Nature of Entrepreneurship - Coursework Example

SELF-HELP GUIDE Name Course Tutor Date Introduction With the globalization as well as advancement in technology, the world has become a global village. In it people engage in different businesses in order to realize both personal goals and the goals of others. Entrepreneurship as a concept has drawn much attention of scholars and the society at large with efforts to develop it being unveiled as time progresses. Entrepreneurs have been seen as people who risk their investments into ventures of whatever size with the mind of making profits. The paper will evaluate the nature of entrepreneurship elucidating lucidly the behaviors of the entrepreneurs that make them unique. The paper will also discuss the essential components of an entrepreneurial business plan as well as touch on the ways in which entrepreneurs can manage the rapidly growing obstacles in the entrepreneurial environment. Lastly, the paper also covers the sources of information paying a closer look at the entrepreneurs themselves as well as past significant events that date back to fifty years. Entrepreneurship There are different definitions to the word entrepreneurship provided by various authors based on different perspectives (Chand, 2015). However, for simplicity, entrepreneurship may mean the willingness and capacity to develop, strategize, organize, and effectively manage a business venture along with the associated risks with the core agenda of making profits (Chand, 2015). Most economies are dependent on the entrepreneurship that is taking place at the global scale. There are very many types of entrepreneurs. Innovative entrepreneurs have the ability to think of new and better economic ideas of management and business organizations. Imitating entrepreneurs on the other hand follow the path already taken by the innovative lot (Chand, 2015). There is also the Fabian entrepreneur that basically leverages on developments and innovations to motivate them (Chand, 2015). The other lot is the drone entrepreneurs who are conservative and believes in the slow progress of business. Lastly, there are also social entrepreneurs that promote social innovation as well as transformation in a variety of fields where profits can be gotten (Chand, 2015). Nature of Entrepreneurship There are very many unique attributes of entrepreneurship (Bygrave & Zacharakis, 2007). First off, it is an economic activity that involves the creation, management and operation of ventures or enterprises with the core aim of making profits while at the same time creating value or wealth through equitable and maximum utilization of resources (Bygrave & Zacharakis, 2007). The entrepreneurial process is continuous despite the unbalanced business environment and has been referred to as a dynamic force in most literature (Chand, 2015). Second, entrepreneurship is directly linked to innovation. There is the continuous search of new ideas that will help create value and utilize resources to the maximum. As such, entrepreneurship compels individuals to evaluate the existing modes of operations in business and come up with better and efficient ways or systems of doing things that are adaptable. For that matter entrepreneurship can be seen as a continuous method of performance optimization in the global business world. The third nature of entrepreneurship is that it has profit potential. The chief aim of entrepreneurship as previously seen is to make profits. Profits come as compensation to the entrepreneur for the risk they have undertaken (Bygrave & Zacharakis, 2007). This removes the threat of entrepreneurship being abstract and theoretical in nature. Fourthly, entrepreneurship itself is a risk bearing activity (Bygrave & Zacharakis, 2007). The entrepreneurs are uncertain about the markets tomorrow but take a go ahead and invest. In this way entrepreneurship proves to be process where assuming risks is part of normal life. Entrepreneurship plays a significant role in business in various ways. First, it brings in innovation into the business thus making it have competitive advantage over its peers (Megginson, Byrd, & Megginson, 2006). Entrepreneurship also creates the spirit of management for the business owners so that they are able to balance between the resources and the profits (Chand, 2015). Entrepreneurship leads to the creation of enterprises that later on grow into organizations that boost the individual as well as the country’s economy (Bygrave & Zacharakis, 2007). Entrepreneurship also helps in strategizing on how to enter new markets as well as how to create value with the available resources (Megginson et al., 2006). Entrepreneurship also makes the process of decision making in challenging times such as financial crisis easy. Entrepreneurial Behavior There are intrinsic qualities that delineate entrepreneurs from other people. Firstly, entrepreneurs are basically innovation drive (Bygrave & Zacharakis, 2007). This takes place when a concept is introduced somewhere it has never been applied or when new ideas of doing things are introduced. These innovations are meant to add value to the market and offer solutions at a profit (Chand, 2015). Innovation comes handy with creativity so as to do things in a different and efficient way. Secondly, entrepreneurship means the assumption of risks this is because the entrepreneurs are not assured of what the future holds for business (Carsrud & Brannback, 2009). The willingness to assume risks allows the entrepreneurs to develop new things and match ahead in their efforts. The other entrepreneurial behavior portrayed by the entrepreneurs is the ability to research. The entrepreneurs have to go through a variety of sources even before assuming the risk so that they will have a backup plan in store (Chand, 2015). The entrepreneur will only invest in a venture after analyzing its strengths and weaknesses, testing the applicability of the ideas, supplementing the ideas with empirical findings and then choosing the best alternative that is plausible. Entrepreneurs are peopling who like working as a team (Carsrud & Brannback, 2009). The team will be those helping with decisions, funds and the processes in the business (Chand, 2015). Entrepreneurs develop management capabilities that drive the team towards the achievement of the set purpose. The entrepreneurs are also able to plan, coordinate, organize, staff, control and direct the teams they are working with for better resource utilization (Carsrud & Brannback, 2009). The entrepreneurs also overcome the resistance to changes through new robust ideas. The entrepreneurs are good communicators so that they are able to share their visions with the team for better realization of goals (Chand, 2015). Entrepreneurship also catalyzes the development of the economy through coming up with better ways of exploring resources (Carsrud & Brannback, 2009). Elements of an Entrepreneurial Business Plan The global market is very dynamic and unpredictable. Therefore, for an entrepreneur to fair on well with minimal risks they should develop a business plan. In simple terms a business plan is a roadmap for a business that outlines goals and the strategic directions to be taken in order to realize the same goals (Business.gov.au, 2015). With the advent of technology the significance of professionals in developing business plans has been outdone with. However, the professionals in writing business plans are still essential in business. The business plan is essential for securing funding from various sources. Tribby (2013) notes that prior to writing the business plan a complete research has to be conducted in and around the business so as to have insights on how the market environment looks like and strategize properly. Title Page In this section the plan should have general information about the business. This could include such things as business logo, name and overview of the plan, addresses, name of the business or company if applicable (Business.gov.au, 2015). Australian business number (ABN), or CAN for companies, revision histories and communication strategy table as well as table of contents (Business.gov.au, 2015). Executive Summary The first important component that should be covered in the business plan is the executive summary. This section gives an overview of the whole business plan and comes after the title page (Business.gov.au, 2015). Here the synopsis of the whole business plan is outlined sequentially as the facts are presented in the plan (Tribby, 2013). The statement in this section should be short and in business like language. Business Analysis This section is very vital for any business plan. This will contain the history of the business, past accomplishments, the registrations, staff, products and services and physical address of the business (Business.gov.au, 2015; Tribby, 2013). It is also here that the entrepreneur states the type of business it is. Market Analysis This is also another vital section that defines a business plan. This section will contain a lucid illustration of the knowledge of the industry the business is in (Katz & Green, 2007). the entrepreneur will be able to familiarize themselves with the market so as to know the target market and position the business effectively (Business.gov.au, 2015). This will contain information about the market the business is entering as well as the industry, the potential customer and customer segments to target, and the competitors (Tribby, 2013). This section will also go ahead to analyze and state various entry level strategies for the business to survive (Business.gov.au, 2015). Organization and Management This section will give an outline of the organizational culture of the business. Here organizational charts can be utilized so as to illustrate the hierarchy of control in the business. The section should also outline the ownership of the business that is it a partnership or sole proprietorship (Katz & Green, 2007). Additionally, this section also gives an overview of the management team and the qualification of the panel of experts that man the business or the board of directors if applicable. Marketing Strategies This is the lifeblood of any business. It creates the customers and generates sales of the business products and services (Tribby, 2013). The section should elucidate the marketing strategies that will be taken to reach the identified target markets and consumer segments (Business.gov.au, 2015). The section should include tactics, strategies and then channels that will be used for marketing success (Katz & Green, 2007; Tribby, 2013). The section could also include some of the marketing strategies that have been applied successfully by the competitors and seem to hold water for the business too. The section should also include the strategies that will be used in sales of the products or services to the customers in the market (Katz & Green, 2007). Service or Product Line This section describes the services being offered as well as the products of the business. Here the entrepreneur should explain what they are actually selling (Katz & Green, 2007; Tribby, 2013). The section also contains a peculiar selling proposition (Business.gov.au, 2015). This authentically means that the plan has to show in this section, how different the products and services are from the others and why it is a better option. The Future of the Business This is a very unique section that also holds a lot of water for the plan to roll out. Here the entrepreneur should indicate the future plans the business has in the future (Katz & Green, 2007). This section should include the vision of the business through vision and mission statement, the goals of the business and the key business milestones (Business.gov.au, 2015; Tribby, 2013). Additionally, the section should also include the action plans that are yet to be applied by the business for its success. Funding Requirements This section should expound on the amount of funding that the business will require in rolling out its plan (Katz & Green, 2007). The funding requirements should be realistic and include the worst case scenario. Financials This is the second last section of the plan. Here the entrepreneur ensures that all financial plans are well written (Tribby, 2013). This could include how the business will be funded, the costs and the financial projections (Katz & Green, 2007). The section could include the list of creditors as well as any arrangements for recovery periods, the current debtors as well as the information on the agreements on when to pay, the government funding through all local government bodies, and the expected cash flow table (Business.gov.au, 2015; Tribby, 2013). The latter includes the track of all the cash items that are incoming as well as outgoing (Business.gov.au, 2015). A good business plan is not written once (Business.gov.au, 2015). This means that as many people as possible with the knowledge of business plans should cruise through the business plan so as to eliminate the chances of it either being turned down by the investors or being rendered invalid by the management (Business.gov.au, 2015). To its worse poorly written business plan always do not auger well for the business as the business may stall along the way (Katz & Green, 2007). The plan should be revisited at least once monthly or quarterly so as to make the necessary amendments (Tribby, 2013). Managing Rapid Growth and Overcoming Obstacles in the Entrepreneurial Environment The entrepreneurial path is not always smooth; entrepreneurs have to face the rapid growth of business with ferocity in order to succeed (Hindle & Klyver, 2011). Some of the obstacles include cash flow and financial management, keeping up with the market pace, acquisition of the right systems, abrupt change, problem solving, and skills and attitude as well as some personal factors (Hindle & Klyver, 2011). Some other obstacles include government regulations, finding the right business location, finding good employees, assembling a business team, raising start-up capital, developing the vision for the business and stewardship of the business (Carsrud & Brannback, 2009). The entrepreneurs should overcome these barriers by using information as the tool at hand. The entrepreneur should develop technical, managerial, and entrepreneurial skills through attending seminars and vocational training sessions (Megginson et al., 2006). The entrepreneurs should also capitalize on their passion so as to overcome the obstacles. In some instances the entrepreneurs are forced to have mentors who are successful entrepreneurs (Carsrud & Brannback, 2009). These mentors will offer solutions when there is problem. The entrepreneurs should also plan ahead so that when opportunities present themselves they are utilized to the maximum (Mitra, 2012). When the entrepreneur has lost hope franchising or outsourcing are the best ways to overcome hurdles in the business. The entrepreneurs also develop new strategies and priorities so as to strengthen their problem solving base (Hindle & Klyver, 2011). As the business grows to overwhelming levels, the entrepreneurs should delegate the tasks in the business so that no task goes unhandled (Carsrud & Brannback, 2009). To cope up with change as an obstacle, the entrepreneurs usually update the information on the business plan (Mitra, 2012). Last but not least, the entrepreneurs develop a set of skills that are necessary to welcome growth so that they effectively manage all the factors associated with growth (Mitra, 2012). Sources of Information for Entrepreneurs There is an added advantage for the contemporary entrepreneurs in regard to sourcing information. The internet presents a rich source of information for the entrepreneurs in that they are able to get the trends in the market even in the past years dating from when the internet became global (Fuduric, 2008). There are designated business sites that provide technical information for entrepreneurs in the field of entrepreneurship (Hindle & Klyver, 2011). The other useful source is the various events that are organized either for policy making or knowledge sharing (Fuduric, 2008). Through attending such seminars the entrepreneur is able to get information of the past and the future changes that they could comply with (Fuduric, 2008). A rich source of past information about entrepreneurs lies in print media; this includes books, magazines, periodicals, journals and other more prints that are used for the purpose of disseminating such information. The good thing with print media is that it can be traced back in history (Fuduric, 2008). This means that an entrepreneur intending to innovate further an idea that was presented years back can read trough the documents and get an insight that could be beneficial even when drawing the plan. Additionally, successful entrepreneurs also form a rich source of information either for decision making or idea generation (Fuduric, 2008). The entrepreneurs themselves could also generate ideas through brainstorming (Fuduric, 2008). This gives the entrepreneurs the chance of analyzing the market trends so as to arrive to a better conclusion. Conclusion Entrepreneurship is a very vital component in the contemporary business. It backs up the economy as well as business as can be seen in the paper. As can be seen in the paper there are various attributes that contribute to entrepreneurship these include risk assumption, innovation, and economic development among others. Prospects are that when an entrepreneur writes down a business plan, they are able to evade the problems that would otherwise stall the whole business. Various methods exist that the entrepreneurs could use to manage change and avoid obstacles that come their way in rolling out the venture. Lastly, there are various sources of information for the entrepreneurs including the entrepreneurs themselves when generating ideas or making decisions. Bibliography Business.gov.au. (2015). Finances section - Business plan | business.gov.au. Retrieved from http://www.business.gov.au/business-topics/business-planning/writing-a-business-plan/how-to-write-a-business-plan/Pages/finances-section-of-plan.aspx Bygrave, W. D., & Zacharakis, A. (2007). Entrepreneurship. Princeton, NJ: Recording for the Blind & Dyslexic. Carsrud, A. L., & Brannback, M. E. (2009). Understanding the Entrepreneurial Mind. Dordrecht: Springer. Chand, S. (2015). Entrepreneurship: Characteristics,Importance, Types, and Functions of Entrepreneurship. Retrieved from http://www.yourarticlelibrary.com/entrepreneur/entrepreneurship-characteristicsimportance-types-and-functions-of-entrepreneurship/5228/ Fuduric, N. (2008). The Sources of Entrepreneurial Opportunities: perspectives on Individuals and Institutions. Retrieved from http://vbn.aau.dk/files/16063252/the_sources_of_entrepreneurial.pdf Hindle, K., & Klyver, K. (2011). Handbook of research on new venture creation. Cheltenham, Glos: Edward Elgar. Katz, J. A., & Green, R. P. (2007). Entrepreneurial small business. Boston: McGraw-Hill/Irwin. Megginson, L. C., Byrd, M. J., & Megginson, W. L. (2006). Small business management: An entrepreneur's guidebook. Boston, MA: McGraw-Hill/Irwin. Mitra, J. (2012). Entrepreneurship, innovation and regional development: An introduction. Abingdon, Oxon: Routledge. Tribby, M. (2013, July 23). The Eight Key Elements of a Successful Business Plan and How to Make Them Work for You | MaryEllen Tribby. Retrieved from http://www.huffingtonpost.com/maryellen-tribby/the-eight-key-elements-of_b_3623800.html Read More