Entrepreneurship is a process of creating new products or services by giving the time and efforts as needed. In addition, it is necessary to accept and acknowledge social, psychological, and financial risks, within this process. Consequently, the process also assumes the resulting awards and profit, as well as a freedom to do what one wants, to a certain extent. Entrepreneur is a person who takes all risks and actively creates and manages his or her own business with a purpose of receiving the profit and rewards. Moreover, this person manages the process and human resources while he or she creates a profitable business. The government plays a significant role in creating a positive business environment, where entrepreneurs should have stability, freedom, and opportunities for constant growth. The role of entrepreneurship in economic growth is crucial because it increases per capita output, as well as income of the people in the country. In addition, entrepreneurship creates new job opportunities and develops infrastructure and production. The entrepreneurial process includes pursuing the new possible markets or ventures, creation of the new products, services, and organization; expansion into new markets (Hirsch, 2009).
Target Markets and Identifying Business Opportunities
Target market is referred to as a group of customers, at which a business decided to aim its marketing efforts and direct its product. When an entrepreneur decides to enter the new market, it is vital to make market research and create the necessary strategy for a chosen market. Each entrepreneur is willing to choose the most profitable market, where it is also crucial to examine target audience. Target market usually assumes many aspects, such as competitors on this market, consumers and their requirements (target audience), and possible business opportunities. Usually, before entering the new market, it is vital to make segmentation with a help of a marketing mix. Segmentation is necessary because it helps creating the overall view of the market and its consumers (Hirsch, 2009). Target markets are usually divided into several aspects such as demographic or socioeconomic aspect (age, gender, education); geographic (location, geographical features, climate); psychographic (values, attitudes, lifestyle); behavioural (loyalty, occasions); product-related segmentation (attitude towards product). Marketing mix is defined as a product, place, promotion, price, and these components should be set according to the target market and audience. Business opportunity can be a benefit of the market that entrepreneurs should recognize before entering the new market. The main difference between business opportunity and own independent business is that there is no necessity in continuing the relationships with the seller. Business opportunity also assumes a sale or lease of a product or service that consequently will allow a purchaser to start a business. There are several kinds of business opportunities ventures such as distributorship, dealer, trademark, network marketing, rack jobber, and cooperatives.
New Product Development and Knowledge Requirements
While entering into the new market with the new product, it is vital to create and develop this product according to the market features and requirements. To develop the new product, it is crucial to make a market research and market analysis that will bring the necessary knowledge according to its relevance. It is necessary to make design of the product, as well as set the relevant price. Then, it is vital to find the right channels of distribution and create a successful promotion. There are also stages of product development, where the first stage is an idea generation, followed with idea screening, testing and concept developing, marketing strategy, business analysis, product developing, test marketing, and commercialization.
All these stages will help the entrepreneurs to create the necessary knowledge of potential customers and their requirements and needs. In the first stage, it is necessary to conduct a market research, as well as work out the sources of getting the necessary information that consequently will help in creating the necessary idea about consultants, employees, competitors, customers, distributors and suppliers. In the second stage, idea screening, it is vital to select the best ideas for their future implementation. The third stage requires testing to avoid possible failures of the idea. Usually, marketing managers make various observations, researches, or tests, like creation of the focus-group, questionnaires related to the product under development, and other approaches for getting the necessary information. In creating marketing strategy, it is necessary to make segmentation and marketing mix, as well as decide what strategy is relevant for the product. Then, it is crucial to make a business analysis, where a company must also count the possible profit or loss. In addition to this stage, it is vital to count the possible expenses of the product. On the sixth stage, product development, it is crucial to create a prototype of the product and observe the reaction of the potential clients towards this product. Test marketing is necessary for testing the product in the area where it will be promoted. Finally, the last stage is commercialization that is defined after successful testing and following all the previous stages; it is necessary to view the time of the launch, the cost of the launch, how the product will be launched, and the information according the region where the product is to be launched (Hirsch, 2009).
Consequently, these stages will help in understanding the possible scenario of the product promotion and help in collecting all necessary information of the market and the audience to be targeted.
Business Planning, The Business Model, Company Formation
Every entrepreneur, prior to starting a business, should recognize the business model and create a business plan that will provide a description of the future business. This stage is an extremely vital point for the entrepreneur as it is necessary to collect all the information according to the possible profit or loss accounts, possession of the resources to be used, and other important aspects. In general terms, a business plan includes information on a three-five years plan. Business plan should have a summary that includes general information of the business plan. After outline, it is necessary to make a business description that usually describes the industry where the business will be operating; also, it is vital to set the possible opportunities. The next step of the business planning is the recognizing of the market strategies. This step is crucial since, after a market research is done, an entrepreneur can choose the target market and outline a strategy that can be relevant. Furthermore, a business plan should include a competitive analysis because it will bring information in terms of strengths and weaknesses of the business versus its competitors. In addition, at this stage, it is crucial to provide the most relevant strategy of mitigating the competition risks (Stokes, 2010). It is also necessary to include a design and development plan where the main goal is to provide possible investors with the information related to the context of the product, its design, as well as the marketing campaign and the company itself. Moreover, at this stage it is necessary to include the information related to the budget development. Operations and management plan are also a significant part of any business plan, where the main purpose is to provide the information pertaining to logistics and various responsibilities of the management team, the tasks, the capital, and expense requirements for the future operations of the business. Another major step in the business plan is the financial plan, where the financial data of the company it is summarized (Scarborough, 2003).
Business model is similar to a business plan; however, its main purpose is seen in representing the description of various aspects of a business, such as goals, infrastructure, organization, and strategies. Company’s establishment includes the company’s registration procedure, as well (Stokes, 2010).
Creativity, Inventions, and Prototype Development
It is certainly the fact that for the future success of each business, it is necessary to create the product that will bring as much profit as possible. Creativity plays an integral role in entrepreneurship process. While creating the product it is necessary to collect the best ideas in its context, design, and the way of promotion. In addition, the creation of a product should account the target market, target audience, and competitors. It is a fact that creative ideas in business decisions can bring the most possible competitive benefits and success. One of the most expressive examples is Apple Company, where each business decision has the highest level of creativity. The design of the products in Apple Company has the most innovative decisions and brave ideas. However, one of the most significant features of this company is the way of promotion. It is evident that the Apple Company is well-known by it most innovative promotional strategies, and consequently it is possible to see that creativity is a significant part of the business that can bring the most profitable results for the company (Stokes, 2010).
By making the new inventions, it is also vital to develop the prototype of the product. The main purpose of the prototype development is to create a model of a product that will help in recognizing the reaction on this product by the potential consumers and bring the information related to the best way of its implementation.
Each company might face unfortunate events and force-majeure that can bring a lot of harm to the company. Entrepreneurs are always exposed to risks of every act and decision that they experience. Consequently, it is possible to conclude that risk is a significant and inevitable part of entrepreneurship.
In the view light of the possibility of negative events and force-majeure emergence, economists started to develop a study which will help in preventing or reducing such risks, and this science is known as risks management. Risk management can include the observation and analysis of such issues as economic growth, rivals, interest rates, adverse trends in commodity prices, and currency rates. Moreover, today risk management has expanded to include financial risks. There are several approaches in risk management, such as scenario analysis (that means a study of possible negative events); operational risk management, financial risk management, project, currency, and credit risk management. In addition, it is necessary to view the possible threat, availability of vulnerabilities, potential impact. Risk management includes several stages such as recognizing of risks, analysis of risk, possible measures and approaches in reducing a risk. Risk management can appear from different factors, which might be both internal and external factors. By making the analysis of external factors, it is vital to view the risks related to competition, culture, regulation, customer changes, relations and suppliers. Internal risks are related to intellectual capital, information systems, research and development. To conclude, it is possible to see that risk management has a very positive impact on business organization, decision-making, planning, and prioritization (Risk Management in Business, n.d.).
Business Critical Success Factors
As it was mentioned above, there are several factors in business that well-known as business critical success factors. The first is internal factors – marketing efforts, development of the new product strategies, and dealing with internal barriers. The right organization of internal factors helps the company to gain the necessary goals. As an example of these factors are making a stronger supplier relationships, meeting the quality standards, and so on. Other significant factors are external factors – environmental factors that can be economic health and vitality, the business climate, technological innovations (Stokes, 2010).. In addition, for the future success of the company, it is necessary to observe the competitors, the industry, and current marketplace.
Selling and Customer Service
It is certainly the fact that today, due to fast and constant growth in the competitiveness in the markets, it is vital to find necessary ways of achieving the goals of the company and increasing the profit. Proper sales management and customer service can be referred to as a basis of the successful strategy of the company. Each company provides its clients with significant customer service, the main goal of which is to make all the possible efforts to encourage the customer to come back. The most vital part of successful sales and customer service is hiring of the professional staff. Every entrepreneur (while starting the business) should recognize the importance of each member of the company. Professional staff consequently will result in the success of the company. There are several rules of the appropriate customer service; they comprise of politeness towards the clients, always answering to their complaints, and always listening to their requirements.
In addition, for increasing sales, it is vital to be aware of the product or service that is supposed to be sold; moreover, it is crucial to use the advantages of technologies in communication with the clients. With the help of technologies, it is possible to be in touch with the clients and provide them with all necessary information anytime it is required.
It is the fact that staff is one of the most significant aspects of the successful business. That is why, it is necessary to develop personnel management in any company. The employees who feel comfortable working for the company will work better than those who work in disturbing and bad conditions. Strong management and motivation of the personnel can result in the most effective and productive work of the staff. Effective personnel manager should encourage team work (Stokes, 2010).
In addition, a good manager should understand that every person in the company always has a lot of useful ideas and it is always better to work together because every employee has its own strengths and can add something innovative. An increasing number of managers understand that the right motivation of the personnel can have an impressive effect on work. When the employee is satisfied with his or her job, he or she will be more dedicated and working harder. Consequently, the employees will be afraid of losing their jobs, and they will be loyal as much as possible. It is also necessary to notice, not only money serves as a motivation factor, but safety or stability, as well. It is crucial that an entrepreneur accounts a variety of other needs of his employees, such as moral aspects, team work, creativity, realization of the potential, education and good relaxations conditions. For example in majority of large companies it is possible to study foreign languages for free, attend trainings or a company can pay for employees’ education, and so on. There are many of employee’s motivation theories. One of them is equity theory. The theory explains the satisfaction that comes from justice and equality, if the manager leads his / her staff according to principles of justice. Theory of Justice puts a value on fair treatment, which is believed to be the major motivational factor among the staff. Every person wants to feel that all his efforts are treated fairly. That is why more companies have their bonuses and compensations. However, this theory has its own critics because what a manager thinks is fair towards his employees, might be exactly the opposite, in real terms. Using the Maslow’s hierarchy of needs, it is possible to understand this situation deeply. First, physiological and safety needs have to be satisfied; in that case it is possible to include stability and employment, good salary, followed with love and belonging. Then, there is esteem, when every person wants to feel that he or she is respected by others; other crucial aspects are one’s self-confidence coupled with self-esteem. Finally, self-actualization is yet another crucial aspect to be satisfied.
Business Etiquette and Personal Image
Following the right personnel management, business etiquette is also a significant part of successful business. The positive conditions at a workplace can result in the highest level of productivity at work. Business etiquette is also necessary in all aspects of making the business such as communication within the company and communication with customers or partners. As a result, business etiquette influences the personal image of the company. Such rules as politeness and responsibility are extremely vital. The business etiquette includes handshaking, polite words, polite language, and respectable behaviour. In addition, it is necessary to be well-dressed (according to business etiquette), and abide to the rules, such as: do not interrupt, do not gossip, and follow the rules of the company that can be referred to as ethics (Coulter, 2002). Every member of the company must follow the ethical rules, and good manager has to control the situation at work and prevent possible unethical issues. Image of the company depends directly of the performance of the staff; that is why business etiquette is a significant part of company’s organization.
Another major part of successful business is the development of the presentation skills. For every company’s activity it is necessary to make a good presentation. Usually, presentation is necessary in trainings, presentation of the new ideas and decisions, planning, and so on (Mariotti, 2003).
Assessment of employees is also a significant part in organizational structure. Each manager should test the employees; evaluate them with a goal of developing their skills and productivity. In addition, it is necessary to recognize and develop the competitive advances of the company. Competitive advantages are the positive sides of the company that brings the benefits to the company in comparison with its competitors. It is also vital to manage time, money and resources of the company as this approach helps in organization of the business process and company’s profitability. It is certainly the case that these aspects are necessary for the successful process where every action is counted and will result in the most effective results (Longenecker, 2003).
In conclusion, entrepreneurship is a process of creating new products or services by giving both time and efforts that are needed. In addition, in this process, it is necessary to accept and acknowledge social, psychological, and financial risks. When an entrepreneur decides to enter the new market, it is vital to make market research and create the necessary strategy for the chosen market. Each entrepreneur is willing to choose the most profitable market, where it is also crucial to examine a target audience. However, because of threats of negative events and force-majeure emergence, economists started to develop a study which will help in preventing or reducing associated risks, and this science is known as risks management. Each company provides its clients with significant customer service, the main goal of which is to make all the possible efforts to encourage the customer to be loyal. The most vital part of successful sales and customer service is hiring of professional staff. Following the right personnel management, business etiquette is also a significant part of successful business operations.