Entrepreneurship: Theories, Notes, Questions

An entrepreneur is someone who capitalizes on an opportunity to create a new business while talking the risks enjoying its rewards.

Question and Answers

Question: Oliver and Akash, are recent graduates of the University. They are planning to start their business together with some savings they have from part-time jobs. However, they are aware that they need more funds for their business venture and are planning to approach family and friends for investment. They have contacted you for advice on different types of financing options available for their business venture development. Write an email to Oliver and Akash and explain the following:
a) Explain the differences between the four stages of venture development: seed, start-up, growth/expansion, and maturity.
b) Discuss, in detail, the financing options available to Oliver and Akash at the seed stage of their business venture other than bootstrapping.

Question: You are required to record a video presentation setting out a strategic, marketing, financial, operations management or HRM plan for a new venture based on your group’s allocated design project. The aim is to encourage you to apply your knowledge and insights of good business planning practice (drawn from the module, your associated reading and your business experience) to the development and presentation of this plan and to the underlying analysis and evaluation. The individual video presentation should include an overview of your chosen contribution to the business plan, drawing on the relevant elements of the business plan and elaborating on the key issues and recommendations. The assignment requires you to conduct independent research, data collection, and data interpretation from various sources such as a library and/or the Web, and work in order to record your presentation.

You are required to write an individual report reflecting on your work. The aim is to encourage you to develop a critical approach to your work, through carrying out an analysis and evaluation of your group’s allocated business plan, its key elements, and of the effectiveness of your own contribution to its development. The assignment should include: A brief introduction to the product or service forming the basis of your group business plan. A brief summary of the key elements of your group’s allocated business plan, the underlying theoretical issues and the linkages between the plan and the commercialisation of your product or service. An analysis and evaluation of the strengths and weaknesses of the plan and suggestions as to how this could have been improved. An analysis and evaluation of the strengths and weaknesses of your own contribution to the business plan and to the development of it. A summary of the main benefits that you feel that you have drawn from your participation in the module and the group business planning process, including academic and anticipated employability outcomes.

Question: (a) Why do entrepreneurs need to know about barriers to entry as they research feasibility of their (b) Draw the entrepreneurial process model and explain it.

Question: (a) Describe the entrepreneurship external environment forces. (b) Discuss the snares of innovation.

Question: (a) Discuss the role that social responsibility and ethics play in the context of entrepreneurship. (b) What is competitive advantage, and why do entrepreneurs need to care about it.

Question: (a) Developing rural entrepreneurship is highly important for India.” Comment and suggest measures to improve this sector. (b) List and explain the various financial options from which entrepreneurs may choose.

Question: Strategic Growth Plan for an Existing Small/ Medium Sized Business

Prepare a strategic growth plan for a small/medium business. The main body of the report should include discussion of the significance and interpretation of your analysis of the industry/ sector & business and specific strategic recommendations for the future strategic growth of the organisation.

Tables/ charts etc; PEST Analysis, SWOT Analysis etc should be put into your appendices. Do NOT just describe these analytical tools in the main body of your report, you MUST highlight the significance of the analysis, what do they reveal about the sector? What are the implications for the company? That is what analysis means.

The real value of entrepreneurs doing a strategic growth plan is not just having the finished product in hand; rather, the value lies in the process of research and thinking about the business in a systematic way. The act of planning helps you to think things through thoroughly, study and research when you are not sure of the facts; to explore ideas critically takes time, but avoids costly, perhaps disastrous, mistakes later.

The plan outline given is a generic model suitable for all types of businesses. However, you may modify it to suit the particular circumstances. The quality, structure and appearance of the work as well as the ideas expressed within are all important. Much of the efforts will be spent in researching the company, industry & competitors, often re-thinking ideas and assumptions. As you do this, different opportunities and ideas for possible future growth and innovations will start to emerge – you need to research & think these through from an early stage. The primary purpose of this report is to develop a holistic growth strategy for the business over the next 1- 5 years.

You must provide a list of references at the end of your report.

Organisation Strategic Position:

This section should briefly introduce the organisation & provide some analysis of the overall strategic position of the business in relation to competition & changes in the sector. Many companies have a brief mission statement, explaining their reason for existence and their guiding principles. If the company has a mission statement, this is a good place to put it in the plan – you should comment on this. Whether they have a mission statement or not you must identify the sector they compete within, who do they market their products and services to? (Briefly here – you will do a more thorough explanation in the market analysis section).

Is this a growing business? What changes are happening in the sector and how might the company position itself to take advantage of them? Briefly Identify key competitors. Highlight the most important company strengths/ Weaknesses of the company. What significant challenges the company faces now and in the foreseeable future. Briefly, what are the plans for the future growth of the business?

In your appendices, include factual information on the organisation or company background. Avoid making this just a potted history of the business, but refer to; years in business, short bio of lead entrepreneur, reputation (if known) in the business community, sales and profit history (if available), number of employees.

Strategic Industry/ Market Analysis & Competitor Analysis:

Overview & trends in the industry: An overview of the sector/ industry, eg: size/ value/ growth over recent years? key markets key competitors? Trends in the sector/ industry eg: changing consumer buying behaviour/ preferences? Emergence of new technologies? Innovations in service & product development? Emergence of new markets? Changing environmental/ legal requirements? You MUST refer to industry data & market reports for this – It is really important to demonstrate a proper understanding of the sector/ industry.

Then:

Use PEST analysis to undertake a macro environmental analysis & identify the issues/ factors impacting now and likely to impact in the future on the sector/ industry & the implications for the business. You should include a PEST or PESTLE analysis table in your APPENDICES. Then in the main body of the report should be your analysis/ discussion of this.

Use Five Force Analysis to identify and analyse the competitive forces in the industry – Which are high? Which are low? What does your Five force analysis reveal in terms of how difficult or easy it might be for the organisation to achieve growth given the competitive forces? You should include a Five Force analysis table in your APPENDICES. In the main body of the report should be your analysis/ discussion of this.

Use SWOT Analysis to undertake an evaluation of the company’s strengths & weaknesses related to factors such as finance, marketing, management, production or service levels. You should also provide a clear identification & discussion of opportunities and threats present or emerging from the external environment eg: changes in legislation increasing market demand, access to new international markets, competitor activity, new distribution channels, supplier problems… You should include a SWOT analysis table in your APPENDICES. In the main body of the report should be your analysis/ discussion of this.

Your discussion of the analysis part of SWOT is where you can demonstrate how you think the company might build on strengths, limit or overcome weaknesses, capitalise on opportunities & protect the company from threats – This should be shown in the form of a TOWS matrix.

Competitor Analysis:

List the organisations main competitors: You need to identify 3 KEY competitors. Do they compete with the company across the board, or just for certain products or services, certain customers, or in certain locations? Use the factors in the table below to compare the company with the three most important competitors.

Since factors vary with each industry, you may want to customise the list of factors for your particular company: Products. Price. Distribution methods/ Digital platform. Quality. Range/ Selection. Service. Reliability. Expertise. Company Reputation. Location. Marketing/ promotion. Social Media Strategy. Brand Image. You should rank your chosen company against each of these factors on a score of 1 – 10. Where 1 = Very weak/ poor & 10 = Very strong/ greatest strength as a business Then evaluate on the same basis each of the 3 key competitors. You can then VISUALLY map all of these in a graph. Having produced a competitor chart, you then to write several short paragraphs stating the particular competitive strengths & weaknesses of each of the 3 competitors and discuss what strategies might this suggest.

Recommended Growth Strategies

This section of the report requires you to develop a holistic growth strategy for the business. It is recommended that you present this as three integrated stages.

Stage one discussing short term strategies over the next 12 month period. Stage two from the end of year 1 to end of year 3. Stage three end of year 3 to year 5.

You should make reference to the basis on which the company is currently competing & the basis it will compete on in the future. Remember MOST firms only compete on the basis of one generic advantage e.g. Focused Differentiation, cost leadership. You should also make reference here to your understanding of the organization’s current strategic capability – Skills/ resources/ competencies.

It is very unlikely there will be just one strategy, rather a number of strategic initiatives that work together over the 5 year period to achieve the growth. Your report should demonstrate how the different facets of strategy work together and make long term strategic sense over time. You should place particular emphasis on issues of innovation and competitiveness.

It is important that these growth strategies should make sense in light of the analysis in the previous sections of your plan i.e. capitalising on what the organisation is good at, responding to market changes, looking to take advantage of new opportunities, overcoming looming threats or developing new innovative services, products or ways of working. You should make appropriate references to your analysis in this section.

Each strategy needs to have a clear strategic rationale linked to specific strategic objectives for the company. You need to explain the strategy, why do you think these strategies are appropriate? How will they achieve substantial growth? Discuss the details of each option considering where appropriate.

Using Ansoff’s growth matrix, discuss the future growth strategies for each of the three stages.

It is suggested the structure of this section addresses the following:

For example the initial 12 month period may involve market penetration strategies (where the business focuses on selling existing products into existing markets) This is usually achieved through a combination of different marketing activities e.g. developing social media strategies, introducing loyalty schemes, developing competitive pricing strategies to increase usage. Engaging in marketing/ promotional campaigns or putting more resources into personal selling.

The second stage might involve product development strategies or market development strategies. These need to be explained – Don’t simply describe what product development is out of the text book! The strategic reasoning or rationale for these strategies in the context of the firm MUST be given (for example to increase market share geographically, to improve competitiveness through process or product innovation or to improve the supply chain efficiencies) & then provide some detail of what implementing this strategy will involve – this should include a discussion how the strategy might be achieved and what issues/ difficulties this might present.

The third stage might also involve product development strategies or market development strategies. It might also involve overseas market development – if you do choose this as a future strategy you should clearly identify the host target country, what is your strategic reasoning/ rationale?, What evidence exists to substantiate this? (e.g Market reports/ stats on growth of this market in chosen country) How will the firm will enter this market & why this particular method? Does this involve identifying a suitable business partner? Which particular cities will you target? What will the investment overseas involve – premises? Staff? What difficulties do you anticipate? You might also consider diversification strategies for the third stage – possibly in a related area. Again, be specific, consider all the issues & questions about how this might be achieved and what the strategic reasoning for this strategy is.

Given what has been said above, it is very unlikely there will be just one strategy, rather a number of strategic initiatives that work together over the 5 year period to achieve the growth.

Your report should demonstrate how the different parts of the strategy work together and make long term strategic sense over time. You should place particular emphasis on issues of innovation and competitiveness. It is important that these growth strategies should make sense in light of the analysis in the previous sections of your plan i.e. capitalising on what the organisation is good at (strategic capability), responding to market changes, looking to take advantage of new opportunities, overcoming looming threats or developing new innovative services, products or ways of working. You should make appropriate references to your analysis in this section.

The growth strategies then will be a combination of some of the following (You must prioritise these): Market penetration of existing markets. New Product or service Innovations. Market Development/ International Market Development. Diversification into other sectors & products (possibly related to existing business?)

Managing the Growth

In light of your strategic options identified in section 4 on growth strategies you need to consider the following issues:

Timing schedule for Growth Plan: A timeline with projected completion dates of strategic objectives over the 3 stages of the plan. This should illustrate how the different strategic options “fit together” – It is best to present this in a chart format. Projected Sources of Finance – How will the strategies be funded? Loans/ venture capital? Leadership/ Structure – Who the key management team to manage the growth strategy will be? If a single entrepreneur, how will their management style need to change in light of the growth. Does the organisational structure need to change? Premises – Are they big enough for the proposed growth? Where will the business relocate? Technology – will existing systems cope? Would new software or equipment ease pressures? Improve efficiency? Quality? Customer service? Supply Chain Management?

Appendices: Industry Statistics. Market Research. PEST Analysis Table. Five Force Analysis Table. SWOT Analysis Table. TOWS Analysis Table. Competitor Analysis Table. Revised Organisational structural diagrams, who is responsible for key functions? Any other materials needed to support the assumptions in this plan.

Question: Creating a Winning Business

Prepare an individual New Venture Business Plan report. The report will comprise of five sections:

• The Executive Summary: The Problem – The Solution.
• The Value Proposition Canvas and Business Canvas Model.
• Market analysis: Secondary and Primary research – feasibility/ proof of concept
• Marketing launch & Marketing Plan
• Finance: Projected Startup costs, Sales revenue, and Cash Flow forecast & summary for future growth

You should also include an appendices section to the report in which you can include supporting materials such as, but not limited to: Your formative Business Pitch slides, market research questionnaire, equipment lists, supplier details, map of business location, identification of necessary licenses.

The Executive Summary you should: Introduce and briefly explain your creative business idea. Summarize the problem(s) you are solving for customers and your creative solution. Briefly identify your Role and Key Skills in the business and any staff if applicable. Briefly identify the target market(s) you intend to serve and how you will reach them.

The Value Proposition Canvas and Business Canvas Model you should: Produce a completed Value Proposition Canvas for your business with written explanation. Produce a completed Business Canvas Model for your business with written explanation.

Market analysis: Secondary and Primary research you should: Undertake an analysis (quantitative & qualitative) of the market/ sector you intend to compete in (You must include reference to Market research data from published sources eg: MINTEL and or other reports.) What are the key trends in the sector? What opportunities does this reveal for your business idea? Include a discussion of the results of your primary market research to substantiate that there is demand for the service or product. You should also make reference to any changes you have made to the business idea/ service or product/ distribution based on the primary research findings. Provide a clear description of the target market(s). Complete a competitor analysis: Who are the three most significant competitors in the market/ geographical area you are targeting (You should identify and comment on your competitor’s key strengths & weaknesses?).

Marketing launch & Marketing Plan you should: State how you will Launch your business (create an identity, building awareness with your target market(s) How will you do this? Launch event? Pop up shop? Social media? Introductory offers? Endorsement from influencers/ bloggers? Develop a summary marketing communication plan for your business. Online and offline – Targeted Promotional activity/publicity/ Events/Shows/ Selling activity/ social media marketing strategy: How you will use and combine Instagram/ You Tube/ Facebook etc? and links to your web site. Explain how will you sell and distribute your products or services? Through social media? Website? Direct to customers or through intermediaries? Selling to commercial buyers? (other businesses?) State how will you price your service or products? (Avoid simply competing on price). Use of a customer subscription model? Single unit vs. bulk purchases? (Your pricing strategy should relate to the projected monthly sales revenue in section 5.

Finance you should: Identify your start-up costs- capital items you will need/ initial materials or stock– This should be as realistic as possible. How much start-up capital will you need to start the business? Complete a monthly sales revenue forecast for 12 months – You should provide some written discussion of this section to explain how you reached your sales figure. Produce a 12 Month cash-flow forecast – You should provide some written discussion of this section A cashflow template is provided on CANVAS. Include a brief summary statement at the end of your report identifying the future growth potential of the business over the next 2 years.

Question:

When your Aunt and Uncle learned that you decided to enroll in College and pursue a career in tourism and hospitality, they were excited for you. You have just received an envelope which was sent by your Aunt and Uncle. When you open the envelope, there’s a letter inside explaining that your Aunt and Uncle are giving you $5,000 !

However … there’s a bit of a “catch”.

The money may only be used to start your own tourism or hospitality small business, and you must create and send them your business plan for your business before they’ll give you the money. You have decided that you will start your business after you graduate from Seneca, but now you need to complete your business plan.

Your Aunt and Uncle have provided a separate “Business Plan Report” document which you must complete before your Aunt and Uncle will approve your Business Plan Report and give you the $5,000 to start your business.

Your assignment is to complete the “Business Plan Report”. Use the questions below as your guide to think about what you may want to discuss in your Business Plan Report. Do not include the questions and information below … just include your thoughts for each section in the Business Plan Report. You do not need to discuss all of the items shown under each section … think about what the most important and relevant factors are for your business and focus on those.

You may include diagrams, graphs, or charts from research you conduct while completing your Business Plan Report. Be sure to include these in your sources cited.

Entrepreneurship Cell and Skill Hub in Colleges

More colleges now have Entrepreneurship cell and Skill Hub (cell) that strive to nurture students to understand the entrepreneurial ecosystem and build their own start-ups.

College principals believe that the Entrepreneurship Cell and Skill Hub will boost the start-up culture (that continues to thrive in some Colleges), and will give an impetus to numerous budding entrepreneurs studying in the college.