THE ENTREPRENEURIAL PROCESS

The Entrepreneurial Process



The Entrepreneurial Process

Introduction

The entrepreneurial process is the core method of initiating a new business enterprise this process comprises of a number of elements other than just solving problems on a managerial level. It is must for an entrepreneur to determine an opportunity, analyze it and then develop an innovative idea from the opportunity by surpassing the challenges and forces which creates hurdle in the way of innovation. The entrepreneurial process comprises of four distinct steps;

Identifying and evaluating the opportunity

Developing a business plan

Determining the required resources

Managing the new enterprise

Though, these processes progress gradually; a single stage cannot be completed in isolation or by ignoring other steps while working at one. For instance, in order to start identify a lucrative opportunity and evaluate it, an entrepreneur must have an idea, as to what business should be started (Hisrich et al, 2005).

Discussion

The four steps of the entrepreneurial process are as follows:

Identifying and Evaluating the Opportunity

This is a very difficult task and in most traditional cases of successful businesses opportunities not just pops up in the market. Opportunities can only be recognized if the entrepreneur has enough alertness to suffice the need of identifying an opportunity. Moreover, in a few instances, establishing an appropriate mechanism for identifying a potential opportunity is required. For instance, an entrepreneur repeatedly asks the attendants of every cocktail party whether they are using a product which is not fulfilling their need or the purpose the product is meant for. By doing this, this entrepreneur is in constant search for an opportunity for creating a much better product. No matter, if the opportunity determined through business associates, technical people, channel members or consumers, it must be properly screened and analyzed. This analysis is considered to be the most critical part of the entire entrepreneurial process, as it enables the entrepreneur to evaluate if the service or product has returns more than the resources required for it.

This assessment method requires assessing the scope of opportunity in terms of time span, the perceived and real value of the opportunity, the risks and returns associated with it, whether it has a fit with the goals and personal skills of the entrepreneur, and the unique features or competitive advantage in the market. The primary measures for identifying risks and rewards include determining the market size and the scope of the opportunity. The risks identified through these measures highlight the market, technology, amount of capital involved and the competition prevailing in the market. The amount of capital needed can be used to analyze the return and rewards associated with the opportunity. Assessing the opportunity entails answering a few questions which are as follows:

What are the individual observations that you have learned or identified in terms of the market need?

What are the social stipulations which underlie this need?

What exclusive rights might exist to fulfill this need?

What is the intensity and behavior of the competition?

In this activity where money can be earned?

These are not the only questions which an entrepreneur ...