Entrepreneurship Sample Essay
- Entrepreneurs think and act ingeniously when it comes to resources. What does this mean and why is it so important?
Entrepreneurs tend to be creative and inventive and usually seek to apply the most minimum possible amounts of various kinds of resources at all levels within their venture’s growth. Instead of owning the resources needed, entrepreneurs look forward to control those resources. By doing that, they minimize the risks in pursuit of the chances while ensuring there is less capital, staged capital commitments, reduced hazards, lower costs, low sunk cost and more flexibility in operation of business activities (Adams & Spinelli, 2015). The capital needed is smaller compared to the parsimony quest – the financial exposure is thus minimized similar with the founder’s equity.Entrepreneurship Sample Essay Capital infusions are made to match value inflection points and critical milestones and signals whether it is good to keep going, raising more capital or aborting the venture. Entrepreneurs who control their resources without having them first are in a more appropriate position to dedicate or reject – as one significant cost of resource ownership has an inherent inflexibility (Gillis et.al, 2014). More so, sunk costs are minimal whenever the company practices its alternatives to reject the ventures at whosoever point. Minimal fixed prices positively affect the breakeven, even though the danger related with variable costs should be taken into consideration. Thinking and acting ingeniously for entrepreneurs is also vital to making all risks reduced apart from minimizing the entire exposure of such occurrences.Entrepreneurship Sample Essay
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- Describe at least two creative bootstrapping resources.
Reducing resources is colloquially known as bootstrapping. Bootstrapping is referred as the multistage dedication of resources with a reduced commitment at every decision making point or stage. Factoring and leasing are two examples of these. Factoring is the financing technique where the accounts receivable are actually sold to a buyer to raise capital (Peris-Ortiz et.al, 2012). The factor becomes the creditor and takes the duty of gathering the receivables among other tasks. Apart from reducing the internal expenses, the process also frees the funds that might otherwise be tied into other receivables. Concerning leasing, the lessee enjoys by making smaller payments and has the capability of walking away from the equipment by the finishing of the leasing term and can also negotiate the build-in sustenance fees offered by the lessor.
- Why will the Internet become an increasingly important gateway to controlling resources?
Internet will increasingly become a vital gateway in management of resources considering the dynamic model dealing with online services that is becoming popular and changing the manner in which nonprofits perform their fund-raising auctions. Before, staffing and coordinating similar avenues has normally been a problem due to the volunteer turnover that needs the sustaining of the most of the workforce every time an auction is conducted. The internet has turned into a key instrument for promoting and publicizing (Perrigot et.al, 2013). A business can introduce itself to clients with the utilization of a site or online commercials. Numerous businesses now utilize the internet as a method for making clients mindful of their present advancements. This can be extremely useful to businesses that are focusing on a more youthful group of onlookers.Entrepreneurship Sample Essay The Internet has changed the way the world works together on both a neighborhood and worldwide level. From selecting representatives to assembling information on the opposition, the ways businesses use the Internet are various, similar to the Internet’s banquet to the business group.
- In selecting outside advisors, a board, consultants, and the like, what are the most important criteria, and why?
When selecting outside advisors, the suitable criteria should begin with the board or team, their lawyers, followed by bankers, then accountants and consultants for their initial outside directors. The board of advisors is meant to dispense advice whereby particular financial requirements can assist in deciding whether a lender or banker is needed, for instance to offer extra advice (Adams & Spinelli, 2015). Experienced accounts can offer advisory services to growing businesses apart from taxation advice and audits. Consultants on the other hand are hired to solve some specific challenges and fill the gaps not catered by the management team. The advice required within entrepreneurship can be quite specific and technical and at times far-ranging and general.
- What are the five components of the franchise relationship model? Can you describe the interactive nature of these components?
The franchise relationship model has key five components which are: financials, contract, information, market and customer. The model portrays the shaping and opportunity recognition (customer) and articulates the competitive benefits and price of the service delivery structure to extract the demand (SDS) and form a return on investment (Michael, 2009).Entrepreneurship Sample Essay On financials, there is the pricing promotion whilst contract deals with market development, task specification and inefficient investment supply. The Information Component covers on free riding and shirking, the market one tackles on renegotiate litigate and customer caters on system and service delivery.
- Why do you think the public franchisors consistently outperformed the S&P 500?
Majority of the franchisors who meet the criteria for great-potential venture franchise have been rewarded by the capital marketplace. In turn, they have done appropriately in return to shareholders. Even though the S&P index was hit harder due to the economic downturn following 2001, that was not the case with the public franchisor index. Despite the stock market slide after the irrational exuberance period during the late 1990s got precipitated as a result of very high dot-com valuations, there was a tendency for the correction to depress share costs within the board – including those of blue chip stocks (Adams & Spinelli, 2015).
- Why is entrepreneurial finance simultaneously both the least and most important part of the entrepreneurial process? Explain this paradox.
Financial planning enables entrepreneurs to approximate the timing and quantity of funds required to begin their venture and ensure it continues operations. It overlooks below four issues:Entrepreneurship Sample Essay
- Whether it is worthy to invest money and time in the business;
- Reviews on the cash burn rate;
- Ways of reducing dilution via external investors;
- Contingency plan and scenario analysis
Unlike the established organizations, CFO (Chief Financial Officer) of a start up organization deals on more strategic duty and concentrates on milestones with provided cash resources, dangers of not catering milestones, alterations in valuation according to their fulfilment and optional planning (Gillis et.al, 2014). In addition, financial planning assists in determining the venture’s value and caters as a crucial marketing tool upon prospective investors. Conventional valuation methods founded on DCF (Discounted cash flow) and accounting or multiples does not show particular features of the start-up. Rather, alternative methods are often applied.
- What is meant by free cash flow and why do entrepreneurs need to understand this?
Free cash flow (FCF) is the manner of looking at the cash flow of a business to view what is ready for distribution within the entire stakeholders in security of the corporate entity. That can be helpful in parties such as debt holders, equity holders, convertible security holders, preferred stock holders among others whenever they want to see the amount of money can be gotten from an organization without causing injuries into its functions. The FCF can be calculated in various ways according on the accounting information and audience available. The usual definition is taking the earnings before taxes and interest, add any amortization & depreciation and then deduct any alternations in capital expenditure and working capital (Watson, 2008). According to the audience, various adjustments and refinements are also forced to eliminate distortions. Free cash can vary from the net income for a specific accounting period, while the FCF takes into consideration the taking of capital items and the additions needed in working capital.
Adams, R., & Spinelli, S. (2015). New Venture Creation – Entrepreneurship for the 21st Century (Tenth ed.). New York: McGraw-Hill Higher Education.
Gillis, W. E., Combs, J. G., & Ketchen, D. J. (2014). Using Resource-Based Theory to Help Explain Plural Form Franchising. Entrepreneurship: Theory & Practice, 38(3), 449-472. doi:10.1111/etap.12008 Entrepreneurship Sample Essay
Michael, S. C. (2009). Entrepreneurial signalling to attract resources: the case of franchising. Managerial & Decision Economics, 30(6), 405-422. doi:10.1002/mde.1460
Peris-Ortiz, M., Willoughby, M., & Rueda-Armengot, C. (2012). Performance in franchising: the effects of different management styles. Service Industries Journal, 32(16), 2507-2525.
Perrigot, R., López-Fernández, B., & Eroglu, S. (2013). Intangible Resources and Plural Form as Drivers of Franchise Internationalization: Examination within a Two-Country Perspective. Journal of Small Business Management, 51(4), 557-577. doi:10.1111/jsbm.12006
Classic entrepreneurship refers to a line of business that is profitable and productive at the same time. In addition, this form of entrepreneurship is characterized by a high level of innovation and originality such that the target consumers are satisfied with the products and services (Spinelli and Adams, 2012). The concept of a high potential venture means that the classic entrepreneurship is one that is bound to bring in high returns on investment. This can be due to reasons such as an untapped market or a large customer base (Acs and Audretsch, 2010). Therefore, venturing into such an entrepreneurial decision requires a lot of planning in terms of capital, equitable resources, as well as pooling of financial resources so that the right balance is achieved between income, profits and expenditure.
- “People don’t want to be managed, they want to be led.” Explain what this means and its importance and implications for developing your own style and leadership philosophy.
The meaning behind this statement is that people desire a leader who will impart the right values and skills in them through the process of exemplary leadership (Chell, 2004).Entrepreneurship Sample Essay For instance, if a leader requires that his or her employees complete their assignments promptly, they should be able to set this example by doing so themselves. Once the employees see that their leader values time, they begin to learn that observing deadlines are an important quality for any business (Spinelli and Adams, 2012). This is contrary to being managed where some leaders prefer imposing deadlines on employees, yet the workload of responsibilities is too high. A leader who is able to guide others by example is able to prove to the team that it is important to cultivate and develop a certain trait by first having it as a leader. In this way, the rest of the staff members or employees are able to follow suit and emulate accordingly.
- What are the most important determinants of success and failure in new businesses? Who has the best and worst chances for success, and why?
A business can succeed or fail depending on whether a number of factors have been put into consideration. The most important determinants of success would be availability of capital, competence of employees, strategic location of the business and creativity of the business venture. These factors bring in success because one must be competent enough to be able to manage the finances of the firm (Gielnik et al, 2015). In addition, it is also important for the business to be located strategically so that there is a high flow of customers in and out of the retail store. On he other hand, the worst chances of success would be the determinants of failure. Perhaps the biggest cause of failure is the lack of competence of businesspersons, lack of commitment to the business and lack of leadership qualities. These factors can drive business to fail, irrespective of whether the firm has enough money or not.
- What criteria and characteristics do high growth entrepreneurs, venture capitalists, and private investors seek in evaluating business opportunities? How can these make a difference?
High growth entrepreneurs are people who are determined to see a business succeed at all costs. Due to this, they are usually very cautious when it comes to evaluating a business to ascertain whether it has the potential for growth (Spinelli and Adams, 2012). One of the criteria used in this evaluation is the originality of the business idea in relation to the target market. An idea that is highly original means that there are very few competitors and therefore, there is a larger likelihood that the business will do well (Sahut and Peris-Ortiz, 2014). What’s more, this business requires to be evaluated in terms of whether the target market will be receptive of the idea or not. Secondly, high growth entrepreneurs evaluate businesses in terms of the level of risk (Spinelli and Adams, 2012). The higher the risk taken by an entrepreneur translates into a high return in terms of profits. Therefore, growth entrepreneurs are willing to invest in such a business because they are certain that the returns will be great.Entrepreneurship Sample Essay
- Define and explain the Timmons Model. Apply it and graphically depict, as in the Google example, the first five years or so of a new company with which you are familiar.
The Timmons model is a business and entrepreneurship tool that is applied to search for the most optimal opportunity that can match the team and resources available. This model helps the entrepreneur to search for this opportunity through a high potential venture strategy that capitalizes on making the firm profitable (Mazzarol, 2014). The Timmons model can be used to analyze the Telco company, which provides telecommunication services to its clients. The graphical analysis of this firm indicates that the rate of making phone calls through wireless means declines as the years passes by. This means that the company should consider adopting wireless technology, which is more contemporary and promising in the future, since this is also the digital era.
The Telco Company Revenue Over The Years
- In what ways does looking through a sustainability lens change how an entrepreneur approaches a new venture opportunity?
Sustainability is a modern concept that is concerned with protecting and preserving the environment. The sustainability process is achieved through the reduction of pollution, adopting green technology and also minimizing the emissions released into the environment (Spinelli and Adams, 2012). Entrepreneurship Sample Essay Therefore, a new business should consider all these facts before estabhing itself. This ensures that the environment is preserved while at the same time the quality of life of future generations is improved.
- Why has the clean commerce domain become one of the hottest for venture capital investors?
Clean commerce refers to a reasonably new venture of business where the entrepreneur is free to adopt an online approach to run the affairs of the business. Clean commerce is closely linked to sustainability because it also strives to protect the environment (Spinelli and Adams, 2012). This explains why capital investors are attracted to this new form of business because it causes minimal harm to the environment. What’s more, it ensures that resources are utilized equitably such that every person is assured of an equal share of the benefits.
- How has the communications revolution become a major driver of entrepreneurial thinking and opportunities in sustainable, green business models?
Communication is one of the most important tools that drive the heart of virtually all businesses. The revolution of communication has opened up new avenues of receiving and sending information. The internet and mobile phone technology are the two main channels that have changed the drive of business currently (Spinelli and Adams, 2012). Entrepreneurship Sample Essay
This is because they are affordable and convenient in the sense that people from all corners of the globe can talk to one another without any hussles. These benefits have contributed to sustainable businesses such that paperless technology is now used to communicate (Spinelli and Adams, 2012). Emails, calls, video conferencing, as well as live chats are now preferred to print technology that stresses the immediate environment. Hence, green businesses are on the rise with most of them investing in wireless and paperless technologies.
- What are the most important skills, values, talents, abilities, and mind-sets one needs to cultivate as an entrepreneur?
A successful entrepreneur is one who is focus driven, patient, persistent, creative and charming. Additionally, any individual who desires to become a skilled entrepreneur should strive to be highly competent, trained and innovative so as to drive any business venture to its profits (Spinelli and Adams, 2012). The combination of all these traits is essential to any person who desires to establish profitable entrepreneurial venture.Entrepreneurship Sample Essay
Acs, Z. J., & Audretsch, D. B. (2010). Handbook of entrepreneurship research: An interdisciplinary survey and introduction. New York: Springer.
Chell, E. (2004). Entrepreneurship: Globalization, innovation and development. London [u.a.: Thomson Learning
Gielnik, M. M., Frese, M., Kahara-Kawuki, A., Katono, I. W., Kyejjusa, S., Ngoma, M., & … Dlugosch, T. J. (2015). Action And Action-Regulation In Entrepreneurship: Evaluating A Student Training For Promoting Entrepreneurship. Academy Of Management Learning & Education, 14 (1), 69-94. Doi:10.5465/Amle.2012.0107
Mazzarol, T. (2014). Research Review: A Review Of The Latest Research In The Field Of Small Business And Entrepreneurship: Financial Management In Smes. Small Enterprise Research, 21 (1), 2-13. Doi:10.5172/Ser.2014.21.1.2
Sahut, J., & Peris-Ortiz, M. (2014). Small Business, Innovation, And Entrepreneurship. Small Business Economics, 42 (4), 663-668. Doi: 10.1007/S11187-013-9521-9
Spinelli, S. and Adams, R. (2012). New Venture Creation – Entrepreneurship For the 21st Century, 10e. McGraw-Hill Higher Education ISBN: 9780077862480.Entrepreneurship Sample Essay