Entrepreneurship for Everyone

Posted on Thursday, August 23, 2012 by



Define entrepreneurship in your own words and demystify in by writing down your own example o metaphor and a paradox about it.


An entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise. An entrepreneur is an agent of change. Entrepreneurship is the process of discovering new ways of combining resources. When the market value generated by this new combination of resources is greater than the market value these resources can generate elsewhere individually or in some other combination, the entrepreneur makes a profit. An entrepreneur who takes the resources necessary to produce a pair of jeans that can be sold for thirty dollars and instead turns them into a denim backpack that sells for fifty dollars will earn a profit by increasing the value those resources create. This comparison is possible because in competitive resource markets, an entrepreneur’s costs of production are determined by the prices required to bid the necessary resources away from alternative uses. Those prices will be equal to the value that the resources could create in their next-best alternate uses. Because the price of purchasing resources measures this opportunity cost— the value of the forgone alternatives—the profit entrepreneurs make reflects the amount by which they have increased the value generated by the resources under their control.

Entrepreneurs who make a loss, however, have reduced the value created by the resources under their control; that is, those resources could have produced more value elsewhere. Losses mean that an entrepreneur has essentially turned a fifty-dollar denim backpack into a thirty-dollar pair of jeans. This error in judgment is part of the entrepreneurial learning, or discovery, process vital to the efficient operation of markets. The profit-and-loss system of capitalism helps to quickly sort through the many new resource combinations entrepreneurs discover. A vibrant, growing economy depends on the efficiency of the process by which new ideas are quickly discovered, acted on, and labeled as successes or failures. Just as important as identifying successes is making sure that failures are quickly extinguished, freeing poorly used resources to go elsewhere. This is the positive side of business failure.

Successful entrepreneurs expand the size of the economic pie for everyone. Bill Gates, who as an undergraduate at Harvard developed BASIC for the first microcomputer, went on to help found Microsoft in 1975. During the 1980s, IBM contracted with Gates to provide the operating system for its computers, a system now known as MS-DOS. Gates procured the software from another firm, essentially turning the thirty-dollar pair of jeans into a multibillion-dollar product. Microsoft’s Office and Windows operating software now run on about 90 percent of the world’s computers. By making software that increases human productivity, Gates expanded our ability to generate output (and income), resulting in a higher standard of living for all.

Sam Walton, the founder of Wal-Mart, was another entrepreneur who touched millions of lives in a positive way. His innovations in distribution warehouse centers and inventory control allowed Wal-Mart to grow, in less than thirty years, from a single store in Arkansas to the nation’s largest retail chain. Shoppers benefit from the low prices and convenient locations that Walton’s Wal-Marts provide. Along with other entrepreneurs such as Ted Turner (CNN), Henry Ford (Ford automobiles), Ray Kroc (McDonald’s franchising), and Fred Smith (FedEx), Walton significantly improved the everyday life of billions of people all over the world.

Entrepreneurial Skills

Posted on Tuesday, August 21, 2012 by


What are the most important skills, values, talents, abilities, and mind-set one needs to cultivate as an entrepreneur?



What skills do you need as an entrepreneur What makes someone a successful entrepreneur? It certainly helps to have strong technology skills or expertise in a key area, but these are not defining characteristics of entrepreneurship.Instead, the key qualities are traits such as creativity, the ability to keep going in the face of hardship, and the social skills needed to build great teams.If you want to start a business, it's essential to learn the specific skills that underpin these qualities. It's also important to develop entrepreneurial skills if you're in a job role where you're expected to develop a business, or "take things forward" more generally.
In this article, we'll look at the skills you need to be a successful entrepreneur, and we'll explore resources that you can use to develop the traits needed for success.
                                                                                       
We've gathered these traits into four categories:
 Personal characteristics.
 Interpersonal skills.
 Critical and creative thinking skills.

Practical skills.
We'll now examine each category in more detail, and look at some of the questions you will need to ask yourself if you want to become a successful entrepreneur.
Personal Characteristics
First, examine your personal characteristics, values, and beliefs. Do you have the mindset that's typical of successful entrepreneurs?
 Optimism: Are you an optimistic thinker? Optimism is truly an asset, and it will help get you through the tough times that many entrepreneurs experience as they find a business model that works for them.
Vision: Can you easily see where things can be improved? Can you quickly grasp the "big picture," and explain this to others? And can you create a compelling vision of the future, and then inspire other people to engage with that vision?
Initiative: Do you have initiative, and instinctively start problem-solving or business improvement projects?
Desire for Control: Do you enjoy being in charge and making decisions? Are you motivated to lead others?
Drive and Persistence: Are you self-motivated and energetic? And are you prepared to work hard, for a very long time, to realize your goals? Risk Tolerance: Are you able to take risks, and make decisions when facts are uncertain?
 Resilience: Are you resilient, so that you can pick yourself up when things don't go as planned? And do you learn and grow from your mistakes and failures? (If you avoid taking action because you're afraid of failing, our article on Overcoming Fear of Failure can help you face your fears and move forward.)
Interpersonal Skills
As a successful entrepreneur, you'll have to work closely with people – this is where it is critical to be able to build great relationships with your team, customers, suppliers, shareholders, investors, and more. Some people are more gifted in this area than others, but, fortunately, you can learn and improve these skills. The types of interpersonal skills you'll need include:
Leadership and Motivation: Can you lead and motivate others to follow you and deliver your vision? And are you able to delegate work to others? As a successful entrepreneur, you'll have to depend on others to get beyond a very early stage in your business – there's just too much to do all on your own!
Communication Skills: Are you competent with all types of communication? You need to be able to communicate well to sell your vision of the future to investors, potential clients, team members, and more.
 Listening: Do you hear what others are telling you? Your ability to listen can make or break you as an entrepreneur. Make sure that you're skilled at active listening and empathetic listening.
 Personal Relations: Are you emotionally intelligent? The higher your EI, the easier it will be for you to work with others. The good news is that you can improve your emotional intelligence!
 Negotiation: Are you a good negotiator? Not only do you need to negotiate keen prices, you also need to be able to resolve differences between people in a positive, mutually beneficial way.
 Ethics: Do you deal with people based on respect, integrity, fairness, and truthfulness? Can you lead ethically? You'll find it hard to build a happy, committed team if you deal with people – staff, customers or suppliers – in a shabby way.
Critical and Creative Thinking Skills
As an entrepreneur, you also need to come up with fresh ideas, and make good decisions about opportunities and potential projects.
Many people think that you're either born creative or you're not. However, creativity is a skill that you can develop if you invest the time and effort.
Creative Thinking: Are you able to see situations from a variety of perspectives and come up with original ideas? (There are many creativity tools that will help you do this.)
 Problem Solving: How good are you at coming up with sound solutions to the problems you're facing? Tools such as Cause & Effect Analysis, the 5 Whys Technique, and CATWOE are just some of the problem-solving tools that you'll need to be familiar with.
 Recognizing Opportunities: Do you recognize opportunities when they present themselves? Can you spot a trend? And are you able to create a plan to take advantage of the opportunities you identify?
Practical Skills
You also need the practical skills and knowledge needed to produce goods or services effectively, and run a company.
Goal Setting: Do you regularly set goals, create a plan to achieve them, and then carry out that plan?
Planning and Organizing: Do you have the talents, skills, and abilities necessary to achieve your goals? Can you coordinate people to achieve these efficiently and effectively? (Here, effective project management skills are important, as are basic organization skills.) And do you know how to develop a coherent, well thought-through business plan, including developing and learning from appropriate financial forecasts?
 Decision Making: How good are you at making decisions? Do you make them based on relevant information and by weighing the potential consequences? And are you confident in the decisions that you make?
Core decision-making tools include Decision Tree Analysis, Grid Analysis, and Six Thinking Hats.
You need knowledge in several areas when starting or running a business. For instance:
Business knowledge: Do you have a good general knowledge of the main functional areas of a business (sales, marketing, finance, and operations), and are you able to operate or manage others in these areas with a reasonable degree of competence?
Entrepreneurial knowledge: Do you understand how entrepreneurs raise capital? And do you understand the sheer amount of experimentation and hard work that may be needed to find a business model that works for you?
Opportunity-specific knowledge: Do you understand the market you're attempting to enter, and do you know what you need to do to bring your product or service to market?
Venture-specific knowledge: Do you know what you need to do to make this type of business successful? And do you understand the specifics of the business that you want to start? (This is where it's often useful to work for a short time in a similar business.)

You can also learn from others who have worked on projects similar to the ones that you're contemplating, or find a mentor – someone else who's been there before and is willing to coach you.


 Defining Entrepreneurship
Some experts think of entrepreneurs as people who are willing to take risks that other people are not. Others define them as people who start and build successful businesses.Thinking about the first of these definitions, entrepreneurship doesn't necessarily involve starting your own business. Many people who don't work for themselves are recognized as entrepreneurs within their organizations.Regardless of how you define an "entrepreneur," one thing is certain: becoming a successful entrepreneur isn't easy.So, how does one person successfully take advantage of an opportunity, while another, equally knowledgeable person does not? Do entrepreneurs have a different genetic makeup? Or do they operate from a different vantage point, that somehow directs their decisions for them?Though many researchers have studied the subject, there are no definitive answers. What we do know is that successful entrepreneurs seem to have certain traits in common.




Components of Timmons Model of Entrepreneurial Process

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Describe how Timmons Model of the Entrepreneurial Process changed the odds of the success of the organization, how can we fix it, shape it, and mold it and describe in general how the model works using examples, metaphors, or analogy

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The Timmons Model identifies three components of the entrepreneurship process that can be assessed, influenced, shaped, and altered. The entrepreneur is responsible for assessing the opportunity, marshaling resources to capture the opportunity, and developing a team to exploit the opportunity for value creation. An appropriate metaphor for the Timmons Model is juggler bouncing up and down on a trampoline that is moving on a conveyor belt at unpredictable speeds and directions, while to keep all three balls in the air. That is the dynamic nature of an early-stage start-up. Few high-growth ventures are started without the assembly of an experienced and skilled team. Creativity, communication, and leadership moderate the strength of the model components and increase the likelihood of ventures success. Finally, the business plan provides the language and code for communicating the quality of the three driving forces of Timmons Model and of their fit and balance. 

The Timmons Model of the Entrepreneurial Procrss

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Discuss whole process of the entrepreneurial process. Explain the specific rules of a.) opportunities b.) resource c.) team and discuss this elements related to each other.


Through the Entrepreneurial Process, it is important to understand each component, or driving force of the Timmons Model. We begin with a discussion of opportunity.

THE OPPORTUNITY: Identification and Evaluation

At the heart of the entrepreneurial process is the Opportunity. Generally, entrepreneurs possess distinct cognitive processing skills and capacity that aid opportunity recognition and exploitation. It is focused on the on the individuals prosperity to recognized opportunity through a process of discovery and posited that entrepreneurs are alert individuals that able to identify opportunities when markets are of disequilibrium.
In short, the greater the growth, size, durability and robustness of the gross and net margins and free cash flow, the greater the opportunity. The more imperfect the market, the greater the opportunity. The greater the rate of change, the discontinuities, and chaos, the greater is the opportunity. The greater the inconsistencies in existing service and quality, in lead times and lag times, and the greater the vacuums and gaps in information and knowledge, the greater is the opportunity. Assuming that the opportunity is present, successful opportunity capture depends on the opportunity resource base.

RESOURCES: Creative and Parsimonious

The type of resource needed for new venture creation goes beyond the demand for financial resources; thinking cash first is often the demise of the new venture. Gathering other, more specific, resources in a creative fashion will often be a source of competitive differentiation. However, the goal is to develop resources that are valuable, inimitable, durable and value  capturing leading to competitive superiority. For the new venture, resources evolve from bootstrapped, and continuously upgraded.

THE ENTREPRENEURIAL TEAM

The model of team formation, like resources previously discussed, must be mapped to the opportunity. Different modes of entrepreneurial team formation exist. First, the lead entrepreneur has the business idea and then builds a team to develop the new venture. Second, a team of entrepreneurs recognize an opportunity and develops the idea to fruition. Finally, team is developed over a period of time. As with the discussion on resources, the ability to develop a high performing entrepreneurial team is often defend on the lead entrepreneur's social network. That the diversity of an entrepreneur's network is correlated to the scope of perceived opportunities available. Strong ties are considered to be direct relationships such as family, friends, and colleagues. Conversely, weak ties are indirect relationships such as venture capitalist, trade association and banks. It has been argued that too many strong ties and not enough weak ties can limit the entrepreneur and his potential for resource acquisition because strong ties are often with like-minded individuals.


Failing is Succeding

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What are the most important determinants of success and failure in new business? Who has the best and worst chances for success, and why?



 Business Failure is a negative and depressing event, one without any value, something that most entrepreneurs would soon want to forget and wished never happened. The result failed business will include a great deal of stress in many areas of one's life; personal, professional, and financial. After sacrificing too much of your vision into reality only to see it fall apart is certainly devastating. Having a face and core with something like that would make one feel like crawling into a hole and taking the hole with them. Hard to imagine the misery and darkness one suffers from that kind of failure.

 Failure simply means a form of success, a foundation of success. Learning from success is important, but learning from failure is vital to succeeding. Adapting this type of mindset is a powerful tool of an entrepreneur. If you see all your attempts as a part of the road of succeeding and even a vital necessity, then are they even failures at all? The answer is they are only failures if you denied yourself the opportunity to learn from this experience

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