The Entrepreneurial Decision Process

Entrepreneurial Process

Definition: The Entrepreneur is a change agent that acts as an industrialist and undertakes the risk associated with forming the business for commercial use. An entrepreneur has an unusual foresight to identify the potential demand for the goods and services.

The entrepreneurship is a continuous process that needs to be followed by an entrepreneur to plan and launch the new ventures more efficiently

Stage one of the entrepreneurial process deals with opportunity identification. An opportunity by definition is a favorable set of circumstances which creates a need for a new product, business, or service (Barringer & Ireland, 2010). Opportunity identification. is the process by which the entrepreneur comes up with a prospective idea for a new venture. Identifying the opportunity is not simple. identification. takes research, exploration, and evaluation of current needs, demands, and trends from consumers and others (Dhenak, 2010). With researching and surveying, the product or service can develop. The organization or individual can now innovate what is lacking as long as the market exists for the opportunity to present itself.

If the market is mature the window of opportunity is closed (Barringer & Ireland, 2010). Qualities through innovation add value to a product, service, or business. The qualities are attractiveness, durability, timeliness, and fixation to the product (Barringer & Ireland, 2010).

2. Entrepreneurial decision making is not scientific decision making!

The Entrepreneurial Decision Process is a natural and logical approach which helps individuals to achieve success in new ventures. Most of the individuals have innovative and creative ideas.

 Some of them recognize the opportunity to bring their ideas in the market and start a new venture. Starting a venture takes a lot of courage. To become successful and be in business, the combination of three skills i.e. hard work, skill and perseverance is required. When entrepreneurs identify prospects, they decide whether to start new ventures.

The entrepreneurial decision process is a movement from a present lifestyle to forming a new enterprise

1.          Entrepreneurial decisions are different from managerial decisions. Managerial decision making is scientific decision making, which is based on data and calculation.

2.         Entrepreneurial decision making is based on alertness, intuition, imagination, and judgment. Different people have different thoughts and judgments about the same data, so choices will be different.

3.         The most important decision making by outstanding entrepreneurs were often not originally acknowledged by the majority of people or were even considered preposterous. 

4.        Entrepreneurs do not make decisions according to majority opinion.  Of course, the opinion of the entrepreneur might be incorrect.  But we have no way to judge correctness before the future arrives.  Majority opinion cannot be the standard for judgment.

5.         Under uncertainty and indeterminacy of the future, imagination plays a vital role in entrepreneurial decisions. Indefiniteness implies choice can make a difference in the history to come.  Imagination is not a prediction of the future, but a blueprint for the future.

For example, when Henry Ford imagined a mass market for automobiles in the early 1900s, he meant to make it happen. Without his imagination, it would have been impossible for 60% of American households to have a family car by 1930. Managerial decisions can be delegated to non-entrepreneurial people, but entrepreneurial decisions can be made only by entrepreneurs.

3. Second, entrepreneurial decision making is not finding a solution with given constraints; it is changing the constraints themselves.

A person that does not have the ability to change constraints cannot possibly become a successful entrepreneur.  So-called innovation in essence is changing constraints to do what appears to be impossible.

In fact, according to my observation, all outstanding entrepreneurs must have this kind of reality distortion field. Uncertainty means that no entrepreneur can control all external factors. 

4. Entrepreneurs have objectives beyond profit. 

Profit maximization is a standard assumption in mainstream economics.  In the real world, at least from the perspective of outstanding entrepreneurs, making money is not their sole objective, nor is it the end goal. Entrepreneurs pursue not only profits, but also great success and the realization of their dreams. For entrepreneurs, making money is a means to realize success. 

 

Joseph Schumpeter believed that entrepreneurs are driven by three non-monetary motives:

(1)     “the dream and the will to found a private kingdom,”

(2)    “the will to conquer,” and

(3)    “the joy of creating.”

(4)   To start a new venture is not an easy task. It requires a lot of courage and high energy. The persons who interested to start a new venture try to start business in their familiar area. This definitely helps them.

(5)    An individual’s culture, subculture, family, teachers, and peers have an important role to build one’s perception in starting a new company. Culture and subculture support an individual to create a new business successfully. Individuals plan enthusiastically new enterprises in these supportive environments.

(6)   Similarly, university education base is an important factor for entrepreneurial activity and company formation. At last, peers are also very significant role in the decision to form a company.

(7)   An environment which supports entrepreneurs and potential entrepreneurs for discuss ideas, problems, and solutions produces more new ventures than an area where these are not available. Possibility of New Venture Formation Even though the desirability of new venture formation is based on individual’s culture, subculture, family, teachers, and peers, the second feature of decision process has talk about the possibility of new venture formation.

(8)   Factors like government, background, marketing, role models, and finances contribute significantly to the creation of a new venture.

(9)   Government contributes by providing the infrastructural support to a new venture.

(10)                        Entrepreneurial necessary background like formal education and previous business experience help them to manage with the social, psychological, and financial risks.

(11)  An understanding of marketing like total package of product, price, distribution, and promotion also plays an important role in beginning a new company. Having a role model can be one of the most powerful influences in starting a new venture.

 

5. 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.

 6.Resourcing:

The third step in the entrepreneurial process is resourcing, where in 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. This stage is determining and allocating resources.

7. 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.

 

8. Managing the enterprise.

Once resources are secure with the entrepreneurial process business plan implementation can take place. Managing the company means examining operational issues that will occur when implementation begins and throughout the entire business plan cycle. The management process involves implementing structure and business style while determining variables for success.

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

Types of Start-Ups - the entrepreneurial decision process.

These are: Cottage Company, Lifestyle Firms, Foundation Companies, and High-Potential Ventures.

A Cottage Company : A cottage company is a privately held business that normally employs less than ten people.

A Lifestyle Firm :A lifestyle firm is a small venture that supports the owners and enjoys modest growth. The entrepreneur devoted limited money for research and development. This type of firm may grow after a long period to 30 or 40 employees and have annual turnover of about $2 million.

The Foundation Company :The foundation company is formed after research and development and bases the foundation for a new business area. It generally draws the interest of private investors only not the venture capital community, because this type of start-up not often goes public.

The High-Potential Venture The high-potential business enterprises may start like a foundation company, receives the great investment interest and publicity because of its rapid growth. The company could employ around 500 workforces. These firms are also called gazelles and are integral part to the economic development.

Social Startups

Social startups are aimed at creating a positive impact on society. Some social startups operate as non-profits, solely dedicated to bettering the world. Another concept worth exploring is Corporate Social Responsibility (CSR), a starting point for companies interested in making a difference.

1. How do I determine what type of startup is right for me?

Consider your interests, goals, and resources to determine the right startup type for you.

2. How do I choose the right business model for my startup?

Choosing the right business model for your startup is crucial for its success. Consider factors like your target market, revenue streams, and cost structure. Evaluate different types of startups with examples to determine which aligns best with your goals and resources.

3. What are some common challenges facing startups in different categories?

Startups in different categories face common challenges like startup ideas, retaining customers, building a strong brand presence, startup financing, and scaling operations. Additionally, each category has its specific challenges.

 

 

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ROLE OF WOMEN ENTREPRENEURS IN THE INDIA

 

In India, women dominate the micro enterprise sector both in rural and urban areas. According to the central statistical authority women account for close to 70 per cent of the micro enterprises in India are run by women. The role of women entrepreneurs can be explained from the following points

1. Employment Generation:

 It implies that women entrepreneurs not only establish their enterprise, but provide job to others. Women entrepreneurship is about women's position in the society and their role as entrepreneurs in the same society.

 It can be understood in two ways, namely, at the individual level (number of self-employed) and at the firm level (number of firms owned by women and their economic impact). In this way, woman entrepreneurs have an important impact on the economy in terms of their ability to create jobs for themselves as well as for others.

2. Economic Development: 

It signifies that women entrepreneur contribute to the gross domestic product of the country by establishing enterprises and producing goods and services. Due to their entrepreneurial activity, women entrepreneurs bring dynamism in market. In this way, they also help in increasing the national income of the country.

3. Better Utilization of Resources: 

It implies that the involvement of women in industrial development ensure the effective utilization of all available resources (labor, raw materials, capital).

4. Capital formation:

 Entrepreneurs mobilize the idle savings of the public through the issue of industrial securities. The rate of capital formation increases, which is essential for rapid economic growth.

5. Improved Quality of Life: 

It implies that women entrepreneurs are now economically independent and take decisions independently. They are now capable of upbringing their children according to their wish. They are providing quality education to their children.  They not only improve their living standards, but also the living standards of others by providing them the means of earning.

6. Balanced Regional Development: 

Women entrepreneurs in India are to remove regional disparities in economic development. They set up industries in backward areas to avail of the resources concessions and subsidies offered by government

7. Innovation: 

Innovation is the key to entrepreneurship. As an innovator, the entrepreneur assumes the role of a pioneer and an industrial leader. Entrepreneurs have contributed many innovations in developing new products and in the existing products and services. All these have resulted in economic development by way of generating employment, more income etc.,

 

FACTORS RESPONSIBLE FOR INCREASING FEMALE ENTREPRENEURSHIP IN INDIA

 In spite of the growing number of female entrepreneurs, the share of female entrepreneurs is still significantly low when compared to their participation rate. Several factors responsible for increasing the level of female entrepreneurship in India:

1. Nature of Entrepreneurship: 

Women enter into entrepreneurial activity because regular employment does not provide them with the flexibility, control or challenge offered by business ownership.

2. Empowerment:

 Indian women are becoming more empowered now-adays. Legislations are being progressively drafted to offer them more opportunities at various levels.

 3. Social Conditions: 

For women, in particular, the relatively high involvement is necessary. Entrepreneurship indicates that self-employment is used as a way to circumvent(avoid) institutional and cultural constraints with respect to female employment, as well as a way to provide supplemental family income.

4. Literacy and Education: Increased levels of education have played a crucial role in initiating the process of entrepreneurship.

5. Multitask Oriented: Women are known for juggling many tasks at the same time and still producing excellent results. A woman can talk on the phone, open and read her email and schedule what else she needs to finish for the rest of the day all at the same time. Men have more trouble with this multitasking thing; therefore sometimes they miss many opportunities.

6. Being Patient with the Process: 

This is an extremely important attribute for entrepreneurs to have. Too often we hear of visionary entrepreneurs who tried to start their businesses and after a few months gave up. Very often we find these entrepreneurs gave up on their dreams too soon. They became impatient with the process. Women know naturally that you must wait in order to receive positive outcomes.

7. Branding and Marketing Themselves: 

Women are natural marketers. They are so passionate and enthusiastic about what they choose to do that they just do not stop talking about it. They don't forget to emphasize the benefits of their services to their potential customers. They understand how to emphasize the positive.

8. Collaborator: 

Women entrepreneurs are becoming more and more successful because they are natural collaborators and love doing project together. When they find likeminded women whom they like and think they can accomplish something with by combining their talents they do it.

9. Structural Shift: One of the primary drivers is a structural shift. Women are now a greater part of the economic make-up of society; there are more women in the workforce. They are resourceful, leaving the workforce to stay home and raise a family, re-entering when the kids are grown or working a flex schedule when their kids go to school.

10. It's the Blend: 

One of the biggest reasons women entrepreneurs are now in the forefront is their desire to blend career and life ambitions. They put their passions into practice and it shines through in entrepreneurial endeavors. For them it's not just a job, it's a significant part of who they are.

11. Relating to Customers' Needs:

 One of the biggest reasons women entrepreneurs are so successful is they are more conscious of their customers' needs. Men for the most part are not customers they're consumers. It is the big difference.

12. Integrity of Relationships: 

Women's ability to nurture the whole relationship is what makes them great as entrepreneurs. They naturally listen to understand, so they can connect across business boundaries to give solid integrity to relationships.

13. Resourcefulness of Women: 

There are a growing number of work-at home moms starting a business from their homes while taking care of their families..

14. Women are Social: Entrepreneurs now have to be engaged in social media to be successful. By nature, women are social. They can leverage social media in ways that can help jumpstart new businesses quickly and cheaply. Whether it is engaging customers via Twitter, blog, forum or Facebook, they are good at gathering people and starting conversations.

 

SUGGESTIONS

 There are the few suggestions for the development of women entrepreneurs:

1. Women should be considered as a specific target group for all developments.

2. Government should provide better educational facilities and schemes.

3. More Governmental schemes should be launched to motivate women entrepreneurs to engage in small scale and large-scale business ventures.

4. Adequate training programme has to be conducted for the women entrepreneur.

5. Continuous monitoring and improvement of training programmes is essential for grooming women entrepreneurs.

6. Making provision of marketing and sales assistance from government part.

 7. To encourage more passive women entrepreneurs the Women training programme should be organised that taught to recognize psychological needs and express them.

8. The financial institutions should provide more working capital assistance both for small

CONCLUSION: 

In the majority of women operate their medium and small enterprises under very adverse conditions. Not only is it difficult for them to find premises,  markets for their products, access information and credit, but they also have limited access to training especially in the rural areas. Their educational levels are low, they are responsible for all the domestic chores and they have to seek permission from their family members to travel to trade fairs or for training, even if they do want to grow their enterprises. 

Women entrepreneurs need to be better organised in to women entrepreneurs Association which help identify higher potential business opportunities, develop markets for their products, improve product quality and marketing skills, practice good financial management.

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