Nature and Role of Entrepreneurship in Business - Essay Example

Entrepreneurship in the 21st Century Student’s Name Institution Summary This paper provides a complex discussion on the nature and roles of entrepreneurship in the 21st century. It has been noted that the process of entrepreneurship has been successfully transformed to include extensive access to information and financial assistance from both the government and public sectors. It has also been established that the nature of entrepreneurs has remained relatively the same with all experiencing and showcasing almost a similar level of skills like ability to take risks, creativity and innovative risks. The paper also ascertains the importance of business plan for any entrepreneurial based activity. Nature and Role of Entrepreneurship in Business In the earliest period, any individual with money, who was also referred as a forerunner of the capitalist, agreed to enter in an agreement with a go-between in order to sell their respective products. With this arrangement, the forerunner was deemed to be a partial risk bearer while the go-between experienced risks attributed to physical and emotional aspects of the business. In the middle ages, entrepreneurs were perceived to be actors and people who were able to manage extensive production projects. While undertaking these extensive projects, these people did not assume any given level of risks while still managing the projects with the resources availed (Harbi & Anderson, 2010). Nowadays, the activity of entrepreneurship consists of dynamic level of processess of developing incremental levels of wealth. In essence, it involves four distinctive aspects that include; the creation process, committing necessary amounts of time and efforts, assuming certain risks, enjoying rewards of being an entrepreneur; independence, personal satisfaction, as well as monetary benefits. Entrepreneurship assists businesses come up with unique production processess, and selling of distinctive products and services in order to affect high levels of profits. It is important to note that people, who initiate their businesses experiences high chances of failure that is brought about by such aspects of poor sales, intensive levels of competition, lack of start-up capital as well as managerial capacities (Harbi & Anderson, 2010). Large businesses today like Mark& Spencer and Ford were at one time very small businesses which were started by single persons or a group of people that had the entrepreneurial drive to start small and grow bigger. Thus, it means that entrepreneurship skills and capacities have always played a greater role in providing formidable platform for future success stories (Harbi & Anderson, 2010). In fact, most of the current SMEs are a product of intensive entrepreneurial capabilities. Understanding Entrepreneurial Behaviours A successful entrepreneur possesses a significant number of attributes that facilitates their respective growth and development in their areas of operations. It takes a lot of efforts and dedication to endure the process of entrepreneurship, which mainly involves generating unique ideas, processess or even products that a given market niche will adopt and buy for a long period of time (Moroz &Hindle, 2012). Such notable entrepreneurs like Bill Gates and Richard Branson of Virgin Airlines have showed that all entrepreneurs should at least share certain core attributes and skills. These attributes are discussed as below; First, entrepreneurs are expected to showcase intensive levels of teamwork techniques. In most cases, they are not good in coming up with ideas but they will take enough time to build up on an existing business idea or product specification and as a result, develop unique features that have never been witnessed before (Moroz, & Hindle, 2012). In the course of coming up with the unique ideas and products, successful entrepreneurs embark on gathering enough information from other team members in order to perfect certain areas of the ideas. The will rely on teamwork capacity to instigate their unique operations. Secondly, successful entrepreneurs will always adopt effective communication skills in order to receive and access certain levels of required information. Markedly, the 21st century entrepreneur has lots of communication platforms at their disposals that have been brought about by intensive developments in technology (Moroz & Hindle, 2012). Even in cases where entrepreneurs portray poor communication skills, they have always resorted to manual and guides positioned within the internet like electronic mails, social media platforms or even going a notch higher to outsource such an important aspect. Effective communication skills is deemed useful especially in cases where one is trying to source for external forms of resources from potential investors or venture capitalists. Most importantly, communication processess has always been applied on a wider scale to involve other relevant stakeholders. Thirdly, entrepreneurs show intensive levels of innovation capabilities. Innovation is the process that uses new aspects of knowledge, technologies in order to develop new products or in other cases seek unique ways of improving existing products themselves (Moroz & Hindle, 2012). Certainly, knowledge generation, dissemination and application are deemed necessary for innovation processess. For purposes of policy formulation, innovation is deemed to be the sole builder of long term competitiveness, growth and employment in aspects related to business initiation and operations. It is argued innovation is fairly comprehended as a process and as a process that consists of a significant number of attributes within a networked relationship (Moroz & Hindle, 2012). Entrepreneurships in the 21st century adopts aspects related to both the external and internal aspects of an idea, as well as channels to market as they seek advance their respective technological capabilities. Fourth, entrepreneurs within the current century portray lots of creativity. The level of creativity is enhanced by the current developments in technologies. Accordingly, it is noted that creativity comes before any given innovation (Slotte-Kock & Coviello, 2010). It usually emanates from past knowledge and experiences learned so that it forms a basis for formulating something unique that nobody has ever done before. Successful entrepreneurs showcase intense levels of creativity while coming up with ideas and processess because they have engaged in extensive research processess as a way of understanding aspects, which have never been done before. Fifth, it is argued that successful entrepreneurs are those that are able to undertake in any given venture without the fear for possible risks. In the early periods of entrepreneurship, the entrepreneur was only exposed to certain levels of risks that inclined towards finances because roles were differentiated between them and venture capitalist (Slotte-Kock & Coviello, 2010). However, in the 21st century entrepreneurs experience a combination of all risks so that they were exposed to financial, physical and emotional risks (Slotte-Kock & Coviello, 2010). They are even referred as successful risk-takers because they engage in ventures that other perceive to involve lots of risks hence possibility of either gaining or losing in the end. Sixth, high motivation capability is yet another aspect that successful entrepreneurs portray. They showcase lots of personal drive and ambitions, which results to a deeper desire to make a substantial level of impact (Slotte-Kock & Coviello, 2010). It is important to note that successful entrepreneurs carry on with the activity mainly because they are driven by the desire to create and accumulate substantial levels of wealth as well as social responsibility. Important Elements in Formulating and Evaluating an Entrepreneurial Business Plan for Start-Up Organisation Organisations A business plan is a fairly written document that is formulated by an entrepreneur that portrays a substantial number of internal and external elements necessary in the starting up of a given organisation. It gives a clear and concise analysis on both long and short term decision making processess. It is considered to be the fundamental road map necessary for business development (Thomas et al, 2009). By development of an effective business plan, an entrepreneur is able to establish the amount of money that will be required from both new and existing sources. The business plan is deemed important and valuable to the entrepreneur and investors since it allows for the establishment of viability of the venture within a designated market framework and, also, it serves as a crucial tool necessary for sourcing adequate finances. Since a business plan should portray all of the needs of all potential evaluators like the lenders and potential investors, aspects related to software packages as well as internet samples should be utilised at a minimal level. Considering that an entrepreneur to a start-up organisation is fully aware of who will analyse the plan, significant level of changes will be necessary. An entrepreneur will require distinctive information needs by way of conducting feasibility studies in order to establish whether there might be potential barriers to success. In this regards, the entrepreneur will be required to come up with definitive goals and objectives that avails a certain framework for the business plan (Thomas et al, 2009). One such important information lies with market informational data whereby analysis is conducted to establish the market potential for the product or service at hand. Some of the notable elements required in the formulation and evaluation of a business plan include the following; An introductory page; which is also the title page that avails a clear and concise summary of the business plan’s contents and can include; the name and addresses used for the company, the names of the entrepreneur as well as their contracts, the level of financing that is required and also, a statement of the confidentiality of the report at hand. Notwithstanding, this element formulates the basic concepts, which the entrepreneur is attempting to create and develop. Executive summary; is usually prepared upon the completion of writing the business plan. It is normally an element that covers at least three pages and usually, it depicts the fundamental points within the business plan (Thomas, Gornall, Packham, & Miller, 2009). Some of the notable aspects that are included within this element include a concise summary of the business concept, data that sustains the chances for a given venture as well as information on some of the financial results that will be achieved in the future. Environmental and industry analysis; is an external element that an entrepreneur should first execute in order to establish the different trends and alterations that happen on a national and international platform that might affect the new organisation. Some of the notable environmental factors that can be expounded intensively by the entrepreneur involve the economy, culture, technology as legal frameworks that will affect the organisations’ operations. While still conducting this analysis, the entrepreneur should conduct industry analysis, which will solely focus on specific industry trends like industry demand patterns as well as competition strategies. Description of the start-up organisation; is an element that should be formulated for the purpose of portraying the organisation’s mission and vision statements. These statements are mainly focused on describing the nature of the businesses at hand as well as what the entrepreneur will likely desire to achieve (Thomas et al, 2009). The element allows an entrepreneur to describe fully the products, locations, personnel as well as the immediate background history of the entrepreneur. Marketing plan; is an element that is used to depict the manner for which products will be distributed, priced and promoted. It is ascertained as being the crucial component of a successful start-up organisation. Organisational plan; is a business plan element that lays out the ownership structure of the start-up organisation. In case the venture is a corporation then it should involve the actual number of authorised shares, share options as well as the names and addresses of the underlying directors. Assessment Risk plan; is an element that allows an entrepreneur to indicate the potential risks attributed to the formulation of the new organisation (Thomas et al, 2009). It should also expound on what might occur in cases these risks are realised as well as the necessary strategies that should be used to prevent, minimised and respond to this occurrence. A financial plan; should be used as an element formulated to establish the level of investment needed for the new organisation and it should postulate whether the business plan is economically viable or not (Thomas, Gornall, Packham, & Miller, 2009). The entrepreneur is expected to provide a detailed summary of forecasted sales and expenses for at least three coming years. Important Elements of Managing Rapid Growth and Overcoming Obstacles in an Entrepreneurial Environment Managing Rapid Growth In general terms, rapid growth portrays a process that involves the quickest boost on the level of sales, volume; customers as well incurred expenses on a relatively shorter period of time. When these aspects take position suddenly, it can result to certain side effects that might risk the profitability as well as the future of the newly established organisation (Ylinenpaa, 2009). It is important to note that rapid growth emanates from solidity and atmosphere of the organisation in hand. The processess involved with the management of rapid growth adopts effective aspects of planning, reinforcement of certain goals as well as postulating organisational-broadened operation. During this period, decision making and the capacity to manage skills become crucial especially when it is established that the organisation is growing so fast. Following this line of reasoning, the entrepreneurs’ capacity to establish the numerous indications and to go ahead with the review process on time showcases an ability of efficient management skills. Thus, in order to manage rapid growth, they are expected to understand their immediate customers, be known for a given specialty, outsource routine duties to other professionals as well as adopt a go-the-extra-mile kind of service by referring their customers to other notable businesses (Ylinenpaa, 2009). Overcoming Obstacles in Entrepreneurial Environment Entrepreneurs will only attain success after they have devised effective ways of overcoming all forms of potential obstacles they encounter. This can be done in the following ways; First, it will be crucial for the entrepreneur to discover newer ways necessary for improving existing products or services. The discovery process is especially true whenever competitors take the initiative to copy products and services prompting entrepreneurs to overcome such issues (Ylinenpaa, 2009). Secondly, entrepreneurs are encouraged to continue seeking for other opportunities. Thus, it means that they should be constantly exploiting numerous dreams in order to improve on the existing products and services (Ylinenpaa, 2009). Notably, they can focus on recognising and improving on their immediate weaknesses as a way of transforming them into more productive new ways of attaining profits. Significant Sources of Information and Assistance Including the Entrepreneurs and Significant Entrepreneurial Events over the Last Fifty Years For the past 50 years or so, the activity of entrepreneurship has grown tenfold. There has been numerous campaigns put forward as well as seminars and workshops set up by both the private and public sector to trigger the element at all cost. In fact, in the 21st century, the aspect of entrepreneurship has been advanced to adopt the numerous online platforms where entrepreneurship skills are taught and successful entrepreneurs allowed finances to start up their respective organisations. India and Africa have been perceived as being the epicentre of numerous entrepreneurial activities (Anderson & Li, 2014). Numerous competition have been formulated to aid young entrepreneurs accomplish their dreams of owning successful companies or even introducing new products and processess in the market. The most recent entrepreneurial activity can be seen in mobile phone banking in many of African countries as well as some sections in India. Unlike in the past where information was limited to some few individuals, today technology has allowed the sharing of information to numerous people hence accelerating entrepreneurship process. Government grants are the most common of financial assistance that current entrepreneurs can enjoy. In the past, no such assistance was available. References Anderson, A & Li, J. (2014). Entrepreneurship networked collaboration: Synergetic innovation, knowledge and uncertainty. Journal of General Management, 41(1), 7-21. Anderson, A. R„ Dodd, S. D. and Jack, S. (2010), ‘Network practices and entrepreneurial growth’, Scandinavian Journal of Management, 26(2), 121-133. Frey, K., Luthje, C. and Haag, S. (2011), ‘Whom Should Firms Attract to Open Innovation platforms? The Role of Knowledge Diversity and Motivation’, Long Range Planning, 44 (5-6), 397-420. Harbi, S. E. & Anderson, A. R. (2010), ‘Institutions and the shaping of different forms of entrepreneurship’, The Journal of Socio-Economics, 39(3), 436-444. Moroz, P. W. & Hindle, K. (2012), ‘Entrepreneurship as a Process: Toward Harmonizing Multiple Perspectives’, Entrepreneurship Theory and Practice, 36(4), 781-818. Slotte-Kock, S & Coviello, N. (2010), ‘Entrepreneurship research on network processes: a review and ways forward’, Entrepreneurship Theory and Practice, 34(1), 31-57. Thomas, B., Gornall, T. B., Packham, L & Miller, G. (2009), ‘The individual inventor and the implications for innovation and entrepreneurship: A view from Wales’, Industry and Higher Education, 23(5), 391-403 Ylinenpaa, H. (2009), ‘Entrepreneurship and Innovation Systems: Towards a Development of the ERIS/IRIS Concept’, European Planning Studies, 17(8), 153-170. Read More