THE ENTREPRENEURIAL PROCESS: FROM IDEA TO VENTURE

THE ENTREPRENEURIAL PROCESS: FROM IDEA TO VENTURE

By James Osei Mensah
Department of Agricultural Economics, Agribusiness & Extension
PRESENTED AT THE GAME CAREER BUILDER CONFERENCE 2010

What is entrepreneurship?
The identification and exploitation of previously unexploited opportunities (Hitt, 2001)

The process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction, and independence (Hisrich et al, 2005)

What makes entrepreneurship so important?
Entrepreneurship is a vital source of change in all facets of society, empowering individuals to seek opportunities where others see insurmountable problems
The process leads to the creation of great enterprises that subsequently leads to:

• Job creation
• Increased prosperity
• Higher quality of life
• Reduced societal unrest Etc.

Who then is an entrepreneur?
The entrepreneur is someone who perceives opportunities, creates solutions, and is willing and able to take reasonable risk to build something of value in return for rewards

The entrepreneur is a bold, imaginative deviator from established business methods and practices who incessantly seeks the opportunity to commercialize new products, technologies, processes, and arrangements (Baumol, 2002)

Entrepreneurs are skilled in applied creativity, thrive in response to challenge, and look for unconventional solutions (Dorf & Byers, 2008)

Can I also be an entrepreneur?
“Entrepreneurship is NOT genetic; it can be learned. I make things happen because of my own will, skill, knowledge, and personal power. These are traits you can learn and improve with practice”  Donald Trump

Ok, so how do I know I am an entrepreneur?
              Need for independence
              Need for financial success
              Desired to be innovative
              Self-realization; need for recognition, achievement & status
              Willingness to take reasoned/calculated risk
              Ability to work hard under pressured environments

What goes into the entrepreneurial process?
Dreaming, or having an idea or even IDEAS is an EASY process that “everyone” can do but turning your ideas into successful ventures is a different story

Identification and evaluation of opportunities

An opportunity is a timely and favorable juncture of circumstances providing a good chance for a successful venture. Good opportunities are usually disguised so most people don’t easily recognise them. According to Louis Pasteur“In the field of observation, chance only favour minds which are prepared”                                 

What then makes an attractive opportunity?
Timely: it is a current need or problem
Solvable: the problem can be solved in the near future with accessible resources
Important: the customer deems the problem or need important
Profitable: the customer will pay for the solution and allow the enterprise to profit
Context: favourable regulatory, social, religious and industry situations

    I have seen an opportunity, do I invest resources?
NO, It is important to identify the “sweet spot”
The “sweet spot” is when there is a convergence between three variables:

• Attractive opportunity
• Capabilities and skills of the entrepreneur or entrepreneurial team:  the entrepreneur has the needed skills to perform the tasks or is willing to learn
• Interest, passions and commitment: the entrepreneur by default likes to do the tasks involved, likes challenges and is committed to what is necessary for the firm to succeed

Developing a Business Plan
“The method of enterprising is to plan with audacity and execute with vigour”           (Christian Bovee)

The business plan seeks to answer the ff questions:
Who are you? Description of the business
What are you going to do? A description of your business concept, the products and services, the market, the location, amount of money needed
Where are you going?  The vision, mission & objectives
How are you going to get there? The strategies that will allow you to meet your financial responsibilities, market, compete

Why is it important to develop a business plan?
Help you think through the venture and ensure that you have considered all options and anticipated any potential difficulties
Serve as an operating guide as you turn your ideas into a viable business
Evaluate the feasibility of the business concept and identify that will determine the firm’s success or failure
Examine the strengths and weaknesses of the firm relative to its industry, market, competition and customers
Useful in arranging strategic alliances and obtaining contracts
Convince potential funding programs, lenders and investors that the proposed venture has merit and that you are in control of the project

Determine the Resources Required
This process involves an appraisal of the entrepreneur’s present resources and then...
...a distinction between resources that are critical are those that are just helpful
Assessment of the amount and variety of resources needed and the associated costs
Maintaining larger ownership position should be aimed at, particularly at the start-up stage
Strategies that allow the entrepreneur to acquire the resources at the lowest possible cost and least cost control should be devised        
Proper management  is needed for efficient and effective combination of the acquired resources
The proper management style and structure should be chosen handle the firms through all stages of its life
Key variables for success should be identified
Proper control systems should be put in place to carefully monitor operations Managing the Enterprise
Every firm after product planning, development and launching goes through different stages, life cycle

Organizational Changes during Growth
The skills, spirit, and competence needed to start a firm are different from those needed to manage growth
A competent entrepreneur might therefore fail as a manager during the growth stage
It is however difficult for entrepreneurs to accept this fact due to their long-term involvement with the firm
But it is important for the entrepreneur to appreciate this and change strategies and organizational culture accordingly

Important practices needed to manage your firm
                Proper record keeping and financial control
                Risk management
                Inventory control
                Human resources management
                Competitive marketing strategies
                Strategic planning