The Entrepreneurial Process
The process of creating and managing a new enterprise is called the entrepreneurial process. It has four distinct phases starting from identifying and evaluating the opportunity to manage the enterprise. The phases are discussed below in detail.
1. identify and Evaluate the Opportunity
Opportunity is the favorable condition in the environment. Jn the first step of the entrepreneurial process, the entrepreneur should identify the likely opportunity for the new venture, Opportunity may be identified through inputs from customers, business associates, channel members, and technical people, It may also arise from the development of the general environment such as political, economic, technological, legal, and global environmental changes.
Once the opportunity is identified through varied sources, it should be evaluated. There are some considerations for the evaluation of the opportunity.
- first, the opportunity should cover a significant market size that is profitable with growth potentialities.
- The real as well as the perceived value of the opportunity should be high.
- The opportunity should be suitable in terms of risk and return.
- It should match the personal skills and goals of the entrepreneur.
- Finally, the opportunity should match the competitive environment.
2. Develop Business Plan
The business plan is the description of the future direction of the business. It integrates functional plans such as marketing, production, human resource, and finance. It also provides a detailed description of the business as well as the industry. Once the opportunity is identified and evaluated, the next step of the entrepreneurial process involves the development of the business plan. It is necessary to exploit the identified opportunity. It is also useful to determine the resource requirement, obtaining those resources, and managing the venture successfully.
3. Determine and Obtain the Resource Requirement
As mentioned earlier, entrepreneurship is directed towards the exploitation of opportunity. For this, resources are vital. The determination of resource requirements involves the assessment of the current resources of the enterprise. After assessment of the current resources, the resources required for exploitation of particular opportunities should be determined. The gap between the existing resources and required resources should clearly be identified.
After the resource requirement is identified, the next step of the entrepreneurial process is to acquire the needed resources. The entrepreneur tries to give up little control as much as possible while acquiring resources. In other words, he strives to maintain as large ownership as possible.
4. Manage the Enterprise
Once the resources are obtained, the next and final step of the entrepreneurial process is to manage the enterprise. It involves the implementation of the business plan. in this stage, the management system and organizational structures are clearly spelled out. The critical success factors are determined. A strong control mechanism is established to manage the enterprise successfully.