Entrepreneurs can increase their
chances of success if they understand, follow, and implement the basic
five-stage entrepreneurial process described in this post. These five stages
are summarized in the following figure given below. These five stages form the
back bone of the entrepreneurial process. This post examines the essential
components of entrepreneurial strategy that make up the five stages of the
entrepreneurial process. Each of the key stages includes a main focus activity,
which can be used to plan budgets. We also analyze risks inherent in each stage
and make suggestion for reducing potential problems.
Stage 1: Conducting Opportunity
Analysis
The basic objective of this stage
Is to define the criteria that would make a business opportunity worthwhile. In
this stage, the founder identifier the opportunity and creates a vision for the
company. If there is no vision for the venture, the new idea is just a dream.
Stage 2: Developing the Plan and
Setting up the Company
In this stage, ideas are
discarded and strategies are documented and converted to a business plan. The
focus at this stage is on writing a well-conceived business plan. This plan
details how the vision and market analysis will become a sustainable
competitive advantage. Many entrepreneurs underestimate the time required to
complete a plan which often can take from two to nine months. We will also
discuss how to prepare an oral presentation for investors. The boxed feature, “Preparing
a Business Plan to Launch the Renal Care Group,” reveals how this one
successful venture got started. We will examine the pros and cons of each of
these business structures as well as how to prepare a checklist to start a
business.
Stage 3: Acquiring Financial
Partners/Sources of Funding
Armed with a well-conceived plan,
the next challenge is to focus on acquiring financial investors and partners.
In most cases, entrepreneurs may not be aware of the many financing options
available that would best meet the needs of the business. Therefore, it is
important to know the expectations and requirements of funding sources as well
as the options available for financing.
Stage 4: Determining the
Resources Required and Implementing the Plan
This stage explores the value of
intellectual property and how to file patents, trademarks, and copyrights to
gain competitive advantages in the marketplace. This stage provides an
explanation of these forms of intellectual property (IP) and guides you toward
effectively developing, protecting, and promoting your own IP.
Stage 5: Scaling and Harvesting
the Venture
This stage examines the special
situation of purchasing an existing or turnaround business and owning and
operating a franchise. It highlights the positive and negative attributes of
each type of business and more importantly, outlines the steps to follow in the
decision- making process. This stage explains the business issues and risks
entrepreneurs face when they buy a business and the pros and cons of each kind
of the business.
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