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The Entrepreneurial Process Introduction The entrepreneurial process is defined as the cycle in which mental conceptions and ideas

are transformed and translated into business ideas that represent a profitable opportunity for the entrepreneur to harness resources and design an enterprise that allows him/her to exploit the opportunity to make profit - but in the process also taking calculated risk. The final stage of the process will be the nurturing of the enterprise and the process recurs in the bid to grow the enterprise as new ideas are transformed into growth opportunities and the entrepreneurial process recurs. Various authors and researchers have come up with different models to describe the entrepreneurial process. According to Moore and Bygrave (1994) the entrepreneurial process is built on a cycle of four stages: innovation, a triggering event, implementation and growth. They further argued that during the cycle different variables interact with the environment to influence the entrepreneurial process. The interaction between the environment and individual, organisational and sociological variables define the possible path of each specific entrepreneurial event. Hisrich and Peters (2002) identified four distinct phases of activities in the entrepreneurial process which are: identification and evaluation of the opportunity, development of a business plan, determination of required resources and the management of the resulting enterprise. The entrepreneurial process therefore has some fundamental stages common to all models regardless of the author and a combination of these would give the generic entrepreneurial process. The entrepreneurial process from literature therefore can be summarised in the model below. To explain the entrepreneurial process better Econet Wireless Zimbabwe will be used as an example to apply the concepts to the real world.

Scientific idea generation involves a rigorous examination and analysis of the business environment in which the entrepreneur lives. . and knowledge of the market. Veerabhadrappa Havinal (2009) argues that the entrepreneurship process starts with some change in the real world. understanding the industry. off the idea.The activity based entrepreneurship process from literature Business idea development/ opportunity recognition and development Survival and growth maximisation Strategic management Resource configuration and venture creation Buisness implementaion and opprtunity exploitation Idea generation Idea generation is the seed of the entrepreneurial process. for patterns and trends that can be capitalised into ideas or business opportunities. like social and political trends. Scientific idea generation mainly focuses on the business environment and has the danger of pruning other important factors. According to Cronche et al (2003:50) „establishing a new business usually involves an idea that the entrepreneur pursues enthusiastically‟. However. Sources of ideas usually include prior working experience. Idea generation therefore is the starting point of transforming and translating creativity or innovation into a business opportunity. Scholars have come up with two styles of idea generation that is scientific and artistic idea generation. for some innovations are incremental changes or were developed by others and adapted for use locally”. Kruger (2004) expands that “not all ideas are creative.

This style of idea generation may result in both process and product innovation. It also includes an analysis of the behaviour of intended audiences and competition is identified. services offered. The dangers of idea generation is that the idea might be overrated that is the best idea doesn‟t necessarily guarantee success. its real and perceived value. In this instance work experience become the major source for idea generation as it gave him a better understanding of the telecommunications industry and how best the niche of mobile network services can be exploited. Value of the generated idea is embodied in the capability and capacity of the entrepreneur to transform the idea into a product/service that appeals to the customers and hence capturing a significant share of the market. the entrepreneurship process depends much on the responsibilities expected of the entrepreneur which prompted Brian Tsuchiya to develop an alternative model of the entrepreneurial process which focuses on the responsibilities of the entrepreneur at each stage. its fit with the personal skills and goals of the entrepreneur. This evaluation process involves looking at the length of the opportunity. channel members. The idea was not to introduce a totally new product but adopting an already developed product for a new market. Therefore. fashion. compared and contrasted for a niche or business edge. and manufacturing/production process. its risks and returns. Opportunity Evaluation Whether the opportunity is identified by using input from consumers. and its uniqueness or differential advantage in its competitive environment. political.Artistic idea generation on the other hand includes an analysis of not only the business environment but everything that happens around the entrepreneur. or technical people. Concentration is given to economic. business associates. and social trends. business process. each opportunity must be carefully screened and evaluated. This evaluation of the opportunity is perhaps the most critical element of the entrepreneurial process as it allows the entrepreneur to assess whether the specific product or service has the returns needed compared to the resources required. came up with the idea of providing mobile communication services to the market which was pure being serviced by fixed telecommunications network provided by PTC (Post and Telecommunication Company). this is the stage where Strive Masiyiwa. Van Vuuren and Nieman (1999:6) propose that entrepreneurs need the following entrepreneurial skills: . Relating this to Econet.

The opportunity should be sufficiently compelling for it to be chosen or capitalised on. competition. It is helpful to think of the evaluation step as continually asking the question of whether the opportunity is worth investing in. Finally. It is particularly important that the entrepreneur be able to put forth the necessary time and effort required to make the venture succeed." Five basic questions are asked in evaluating an opportunity. These risks reflect the market. Can we compete (over a sufficiently interesting time horizon): is there sustainable competitive advantage? . 1. The focus of the entrepreneur should be on the opportunities presented to him and their net worth and this is the stage where he asks whether it is an opportunity worth investing in.   creativity and innovation risk taking Ability to have a vision for growth The market size and the length of the window of opportunity are the primary basis for determining the risks and rewards. The amount of capital needed provides the basis for the return and rewards. Opportunity evaluation involves a lot of Research and Development for instance extensive market research which requires the entrepreneur to be abreast with the current activities in the market. Is there a sufficiently attractive market opportunity? 2. Although many entrepreneurs feel that the desire can be developed along the venture. You are actually constructing and then continually revising an "investment prospectus. both from a market perspective and a technology perspective? 3. The methodology for evaluating risks and rewards frequently indicates that an opportunity offers neither a financial nor a personal reward commensurate with the risks involved. An entrepreneur must believe in the opportunity so much that he or she will make the necessary sacrifices to develop the opportunity and manage the resulting organization. typically it does not materialize. technology. the opportunity must fit the personal skills and goals of the entrepreneur. Is your proposed solution feasible. and amount of capital involved.

An opportunity evaluation centres on considering both sides of the coin. An opportunity assessment plan includes the following:    A description of the product or service An assessment of the opportunity An assessment of the entrepreneur and the team. Compared to a business plan. is one method for evaluating an opportunity. According to Forlani and Mullin. It is not a business plan. and does it justify the investment of time and money? If one can answer all of these questions affirmatively. not the entire venture. The entrepreneur should assess the possible risk he will expose himself to by undertaking the project. Opportunity analysis. in this case the entrepreneur should consider the benefits derived against the costs entailed in undertaking the business idea.4. Do we have a team that can effectively capitalize of this opportunity? 5. specifications of all the activities and resources needed to translate the opportunity into a viable business venture. This is the first step toward being able to convince others. employees. partners or providers of capital. and the source of capital to finance the initial venture as well as its growth. entrepreneurs consider both variability in anticipated outcomes and the degree of hazard in a decision alternative to be major sources of risk. career risk. credit risk. Possible risks could range from financial risk. focuses on the opportunity. whether they are prospective customers. The assessment of the opportunity requires answering the following questions:  What market need does it fill? . there is reason to persuade oneself that the opportunity is worth investing in. and provides the basis for making the decision of whether or not to act on the opportunity. The entrepreneur in simple terms should carry out a cost-benefit analysis to find out how much funding or capital is required to start the project against the possible benefits to be derived. What is the risk / reward profile of this opportunity. The entrepreneur should consider the risk-reward profile. liquidity risk. Opportunity evaluation is a necessary in identifying a business project that gives high returns or a high net payoff. it should be shorter. or what is frequently called an opportunity assessment plan.

.        What personal observations have you experienced or recorded with regard to that market need? What social condition underlies this market need? What market research data can be marshalled to describe this market need? What patents might be available to fulfil this need? What competition exists in this market? How would you describe the behaviour of this competition? What does the international market look like? What does the international competition look like? Where is the money to be made in this activity? The opportunity evaluation for Econet concentrated much on the feasibility of the opportunity considering the legal repercussions of a mobile operator that would compete with a strategic government institution in the form of PTC. This resulted in the legal battles that ensued before a mobile operating licence was given to Strive Masiyiwa. The major risk/challenge that was inherent in the opportunity was the acquisition of a mobile operator licence as the government would try by all means to restrict entrance by a private firm into the telecommunications industry – a strategic sector of national significance. By acquiring a mobile operator licence he would be acquiring a licence to grow his business into any other services that can be provided on the mobile network not only of voice calls and text messaging. On the evaluation Strive Masiyiwa realised the following benefits attached to perusing the opportunity:   There was a sufficiently large market in Zimbabwe to generate adequate cash flows that would support a big enterprise The fact that his organisation would be the first to provide mobile telecommunication gave him the monopoly power and the benefits that can be enjoyed in high prices in monopolistic economies  There were viable growth prospects in the opportunity.  The organisation would have a competitive advantage over PTC its sole competitor in that mobile technology had greater opportunities for expansion that fixed networks and mobile technology have a better status compared to fixed networks which would give the resulting organisation a strong brand name and derive customer loyalty.

one can advance to the final stage of a business model. After satisfying the core strategy. Econet. 2005).Planning The development of a business plan is a more standardized product scope. Strategic resources will include personal and human characteristics needed for the venture launch as well as the necessary money. Peters. For instance. The first component is a core strategy which can be described as the unique part of a product. which is to determine the resources. After satisfying the relationships of partnership networks. one can assess the need for resources. the Eco life product in which Econet partnered with FML to provide the product. but encourage growth for instance. A core strategy must be broad to avoid limiting the growth of a start-up. The next component of an effective business model is the compilation of partnership networks (Hirsh. The customer interface is how the business will interact with clients. one can assess how the business will interact with clients and other business peoples. one is ready to advance to the next phase of the entrepreneurial process. the product of mobile telecommunication was unique by then because Zimbabweans were only familiar with fixed telecommunication which was solely supplied by PTC (now Tel-One). & Sheppard. or the delivery of a product of service that will make it stand out. The next part of an effective business plan is the written summation of necessary strategic resources and how to acquire and use them (Hirsh. An effective business plan consists of several components. These are the relationships needed to launch a new venture successfully. and the nature of that contact. The interface may include how to reach a particular audience. A business plan is a written detail of a new business venture. 2005). In relation to Econet planning entailed the description of the product which in this case was mobile voice call and text messaging. To achieve this there was need for a mobile . According to (Hirsh. & Sheppard. when it wanted to start the company. Peters. in the case of Econet. How to structure the nature of business relationships should be identified and characterized. Once the components of a successful business model are satisfied. After identifying key strategic resources. Sheppard. Peters. 2005) business plan should not be too narrow. telebanking and multimedia messaging. Peters. For example. which is how to reach the customers. The final component of a successful business plan is the written summation of the customer interface (Hirsh. 2005). Sheppard. their core strategy was not limited as it later expanded into internet business.

however. There is. the entrepreneur must use . 2. Here the entrepreneur gets ready to launch the venture in a way that minimises risk and maximises returns. managing the enterprise. One can start from scratch and learn it all by him or herself or look at what others have already done and hope to profit from their experiences. and financial plans. no need to take the steps in the same order as suggested below but one will need to take them during the launch of the enterprise. so the only real way to become an entrepreneur is to get out there and do it. Entrepreneurs learn mainly from experience. This is the stage where the dream can first become reality. the entrepreneurial team will go through the process of choosing the right form of corporate entity and actually creating the venture as a legal entity. there was need to hire experts from other countries to propel the launch of the services and install required machinery and technology for its provision. After resources are acquired. Implementing the entrepreneurial strategy – involves activating the marketing. initiation of the last phase begins. There are three crucial steps to be taken to start a new venture and attempts to make short cuts and avoiding some of these steps can be disastrous. The determination of strategic resources is the last step before launching the venture and once the venture is launched. A public limited company was then chosen as the ideal organisational structure as it would harness a lot if capital form initial public offering and has the capacity to expand with growth in market share. The process of launching a new venture can be divided into three key stages of: 1. Company Launch Launching a new venture and becoming an entrepreneur is an exciting and challenging task. The builder then literally turns the dream into reality marking a critical juncture of the venture.operator licence which had to be acquired as part of the planning process. Because the Zimbabwe technological environment was a step behind compared to the developed world. Forming the enterprise to create value – involves setting up a business entity and protecting any intellectual property. operating. Once there is a sufficiently compelling opportunity and a plan.

rising. so that competitors are locked out. 2004:36). or demise. 3. strategic. Planning the future – involves looking ahead and visualising where the entrepreneur wants to go setting the foundation for growth. Rwigwema and Venter. It is often referred to as the closing window. a company stock that to increase in capital value rather than yield high income. structural.them to implement the business plan. The operational problems of the growing enterprise must also be examined. 304) as briefly described below. Synonymous with growing are terms booming. 2001:303. Some entrepreneurs have difficulty managing and growing the venture they created. financial. development. 2002. maturing and developing. increasing. as well as determining the key variables for success. which may lead to its expansion to some optimum size determined by the market demand (Glancey. The Oxford dictionary defines growth as “An industry that is developing particularly rapidly. so that any problem areas can be quickly identified and resolved. 1998. organisational and image indicator (Wickham. Perks and Struwig (2005:171). Growth is critical to the entrepreneurial success and distinguishes the entrepreneurial venture from small business (Wickham. A control system must be established. Financial growth . There are five indicators for growth and these are. It must be closed because if it is not. This involves implementing a management style and structure. Closing window refers to building in competitive advantage. 18). competitors will be able to move in after the entrepreneur and exploit the opportunities themselves. Growth This stage refers to a period in which the entrepreneur decides on the venture‟s future growth. in short ensuring that the venture‟s customers keep coming back. alerts to the problem of defining growth of a business because uncertainty exists about growth comprises. It is the last stage of the entrepreneurial process and relates to that which facilitates the continued survival of the firm. This sets the mood for managing the enterprise leading the growth stage of the entrepreneurial process.

Econet achieved this by expanding into rural areas and trying to improve the network over all of Zimbabwe to increase revenue. Econet added a subsidiary. 2002. costs and investment needed to achieve the turnover. Image growth This relates to changes taking place in the small business such as becoming more formal (such as having formal business premises). as well as changes regarding the entrepreneur‟s role as the business moves from small to large. This motto give a status to the organisation and the customer receiving the services. operations and organisational development(Man et al. management attitudes towards staff. new products and new opportunities. in the process increasing investment in equipment and manpower. business assets and all related value added. exploiting new markets. The activities undertaken in the growth process are linked to five strategic growth intentions. redecorating the premises and moving to a new environment. To grow its image Econet has introduced the Joshua Nkhomo and Capernaum Scholarships. communication links and increased use of internal systems to control resources. Organisational growth This relates to changes taking place in terms of processes used. technological change. moving to newly built premises. which would concentrate on providing internet services for corporates and other organisation. market expansion. organisation‟s culture. and had been used a motto that promotes image growth – the world in your pocket. garnering resources. reporting relationships. .127). Econet shops. Strategic growth This relates to changes taking place through mergers and acquisitions. Eco web now Liquid Telecoms. profits. This gave it a competitive edge to compete with Tel-one in the internet service provision for corporate organisations at the same time harnessing extra turnover for the organisation Structural growth Relates to changes taking place in the way the business organises its internal systems with regard to managerial roles. increasing employees and their responsibilities.This is concerned about increases in turnover.

consolidating available cash on hand. Garnering resources Growth h is dependent on the venture‟s ability to attract new resources for this stage. computerising current operations. securing a loan. upgrading computer systems. taking risks.focused and growing the firm‟s specific competences and skills to overcome constraints and complacence and deploy resources optimally. It also includes exploring a wider range of financing resources. Econet expanded its market by launching its product its different countries including Botswana. seeking additional financing and seeking professional advice. Kenya. expanding advertisement and promotions as well as continuous adapting products to changing tastes. taking action. applying for a loan. Discovery of new opportunities depends on continually scanning the changing business environment and preparing to exploit these opportunities ahead of. setting linkages with external factors. or not far behind competitors. discovering of new ones. selling to new markets. replacing present equipment. from service quality to public relations. Operations aimed at growth include being product/service. With the introduction of the internet service Econet has installed new state-of-the-art base stations nationwide – a technological growth. Nigeria. they have to reach a wider business environment by expanding existing opportunities. Operations This is where the team is continuously revisiting and streamlining every operational aspect. expanding distribution channels. distributing finance for financing resources.Market expansion For businesses to grow. Technological change This includes acquiring new equipment. the United Kingdom and Malta. Garnering resources includes evaluating whether the company has resources to fund the growth strategy. Organisational Growth . It also includes keeping up with increases in technological knowledge.

Growth is dependent on the company structure and the development of the organisation towards increasing the firm‟s competitive advantage. mobile money (Eco cash) and multimedia messaging. The venture cannot afford to acquire asset and set up structures and systems that are incapable of evolving as the organisation develops. so does the structure. Introduction to Business Management . psychological.   University of Pretoria etd –Kruger . until a complex structure emerges.M E (2004). The model from the Duke‟s manual is a generic model that captures the concepts from all the different entrepreneurial models. evaluated. and legal variables interacting with the environment to give a specific trajectory for each entrepreneurial idea to be pursued. The entrepreneurial cycle then repeats itself within the enterprise giving rise to the concept of managers being entrepreneurs. social.Chapter 3 :Entrepreneurship Process Cronche et al (2003). Enterprises are as different as the entrepreneurs that form them and as well different entrepreneurship models can be adopted depending on the entrepreneur‟s ability and the environment the entrepreneur operates. No 3. As a venture grows. This implies that there is no universally accepted model and all models are applicable in different environments. The growth stage entails a recurrence of the entrepreneurial process as new ideas have to generated. planned for and pursued to realised growth opportunities. Econet continued its entrepreneurial process by pursuing new growth opportunities in the form of internet services. BIBLIOGRAPHY:  Asian Perspective Volume 27. Therefore in trying to nurture and grow the enterprise management reinforces the entrepreneurial process and the entrepreneurial cycle recurs. political. mobile personal insurance (Eco life). cultural. 2003 pp 125-175. Conclusion The entrepreneurial process therefore is a function of individual‟s abilities.Entreprenuers and the Entrepreneurial Processes: Historical and theoretical perspectives on entrepreneurship in the Japanese contexts.