Why entrepreneurship is a process

Another important decision you have to make is whether to figure everything out yourself or seek advice. You might think that your problems are unique to your business and no one else will understand. This is completely wrong. Through our wild experience in the trenches building the first health rewards company , we learned that while our businesses are different, our problems are not.

This is reinforced every day through our entrepreneur community where entrepreneurs of all shapes and sizes, with very different businesses, learn that we are all fighting the same fights. Regardless of all the different types of entrepreneurs , every business has sales and marketing, product, people and finance, and the decision-making process for your business will be very similar to others, regardless of the industry.

The day-to-day problems that entrepreneurs encounter are not unique. Someone else has already experienced them and this is why we created the lonely entrepreneur learning community. It is a chance to get the best knowledge and learn from other experienced entrepreneurs! This gives us all a great opportunity to come together to help each other solve them.

You do not have to come up with the most technologically advanced methods of doing something to be considered an innovator. Simply being able to communicate how your business is different to others is an example of entrepreneurial innovation.

We start with understanding the entrepreneurial process and move to examining the elements of sustainability innovation. Each piece is a necessary, but not sufficient, part of the puzzle. By examining the pieces carefully, we can see in Chapter 4 "Entrepreneurship and Sustainability Innovation Analysis" , Section 4. Bear in mind that the mental exercise required in the following discussion is useful not only as an analytic approach for entrepreneurs or investors but also to set out core business plan elements.

Business plans require elaboration on the market opportunity, a thorough understanding of what the entrepreneur brings to the business and the qualifications of the management team, and a clear articulation of the product or service offered and why a customer would purchase it. The business plan also must discuss the resources needed to launch the business and the market entry strategy proposed to establish early sales, lock in reliable suppliers, and provide a platform for growth.

Thus learning and applying the analytical steps discussed in this section has direct synergies with writing a business plan. Successful entrepreneurship occurs when creative individuals bring together a new way of meeting needs and a market opportunity. This is accomplished through a patterned process, one that mobilizes and directs resources to deliver a specific product or service to customers using a market entry strategy that shows investors financial promise of building enduring revenue and profitability streams.

Entrepreneurial innovation combined with sustainability principles can be broken down into the following five key pieces for analysis. Each one needs to be analyzed separately, and then the constellation of factors must fit together into a coherent whole. These five pieces are as follows:. The market opportunity must fit with the product concept in that there must be demand in the market for the product or service, and of course, early customers those willing to purchase have to be identified.

Finally, sufficient resources, including financial resources e. Each piece is discussed in more detail in the sections that follow. The opportunity is a chance to engage in trades with customers that satisfy their desires while generating returns that enable you to continue to operate and to build your business over time. Many different conditions in society can create opportunities for new goods and services.

As a prospective entrepreneur, the key questions are as follows:. Sustainability considerations push this analysis further, asking how you can meet the market need with the smallest ecological footprint possible. Ideally, this need is met through material and energy choices that enhance natural systems; such systems include healthy human bodies and communities as well as environmental systems.

Sustainability considerations include reducing negative impact as well as working to improve the larger system outcomes whenever and wherever financially possible. Let us examine the different pieces separately before we try to put them all together.

Opportunity conditions arise from a variety of sources. At a broad societal level, they are present as the result of forces such as shifting demographics, changes in knowledge and understanding due to scientific advances, a rebalancing or imbalance of political winds, or changing attitudes and norms that give rise to new needs.

These macroforces constantly open up new opportunities for entrepreneurs. Demographic changes will dictate the expansion or contraction of market segments. For example, aging populations in industrialized countries need different products and services to meet their daily requirements, particularly if the trend to stay in their homes continues. Younger populations in emerging economies want products to meet a very different set of material needs and interests.

Features for cell phones, advanced laptop computer designs, gaming software, and other entertainment delivery technologies are higher priorities to this demographic group. Related to sustainability concerns, certain demographic shifts and pollution challenges create opportunities. Furthermore, toxicological science tells us that industrial chemicals ingested by breathing polluted air, drinking unclean water, and eating microscopically contaminated food pass through the placenta into growing fetuses.

We did not have this information ten years ago, but monitoring and detection technologies have improved significantly over a short time frame and such new information creates opportunities. When we speak of an opportunity, we mean the chance to satisfy a specific need for a customer. The customer has a problem that needs an answer or a solution. The opportunity first presents itself when the entrepreneur sees a way to innovatively solve that problem better than existing choices do and at a comparable price.

Assuming there are many buyers who have the same problem and would purchase the solution offered, the opportunity becomes a true business and market opportunity. When opportunities are of a sufficient scale in other words, enough customers can be attracted quickly , and revenues will cover your costs and promise in the near term to offer excess revenue after initial start-up investment expenditures are repaid, then you have a legitimate economic opportunity in the marketplace.

It is important to understand that ideas for businesses are not always actual opportunities; unless suppliers are available and customers can be identified and tapped, the ideas may not develop into opportunities.

Furthermore, an opportunity has multiple dimensions that must be considered including its duration, the size of the targeted market segment, pricing options that enable you to cover expenses, and so forth.

These dimensions must be explored and analyzed as rigorously as possible. While business plans can serve multiple purposes, the first and most important reason for writing a business plan is to test whether an idea is truly an economically promising market opportunity.

The opportunity and the entrepreneur must be intertwined in a way that optimizes the probability for success. People often become entrepreneurs when they see an opportunity. They are compelled to start a venture to find out whether they can convert that opportunity into an ongoing business. The whole process is well delivered in a nutshell, this is a clue to any entrepreneur before a single touch.

Your email address will not be published. Comments who developed this entrepreneurial process and what is the theoretical framework behind it. Thanks for sharing this with very clear steps. It will certainly help when starting my business. The operating plan is the core of your business, and you should make it as good as you can — your plans should be as thorough as possible and your forecasts should be based on the best and most complete evidence you can compile.

Begin with your strategy and break down what needs to be accomplished to achieve your objectives — this is the basis of your plan. The more detailed and fine grained analysis you can develop, the more accurate and reliable your plan will be.

The plan becomes more manageable when you break it down into major functional areas. You should monitor your budget carefully and continually, and make adjustments as needed. A more detailed description of the process of building an operating plan may be found at: Operating Plan Development Process.

Execution is organized by the core functional areas of the company. Idea Generation: every new venture begins with an idea. In our context, we take an idea to be a description of a need or problem of some constituency coupled with a concept of a possible solution.

A characterization of this phase is still work in process on this site. Opportunity Evaluation : this is the step where you ask the question of whether there is an opportunity worth investing in. Investment is principally capital, whether from individuals in the company or from outside investors, and the time and energy of a set of people.

But you should also consider other assets such as intellectual property, personal relationships, physical property, etc. Planning : 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.

Growth : After launch, the company works toward creating its product or service, generating revenue and moving toward sustainable performance. The emphasis shifts from planning to execution.