New Enterprise Creation And Management

● Business enterprise is an organization which is involved in trading of goods and/or

services to the customers (customers may be ultimate consumers, also termed as end
users or the organizational consumers). The term enterprise includes two broad efforts
i.e., taking initiative and taking risk.

● Taking initiative involves all the efforts an entrepreneur takes in business opportunity
identification, screening and selection and preparing and presenting the business plan.
Taking risk here denotes risk of making investments and running the business. It is
needless to mention here that risk is pervasive in business. Running a business highly
relies on anticipation which has the probability of going wrong.

Process:

1. Realizing the entrepreneurial potential

2. Business opportunity identification and selection

3. Examining and assembling the resources

4. Implementing the entrepreneurial strategy

5. Planning the future

1. Realizing the entrepreneurial potential

Having understood the role and functions of entrepreneurs and some basic qualities
that help them become entrepreneurs, let us look in detail at some more qualities,
which must be present or need to be developed to become a successful entrepreneur.

a) Creativity and innovation: The anchor of an entrepreneur's career is

creativity and innovation. Innovation is the process of applying "ntw
knowledge" to practical use. It does not necessarily mean trying new ideas for
the first time but applying the same or a similar idea at different places or in
new settings.You need to develop in your clients as entrepreneurs the quality
of picking up new ideas and adopting them faster than others.

b) Risk-taking: Many of us have new ideas, knowledge and resources. But one
may not start an enterprise because of lack of the quality to take risks involved
in it. You have to develop faith in your clients that no venture is possible
without a certain amount of risk. An entrepreneur assesses the risk and favours
taking a calculated moderate risk (neither very high nor very low).
c) Initiative and drive: An entrepreneur is not merely a dreamer, he or she has
the important quality to translate idea into action; take his or her own initiative
and channelise energy to work hard.

d) Persistence: Often your clients may not achieve success in the first attempt.
There is no successful entrepreneur who has not met failure earlier.
Entrepreneurs who succeed are not overwhelmed with success. They also do
not give up due to initial obstacles and failures, but take repeated and different
actions to overcome them. This characteristic of 'persistence' must be imbibed
as an important entrepreneurial quality.

e) Opportunity seeking: Common people just wait for opportunities to come

along. The majority does not ever recognize opportunities until these become
obvious. An entrepreneur actively looks for, creates, seeks or recognizes
business opportunities, even in crisis.

f) Information seeking: Seeking relevant and precise information is important

for success. It enables your clients to take risk, helps them improve the quality
of decisions that they make, and provides basis for efficient management. An
entrepreneur inculcates the habit of gathering information from all sources and
considers expenses for seeking information as an investment.

g) Seeking and using feedback: Being high achiever, an entrepreneur has the
quality of seeking and using feedback about his or her performance. Based on
the feedback, he or she mends the working style. Often profit or loss is an
indicator of his/ her performance.

h) Concern for standard quality of work: The concern for excellence is the key
quality of an entrepreneur. By attaining certain standard of excellence in his or
her work, he or she proves his or her worth that gives him or her satisfaction.
Substandard performance is just not acceptable. The standard of work
performance is not with fewer resources.

i) Self-confidence: Successful entrepreneurs display high level of

self-confidence. They also believe that they mainly set events in their lives.
They have a major influence on their destinies and fate has just the catalytic
role.

j) Problem-solving orientation: One of the important entrepreneurial qualities

is problem-solving orientation. While pursuing any business goal, an
entrepreneurs make the basic assumption that the problems are bound to be
there. As a matter of fact, they believe that real pleasure comes in solving
these problems. Accordingly, entrepreneurs develop a lifestyle of solving
problems.
 k) Goal setting: Successful entrepreneurs invariably start out on one common
quality - definiteness of purpose. They have clear vision of what is to be
achieved at the end. These goals for entrepreneurs tend to be not only
challenging but realistic and attainable.

l) Faith in planning: To be a successful entrepreneur your clients need to

develop the skill of planning and a firm faith that planning is a must for
successful completion of any task. They should develop and use logical and
step-by-step plans to reach your goal. Through planning, the entrepreneur
prevent the wastage of scarce resources, ensure success by anticipating
possible hurdle, locate new source of help and resort to alternate activities to
reach the goal.

2. Identification of business opportunity:

Entrepreneur is an opportunity seeker. As observed by Albert Einstein “In the middle

of every difficulty lies opportunity”. He perceives an opportunity and strives to
translate the opportunity into an idea. Opportunities do not come suddenly. The
entrepreneur must show alertness to grab opportunities when they come. The
opportunities must be carefully scrutinized and evaluated. The process of identifying
opportunity involves identifying the needs and wants of the customers, scanning the
environment, understanding the competitor’s policy etc.

3. Examining and assembling the resources: Requirements of a New Enterprise

The requirement of a new business enterprise can be listed as below:

● Taking initiative (opportunity identification and selection)

● Analysing the feasibility and profitability of the business proposal

● Developing it into an enterprise by giving a form to it

● Arranging the resources (both human and non-human resources) Financial

resources

➢ Technical know-how

➢ Premises

➢ Equipment

➢ Machineries

● Effectively promoting the business enterprise

● Managing its operations and growth

 To identify the right business opportunity, an entrepreneur needs to consider the
following :

● Identify Market Inefficiencies

● Remove Key Hassles

● Customers Desire to Experience Something New

● Pick a Growing Sector/Industry

● Product Differentiation

● Cash Flow Considerations

● Listen to your potential clients and past leads.

● When you're targeting potential customers listen to their needs, wants,

challenges and frustrations with your industry.

4. Implementing the Entrepreneurial Strategy

An entrepreneur brings together all the resources to start up a new business
organization, now you (as an entrepreneur) have to give a thoughtful consideration as
to how to manage these resources to achieve the main objectives of the business. You
have to formulate proper strategies for that which is also termed as entrepreneurial
strategy. Entrepreneurial strategy consists of focusing on various aspects that can be
broadly categorized into three categories listed below: -

● Strategies related to operations (operation strategy)

● Marketing strategies

● Financial strategy

1. Operation Strategy-

This is related to the business operations (gathering of resources and using it

optimally) which enables the organization to deliver the product or service to the
target customers. Enterpreneur need to strategize effectively so that entrepreneur can
build the required competencies to not only compete in the market but also to gain
competitive edge. The main focus here should be on gathering the right kind of
resources which can be put to use for the organization. All businesses have to ensure
proper management of the operations and ensure that resources are not going waste
and everything happens adequately.
 2. Marketing Strategy-

Nothing is as important in the business world as the customers. They are the king and
pivotal to all the activities of a business organization. Entrepreneur must build a
strong successful relation with the customers and should focus on marketing
accordingly. Marketing should be done in a way that you create a positive image in
the minds of people of the organization and its products and services. The aim is not
only to satisfy the customers but also to delight them so that they feel like getting
associated forever.

3. Finance Strategy-

To do anything entrepreneur need to have finance, hence it is very important to

manage the finance effectively. Entrepreneur should not be fully dependent on your
accountant and managers. At least during the start-up phase entrepreneur should give
enough time to see the financial operations of the business. Entrepreneur have to be
concerned for both liquidity and profitability. Liquidity means keeping enough cash in
the business to meet day to day liabilities, whereas profitability means maximizing
profits of the business.

5. Planning the Future

When you are in business, future planning becomes even more important. Business
should have continuity. Even entrepreneurs feel that starting a business venture is not
as challenging as managing it successfully. Once your enterprise (business
organization) is created and you start your business operations there are many issues
that you will have to face while your business is growing up. It is already discussed
that chances of failure are more in case of newly established small business venture in
comparison to already established large business venture which has grown. The first
five years of business are very crucial. Hence, you need to be highly planned and
careful. As an entrepreneur you need to be very clear where do you want to see your
business in the coming, say ten, years.
For the business growth, the entrepreneur must: -

● Keep on assessing the current performance

● Set a vision for your business growth

● Prepare a business plan for growth (often termed as perspective planning)

● Constantly plan the ways and means to grow

● Be innovative for growth

● Create effective marketing strategy

● Plan for obtaining required finance for growth

● Effectively manage your growth

● Do succession planning well in time

● Plan for recruitment and development of human resource