What are the 4 stages of the entrepreneurial process?
Successful entrepreneurship occurs when creative individuals bring together a new way of meeting needs and or wants. This is accomplished through a patterned process, one that mobilizes and directs resources to deliver a specific product or service to those in a way that is financially viable. While these could be 100% business ideas, they could also be concepts that are based in the spirit of altruism or non-profit. For innovative ideas that are strictly business concepts. sustainability can (and should) be embedded in the design of a product and operations by applying the criteria of reaching toward benign (or at least considerably safer) energy and material use, a reduced resource footprint, and elimination of inequitable social impacts due to the venture’s operations, including its supply-chain impacts. Show Entrepreneurial innovation combined with sustainability principles can be broken down into the following four key elements, each of which requires analysis. Each one needs to be analyzed separately, and then the constellation of factors must fit together into a coherent whole. These four elements are as follows:
Successful ventures are characterized by coherence or “fit” across and throughout these steps. The interests and skills of the entrepreneur must fit with the product design and offering; the team’s qualifications should match the required knowledge needed to launch the venture. There needs to be a financially viable demand (enough people at a financially viable price) for the product or service, and of course, early adopters (those willing to purchase) have to be identified. Finally, sufficient resources, including financial resources (e.g., operating capital), office space, equipment, production facilities, components, materials, and expertise, must be identified and brought to bear. Each piece is discussed in more detail in the sections that follow. Lesson 3.1.1: The Entrepreneurial Process: Part 1 Identify, Analyze, and Plan the Opportunity As discussed in the last section, Opportunity Recognition is the active, cognitive process (or processes) through which individuals conclude that they have identified the potential to create something new that has the potential to generate economic value and that is not currently being exploited or developed and is viewed as desirable in the society in which it occurs (i.e. its development is consistent with existing legal and moral conditions). (Baron, 2004b, p. 52) Because opportunity recognition is a cognitive process, according to Baron (2004b), people can learn to be more effective at recognizing opportunities by changing the way they think about opportunities and how to recognize them. The opportunity is a chance to satisfy the needs and desires of a certain group of people while generating returns that enable you to continue to operate and to build your organization over time. Many different conditions in society can create opportunities for new goods and services. As a prospective entrepreneur, the key questions are as follows:
Opportunity conditions arise from a variety of sources. At a broad societal level, they are present as the result of forces such as shifting demographics, changes in knowledge and understanding due to scientific advances, a rebalancing or imbalance of political winds, or changing attitudes and norms that give rise to new needs. Certain demographic shifts and pollution challenges create SDG opportunities. When you combine enhanced public focus on health and wellness, advanced water treatment methods, clean combustion technologies, renewable “clean” energy sources, conversion of used packaging into new asset streams, benign chemical compounds for industrial processes, and local and sustainability has grown organic food, you begin to see the wide range of opportunities that exist due to macrotrends. Make sure to answer the opportunity questions above in your Entrepreneurial Plan. Identify, Analyze, and Plan the Market What are you offering/doing/selling/contributing? New ventures offer solutions to people’s problems. This concept requires you to not only examine the item or service description but also further understand the group of people whose unmet needs you are meeting (often called market analysis). In any entrepreneurial innovation circumstance you must ask the following questions:
Understanding what you are selling is not as obvious as it might sound. When you sell an electric vehicle you are not just selling transportation. The buyer is buying a package of attributes that might include cutting-edge technology, lower operating costs, and perhaps the satisfaction of being part of a solution to health, environmental, and energy security problems. Make sure to answer the market questions above in your Entrepreneurial Plan. Lesson 3.1.2: The Entrepreneurial Process: Part 2 Identify, Analyze, and Plan the Entrepreneur & Entrepreneurial Team The opportunity and the entrepreneur must be intertwined in a way that optimizes the probability for success. People often become entrepreneurs when they see an opportunity. They are compelled to start something to find out whether they can convert that opportunity into an ongoing source of fulfillment and potential financial gain. That means that, ideally, the entrepreneur’s life experience, education, skills, work exposure, and network of contacts align well with the opportunity. We have covered this in previous sections, so if you need to refer back to consider the role of the entrepreneur’s skills, abilities, and cognition. Entrepreneurs sometimes act alone, but this can only take us so far. A good entrepreneurial plan, an interesting product idea, and a promising opportunity are all positive, but in the end it is the ability of the entrepreneur to attract a team, get a product out, and provide it to customers is the thing that counts. Typically there is an individual who initially drives the process through his or her ability to mobilize resources and sometimes through sheer force of will, hard work, and determination to succeed. In challenging times it is the entrepreneur’s vision and leadership abilities that can carry the day. Ultimately, led by the entrepreneur, a team forms. As the organization grows, the team becomes the key factor. The entrepreneur’s skills, education, capabilities, and weaknesses must be augmented and complemented by the competencies of the team members they bring to the project. The following are important questions to ask:
If an organization has been established and the team has not yet been formed, these questions will be useful to help you understand what configuration of people might compose an effective team to carry the business through its early evolutionary stages. Make sure to note who / what expertise is needed in your team as part of your Entrepreneurial Plan. Identify, Analyze, and Plan the Resources Successful entrepreneurial processes require entrepreneurs and teams to mobilize a wide array of resources quickly and efficiently. All innovative and entrepreneurial ventures combine specific resources such as capital, talent and know-how (e.g., accountants, lawyers), equipment, and production facilities. Breaking down an opportunity’s required resources into components can clarify what is needed and when it is needed. Although resource needs change during the early growth stages of an opportunity, at each stage the entrepreneur should be clear about the priority resources that enable or inhibit moving to the next stage of growth. What kinds of resources are needed? The following list provides guidance:
Make sure to note what resources are needed as part of your Entrepreneurial Plan The Overall Process The process of entrepreneurship melds these pieces together in processes that unfold over weeks and months, and eventually years if the business is successful. Breaking down the process into categories and components helps you understand the pieces and how they fit together. What we find in retrospect with successful launches is a cohesive fit among the parts. The entrepreneur’s skills and education match what the start-up needs. The opportunity can be optimally explored with the team and resources that are identified and mobilized. The resources must be brought to bear to launch the opportunity with an entry strategy that delivers the value-driven concept in a way that solves customers’ problems. Lesson 3.1.3: Entrepreneurial Planning: Part 1 With all of these things in mind, documenting answers to the questions above, and the analysis undertaken to answer them is contained in an entrepreneurial plan. This is a document that you would use to plan out the details for the elements outlined above. Making sure you identify, analyze, and plan these elements is a great starting point, and to make sure this is all done really well, have a look at the principles below. Entrepreneurial Plan Communication Principles As Hindle and Mainprize (2006) note, business plan writers must strive to communicate their expectations about the nature of an uncertain future. However, the liabilities of newness make communicating the expected future of new opportunities difficult (more so than for existing organizations). They outline five communications principles:
Lesson 3.1.4: Entrepreneurial Planning: Part 2 Entrepreneurial Plan Credibility Principles Entrepreneurial plan writers must strive to project credibility (Hindle & Mainprize, 2006), so there must be a match between what the entrepreneurship team (resource seekers) needs and what the resource providers expect based on their criteria. A take it or leave it approach (i.e. financial forecasts set in concrete) by the entrepreneurship team has a high likelihood of failure in terms of securing resources. Hindle and Mainprize (2006) outline five principles to help entrepreneurs project credibility:
Lesson 3.1.5: Entrepreneurial Planning: Part 3 General Entrepreneurial Plan Guidelines Many entrepreneurs must have a plan to achieve their goals. The following are some basic guidelines for entrepreneurial plan development.
Activity 3.1.1: SDG Simulation Unit 3 Assignment: Your Plan of Action The purpose of this assignment is to connect all of the dots that you have been learning about and engaging with over the past unit when it comes to the entrepreneurial planning process. Watch this video on developing a process map. You are going to develop your own process map outlining the steps you need to take to develop a robust and well-thought-out entrepreneurial plan. Have a look at the Unit 4 Assignment: Entrepreneurial Plan for more information on what you’re going to be building. The submission should be methodical and outline the process you will go through (i.e. what steps you will complete), and the information sources you will need to fill in the gaps and fill out your plan. Your submission should include a process map diagram, and be about 250 words, which is one page double spaced, or it could be done as an infographic, or a two-three minute presentation. If you are doing this as part of a formal course and have a different approach that you would like to take for developing this assignment, please check with your instructor. Text Attributions The content related to how it all starts and the process steps was taken from “Sustainability, Innovation, and Entrepreneurship” by LibreTexts (2020) CC BY-NC-SA The content related to the opportunity identification cognition and the entrepreneurial plan was taken from “Entrepreneurship and Innovation Toolkit, 3rd Edition” by L. Swanson (2017) CC BY-SA References Baron, R. A. (2004b). Opportunity recognition: Insights from a cognitive perspective. In J. E. Butler (Ed.), Opportunity identification and entrepreneurial behavior(pp. 47-73). Greenwich, Conn.: Information Age Pub Hindle, K., & Mainprize, B. (2006). A systematic approach to writing and rating entrepreneurial business plans. The Journal of Private Equity, 9(3), 7-23. What are the 4 types of entrepreneurial?Most often, the types of entrepreneurship are broken into four categories:. small business.. scalable startups.. large company or intrapreneurship.. social entrepreneurship.. What are the 3 stages of entrepreneurial process?Baron (2004a:170) names the three stages of the entrepreneurship process as screening ideas for feasibility; assembling needed resources; and actually developing a new business.
What are the 4 P's of entrepreneurship?The four P's—product, price, place, and promotion—should work together in your marketing mix. Often, decisions on one element will influence the choices available in others.
|