Key Factors that Underpin a Successful Entrepreneurial Team Engaged in Setting up a Business - Coursework Example

?Critically discuss the key factors that underpin a successful entrepreneurial team engaged in setting up a business. Draw from both, your experience, relevant theories and literature from the Integrative Business Planning Module Contents Contents 2 Introduction 3 Entrepreneurial team and the key factors responsible for their success 7 Reference 10 11 Introduction Entrepreneurship can be expressed as a process of becoming an entrepreneur. An entrepreneur is a person who undertakes a new venture. Starting a new business is not an easy work. It includes many activities like arranging the finance, planning the whole business, arrangement of raw materials, furniture, machinery and other various items which are to be used in the business. He is also responsible to bring innovation in the business from time to time. All the entrepreneurial activities have to be planned in an effective way for succeeding in the venture. The business plans can range from plans for operation to strategic planning and financial planning. All these plans must be integrated in such a way so that the enterprise could achieve the desired objectives. The various departments should be linked with each other so that a proper coordination can be achieved among them. Nowadays enterprise is not only established by one person but a group of people who have common interest and work for the business. They work as a team in pursuit of the organisational goal. They are the entrepreneurial team. For the success of such type of entrepreneurial teams, every team member must have the qualities of the entrepreneur. They must have the vision, the capacity to arrange the resources and must act as per the plan. Apart from the basic entrepreneurial skills, there are other factors which lead the entrepreneurial teams to success. The success of an entrepreneur or the entrepreneurial team depends upon the success of the enterprise. To understand the activities of the entrepreneur or entrepreneurial team who is engaged in the setting up a new business, it is important to understand the basic process of setting a new business. The first step of starting any type of business is to draw the business plan. This involves the description and nature of the business, the marketing techniques to be used, analysing the competition in the chosen field, analysing the operational work, analysing the human resource requirement, checking the financial viability of the business etc. This is a primary and very important step of setting up a business. Once the business plan is ready the next step is to analyse and take the assistance required for stating the business. The third step is to choose the location of the business. This step requires the analysis of the format of the business and the competitors. The location should be such which could be easily accessible to the customers and the suppli8ers, close to the competitors etc. The next step is to finance the business. This includes arranging the fund for the operations of the venture. Once the finance for the venture is arranged, the next step is to determine the structure of the business. In this step the suitable legal structure is determined according to the government rules and taxation policies and also the viability of the business. The next step is to get the business registered as per the rules and regulations of the state. Once the business is registered, the next step is to register the organisation for the local taxes and the other taxes. After all types of registrations is done one applies for the required licences and permits for operating the business. This is a legal requirement without which an enterprise cannot function in the market. The last step for setting up a new business is to hire the required and efficient human resource needed for the enterprise (US Small Business Administration, No Date). Entrepreneurial process In the previous section the basic steps required for setting up a new business has been discussed. The entrepreneurial process is also to an extent similar to those steps. The entrepreneurial process is the process of establishing a new enterprise. The entrepreneur plays a very important role in developing an enterprise. He or she must have the skills of grabbing the opportunities and fighting back all the odds. The entrepreneurial process has four different steps. They are identifying and evaluating the opportunities, developing a business plan, determining the resources available and required for the enterprise and managing the enterprise. The first step that is identifying the opportunity is a very important and vital step for an entrepreneur. This step result into the determination of the type of business that will be successful in the given situation and has the potential to grow in the future. Once the opportunity is identified then it is evaluated as per the market conditions, growth potentiality, legal requirement etc. The second step is to develop a business plan. The third step is to determine the various resources which are required by the proposed enterprise. This should be done very carefully as underestimation or overestimation of the resources will result in loss for the enterprise. The uncertainty associated with the availability of the resources in future should be considered while determining the resources. Once the enterprise is formed the next step is to manage it efficiently (Hisrich, Peters and Shepherd, 2005, p.1). The entrepreneurial process cannot be successful without relational, territorial and progression phases. While developing an enterprise it is important to analyse the relationship between the enterprise and the environment in which it will operate. The environment consists of both external and internal factors like the political scenario, economic condition of the state, social norms, technological aspects, legal requirements and the stakeholders of the enterprise. The relation of all these environmental factors should be analysed carefully as they can influence the operation of the business. The territorial relations should also be analysed in order to assess the feasibility of the business. The territorial aspect is analysed in order to assess the long term viability and possibility of the extent of innovations which can be brought in the enterprise (Bramanti, 1998, p.5). Qualities of an entrepreneur To be successful entrepreneur, the entrepreneurs must be goal oriented, risk taker, opportunity explorer, must have perseverance, independent, flexible, confident, motivator, stress taker etc (Kumar, et al, 2008, p.3). But, among the all qualities, the most important quality the entrepreneur must be ‘envisioned’; must be ‘enabler’ and ‘enactor’. Envisioning can be defined as the process of imagining and visualising the future. This characteristic helps the entrepreneur to have an idea of the future demand of the product and the market in which the entrepreneur is planning to operate. Envisioning sometime stimulate the process of idea generation of any business. This is one of the important qualities to become a successful entrepreneur. Envision helps the entrepreneur to have an idea of the unseen future and prepare the backup plan ready for dealing any contingencies in future. Envisioners can successfully imagining the inventions and innovations that can be brought into the business in future. Envisioners are creative and imaginative. Enabler is the person who has the ability to arrange and manage all the required recourses and activities in order to implement the ideas generated. The envision deals with the inception of the idea and the enabler deals with the expansion of that idea into reality. Enablers are the organisers who interpret the vision. The enabling characteristic of the entrepreneur helps the entrepreneur to realise the vision in reality. It is the link between the vision and the action. Without this characteristic the entrepreneur will never be able to realise the imagined goal successfully in reality. Enacting refer to the implementing the vision into reality. The successful entrepreneur must have the quality of an enabler. Visioning any excellent idea without implementing in reality would not help the entrepreneur to achieve success. The successful entrepreneur must be able to use the acquired resources to implement the imagined idea into reality. To be successful in entrepreneurship the entrepreneurs must have all the three Es, that is envision, enabling and enacting which will help the organisation to succeed and grow in future (Sykes, 2008, p.18). Entrepreneurial team and the key factors responsible for their success To understand the reasons behind the success of the entrepreneurial team it is important to understand the concept of entrepreneurial team. Entrepreneurial team can be defined as a team of two or more persons having financial and other interests in the venture and also are committed to the success and future of the venture. They work coordinating each other for achieving the goal of the enterprise. They are accountable to both to the team and to the enterprise. Often the success of the enterprise depends upon the efficiency and the effectiveness of the entrepreneurial team. The effectiveness of the entrepreneurial team can be hampered if wrong type of politics exist in the team which could de motivate the team members. Therefore for the success of the entrepreneurial team, the team must have motivational politics and the communication among them must be effective (Schjoedt, No Date, p.2). In a successful entrepreneurial team each member has power. The members of the team are focussed on their goals, and have effective communication among them. The members are motivated and have confidence and trust in them and in the team as a whole. The team members respect each other and have synergy. The team members must possess high energy and patience with mutual understanding and trust on each other. The leadership must be clear so as the rules. The team members must have perseverance and should learn from the past failure (Kirby, No Date, p.190). The success of the entrepreneurial team also depends upon the successful implementation of the integrative business plan. The integrative business plan refers to the integration of the operation and financial plans considering the market situation. In the present time the enterprise can be successful if the strategic plans are properly and effectively integrated with the financial and the operating plans. The strategic, operating and financial plans should be properly coordinated so that the entrepreneurial objective can be achieved. The entrepreneurial team must be successful in coordinating the plans. As discussed earlier, that the entrepreneur must have the 3Es to be successful in business. But to succeed the entrepreneurial process must have the 3Ps they are progression, possibility and process. These three Ps are related to the 3Es quality of the entrepreneur. This can be explained with the help of the diagram given below: (Source: Sykes, 2008, p.10) In the above diagram the relation of the entrepreneurial process with the characteristics of the entrepreneur. The vision of the entrepreneur gives rise to the identification of the possibilities and opportunities of the business. The identification of the possibilities of the various benefit and opportunities motivates the entrepreneur to start the process of realising the vision into reality. This enables the entrepreneur to arrange the resources needed for the objective. The vision, motivation and the acquired resources makes the entrepreneur act to make progress to implement the vision in reality (Sykes, 2008, p.10). Thus to succeed, the entrepreneurial teams must relate the entrepreneurial process with the basic characteristic of the entrepreneurs. In the above sections the various qualities of the entrepreneur and the concept of the entrepreneurial teams have been discussed. Therefore it can be said that the effective formation of the entrepreneurial teams is one of the main reasons for the success of the entrepreneurial teams. Effective communication and coordination is also one of the major reasons of the entrepreneurial team’s success. The members must have trust and respect among each other so that they rise of conflict within the group can be avoided. Another major reason for the success of the entrepreneurial team’s success is relating the entrepreneurs’ quality with that of the process of the enterprise. This enable the enterprise not only succeed but also grow in future. The third and the very important factor responsible for the success of the entrepreneurial teams are the effective coordination and integration of the operational plans with the financial and strategic plans. This helps the teams to coordinate the various activities effectively and also attain success in the entrepreneurial activities. In short the integrated business planning is very important for the success of every enterprise. To conclude the success of the entrepreneurial group depend on the various activities ranging from formation of the group to implementation of the goals. Reference Bramanti, A. (1998). From Space to Territory Relational Development and Territorial Competitiveness. [Pdf]. Available at: http://publish.yorku.ca/~ishd/LEDCD.SP/Links%20BQ/48_From.space.to.territory.bramanti.pdf. [Accessed on August 30, 2011]. Hisrich, R. D. Peters, M. P. and Shepherd, D. A. (2005). The Entrepreneurial Process. [Pdf]. Available at: http://www.sbaer.uca.edu/publications/entrepreneurship/pdf/01.pdf. [Accessed on August 30, 2011]. Kirby, D. (No Date). Entrepreneurship, Team Building and Conflict Resolution. [Pdf]. Available at: http://highered.mcgraw-hill.com/sites/dl/free/0077098587/58746/ch08.pdf. [Accessed on August 30, 2011]. Kumar, S. A. Et al. (2008). Entrepreneurship Development. India: New Age International. Schjoedt, L. (No Date). Entrepreneurial Teams: Definition and Determinants. [Pdf]. Available at: http://usasbe.org/knowledge/proceedings/proceedingsDocs/USASBE2002proceedings-14.pdf. [Accessed on August 30, 2011]. Sykes, N. (2008). Envisioning, Enabling and Enacting Metamorphosing the Enterprise P3 Diagnostic. [Pdf]. Available at: http://www2.warwick.ac.uk/fac/soc/wbs/research/csme/research/working_papers/wp92.pdf. [Accessed on August 30, 2011]. US Small Business Administration. (No Date). Starting a Business. [Online]. Available at: http://www.sba.gov/content/follow-these-steps-starting-business. [Accessed on August 30, 2011]. Read More