Enterprise and Entrepreneurial Management: Ideas and Objectives - Essay Example

Enterprise and Entrepreneurial Management Part One Idea Generation This refers to the process of thinking about solutions to the problems we encounter or looking into ways of improving our lifestyles. It involves the process of examining the environment and determining which is the best and most cost effective way of solving the issues at hand (Goble, 2004). This process ensures that an entrepreneur closely examines his surroundings to determine the best incentives to invest his money. In order for an entrepreneur to develop a good idea he or she should consider all the current elements in the market before making his decision. This will enable him to avoid ventures that can easily result in losses for his business. The entrepreneur has to examine his environment closely to first identify the sector he wants to deal in, the needs of his target customers, the demand and supply of the goods and the available sources of raw materials (Fischer, 2007). He or she also has to assess the labor and material costs he is likely to incur in the event that he pursues that venture. The business location is also an important factor to consider when deciding on the business you intend to put up. This will ensure that the business premises is accessible and the customers can also easily acquire the products they desire from the business (Parker, 2004). The business plan states the idea that an entrepreneur has interests in pursuing along with his financial abilities to finance his ventures. It also specifies his ability to obtain funds from financial institutions along with the business location and his sources of raw materials (Goble, 2004). Strategic Objectives They are the long term achievements that the business hopes to attain. Their formulation enables a business to form plans that will cost effectively enable the business to achieve the set goals (Fischer, 2007) Their formulation is the role of the senior management of the organization and is done for the purpose of achieving the company’s goals. The formulation of this strategies entails considerations of issues such as the scope of operations, the business financial status and their target customers. An analysis of the target market has to be done as it enables the determination of the prices for their goods. The formation of the strategy involves the consideration of the social, fiscal and political forces affecting a business environment (Parker, 2004). The proper analysis of the forces affecting the business environment will enable the management to come up with objectives that are realistic and achievable. The business plan includes the strategic objectives that an entrepreneur targets to achieve in the long run period of his operations. This plan indicates the most appropriate methods the business will use for the purpose of meeting their target (landoli and Lanstorm, 2007). Market Analysis and Research The making of a market examination enables the management to determine the factors affecting the market and their impacts on the market. The carrying out of a research involves the use of scientific and objective methods to determine how improvements on a product can be made (Fischer, 2007). This enables the business to satisfy their customer’s needs more effectively. The analysis of a market is done to determine the supply and demand of the final goods and services and the supply and demand of the raw materials to apply in the production process. This analysis assists in evaluating the availability and costs of the labor and raw materials that the business requires in the production process. The analysis of the market conditions involves the examination of issues such as the ease of accessibility to the business by their customers, an analysis of their competitors and the market share that the business intends to hold (Parker, 2004). The business plan incorporates information on the businesses market share, an analysis of their target market and the prices they will charge in contrast to their competitors. It also includes information about the sales, promotion and allotment strategies that the business intends to use. The various types of research methodologies that the business will use is also an inclusion of this section. The process of research enables a business to come up with products that satisfy their customers’ needs more efficiently. This activity also aims at achieving new methods and procedures that aid the business in cutting the costs they incur in the production of their products. The carrying out of efficient research by a business improves its chances of creating superior goods while cutting costs. This can assist the business in building a competitive advantage in the market (landoli and Lanstorm, 2007). Understanding the Competition This refers to the ability of an entrepreneur to understand the styles and strategies that the competitors are using to counter their products. It involves understanding the competitors behavior with the aim of establishing a competitive advantage over them (landoli and Lanstorm, 2007). An entrepreneur is able to determine the strategies he or she will apply to counter the competition and still remain profitable. The entrepreneur is able to attain information on alternative sources of raw materials with varying costs by evaluating their competitors suppliers. A study of the production patterns the competitors use will enable an entrepreneur to determine the different levels he should provide to the market at different times. The business plan gives details of the production, pricing, promotion and advertising methods a business will use in countering the competition (Fischer, 2007). The analysis of the competition that a business faces helps the entrepreneur in analyzing the performance of his products against his competitor’s. The availability of this information enables an entrepreneur to avoid making losses that occur due to excessive costs. Cash Flow The cash flow statement is a financial book of accounts that records the total amount of income and expenses that a business entity generates over a certain period. This books assist an entrepreneur in determining the liquidity level of his business (Parker, 2004). They display the variable and constant costs the business incurs along with the income it generates in the time period. The book of account is vital for running of the business venture because it enables an entrepreneur to efficiently determine and control the costs he incurs. A business plan incorporates information on the cash the business expects to make and spend on different activities in their schedule. This information is vital since it enables the business to account for the use of the resources at their disposal. This action can lead to the elimination of unnecessary costs and eventually assist an entrepreneur in increasing his gains (landoli and Lanstorm, 2007). Profit and Loss Forecast This financial book shows the gross profits or losses and the net profits or losses that a business makes over a certain period. It is essential in informing the entrepreneur whether his business is making profits or losses (Fischer, 2007). A forecast of the profits and losses a business expects to make over a certain period of time is available in the business plan. The forecast helps the entrepreneur in predicting the outcomes of a business venture over a period of time. It also enables an entrepreneur to make appropriate decisions regarding the use of the resources at their disposal. This forecast helps in evaluating the performance of a business and determine whether it is making profits or losses. Balance Sheet Projections This financial book presents the value of the business’ assets, liabilities and finances as at a certain point of time. For the performance of a business to indicate success, the balance sheet has to be equal on both the debit and credit accounts (landoli and Lanstorm, 2007). The business plan has a balance sheet for the purpose of indicating the value of the assets and liabilities the business has at a certain period of time. It helps an entrepreneur to ascertain the business worth and performances after a trading period. Competitive Strategy This are the processes and policies that an entrepreneur adopts to counter the competition in the market. The formulation of efficient strategies enables an entrepreneur to achieve success in his business endeavors. The strategies in use can help an entrepreneur build a competitive advantage over his competitors (landoli and Lanstorm, 2007). The business plan incorporates the strategies that an entrepreneur uses in selling his products, giving promotions and advertising his products. This plan also includes the pricing strategies the entrepreneur uses in contrast to his competitors strategies. The employment of appropriate strategies in different environments enables the business to overcome many obstacles in the market. The level of success that an entrepreneur enjoys depends on how efficient the strategies he applies are against his competitors. Scenario Analysis It is a description of the activities and the environment the business the business will be operating in. It describes the production process that a business indulges in when processing a final product from its raw form. It gives the details of the labor and material costs that the business will incur (Parker, 2004). An understanding of the scenario a business will operate in enables an entrepreneur to make appropriate decisions when he encounters problems in his ventures. A business plan incorporates information about the business environment along with the activities and costs it will incur in producing goods. It also gives the details on the availability and affordance of labor and raw materials. The availability of this information enables an entrepreneur to overcome any uncertain events the business encounters. For example, the lack of raw materials in one area will enable him to acquire these service from other areas. Part Two Entrepreneurial Characteristics These are the behaviors and attitudes that an entrepreneur displays while performing his everyday business ventures. A successful entrepreneur displays certain behaviors and attitudes that assist him in achieving success in his endeavors (Parker, 2004). The want to achieve and the active participation in the business ventures by an entrepreneur enables him to achieve success. The entrepreneurs ability to solve problems in the business and take risks helps him to achieve success. An entrepreneur should also operate independently and always be optimistic about the results of his ventures to ensure his success (landoli and Lanstorm, 2007). Time consciousness is an important attitude that enables an entrepreneur to avoid wasting time. This results in his business incurring additional costs. The display of creativity and self confidence by an entrepreneur while performing his duties enables him to easily achieve success in his endeavors. The want to achieve drives an entrepreneur into striving to achieve the objectives that he sets for his business. This involves working hard, making appropriate decisions and keeping to his budget. The decisions that an entrepreneur makes enable him to make profits or losses in the course of his business ventures. He or she has to sacrifice his time and resources for the business activities to run according to plan (landoli and Lanstorm, 2007). As a business person I have a great desire of achieving the targets that I have set. A successful entrepreneur has to actively participate in the running of his business to ensure any hindrances on his activities are dealt with appropriately. The actions that an entrepreneur takes can assist a business in evading losses. As an entrepreneur I am quick in taking decisions that will benefit me and my ventures. The entrepreneur has to possess problem solving abilities along with the confidence of indulging in risky but profitable business activities to achieve success. This attitudes enable him to boost the chances of increasing his returns. An increase in returns also results from his problem solving abilities. A business operates smoothly when the entrepreneur effectively addresses its problems. As a business person I have these abilities and they assist me to carry out my ventures profitably. An entrepreneur should be able to take initiatives that will bring growth to his business (Landstorm, 2008). He should also ensure that activities resulting in time wastage and eventual loss to a business are dealt with accordingly. The above attitudes and behaviors are vital for an entrepreneur who wishes to introduce new products to the market (Landstorm, 2008). The adoption of new methods of doing things in a business also requires many of these attitudes and behaviors for them to be successful. I do possess most of the above qualities and also happen to be optimistic of my results when doing business. The environment has many barriers and hindrances to achieving success in business. The ability of an entrepreneur to make independent decisions enables him to overcome most of these difficulties. The creation of unique products enables an entrepreneur to develop a competitive advantage over his competitors (Wiklund, 2006). This eventually leads to a growth in the business returns and its success. I possess the ability of doing things independently to suit my needs and objectives in business. A person who displays the above traits eventually ends up becoming a successful entrepreneur (Fischer, 2007). Theories In Relation To the Personality Factors of an Entrepreneur Entrepreneurship theories suggest that an entrepreneur gets the influences on his personality from the surroundings of his business ventures. The economic, psychological and sociological theories explain these concepts more clearly. The economic theory suggests that entrepreneurs get their influence from the economic situations they experience. According to Cotillion, the act of taking risks by entrepreneurs enables the creation of wealth. The theory is very important for businesses that are beginning since success is only achievable in enabling environments. The presence of favorable conditions in an economy makes a business person to become self confident, inventive and optimistic of his ventures (Chell and Haworth, 2001). The psychological theory implies that entrepreneurs have special attributes, morals and outlooks that motivate them when making vital decisions in business. This theory explains how the personal characteristics of an individual affect his entrepreneual activities. McClelland claims that the want to obtain is the major determinant of an entrepreneurs activities (Wiklund, 2006). The urge of making profits makes an entrepreneur to handle risks and bear all responsibility for his actions. The theory consists of three ideologies which are the motivation to get, the locus of power along with the issue of the self actualization of the businessman. The motivation to get comes from the need to acquire, control and associate. The want to acquire leads one to success whereas the locus of power impacts the habits of an entrepreneur. This is either due to his own behavior or factors beyond his control. Abraham Maslow suggests that self actualization does not depend on other people but on an individual’s needs. This theory states that entrepreneurs adopt personalities that their environments favor. It also states that the interaction of these three factors plays a vital role in the determination of an entrepreneurs behavior. The urgency of the needs to an individual determines the success level he hopes to acquire (Maslow, 2005). The theory on sociology states that customs, beliefs and the communal structures in organizations determine an entrepreneur’s performance. According to Kent, an economist, a person becomes a successful entrepreneur as a result of associating with successful businessmen. According to him, this link provides an entrepreneur with the communal support that he requires in his business ventures (Krueger, 2002). The self efficacy and effectuation theory describes a successful entrepreneur as one who is efficient and effective in performing his ventures. It states that these type of entrepreneurs end up becoming successful due to their efforts. This happens to be true since to obtain success in a business an entrepreneur requires to add extra effort in his endeavors. The theory suggests that an entrepreneur has to consistently monitor the activities in his business to ensure they bring returns. Self efficacy is the belief that an entrepreneur can do certain things in certain ways and still encounter success in his endeavors. Our personal views of how self efficient we can be affects the way we socialize in a community. This implies that the attitudes the entrepreneur has concerning the methods he uses will greatly influence his success or failures in business. The issue of self efficacy affects the behavior, motivation, patterns of thinking along with the responses a person gives to others (Parker, 2004). The factors that affect the issue of self efficacy are the use of expert experience, modeling from the previous experiences others did encounter and persuasion from one’s peers (Kurakto and Hodgetts, 2008). Another issue that affects self efficiency is the effect of psychological forces. The examples of such forces includes issues such as stress, aches, fear and exhaustion. This forces can greatly reduce the efficiency of an entrepreneur. Conclusion The attendance of seminars and the research done on entrepreneurship enables me to understand better the need for adopting the characteristics of an entrepreneur who is successful. These characteristics enhance the way a person conducts himself when doing business. The skills that I acquire enable me to become a better entrepreneur since they give insight into the process of achieving success in business. Appendix 1.0 Executive Summary This paper offers a critical analysis of the components of the business plan along with a critique of how these elements affect an entrepreneur. It offers definitions of the elements of the business plan and assesses the issues of idea generation, strategic objectives along with the market analysis and research activities. It also looks at the issues of comprehending the competitors in a certain market along with the financial projections the business makes. The report analyzes the effects and impacts of the financial statements on the performance of the business. The competitive schemes and the scenario analysis are the focus of the final part of part one of the paper. This report also describes the theories that are applicable in shaping an entrepreneurs personality into those of a successful one. The conclusion part of the paper describes my summary of the impacts the learning process has had on me as an upcoming entrepreneur. 2.0 Technical Information The report does focus on the critical evaluation of the elements of the business plan, offers definitions and entrepreneur traits that drive successful entrepreneurs. It gives an highlight into the theories affecting their behaviors. 3.0 Intellectual Property This report has put to use different materials from different author through the use of citations. The authors whose materials have been put to use in writing the paper get all the due recognition in the references list. 4.0 Business Opportunity The report explains how entrepreneurs can improve their chances of success in business. It also explains how the growth of the entrepreneurs personality occurs. 5.0 Market Description The report analyzes the conditions and forces that affect the market for a business. It also describes best conditions for achieving success in the business. 6.0 Competition An analysis of the impacts of competition and the concerns of the business plan in regard it is given. 7.0 Financial Projections This report analyzes the financial forecasts made in a business plan along with the interpretations indicating the direction of growth the business is taking. References Abraham, M 2005. On Dominance, Self-Esteem and Self-Actualization, Maurice Bassett, Paris. Chell, E, and Haworth, J 1991. The Entrepreneurship Personality. Concepts, Cases and Categories, Routledge, New York. Fischer, M 2007. The Impact of Personal and Environmental Factors on Entrepreneurship, GRIN Verlag, Stuttgart. Goble, F 2004. The Third Force. The Psychology of Abraham Maslow, Maurice Basset, New York. Krueger, N 2002. Entrepreneurship Critical Perspectives on Business and Management, Taylor and Francis, New York. Kuragto, D, and Hodgetts, D 2008. Entrepreneurship. Theory, Process and Practice, Cengage Learning, London. Landoli, L, and Landstorm, H 2007. Entrepreneurship, Competitiveness and Local Development. Frontiers in European Entrepreneurship Research, Edward Elgar Publishing, New York. Landstorm, H 2008. Entrepreneurship, Sustainable Growth and Performance. Frontiers in European Entrepreneurship Research, Edward Elgar Publishing, New York. Parker, S 2004. The Economics of Self-Employment and Entrepreneurship, Cambridge University press, London. Wiklund, J 2006. Entrepreneurship. Frameworks and Empirical Investigation from Forthcoming Leaders of European Research, Emerald Group Publishing, Brussels. Read More