The first thing to do before one sets out to start a business is identification of an opportunity. He then strategize on the way forward; the success of the business is dependent on how well he is going to capture customers to buy from him, which on the other side is dependent on the quality of initial entrepreneurial decision. Different places require different set ups for their success (Avery, 2004). This paper analyzes the process that an entrepreneur undergoes before setting up a business.
We will write a custom Critical Writing on Entrepreneurial Process specifically for you
301 certified writers online
Every situation or opportunity has its own unique potential that an entrepreneur must capture if he is to be successful. This will be in consideration of business risk; business risk is the uncertainty on to whether the kind of business that the one has engaged in will be of success.
This is in both new and existing business when they want to extend their business to other areas of a start up business. Businesses are driven by market of goods produced; thus an entrepreneur must ensure that there is potential in the chosen location. When investing in some kind of a business there is the initial and subsequent running expenses. In a business environment the proceeds from the business should cover all this and there remain a portion that is the profit of the investor (Livingston, 2008).
Competition is a good element in the business arena since it ensures that quality goods and services are provided; it is the one that keeps the businessmen on their toes to ensure that they earn customer loyalty. This calls for continuous improvements of its products and services.
Two things must be considered then, whether the entrepreneur will be able to enter the market and whether he is capable to improve his products always. However, there are areas that competition is so high that any entrant will risk so highly and possibility of entering the market effectively becomes a problem, all these are factors that should be considered before making the go-ahead decision (Duening, Hisrich, & Lechter, 2009).
The success of an organization is dependent on the quality of decision made by its manager. One of the major attributes that make a good manager stand out is his or her decisiveness. The quality of decisions made by a manager is reflected in the performance of his or her organization.
Other than the control by decision of the management, Customers influence almost all parts of a business. The available target customer’s needs should be well understood so as when deciding the kind of business to engage in, one is aware of the available customer segment. By segment we mean the class, social status, age, and income level. One must align himself to the interest of the customer and by so doing there will be continued business.
When a business is established, the success will be dependent on the quality of the good/services that it will offer to the market. They must be those that satisfy the needs of the customer. As the business, he should listen to what other people have to say about the entire process. There are decisions that cannot be delegated and others can, there is need to separate them (Ebbena, & Johnson, 2006).
Capital is required for the set up of the business and the general running of the business; before one sets to start up a business there is the need to know the probable sources of capital. This may be from ones saving or a loan facility. Whichever the sources there is the need of understanding its source and ensure that it is dependable in all times. If the capital sources are not dependable chances that the business will go under are high.
There are day to day and short term financial obligations that should be met by a business and the money must be available for its running. These include overdrafts and creditors have to be paid. These calls for a constant amount of money to be available in the business this is what is referred to as liquidity. To cover this, business employ various ways to ensure that this is done, an example of the ways that they employ is buying of short term securities.
This may be in the form of shares in the stock exchange that is expected to be sold at a gain and the finances gotten can be used to meet the financial obligation. Another way that some businesses use to meet the financial obligation is by investing back the profits that they get into the same business and the cash flows that bear as a result are used to meet the obligations.
It is not always the case that a business set up will be successful, there are times that it may fail; when starting a business this should be taken into consideration. Business dynamics cannot be predicted with a 100% certainty. If the trend fails to favor a business, then the business is more likely not to meet its obligation.
It may be a failure in the market, change of fashion, calamities or negative goodwill created; they may hinder continuity of a business (Shane, 2003). To cater for this eventuality, there is need to have an exit plan. Mitigating any loss that is likely to result from loss of business is one of the common ways to have an exit strategy that will not hurt the entrepreneur.
Starting up a new business is taking a risk; however if the decision is well thought there are numerous benefits that come up with investing in business. Before one set to start there are short and long terms parameters that he should consider to ensure that there will be continuity in the business.
Get your first paper with 15% OFF
The future is unpredictable and so even the smallest details about something should be interpolated before starting up. From the above study; it has come clear to me that entrepreneurship is all about how well one can understand the future and plan on it. It involves a process of analyzing risks associated in a certain area and working in full recognition of their presence. All mitigation factors should be put in place before the business is started.
Avery, G. C. (2004). Understanding leadership: Paradigms and cases. London: SAGE Publications.
Duening, N., Hisrich, D., Lechter, A. (2009). Technology Entrepreneurship. New York: Academic Press
Ebbena, J.; Johnson, A. (2006), “Bootstrapping in small firms: An empirical analysis of change over time”, Journal of Business Venturing, Volume 21, Issue 6, November 2006, Pages 851-865
Livingston, J. (2008). Founders at work: stories of startups’ early days. Berkeley, CA; New York: Apress.
Shane, S. (2003). A General Theory of Entrepreneurship: the Individual-Opportunity Nexus. New York: Edward Elgar