The entrepreneurial process

IN both the developed and developing countries small businesses have become one of the engines driving economic and social development.
Studies carried out in a number of countries, including the United States, have shown that in addition to being drivers of economic and social development, small businesses are a major source of job creation and also a powerful source for innovation.
In the United States alone small businesses produce 14 times more patents per employee than large businesses. This shows the innovativeness of the small businesses.

It’s however not all roses for the entrepreneur who tries to enter into business. A large number of these start-ups do not achieve success.
It has been established through research that the main reasons for this high mortality rate is the entrepreneurs’ lack of ability to develop and manage their businesses.

It is therefore very important for an entrepreneur to understand the dynamics of entrepreneurship and the entrepreneur’s role as the main actor in this process.  The process of launching a business involves a number of critical phases that an entrepreneur has to go through namely, identification and evaluation of an opportunity, development of the business plan, raising funding, and determination of the required resources and management of the enterprise.

At each of these stages an entrepreneur should acquire certain skills and attributes.
The entrepreneurial journey starts with getting or generating the right idea leading to eventually building a successful business or not.
At each of these stages an entrepreneur has to take the right steps or actions, and any decisions that the entrepreneur has to make should be smart and highly calculated to ensure the success of the venture.

Social media has made us think building a business is a walk in the park.
It’s all glitter on the Facebook but reality is not. These businesses take time to build. Rome was not built in a day. Don’t just take a plunge into entrepreneurship because of excitement.

Before you make that bold move you need to know what you are getting into. The entrepreneurial process we will discuss is intended to highlight the issues that you need to be aware of.  In this discussion I will briefly touch on each stage but later on unpack each stage in detail.
The first stage in stepping out as an entrepreneur is finding the right business idea.

You need to identify and evaluate the right opportunity that the market will need. Without a business idea, you can’t start a business.
You will need to do a market research to determine if the people really need what you want to bring to the market. Ensure that the idea matches your talents, skills and that you are passionate about what you want to do.

You should have the capacity to execute your business opportunity or else it will end up a failure.
The second stage is developing a business plan. It doesn’t need to be very detailed but it will act as a roadmap of what you want to do. It’s likely that this plan will change as you get responses from the market about your business idea.
So be prepared to change it. The plan is not cast in stone. The plan should show what you are bringing to the market-your mission or why you have set the business.

It should also include the product, the market, resources required and financial projections.
The third stage would be the identification of the resources you will require to run the venture.
Resources will include money, machinery, human capital, materials and processes that will drive the business. These should be reflected in the business plan.

The fourth stage is very critical if the business idea has to be realised. You need to raise your seed funding to fund the venture.
Having drawn up the business plan you would have identified and understood the full financial implications of the project. There are many ways of raising the finances.

You can raise funding by getting an investment from investors, venture capitalists, or Government grants, a bank loan or borrow from friends or relatives. The last stage is getting the customers and run the business. Getting paying customers is the real challenge and this can make or break the business.

Your main goal at the outset should be to acquire as many paying customers as possible, at the lowest cost of acquiring customers possible.
Once you have acquired the customers you need to do everything you can to retain them. Losing a customer is very costly.
To acquire and retain a customer you need a quality product/service at a competitive price while offering exceptional customer service.
Happy customers will advertise your business. In this phase strive to make your business a success.

l Stewart Jakarasi is a business and financial strategist and a lecturer in business strategy and performance management.
He provides advisory and guidance on leadership, strategy and execution, preparation of business plans and on how to build and sustain high-performing organisations.

For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts: sjakarasi@gmail.com or +266 58881062 or on WhatsApp +266 62110062