How Entrepreneurial Management Should Start - Essay Example

?Portfolio (Part A) Introduction A business plan is where an enterprise or venture should start. Just like any types of materials for planning activity, a business plan is a formal statement of every detailed aspect of a business of an enterprise or venture that is about to start or be revised (Cross and Richey, 1998). Thus, a business plan must substantially include idea generation, strategic objectives, market analysis and research, understanding the competition, understanding of financial numbers and projections, and competitive strategy and scenario analysis. All of these are considered important components of a business plan in order to cover everything and be categorized accordingly. It is important to consider financial, legal, marketing and other related business considerations in order to keep an enterprise organised in every aspect of it to survive the competition. Competition is everywhere and there are various ways made by business organisations that try to make them a cut above any other. It is in this reason that there is a need to completely set everything prepared and ready before an enterprise can keep going. Hence, a business plan. Idea Generation As the familiar adage puts it, ‘Knowledge is power’. Everything that comes to be created must start with an idea and all generated ideas can be combined together to form a substantial knowledge on certain things, issues or activities. In business activities, there is a need to consolidate all the necessaries and this would include basic data, the business details, financial data, financial reports, supporting documents and more (Cross and Richey, 1998). Therefore, understanding the basic components of each of these will lead to the generation of better ideas. Placing it in the context of business plan making, all of these mentioned basic components can be substantially included in the outline. Therefore, one of the basic approaches in order to generate idea for a business plan is to consider making an outline that will cover all the necessaries to generate ideas. In doing so, this will give the firms enough ideas on where to start everything and what to be added. This would also include finding the unnecessary that needs to be eliminated from the business plan. Strategic Objectives From the idea of Porter (1980) on competitive strategy in reaching competitive advantage, everything about this whole process starts with an objective. The objective itself encompasses everything about formulating strategies. Strategic objectives are very important in business plan since these would determine the right actions to take in order for the business to keep going, competitively above any other. The objective simply starts with knowing what the business owner desires most which might be in line with profit, stature, satisfaction, security and many more (Cross and Richey, 1998). In knowing these desires, the right objectives are obtained and it is through knowing them one may be able to strategically formulate objectives that will ensure competitive advantage. It is impossible therefore to formulate strategic objectives if the business owners do not have complete idea on what they really want to achieve. It is therefore clear that the strategic objectives in any business plan must be able to integrate all the desires and wants of the business owners in order to carefully select the right target to be set for the venture. Market Analysis and Research Here is another important consideration in any business plan. Market analysis and research are widely discussed aspects in every business. This is the reason why there is a growing body of knowledge in marketing particularly on its detailed aspects such as market analysis and research. A business plan therefore must be able to have market analysis and research considering that the whole business process includes marketing activities and part of these is to understand the interaction between the enterprise and the market in general (Kotler et al., 1999; Boone and Kurtz, 2006). The market is a broad area since it covers a vast field of concepts such as customers, competitors, industry, offering, promotions and more. These fields require focus and attention knowing that they can substantially provide better ways to continue business operation. These areas cannot just be covered in an instant that is why there are growing number of activities concerning market analysis and research among sophisticated business organisations. After all, sources of supply, sales programs, special projects, pricing, advertising, promotion, publicity, public relations are just some of marketing considerations that a firm needs to consider in a business plan (Cross and Richey, 1998). Understanding the Competition As stated earlier, competition takes place everywhere and it is getting intense as ever (Garrison and Noreen, 2000). This is the reason why there is a need to understand the competition and this must be essentially addressed in any business plan. In order to understand competition, it can be illustrated for instance as a way for every business organisation to achieve certain market share. There are different lines of offerings and each of them is not just provided by a single firm. There might be many firms trying to offer the same offerings for all. In this case, the role has become survival of the fittest. Thus, in order to survive most firms have completely understood that it pays to enrich their understanding about competition. Thus, there is a need to scrutinize in detail the nature and locations of competitors and implementation of strength-weakness-opportunity-threat analysis in comparison with the recent competition (Cross and Richey, 1998). The very advantage of doing this is that the firm is given with an opportunity to understand further its current capacity to compete. Understanding of Financial Numbers and Projections Financial aspect is always an important consideration in a business that operates to achieve certain goals in the future. Projections are necessary and this would help liberate the company from future risks. Financial projection therefore is making sense prior to creating a business that is viewed to work as planned. A business plan is never complete without the financial considerations (Cross and Richey, 1998). There are significant and important portions for financial aspects in the business plan that take into account business operations with respect to financial matters in the future. What makes this especially important is the fact that it involves financial management. Since it is about financial management then there is involvement of forecasting and planning, investment and financing decisions, coordination and control and consideration of capital markets (Brigham, 1992). For instance, part of control is to understand cash flow and its projection. It is important to do so because this would determine how the business could survive with a well-managed financial status quo. This can encompass any form of management that deals with planning, directing, motivating and controlling such as in managerial accounting for instance (Garrison and Noreen, 2000). Competitive Strategy Analysis As discussed earlier, there is a need to find out the right strategic objectives in order to formulate competitive strategies. Competitive strategies are put into plan which will become the basis of a certain firm’s future competitive moves. For Porter (1980), there are three generic competitive strategies that need to be considered in order to outperform other firms in the same industry. These involved overall cost leadership, differentiation and focus. By this, there is a need to involve in a business plan to consider the fact that an enterprise needs to evaluate its status in either for new entrant or existing but needs some revision. In either way, there is a great consideration to understand the needed competitive strategy. Overall cost leadership is a good strategy but such demands more than just the basic and a certain firm will learn more about it as the business continues to work in actual. In the same way, differentiation provides no assurance for it looks into details at customer loyalty. Finally, focus is a very substantial strategy but it depends entirely on how the firm’s nature performs in the actual setting. Thus, competitive strategy analysis is a broad concept and covering it in the business plan requires essential consideration of competitive advantage. Scenario Analysis Aside from all other considerations in the business plan, scenario analysis is something like seeing everything works into detail. It is covered in here what are the best practices that need to be included and what are those actions that are need to be eliminated when things are not going right. This is just like seeing a movie and after all editing the needed parts which require so. This takes into account all the essential elements needed. Summary (170) Business plan is a formal statement of an enterprise on how exactly it would operate in the long run. Business plan requires all the essential elements needed by an enterprise in order to survive. This means that business plan serves as a guide that will help the company see its probable performance in the future. Since business plan constitutes plans for the days to come, the best part of it is actually trying to keep in touch with the present condition while creating the right path for the future. Business plan does not require anything else outside the bound of business. What it needs to consider are all the essential elements that are just found right within the realm of business. (Part B) Introduction Entrepreneurs are known to be of different types. Entrepreneurs who are known to be innovators are imaginative when it comes to their personality type. They are known for their originality, inspiration, love and transformation. Entrepreneurs who are categorized as new designer or enabler are known for their personality type which is largely influence by intuition. Their attributes therefore are more in line with evolution, development, symbiosis and connection. Entrepreneurs who are leader type are known to be authoritative. Their personality type is known to be more enhanced with authority. Since they are enhanced with authority, they tend to give direction, manage to carry responsibility, build or create structure and definitely initiate or implement control. Those entrepreneurs who are known to be as new entrepreneurs are also known to have strong will. As a result they put too much emphasis on achievement, opportunity, risk-taking and power. Entrepreneurs who are defined animateurs are sociable and because of this, they tend to put more emphasis on informality, shared values, community and culture. Adventurer entrepreneurs on the other hand are full of vigor and energy. As a result, their greatest attributes are in line more with movement, work, health and activity. These are summarise in Table 1. Table 1. Entrepreneurship type, personality and attributes (Kirby, 2006) Entrepreneurship type Personality type Attributes Innovator Imagination Originality, inspiration, love, transformation New designer/enabler Intuition Evolution, development, symbiosis, connection Leader Authority Direction, responsibility, structure, control New entrepreneur Will Achievement, opportunity, risk-taking, power Animateur Sociability Informality, shared values, community, culture Adventurer Energy Movement, work, health, activity According to Kirby (2006) entrepreneurs are known for their risk-taking ability, need for achievement, locus of control, desire for autonomy, deviancy, creativity and opportunism, and intuition. Even though there are no exact definition about what an entrepreneur is from large range of literature, Kirby (2006) pointed out that it is important to consider various abilities and attributes of every person that engages in business activity. Risk-taking ability This has something to do with the capacity of an entrepreneur to gamble things and how willing are they to afford things in exchange for something else especially in situations when the outcome is more likely in a sort of chance or probability. Entrepreneurs who are defined as new entrepreneurs are known for their attributes especially in situation involving risks. They are most likely to take risks due to their positive beliefs that there is something positive about taking risks at certain point in time. Since they do more on risk-taking power, they are also most likely to search for more achievement in life. As a result, they tend to strike while the iron is hot. They closely evaluate opportunities because it matters a lot to them to come up with achievement. These people are also trying to achieve as much power as possible. In return, they try to seize every moment that promises achievement, opportunity and something that will pay off to whatever they invest or risk in life. Need for achievement Every entrepreneur type is trying to reach for achievement. The new entrepreneur is more likely to achieve something more due to too much value they put on achievement, power, opportunity and risk-taking. The innovator values so much on achieving something fresh and better, and at some point a cut above the other. The new designer or enabler on the other hand takes into account their intuition in order to come up with something new. Designers or enables tend to create connection in everything that is why they usually come up with development. On the other hand, entrepreneurs who are leader in nature defined achievement on how they take control of situation. These people live by their responsibility. Locus of control Different entrepreneurship type has certain level of locus of control considering that everyone has corresponding and different perceptions in life. Thus, this is one way of saying that people’s perception in life actually determines their personality. Such personality therefore is capable of telling the kind of attributes an individual may possess. Desire for autonomy This is another aspect of personality considering that everyday people are faced not only to govern others but themselves. Everyone has free will and freedom to choose what they should become in their lives. Thus, all who have developed personality have the opportunity to manage themselves. Deviancy and Creativity To desire for innovation and be different from others in approach of a certain situation is a form of deviancy. This has something to do with one’s creativity to think of something that is not found from others. This is a matter of being unique and taking the path which is less traveled or none at all has come to walk on. Opportunism and intuition Opportunism and intuition are other aspects in personality. Each of entrepreneurship type has certain level of consideration of things when it comes to creating opportunity and trying to understand things beyond what the mind can justify. Thus, these aspects of personality therefore can be used to explain why there are successful entrepreneurs and why there are not. Self-efficacy This has something to do with the belief of a person to do things as perceived. Thus, every entrepreneur that has positive outlook in life therefore has the good chance to do better in life. Effectuation Accomplishment or achievement is necessary consideration. This defines how an individual creates a substantial meaning on everything that has to be done. The theories on the personality factors of entrepreneurs Since there is no definite definition about entrepreneurs, Kirby (2006) argued that everyone can become one. This can be taken into consideration if there is substantial understanding of theories on personality (Burger, 2007; Gordon, 1999). According to Feldman (2003), there are five basic approaches in understanding personality: psychoanalytic, trait approaches, learning approaches, biological and evolutionary approaches and humanistic approaches. The psychoanalytic approach emphasizes the unconscious while trait, learning and biological and evolutionary approaches disregard both conscious and unconscious. On the other hand, the humanistic approach stresses more of the conscious than the unconscious. Thus, it is therefore important to understand personality in detail if there is enough understanding on the conscious and unconscious determinants of personality. These theories try to explain everyone’s personality prior to understanding more about the people based on their personality. Trait approaches are about trying to place labels on personality in order to fully understand more of it. Learning approaches on the other hand try to point out that humans become what they learned. Thus, it is involved in this approach some social cognitive approaches to personality. On the other hand, biological and evolutionary approaches try to question if everyone inherit their personality. The humanistic approaches try to consider that everyone is unique in this world. Thus, nobody has the same personality with the other. Based on these theories in understanding personality, there are different assumptions made and thus this resulted to different level of understanding of personality in the first place. This only proves the fact that there can be no definite definition of what an entrepreneur is considering that everyone has different personality. The only way to understand an entrepreneur as Kirby (2006) suggested is to know the behaviors that are required by people who are identified as entrepreneurs. The following are some behaviours that are required by the entrepreneurs (Kirby, 2006). Total commitment, determination and perseverance drive to achieve and grow orientation to goals and opportunities taking initiative and personal responsibility veridical awareness and a sense of humor seeking and using feedback internal locus of control tolerance of ambiquity, stress and uncertainty calculated risk-taking and risk sharing low need for status and power integrity and reliability decisiveness, urgency and patience learning from failure team-builder and hero-maker As noticed, these behaviours can be identified as integral parts of the basic attributes of different classifications of entrepreneurs. Thus, possessing some of these behaviours can be determinants of finding the entrepreneurship type of a person. Personal Evaluation As for me, I am most likely having the personality type and attributes of a new entrepreneur. I always look forward achievement in life and such is a substantive idea for me to find remarkable opportunity. I look forward for power and that in everything I do; there is a strong will to come up with necessary achievement. Thus, I am used to taking risks no matter what it takes for me just to be able to achieve the necessary which I believe is a must. Engaging in market challenges I found out that I entirely used my strong will personality and I believe it has been efficiently improved for the better. I come across with different challenges and only to find out that there is always the right time to take risk and play safe. Thus, I believe that at this moment in time, I am developing another personalities that I think would put me to the next level. References Boone, L. E., and Kurtz, D. L. (2006) Contemporary Marketing. 12th ed. USA: Thomson/South-Western. Brigham, E. F. (1992) Fundamentals of Financial Management. 6th ed. USA: Dryden/HBJ. Burger, J. M. (2007) Personality. USA: Cengage Learning. Cross, W., and Richey, A. M. (1998) Model Business Plans. USA: Prentice Hall Press. Feldman, R. S. (2000) Essentials of Understanding Psychology. 5th ed. USA: McGraw Hill. Garrison, R. H., and Noreen, E. W. (2000) Managerial Accounting. 9th ed. USA: Irwin/McGraw-Hill. Gordon, R. G. (1999) Personality. Great Britain: Routledge. Kirby, D. A. (2006) ‘Enterepreneurship education: can business schools meet the challenge?’ in A. Fayolle and H. Klandt (eds). Great Britain: Edward Elgar Publishing. Kotler, P., Armstrong, G., Saunders, J., and Wong, V. (1999) Principles of Marketing. 2nd European ed. Milan: Prentice Hall. Porter, M. E. (1980) Competitive Strategy. USA: Free Press. Read More