Processes and Definitions of Enterprise and Entrepreneurial Management - Essay Example

?Enterprise and Entrepreneurial Management PART ONE Idea Generation The concept of idea generation refers to the process of making a suggestion abouta possible course of action in solving a problem that confronts us or others (Landstorm, 2008). In order to come up with this business idea, I have to think of products that serve as requirements in our daily lives, their demand and supplies, the market conditions, along with the costs to incur in the production, processing and distribution of these goods and services. Among the issues that one needs to consider when writing a business plan are the location of the business venture, the sources of raw materials, the costs of the raw materials along with the labor and the accessibility of the business and its products by the customers (Landstorm, 2008). The consideration of the above factors does assist an entrepreneur in achieving success in the business venture he intends to get into. A business plan includes the business idea that an entrepreneur is considering venturing into. It also describes his reasons for venturing into the business, his financial ability to invest in the venture, the location of his business and the available sources of raw materials (Parker, 2004). Strategic Objectives These are the goals that a business sets to achieve in the short and long run periods. They assist in the formation of the long-term plans in order to achieve a specific purpose for the business (Wiklund, 2006).These objectives are made by the strategic management in a business. They formulate these strategies to achieve the objectives that the business first intends to achieve (Landoli and Landstorm, 2007).When coming up with the strategic objectives for the business, the management will need to consider their scope of operations, their financial abilities, their target customers along with their levels of income. The adoption of a strategy involves the interaction of societal, intellectual, monetary, political and emotional forces (Wiklund, 2006). When formulating strategic objectives, the consideration of the above issues will greatly enable an entrepreneur to achieve success in his business endeavors. A business plan has to incorporate the objectives that the entrepreneur aims to achieve in the long run and the means of achieving them (Landoli and Landstorm, 2007). Market Analysis and Research Market analysis involves the carrying out of extensive investigations into the elements that affect the market of a certain commodity or product (Parker, 2004). The market needs to be analyzed in terms of the supply of the raw materials, the demand for the products and services and the cost and availability of the raw materials requires for business (Fischer, 2007). The market analysis can also involve the assessment of the accessibility to the business by the customers and an analysis of the target market. When a proper analysis is done on the above conditions, success is likely to come to the entrepreneurs venture. The analysis should provide direction on what are the strengths and weaknesses of the business, the growth opportunities the business has and the threats the business is likely to encounter (Parker, 2004). A business plan should include the type of customers a business will deal with, the overall market share the business intends to control, the pricing strategy to be put to use, and the sales, promotion and distribution strategies to use in the business (Parker, 2004). A statement of the research methods that a business plans to use is also on display in the business plan. Research helps in the creation of better products that assist in satisfying the customer’s needs in a more cost effective way. It also assists an entrepreneur in learning the newest methods of producing goods that are of more superior quality than those currently in use by the consumers. Research is very essential for a success to be achievable in the efforts of an entrepreneur. This is because it gives him or her greater insight into their market systems thus enabling him to build a competitive advantage over his competitors (Fischer, 2007). Understanding the Competition This involves the entrepreneur’s ability to comprehend the strategies in use by his competitors when doing business. It also involves the capability of an entrepreneur to establish a competitive advantage over his or her competitors and learn of the operation and pricing strategies they use (Fischer, 2007). The advantage that an entrepreneur gains by understanding the competition is that he is able to price his commodities so as to maximize his profits accordingly (Krueger, 2002). A business plan includes the operation and pricing strategies in use by a business and the methods of promotion and advertising that they intend to use in the future. A careful analysis of the competition by an entrepreneur enables him to comprehend further the forces in the market and how they affect business during different periods of the year. This information is vital in ensuring that success comes to the entrepreneur’s ventures as he is capable of avoiding any loss making situations (Kruger, 2002). Cash Flow This is the total amount of income and expenses that a business incurs in the execution of their routine activities over a certain period of time (Fischer, 2007). They assist in the determination of liquidity in the business at a certain point of time. The business plan includes a list of all the fixed and variable costs along with the incomes an entrepreneur expects to generate over a specific period of time (Chell and Haworth, 1991). The cash flow statement is vital for the operation of a business since it enables an entrepreneur to determine and control the expenses the business is encountering. This information can easily enable the entrepreneur to eliminate unnecessary costs that the business venture incurs. Profit and Loss Forecast The profit and loss accounts in a business plan show the total gains as credit entries and the losses as debit entries. These are done for the purpose of indicating to the entrepreneur the profits or losses he incurs in the execution of his business ventures. A business plan should show the profits and losses the business expects to make over a certain period of time (Krueger, 2002). An accurate and controllable profit and loss forecast will enable the entrepreneur to make correct decisions regarding crucial business decisions. The profits in a business are a measure of the success the business is achieving while the losses in the business are an indication of a poor performance. Balance Sheet Projections A balance sheet is a statement that describes the value of the assets, liabilities and funds that a business has at a certain period of time. A business plan incorporates a balance sheet for a specific amount of time to show the value of their assets, liabilities and funds the business owns over a specific period of time (Fischer, 2007). It aids an entrepreneur in determining the performance of the business and also enables him or her to ascertain the value of the business after a certain trading period (Chell and Haworth, 1991). Competitive Strategy A competitive strategy refers to the policies and procedures that an entrepreneur in business intends to use in order for him or her to become more successful than any of his competitors (Parker, 2004). A business plan includes the strategies that an entrepreneur intends to apply in achieving greater success than anyone in his line of business. This includes issues such as the methods of promoting and advertising their goods. The entrepreneur can also include the pricing strategies he intends to use to establish a competitive advantage over his competitors in his business plan. The competitive strategies that an entrepreneur intends to apply in the operation of his business venture can aid him in accomplishing his objectives effectively (Krueger, 2002). This is because they give him a better insight into the workings of the market forces and his competitor’s activities. The strategies than an entrepreneur adopts in fighting competition in his turf and beyond do determine the level of success a business will achieve. Scenario Analysis A scenario analysis is a description giving the details of the individual business activities that an entrepreneur expects to be dealing in. It is also a description that gives the sequence in which events develop. A business plan incorporates a scenario analysis describing the activities an entrepreneur will participate in when processing his goods from a raw state to a usable state (Kurakto and Hodgetts, 2008). The analysis describes in detail the sequence of activities a business will indulge in along with the material and labor costs to incur in their execution. An understanding of the scenarios that an entrepreneur has to pass through enables him to effectively carry out his business tasks. This eventually leads to time saving in the execution of his activities which in turn saves him from the costs that come with delays. This leads them to enjoying an increase on their returns (Fischer, 2007). PART TWO Entrepreneurial Characteristics The entrepreneurial characteristics are a set of traits in behavior and character that an entrepreneur displays in the course of carrying out his business activities. For an entrepreneur to be successful in his business ventures he ought to display several unique traits. These traits include the desire to achieve the set objectives and goals, having an orientation towards acting rather than passively participating in business activities and having the ability to solve problems that the business faces (Chell and Haworth, 1991). The other desirable characteristics that an entrepreneur needs to have are the abilities to take risks, the ability to take new initiatives in their business ventures, operating independently and always being positive of the results of their business ventures. An entrepreneur has to have the desire to achieve the objectives and goals that he has set for his business. This entails working extra hard, making decisions cautiously and sticking to the initial budgets (Krueger, 2002). The entrepreneur has to make good investment decisions that assist him in reaping the benefits he desires from his business. This is in addition to sacrificing his time and resources to ensure the business operates according to plan. As an entrepreneur, I have a desire for achieving any objectives I set to achieve in the course of performing business. For the entrepreneur to achieve a high level of success he or she has to have an orientation towards acting instead of sitting down and watching his ventures fail. An entrepreneur who takes actions will most likely save their business in the event that a loss occurs. This is because they are likely to take certain measures to prevent these occurrences. As an entrepreneur, I am quick in taking new measures whose results are not verifiable but which I believe will be beneficial to me and my business. A successful entrepreneur should also possess the ability to solve problems adequately in a business and take risks so as to boost the businesses returns. This enhances the chances of expanding the business with an increase in profits as a result of his effective problem solving abilities (Kurakto and Hodgetts, 2008). An entrepreneur should always be positive about the results of a business venture as these aids in boosting his confidence when carrying out his business ventures. The act of being time conscious, creative and self-confident assists an entrepreneur in achieving success in his business ventures. Theories in Relation to the Personality Factors of an Entrepreneur Several theories suggest that an entrepreneur’s gets influence on his personality from the environment that he carries out his business activities in. Theories such as the economic theory, the psychological theory and the sociological theory expound on these concepts more explicitly (Kurakto and Hodgetts, 2008). The economic theory puts forward the idea that an entrepreneur gets influence on his personality from the economic conditions he encounters. According to an economist known as Cotillion, entrepreneurs are risk takers who take risks for the purposes of creating wealth. This theory is vital for businesses that are starting. This is because for success to be achievable there has to be an enabling environment for the entrepreneur to carry out his activities (Krueger, 2002). A favorable economic situation will make an entrepreneur become positive, self-confident and innovative in his ventures and vice versa. The psychological theory of personality suggests that entrepreneurs have unique attributes, ethics and attitudes that drive them when making crucial business decisions. It concerns itself with expounding the issue of how personality traits influence an entrepreneur’s behavior. According to Mc Cleland, the desire for achievement is the main determinant of an entrepreneur’s behavior (Goble, 2004). The desire for achievement makes an entrepreneur take risks and personal responsibility for the results of their ventures. Finally, the sociological theory maintains that culture, beliefs and the social structures of organizations are the main determinants of an entrepreneur’s behavior. According to the economist Kent, for one to become a successful entrepreneur he has to have a relationship with other people who are successful entrepreneurs. He did suggest that this linkage provides the social support that an entrepreneur will require in the field (Parker, 2004). The theory of self-efficacy and effectuation states that for an entrepreneur to be successful he has to be efficient and effective in carrying out the activities in his business schedule. This implies that entrepreneurs who are not efficient will not find success in their endeavors. This is true since one has to put some effort in his activities while at the same time monitoring his performances to achieve success (Kurakto and Hodgetts, 2008). Conclusion After researching and attending seminars on entrepreneurship, I feel I have a better understanding of the need to adopt the characteristics of a successful entrepreneur. This is because they assist a person in making decisions and managing a business venture effectively. Appendix 1.0 Executive summary The report offers critical evaluations and definitions on various concepts in use when carrying out business. It also involves what they entail in the business plan. The definitions and applications along with the evaluation of issues such as idea generation, strategic objectives, the market analysis and research activities, understanding competition and financial numbers along with the fiscal projections are done in the introductory chapter of the report. The issues of scenario analysis and the competitive strategies have also been brought into focus along with their components, applications and impacts to the business plan. The second part of the report describes the entrepreneurial characteristics that are desirable for one to become a successful entrepreneur. The descriptions of the traits along with the theories that support an entrepreneur’s personality development come under this part. An analysis of the theories has also been done to determine their effect on a business man’s behavior. The conclusion part of the report gives details of the effects I did feel from carrying out my research on the entrepreneur traits. 1.1 Introduction The report critically evaluates the elements that form the business plan along with their definitions and reviews. The contents of the business plan are put under discussion through various subheadings. It also describes the entrepreneurial traits that are available for one to become successful in his business ventures. The report describes the entrepreneur theories that support the personality development of an individual into those of a successful entrepreneur. 1.2 Technical information This report focuses on the evaluation of the components of a business plan, their definitions and various entrepreneurial traits that affect the successful performances of an entrepreneur. 1.3 Intellectual property The achievement of the rights to the ideas in these report are as a result of using citations. These assists in showing respect towards the various authors whose materials have been put to use when writing the report. 2. Business opportunity This report gives details of how an entrepreneur can increase his chances of success in a business. It also provides details of how personality development occurs in an entrepreneur. 2.1 Market Description The report gives details of the analysis done on the business markets and the inclusions made on the issue in the business plan. It also describes the methods that a business prescribes for itself when carrying out research activities. 2.2 Competition An analysis of what brings competition to the business and what it is has been done in the report. This report highlights the contents of the business plan in relation to a business’s competitors in the market along with their market shares and locations. 2.3 Commercial strategy The report gives the definitions and implications of the strategies that a business adopts when carrying out its commercial activities. The implications of these strategies are also put under consideration in the business plan. They assist the financiers of a business venture in indentifying the strategies an entrepreneur intends to apply in marketing his or her products. 2.4 Market potential The report provides the descriptions of what should be available in the business plan as concerns the market potential for a business. The plan also stipulates the market share a business intends to control, their expectations on the returns from the business along with the turnovers. 3.0 Directors, partners and owners The report provides the stipulation that a business plan provides a list of the business director, partners and owners along with their financial contributions. The sharing of duties among the members of staff is also made as an inclusion to the business plan in case it is a partnership business or a company. 4.0 Production, Research and Development This report critically evaluates the production, research and production techniques that an entrepreneur includes in his business plan. The research methods that a firm intends to apply in the execution of their development efforts are also put into consideration when writing the business plan. 5.0 Financial projections The report identifies the definitions and implications of financial projections that are made to a business plan. These projections include issues such as cash flow forecasts and profit and loss forecasts that a business intends to make over a certain trading period. 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