ENTREPRENEURIAL PROCESS

Entrepreneurial process
it is the process of pursuing a new venture, whether it be a new products into existing
markets, existing products into new markets, and/or the new creation of a new organization

Discovery:
• An entrepreneurial process begins with the idea generation, wherein the entrepreneur
identifies and evaluates the business opportunities.
• The identification and the evaluation of opportunities is a difficult task; an entrepreneur
seeks inputs from all the persons including employees, consumers, channel partners,
technical people, etc. to reach to an optimum business opportunity. Once the
opportunity has been decided upon, the next step is to evaluate it.

An entrepreneur can evaluate the efficiency of an opportunity by continuously asking certain

questions to himself, such as:
• whether the opportunity is worth investing in,
• is it sufficiently attractive,
• are the proposed solutions feasible,
• is there any competitive advantage,
• what are the risk associated with it.

Above all, an entrepreneur must analyze his personal skills and hobbies, whether these
coincides with the entrepreneurial goals or not.
Opportunity Evaluation
• It is helpful to think of the evaluation step as continually asking the question of whether
the opportunity is worth investing in. You are actually constructing and then continually
revising an “investment prospectus.”
There are five basic questions that you should ask as you evaluate an opportunity.
1. Is there a sufficiently attractive market opportunity?
2. Is your proposed solution feasible, both from a market perspective and a technology
perspective?
3. Can we compete (over a sufficiently interesting time horizon): is there sustainable
competitive advantage?
4. Do we have a team that can effectively capitalize of this opportunity?
5. What is the risk / reward profile of this opportunity, and does it justify the investment
of time and money?

Developing a Business Plan:

• Once the opportunity is identified, an entrepreneur needs to create a comprehensive

business plan. A business plan is critical to the success of any new venture since it acts
as a benchmark and the evaluation criteria to see if the organization is moving towards
its set goals.

• An entrepreneur must dedicate his sufficient time towards its creation, the major
components of a business plan are mission and vision statement, goals and objectives,
capital requirement, a description of products and services, etc.

• Once you have decided that an opportunity, you need a plan for how to capitalize on
that opportunity. A plan begins as a fairly simple set of ideas, and then becomes more
complex as the business takes shape. In the planning phase you will need to create two
things: strategy and operating plan.

Strategy

Target customers
• The target customer is the set of potential buyers who are your focus as you design your
company’s solution. The more you know about them, the better off you are. Your
characterization should be both qualitative and quantitative.
• You should investigate any alternatives the customer has for solving or working around
the problem or need that you are targeting. You should understand the buying process
in detail, including who are the decision makers and who influences the decision.

Business Model
• The business model is your theory about how you will make money. It involves a
definition of a solution to the customer’s need, an hypothesis about how and how much
the customer will pay for that solution.
 • If there are any assumptions required for your theory to be true (such as the existence
of complementary product or services, or the customer’s willingness to change business
processes) these should also be articulated.

Position
• “Position” refers both to how your company is differentiated from any competitors and
also how it relates to other companies in the value chain. This is an opportunity to
define, at a fundamental level, what your company will do and what it will not do.
• An element of position is your company’s vision: how it wants to be known or thought
of. A compelling vision is necessary to inspire investors, recruit and motivate employees,
and to excite customers and partners.

Milestones / Objectives
As a first step toward creating your operating plan, you should create a set of high level
objectives for your business. This should include:
• Key milestones (prototype, product, customer, partnerships,etc.)
• Share or penetration into your chosen market

Operating plan

Your operating plan is where you spell out all of the things that you plan to do and what
they will yield for your business. The activities will cover all areas of the business:
marketing, selling and etc. These activities should yield products by a certain
date, possibly partners, customers, etc. These activities will drive the financial
performance of the company.

• Company timeline
This is a representation of all the major accomplishments or deliverables that are
necessary for you to achieve your strategy.

• Staffing plan
This is the document where you capture all of the hiring your firm will do (skills,
experience and timing).

• Budget
The budget is where all the pieces of the operating plan come together and are
expressed in financial terms. This is a critical document for managing your business.

• Financing plan
This includes the capital needs of the company, the timing of those needs and the
desired/expected sources of that capital.
Developing a Business Plan
• Description of Business
• Description of Industry
• Technology Plan
• Marketing Plan
• Financial Plan
• Production Plan
• Organizational Plan
• Operation Plan

Resourcing:
• The third step in the entrepreneurial process is resourcing, wherein the entrepreneur
identifies the sources from where the finance and the human resource can be arranged.
• Here, the entrepreneur finds the investors for its new venture and the personnel to
carry out the business activities.

Managing the company:

• Once the funds are raised and the employees are hired, the next step is to initiate the
business operations to achieve the set goals. First of all, an entrepreneur must decide
the management structure or the hierarchy that is required to solve the operational
problems when they arise.

Harvesting:
• The final step in the entrepreneurial process is harvesting wherein, an entrepreneur
decides on the future prospects of the business, i.e. its growth and development.
• Here, the actual growth is compared against the planned growth and then the decision
regarding the stability or the expansion of business operations is undertaken
accordingly, by an entrepreneur.

References:
• https://sites.fuqua.duke.edu/dukeven/selected-topics/the-entrepreneurial-process/
• https://businessjargons.com/entrepreneurial-process.html