with sales forecast and influences the amount of finance required. Target customer profile is crucial to the market analysis. This involves narrowing down the number of customers and being left with those capable of buying the product. This helps in efficient focusing of one’s efforts. It involves determining why the customers will buy the product (Kuratko, 2013). The analysis of information at this stage helps in building the customer profile. The main aim is to define the potential customers as accurate as possible. This section will involve determining customer location, age, behaviour and cultural considerations (Kuratko, 2013). The information required in this area can be obtained from public sources, interviews as well as personal experience. The third element is competitor assessment. This involves carrying out a review of competitors specific to the business. Competitors, in this case, are composed of those with similar products as well as the substitutes (Kuratko, 2013). After defining the business competitors, the next step is profiling them. This involves critically analyzing the competitors and determining their strengths and weakness. At this section, one is supposed to look how the competitors fulfil the needs that you intend to satisfy (Australian Government, 2015). The analysis will help in knowing where the competitors have a competitive advantage and how to address it. The fourth element is the marketing plan. This involves product, price, distribution and promotion. Products and services section looks at what the business is going to offer to the market. The section explains how the product or service is used. This gives the entrepreneur a chance to explain the product, its features and expected benefits to consumers (Kuratko, 2013). An accurate description of the product or service is required in this section. The entrepreneur has to describe the product and how it will help the target market address their needs. Pricing should always be based on the expected product or service value, marketing objectives, competition and costs incurred. An entrepreneur is expected to take the best pricing strategy. The price selected should always lead to some profit (Kuratko, 2013). The distribution decision should be based on the best way for moving the products to the final consumer. Distribution involves determining how the product will be sold and specific channels to be used. Promotional activities in this section are supposed to focus on the target consumer segment. This involves the type of advertisement, personal selling and public relations being used. The main aim is to come with the most efficient way to target the consumers. The business plan should have plans for future (Australian Government, 2015). This includes a vision statement, set goals and main milestones for the business. Lastly, a financial plan is required. A financial plan gives details on how the entrepreneur plans to finance the venture, to cost and the financial projections. The financial plan gives an overview of the expected profit in a given timeframe. This involves the money an entrepreneur is going to contribute to the business. This section should be brief and clear to help the reader access the current business financial position (Australian Government, 2015). Financing entrepreneurship is based on the study of venture. When the venture has a high potential for growth, it is important to consider external funding. In most cases, entrepreneurship is funded through personal networks. This is due to the fact that banks may back away from new ventures. One can also look for Angel investors (Australian Government, 2015). Important elements of managing rapid growth and overcoming obstacles in an entrepreneurial environment Rapid growth us characterized by a quick increase in business sales volume, costs and people in a short period. When rapid growth occurs, it can lead to risk of business profitability and future unless it’s acted on (Hatten, 2015). At this time, good decision-making and management are required. Effective management of rapid growth is based on the ability of an entrepreneur to recognize the situation through its indicators and act on it (Kuratko, 2013). Knowing the right clients An entrepreneur is supposed to know their clients. This helps in selecting them when business opportunities are high and accepting all when there is limited business (Kuratko, 2013). This is crucial to survival in a business environment. Having a well-defined speciality An entrepreneur should have a specialty. Despite the fact that there is need to diversify business into related areas, in rapid growth specialization is required. Specialization makes the entrepreneur more efficient in carrying out their business (Kuratko, 2013). This makes it possible to serve more clients in an effective manner and avoid wasting time. Sharing routine tasks with others When there is a rapid business growth, an entrepreneur is supposed to shift more focus on strategic business areas. The routine administrative tasks should not take most of the entrepreneurs’ time. This may lead to hiring employees who will deal with non-strategic tasks (Kuratko, 2013). This involves reducing entrepreneur involvement in tasks such as bookkeeping and accounting through hiring people to help. Significant sources of information and assistance including the entrepreneurs and significant entrepreneurial events While experienced entrepreneurs mostly rely on past experiences, new entrepreneurs consult different sources of information. This involves the use of descriptive information gained from market analysis, industry reports and third party information (Arthur, Hisrich & Cabrera, 2012). The entrepreneur also seeks information from blogs, magazines, major events and opinions (Putta, 2014). There are several government services aimed at helping entrepreneurs with information. Government services can provide and entrepreneur with advice, seminars, networking events as we as workshops. In some cases, an entrepreneur can benefit from being assisted with a business coach (Putta, 2014). In most countries, there are small business workshops. Workshops help an entrepreneur to deal with issues such as planning, managing finances, staff employment and innovation among others. Attending networking events is helpful as one can expand the market share (Putta, 2014). Networking events are very important in gaining new business contacts. In Australia, there are entrepreneurship events such as Entourage (Entourage, 2015). Entourage has entrepreneurship events organized by specific dates. One can also get resources from their website. There is also global entrepreneur week which is available in different countries. The main aim of Global Entrepreneurship Week is to help emerging entrepreneurs get started with their business ideas (Arthur, Hisrich & Cabrera, 2012). The organisation participates in various events that help in bringing entrepreneurs together worldwide and offering them advice. World Business Forum uses inspirational speakers to inspire young entrepreneurs (World Business Forum, 2015). This is an event that can help an entrepreneur in facing the challenges of venturing into the business. Business mentors or coaches are very resourceful for new ventures (Kuratko, 2013). They help the entrepreneurs in gaining skills, understanding business processes. This helps an entrepreneur to grow their business. Conclusion This self-help guide for entrepreneurs has addressed vital areas which one needs to look at before venturing into entrepreneurship. To become an entrepreneur in the 21st century, one must be able to nature of entrepreneurship and the characteristics of an entrepreneur. The first step is analysing oneself and the proposed venture to determine viability. All vital elements in the business plan have to be analysed critically before venturing. This involves business summary, about your business, market analysis, about future and financial plan. To manage rapid growth an entrepreneur is expected to determine the right clients, have a speciality and share routine tasks. Entrepreneurs can get information from experience or descriptive sources. Descriptive sources involve market data; company reports among others. An entrepreneur can also use a business mentor. There are also entrepreneurship events held in different countries worldwide. References Arthur, S. J., Hisrich, R. D., & Cabrera, Á. 2012, “The importance of education in the entrepreneurial process: a world view,” Journal of Small Business and Enterprise Development, Vol.19, no.3, p.500-514. Australian Government, 2015, Business Plan Template and Guide, Viewed 12th April 2015, http://www.business.gov.au/business-topics/templaplates-and-downloads/business -pltemplate-and-guide/Pages/default.aspx Baum, J. R., Frese, M., & Baron, R. A. 2014, The psychology of entrepreneurship. Psychology Press. Drucker, P. 2014, Innovation and entrepreneurship. Routledge. Entourage, 2015, Home, Entourage.com, Viewed 12th April 2015, http://www.the-entourage.com.au/ Hatten, T. S. 2015, Small business management: Entrepreneurship and beyond. Cengage Learning. Kuratko, D. 2013, Entrepreneurship: Theory, process, and practice. Cengage Learning. Putta, S. S. 2014, “Improving Entrepreneur's Management Skills through Entrepreneurship Training,” Journal of Commerce and Management Thought, Vol.5, no.3, p. 459-474. Schaper, M. 2012, Making ecopreneurs: developing sustainable entrepreneurship. Gower Publishing, Ltd. World Business Forum, 2015, home, Viewed 12th April 2015, http://wbf.wobi.com/ Read More