DIMENSIONS OF AN ENTREPRENEUR DEFINING AN ENTREPRENRENEURIAL ORGANIZATION
There are many dimensions of an entrepreneur and those define an entrepreneurial organization. There should be innovativeness and uniqueness which can arise because of novel ideas and there is a range of options of innovativeness as it can be applied to the products and services. There is obvious risk taking and that is because of the new things are tried and ideas are entertained and put into actions. However, the risk taking is calculated and there is realistic awareness. Therefore, there has to be much experimentation and market tests which might lead to successful hits. Another dimension is of being proactive and this is about implementing actions rather than waiting for the changes to take place and then making some moves. Therefore, the environment has to be studied constantly and they influence the environment rather than being influenced by environmental change. This means deep perception and regular analysis and therefore, incorporating effective change in the ideas and concepts so that outcomes are not a subject to change.
These things can lead to a successful entrepreneur and successful ideas and their implementation becomes easy and positive outcomes are then expected. However, what entrepreneurs need at the end of the day is financing. One such option is venture capital firms who are seeking entrepreneurs because they have substantial funds for investment. Thus, there is a whole process that entrepreneurs should follow so as to achieve the funds and put their ideas into actions. Firstly the process has to be understood and a venture capital partner has to be targeted. The right venture capital firm has to be chosen and this can be done by considering their geography, industry specialization, stage of development and size of investment preferences. The research should be done with care so as to know whether the fund would be a lead investor or the existence of complementary or competing investee ventures within that specific portfolio.
The second important concern is writing the business plan. This is because it the first step in convincing the firm that the team has the capability to build a successful enterprise. There should be an executive summary because most companies go beyond the executive summaries and synopsis, which should be of two pages, because that is when the funding company decides if it meets their criteria or not. Also, at times, they are disappointed and prefer not wasting time if the executive summary is not well-written. A well-written executive summary has: company overview, management team information, products and services to be offered, market analysis, funds requested and uses and then there should be five year projections. In the body of the business plan, these points are elaborated with more statistics and supporting data. Plus, there should be a marketing plan with pricing, distribution channels, and promotions. There has to be elaboration on the competition and operations.
Being brief, stating the company objectives and providing what the firm plans to pursue as goods and services is important for the executive summary. As for the strategy, the tactics have to be described. There should be logical explanations for the strategy and business risks should be highlighted and it is better to keep the language simple rather than getting too technical.
The third step is preparing the financials and forecasts because this suggests to the investor that the entrepreneur has considered the financial implications and has growth plans. Financial forecasting of a period of three to five years should be done including the balance sheet, income statement and cash flow statement. Basic assumptions about sales, cost of sales, other expenses and product development should be used.
In fact business plan is one option with which the plan can be distinct from the rest and executive summary gives an edge if it is succinct. The document should be graphically pleasing. References and introductions from credible resources should be taken. Moreover, potential companies should be targeted and time should be spent on that. A realistic timeline should be prepared and this shows the investor that the plan is carefully prepared.
The business plan should speak the right language of the investors and the entrepreneur should assess the four interdependent factors which are critical such as the people, the opportunity, the context and the risk and reward. People are important because without the right team there is less likelihood of a positive outcome. And often enough investors prefer people who are known rather than fresh therefore; people should be talked about exhaustively. As for the opportunity, the investors question the market for the product/service if is large or rapidly growing or both and whether the industry is or likely to become structurally attractive. Context is regarding the macroeconomic environment such as the government rules and regulations, taxes, exchange rates, inflation, economic activity, interest rates. As for risk and reward even though future is tough to predict, there still should a rough idea as to what is in store for the investor. The potential risks should be clarified and also the idea that if the company can be taken public sometime in the future should be considered. Thus, the business plan should try to clearly let the investor see when he/she can eventually get the money out of the business.
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