Academic Research Into Entrepreneurship

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Extensive business plans were often aimed at traditional lenders, who wanted to be sure that no stone was left unturned. Chances are that in today’s economy, many of the old stones will disappear and be replaced by new ones by the time a conventional business plan is finished. I was never a fan of the business plan treatise. Usually clients should make  business plans that are concise and range about 20 pages. Supplementary information, such as product circulars and marketing materials, can be included in the appendix, but the narrative part of the plan should be a maximum of 20 pages.

The object is not to unearth every conceivable detail but to think through your business model. Few plans are read Financing2in their entirety by potential investors, and the new economy,furthermore, requires an even more concise way of formulating a business model. This new format, the e-Plan, is designed to help all the users of the business plan, which includes the entrepreneur as well as potential investors and employees. It is streamlined both for speed of digestion and ease of use. I consider the e-Plan to be more of a compass than a map. It is designed to guide you in the right direction but it is flexible enough to accommodate shifts and changes in the marketplace. As these changes occur, the e-Plan can be used to produce a corresponding shift in strategy.”

To overcome the finance hurdle and attract the start-up funding you require, try circulating your e-Plan to these funding sources:

  1. Is it feasible for you to fund it yourself?Business Plan
  2. Talk to your friends and family.
  3. Evaluate whether bank financing would be possible.
  4. Use several credit cards.
  5. The Small Business Agency or other government agencies.
  6. Venture capitalists.
  7. Investment bankers.
  8. Venture financing incubators.
  9. Angel investors.
  10. Private placements.
  11. Commercial credit from suppliers.
  12.  Initial public offerings – possibly using something like a Regulation or Small Company Offering Registration.

Most new business builders have personalities and talents which match the fluid challenges and circumstances of the start-up environment. For them, running a mature business is a little too sedate and predictable. Thus, for these types of entrepreneurs, the e-Plan helps them plan their own exit strategies.

 The key qualities which will contribute towards the successful execution of your e-Plan will include:

  1. Perseverance – the ability to stay the course and keep working despite temporary setbacks and short-term failures along the way.
  2. Vision – seeing new and original ways to harness new technology to create greater value for customers.
  3. Expertise – acquiring the knowledge which allows you to completely master your chosen market niche.
  4. Courage – the willpower and strength of mind to move forward boldly even when all the necessary pieces have not yet come together.
  5. Effectiveness – concentrating on doing the right things in a timely, efficient manner.
  6. Planning – establishing a direction for the business to move and then following through consistently on the plan.
  7. Balance – maintaining a sense of perspective and spending time on those activities which replenish mental, physical and spiritual reserves of energy.
  8. Confidence – believing that you will ultimately succeed as a result of all the things you’re doing correctly.

 Your solution will generally have three elements:

1. Product – What product or service will you offer?

You’ll have a product or service that meets a particular need which exists in the marketplace and is not currently being met. Taking into account all other competitive offerings, the product or service you provide will directly address the problem you’ve identified.

2. Customer – Which customers are you planning on serving?

You’ll identify specifically which customers you will serve, and whether you’re targeting the consumer or business marketplaces. If you’re planning on serving consumers, you should be able to segment them by demographic, geographic, psychographic or behavioral factors. Alternatively, if you’re targeting business customers, you should segment them by whatever characteristics makes sense and are appropriate.

3. Value-added role – How will you add value for customers?

In addition to specifying exactly what you’ll bring to the table to add value for customers, you also need to mention your main point of differentiation. The most value will be created if you have a unique selling proposition.

As an entrepreneur, it’s your responsibility to get your business noticed; which means you’ve got to toot your own horn.

You need to let others know that you exist and that you are an expert source of information about

your industry. Start by making sure you know everything you can about your business, product and industry. Contact experts in the field and ask them how they became experts. Talk to as many groups as possible. Volunteer to talk to key organizations, service clubs and business groups free of charge.

So far it has been assumed that an individual’s decision to become an entrepreneur is based solely upon the expected reward. This implies either that the individual perceives no risk in becoming an entrepreneur or that he is indifferent to risk. The only other possibility is that becoming an entrepreneur is neither more nor less risky than undertaking manual work. None of these conditions is likely to be satisfied in practice. Even a person with entrepreneurial ability cannot guarantee that his judgment will always turn out completely successfully.

Perhaps the greatest risk to an individual in becoming an entrepreneur, however, is uncertainty about whether he has the ability or not. An individual with ability is exposed to a much lower probability of loss than is one without it. As noted earlier, entrepreneurial ability is notoriously difficult to screen for; certainly, introspection is an unreliable guide. It is possible that some entrepreneurs may specialize in screening other entrepreneurs for ability, in which case an entrepreneur may be able to reduce his own uncertainty by undergoing screening by others. However, although the entrepreneurs who do the screening presumably have confidence in their own methods, this confidence may not be shared by others. In particular, those on whom the screeners reach a negative verdict may in turn reject the screeners’ methods. This does not imply that those who reject the screeners’ verdict are necessarily certain that they have ability. The validity of the screening procedures is to some extent a subjective issue about which opinions may rightly differ. Those who have been rejected may simply doubt whether the procedures are of any value– merely to preserve their self-esteem. In this case they remain subjectively just as uncertain as they were before about whether or not they have ability.

One of the main reasons why the entrepreneur has become a cultural hero of capitalism is that he is able to rise from humble origins to a position of power and status. His career reaffirms the ideal of an open society in which the underprivileged can achieve eminence on the basis of their personal merit alone. The personal qualities which are rewarded through entrepreneurship are imagination and foresight, and skill in organizing and delegating work. The object of this chapter is to show that this heroic vision of the entrepreneur is, to a large extent, unfounded. Although there are, in most generations and in most societies, some people from humble origins who ‘make it to the top’, there are no grounds – in theory or in practice – for supposing that the probability of making it to the top through entrepreneurship is very high. There are major economic and social barriers to entrepreneurship which someone with potentially superior judgment may well be unable to overcome.

The significance of entrepreneurship is not that it is an easy avenue of personal advancement, but that in comparison with other methods of personal advancement it may offer the best prospects to underprivileged people. In other words, an economically disadvantaged person who wishes to make it to the top may find it easier to do so through entrepreneurship than through other means. This means that entrepreneurship is of relative importance in social mobility, even if the absolute degree of mobility it affords is fairly limited.Suppose a farmer has 1.2 hectares of cultivable land and 2.2 tons of wheat cultivation /year and has to sustain a family of 4 with a loan amount to be repaid back worth 60,000 inr with 30% interest and his children education at stake as the rainfall is not a correct supporter of him.

The decision could be to leave his village by selling the land or becoming an entrepreneur by hiring labours and livestock to feed his family in his village only but with some help of government schemes.

This is a typical scenario in all villages and rural areas from where the problem of migration to urban areas also exists.The market for entrepreneurs allocates judgmental decisions to entrepreneurs.

It has in fact, four main functions:

1. to identify decisions which are judgmental,

2. to identify entrepreneurs whose judgment is likely to be correct,

3. to match entrepreneurs to judgmental decisions so that wherever possible the right decision is made, and

4. to distribute rewards to the entrepreneurs.

It is sometimes denied that a market for entrepreneurs can exist. This is incorrect. It must be admitted, however, that the market for entrepreneurs has some unusual features which mean that it operates in a different way from most other markets.Thus, research in entrepreneurship is required for a detail study on how it can help some aspiring man or women and what strategies can one adopt in order to become successful in this competitive world.

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Mufaddal Dahodwala

The author is ex-employee of Accenture and he is currently pursuing MMS finance from JBIMS,mumbai. He has won several prizes from top MNCs for his contribution towards articles as well as idea generation and business plans having a social impact to the society.

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