Key Factors That Underpin a Successful Entrepreneurial Team - Research Paper Example

? Key Factors That Underpin a Successful Entrepreneurial Team Engaged in Setting up A Business Introduction When setting up a business, several factors are taken into consideration. Although many entrepreneurs have a good business plan when setting their businesses, some key factors are not taken seriously as they are seen to be minor. It is worth noting that drafting a good business plan is one thing and implementing it is another thing. This paper focuses on key factors that entrepreneurs need to consider when setting up a business. These factors range from the mission statement of the business, contribution of entrepreneurial team, and innovative strategies employed by the business. Setting up a business plan Business planning is an integral component when setting up a business. Entrepreneurs need to focus on their business mission and vision, and critical evaluation of both internal and external forces. Based on information gathered during situation analysis, entrepreneurs should establish goals and objectives, which they intend to achieve through efficient strategies (Madura 2006). With or without a business plan, its owners have some ideas of why the business exists, who it serves, and what it offers. In this regard, entrepreneurs need to have a clear set of goals, which should be aligned with the mission and vision statements. This helps the business to determine its growth patterns. However, the business plan is not wholly a factor to consider when setting up a business. Although it reflect the opportunities, concepts, and entrepreneurial team that fit the business, it is vital to consider other issues that the business would rely on for its success. The following sections will highlight these factors, which entrepreneurs need to consider when setting up a business. Identification of potential market It is apparent that all entrepreneurs first identify the line of business they would with to engage in before any other consideration. This implies that they have to carry out a comprehensive market research in order to have a clear picture of how the product or services they wish to offer perform in the market. In their analysis, they should be in a position to locate a potential market with a clear knowledge of the perception of their potential customers and the way they respond to these products or services. In fact, it is argued that entrepreneurs should only decide to start up a business after evaluating the likelihood of getting potential customers (Madura 2006). Therefore, demand is a key factor to consider when setting up a business. Another key factor to consider is competition. It is highly likely that there could be other businesses operating in the market one is intending to set up a business in. In this regard, entrepreneurs should ensure that they have full knowledge of how those other businesses operate and their performance (Tulsian and Pandey 2008). After such deliberations, the entrepreneur should design a plan on how to maintain competitive advantage strategies that would enable them emerge and survive in a highly competitive market. One of the strategies is to evaluate the product or services they want to sell. Analysis of, how the product performs in the market is vital. A good market research should aim at identifying the customer needs, preferences, and rationale of their consumption (Fischer, 1992). After knowing what customers need, they should set up standards that go in line with the customer’s preferences. In fact, studies have indicated that businesses that offer products of high value are more successful than those that do not (Tulsian and Pandey, 2008). It is also crucial to know the kind of products that suits target population. For example, an entrepreneur intending to start a textile business should have full knowledge of the kind of cloth designs that fit each of the age groups. Nevertheless, for a product or service to thrive in a market, promotion plays an integral role in this assurance. In this regard, it is crucial that entrepreneurs select an effective promotion tool for their products or services (Tulsian and Pandey 2008). Nevertheless, this is depends on other factors that may dictate the type of promotion tool to use. For example, financial constrains may limit a new business to use an effective promotion tool. In this regard, entrepreneurs should ensure that they have adequate funds to support promotion activities. A good promotion tool would attract new, potential customers, as well as, maintain the old ones (Longenecker and Gale 2006). Although the above discussed factors are the key to any business, it is apparent that the price of the product and services offered also greatly determines the success of the business. Studies have documented that customers are rational in consumption. They tend to purchase products and services that are cheap and perceived to be of high quality. In this regard, it is vital that entrepreneurs consider offering prices that are reasonable, but competitive. A business that sets its prices high with intentions of making huge profits may end up losing customers to other businesses. Funding After identification and evaluation of the market, entrepreneurs need to assess the viability of their intended business in relation to availability of adequate funds for the business operations (Fischer, 1992). For example, if the business intends to sell products it purchases from a manufacturer, entrepreneurs need assess whether it has adequate funds to make these purchases. It is also necessary to evaluate whether according to the results obtained from market research; the entrepreneur is capable of ensuring a steady supply of products to customers. It is apparent that customers would not return to a business that does not have a steady supply of products they desire, while customers tend to return to businesses that have a steady supply of their desired products. Since the business is not all about products, entrepreneurs need to assess their financial status in regard to meeting costs of running the business (Longenecker and Gale 2006). This should be assessed on the basis of feasibility of the business to sustain its workforce and other costs of running a business. Studies have indicated that organizations that have strong workforce perform excellently. However, it is believed that for an organization to build up a strong workforce it has to offer competitive remuneration and rewards. Therefore, entrepreneurs need to ensure that they have adequate fund to pay their employees. This acts as a motivation factors that ensure that employees perform their duties effectively. In return, customers are delighted with services they receive from the business, and this entices them to return for more. In fact, researches have shown that there is a high likelihood that customers would become loyal to a business with result oriented workforce (Tulsian and Pandey 2008). Generally, this means that the business is able to experience increased sales and this translates to high profits. Licensing For a business to thrive in the market, licensing follows identification of the market and assessment of availability of funds to run the business. Licensing a business acts as an assurance to customers that the company or business they are dealing with is genuine (Fischer, 1992). In fact, studies have documented that customers have a perception that unregistered businesses deals with counterfeit products. Therefore, registering businesses is crucial as far as building customer’s trust is concerned. Besides, employees tend to feel comfortable working for registered business as this acts as a sign of legality of the business. No one would like to work in a business with the fear that the business is not legitimate and that it might deprive the employee off their wages. Commitment After setting up the business, it is crucial for business owners and the workforce to have a commitment in the business. However, commitment comes in several aspects. Firstly, it involves commitment by business owners to oversee a smooth learning of the business (Longenecker and Gale 2006). This begins with hiring of competent and proficient employees. During the recruitment and selection process, business owners need to set standards that potential employees need to meet for them to qualify to hold a position of a particular post. This is extremely important because hiring incompetent workforce can ruin the business. After having the workforce in place, it is paramount that the employer develops an action plan on how the business can be operated effectively. This is developed by a strategic plan, which among other things encompasses employees’ wellness. Employees working in a conducive environment tend to deliver in their line of duty (Kavanagh, Thite and Johnson 2012). Above all, such incentives would make employees to work as a team. Several aspects of the business are enhanced when this happens. Firstly, the team is able to mentor one another as they share ideas. Employees who work as a team are able to help one another solve a particular problem facing the business. They should be able to make decisions on issues affecting the business (Kavanagh, Thite and Johnson 2012). This should be portrayed by application of leadership qualities in the daily running of the business. Leadership qualities should be incorporated in areas like innovation and development strategies. Innovation should be endorsed by businesses that wish to grow. Building frameworks for good governance that support innovation, should be prioritised. This gives room for expanding economic opportunities (Tulsian and Pandey 2008). It’s through innovation that a business can develop. For example, a business should find it necessary to subject its workers in training programs that enhance their skills and competence. Application of technology in businesses has been cited as having a great impact on development of businesses. Therefore, entrepreneurs should also support programs that bring about technological development in their businesses. Rationale for success Studies have indicated that framework for team dynamics first involves task processes, which encompasses behavior and actions of members in relation to having a commitment to attain a common objective (Kavanagh, Thite and Johnson 2012). The other framework involves maintenance process, which articulates on maintaining the team in order to ensure it is successful. In fact, studies have argued that undermining either of the two processes or over-emphasizing on one in the expense of the other could lead to jeopardizing the well-being of the team especially in the long run. It is crucial that the team emphasize on issues like group norms and discipline. Although setting up a business may primarily involve focusing on basic necessities like licensing, funding, and identification of a potential market, entrepreneurs should also focus on the future of the business and set conditions necessary for a bright future of the business in place (Tulsian and Pandey 2008). For example, a focus on performance management should be endorsed because it is a fueling factor to what has already been started. This has both immediate and long-standing reimbursement to the business. It helps in maintaining corporate culture, which the business is laid on. Performance management involves the application of transformation leadership in influencing the workforce to achieve the set standards. For example, a manager of a business should to lead his team in delivering top results. It is argued that businesses that practices democratic management tend to thrive in a highly competitive market. This kind of management encourages employees to take part in the decision making in an organization (Tulsian and Pandey 2008). Managers should ensure that employees are well informed current situation of the business and in anything that affects their work. This way, the business is able to run smoothly as the openness created by democratic management allows for participation by all members of the group in finding solutions to issues affecting the business. Conclusion Business plan is crucial to all businesses. It reflects on the chances, ideas, and entrepreneurial team that fit the business. Entrepreneurs need to have a clear set of goals, which should be allied to the mission and vision statement. Identification of a potential market should follow. This calls for a comprehensive market research in order to have a clear picture of how the product or services they wish to offer perform in the market. They should also consider the issue of competition. This helps them have a clear picture of what to offer in the market in order to surpass their competitors. Analysis of, how the product performs in the market is vital. This should call for selection of an effective promotion tool for their products or services. Funding should also be included in the list of factors to consider. There should be adequate funds for the business operations. This should be followed by licensing the business. This acts as an assurance to customers that the company or business they are dealing with is genuine. After setting up the business, it is indispensable to have a commitment in the operations of the business. This encompasses several factors ranging from having a motivated workforce to good management of the business. Bibliography: Kavanagh, M., Thite, M. and Johnson, R., 2012. Human resource information systems: basics, applications, and future directions. Thousand Oaks, Calif.: SAGE. Fischer, E., 1992. Small Business and Entrepreneurship. Journal of Small Business and Entrepreneurship, 9. (4). Pp 50-76. Longenecker, J. G. and Gale, T., 2006. Small business management: an entrepreneurial emphasis. Mason, Ohio: Thomson/South-Western. Madura, J., 2006. Introduction to business. London: Cengage learning. Tulsian, P. C. and Pandey, V., 2008. Business organisation and management. New Delhi: Pearson Education. Read More