Entrepreneurship (Term Paper Sample)

ENTREPRENEURSHIP
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Table of Contents TOC \o "1-3" \h \z \u Idea Creation and Evaluation PAGEREF _Toc406289279 \h 3From idea to business Proposition – Evolution of idea (strategy) PAGEREF _Toc406289280 \h 4Proof of Concept and Marshalling Resources – Exploitation of idea (Verifying market validity) PAGEREF _Toc406289281 \h 4Entrepreneurial Success PAGEREF _Toc406289282 \h 5References PAGEREF _Toc406289283 \h 7
Idea Creation and Evaluation
Marsili (2010) posits that every business currently boasting of success in the corporate environment began from a mere thought or idea. It is clear that an idea is a critical part of entrepreneurship and forms the basis of any business. Kim & Mauborgne (1999) define idea creation as a thought or concept suggested by an individual with an aim of providing a solution to a given problem in the society. According to Baron (2006), idea creation is a random process that involves critical examination of magazines, journals, internet, observation and even brainstorming in search of a better way of solving a problem. As such, coming up with the solution requires creativity and innovation in order to come up with a unique way of solving the problem (Baron, 2006).
Clearly, there can be numerous approaches of solving a problem in the society. It follows that potential entrepreneurs are associated with numerous ideas that require critical examination and evaluation in order to identify the most suitable one. Chesbrough (2003) says that investors are only ready to risk their investments in venture that are viable hence the need to undertake evaluation of business ideas. To achieve this, there certain criteria adopted during idea creation in order to test the viability of each idea generated (Shane, 2000). The criteria use certain measures including the market potential, financial requirement, uniqueness, labour needs and others in order to establish the ease of solving the problem existing in the society. As a result of this process, Marsili (2010) places idea creation and evaluation as a critical process in entrepreneurship and its success in the society.
From idea to business Proposition – Evolution of idea (strategy)
Drucker (1998) emphasizes that creatively coming up with an idea is a mere thought in the process of building a successful business. It is clear that coming up with a business idea involves critical review of the business environment and identifying issues that require immediate solutions. As an entrepreneur, coming up with a business idea encompasses brainstorming, review of journals, magazines and observations. Critically, an idea is a thought by an entrepreneur that requires an insightful research to determine the possibility of turning into a working business (Shane & Venkataraman, 2000). When a potential entrepreneur identifies a business idea, the idea is measured against certain criteria in the business environment to determine its viability. In most cases, an entrepreneur identifies more than a single idea which is then exposed to certain standards in order to identify the most suitable idea which can be taken into the next stage. Baron (2006) says that an idea does not have any market implying that a mere idea does not have any economic value unless turn into a viable opportunity. In this light, Shane (2000) brings the aspect of business proposition into play and defines it as the process of providing an offer for purposes of consideration by potential investors. Chesbrough (2003) further insists that a business idea that has gone through incubation and is developed to point where it shows promise of success can be described as business proposition. Judging from this school of thought, it is inevitable that a business idea/ thought moves through different processes and finally reaches a point where is viability is identify ready for investment.
Proof of Concept and Marshalling Resources – Exploitation of idea (Verifying market validity)
It is clear that once an idea has been identified and turned into a viable business opportunity, the next process involves identifying potential investors in the opportunity. Chesbrough (2003) describes a business opportunity as a prospective chance that has been identified by an entrepreneur and only requires resources to start it off in a bid to generate profit. Against this backdrop, it is vital to note that an entrepreneur needs to provide a proof of the concept/ idea in order to convince potential investors of its viability in the business environment. To prove its viability, an entrepreneur comes up with a business proposal that details every aspects of the business opportunity. Shane (2000) states that through a business proposal, the potential investors are able to examine the risks and success factors associated with the business. Consequently, the potential investors are able to understand the market, management structure, legal provisions, possibility of success and the amount of finance required to kick-start the proposed business. Through the business plan, the mechanisms of marshalling the required resource for initial and continuous operations are determined. To achieve the objectives set for the business opportunity, a potential investor ready to take the risk has to be identified through presentation of the business proposal. Baron (2006) posits that a business proposal is a document that outlines every activity, resources and other requirements needed to successfully achieve the objectives of the business. Ultimately, this is the major way of marshalling resources to uplift a potential business idea that has evolved into a real business opportunity.
Entrepreneurial Success
Von (2005) describes entrepreneurial success as the point by which a business idea that evolved into an opportunity meets its goals and objectives outlined in the business plan. Judging from the arguments by Gruber (2004), it is clear that entrepreneurial success is achieved when an idea has been put into practice and actually generating the projected profits as indicated in the financial projections. Clearly, the business plan indicates every activity and processes that is to be undertaken by the entrepreneur in order to initiate the business in the society. Gans & Stern (2003) views success in entrepreneurship as the process where a potential entrepreneur finds a potential investor in the business opportunity created. As such, the investor provides the required financial resources necessary to start and operate the business in the market. This is regardless of the anticipated profits by the business because it is a new adventure hence involves great risk by the investor (Drucker, 1998). Baron (2006) views success in terms of the ability of the each part of the business to...