Entrepreneurship Options: New Venture, Family Business, Intrapreneuring, Franchise - Essay.

You have critically analysed your options for becoming an entrepreneur. You wish to enter the world of entrepreneurship, and you can choose any avenue you wish.

Compare and contrast the following four options:

1. Starting or buying an independent venture (includes all types of entrepreneurship, such as Social, High Growth and Lifestyle ventures)

2. Starting a Family Business

3. Starting or buying a new corporate enterprise (Intrapreneuring)

4. Starting a new Franchise or buying an outlet in an existing Franchise.

Use the principles/concepts of entrepreneurship to write a report ensuring that you:

Provide a brief description of the industry and market you wish to enter. 

Explain what type or entrepreneur you would like to be and why you are interested in becoming that type of entrepreneur. You can include any business, or personal characteristics that are relevant to your answer.

The benefits and drawbacks of each of the four options (Independent, Family, Corporate and Franchise).

The benefits and drawbacks of buying an existing business compared to starting one from scratch.

Provide recommendations as to whether or not you will acquire a venture. The recommendations should follow logically from your analysis.

Brief Description of Industry and Market

A business organization is said to be one that provides a product or a service to the target market in exchange for monetary value. The person who is responsible to set up, initiate and organize the inception of such an endeavor is an Entrepreneur. The Entrepreneur is hoped to have a definite skill set that will help the organization grow and expand in the future (Ucbasaran et al.  2013). With every business there are certain amounts of risk associated and at the beginning of the journey the risks are even more, hence an entrepreneur is expected to be able to manage risks carefully and analyze the possibilities of the outcome form the beginning. New business is always welcomed by the economy of a country as it ensures growth and more monitory circulation in the economy An entrepreneur is expected to have a sharp vision of clarity towards the path he or she want the business to run and also ways and means for it to grow in the future. Entrepreneurship is broad and much more complex concept than just about beginning a new business venture, it is a distinguishing attitude of an individual to lead, manage, organize, plan and bear risk without being agitated or feared (Kearney and  Hisrich 2014).   

Innovating Entrepreneur- The individual who drives the company by developing new products or service or by coming up with new proposal and methods of operation.

Imitative Entrepreneur- The entrepreneur who is ready to adapt to some of the innovation that has been led by successful entrepreneur of the industry is imitative in nature.

Fabian Entrepreneur- The one who is a skeptic and is comfortable in the way the proceedings are is a Fabian entrepreneur. He or she is basically a safe player.

Drone Entrepreneur- The entrepreneur who is not adoptable and refuses to implement changes and take risks.

The combination of an innovative and an imitative entrepreneur is the mantel that seems appropriate for starting a new business. Innovative because to begin a new business and to set up an enterprise it is required to have a set of goals that has to achieved in a span of time to get the business started and for an individual to be able to do so he or she has to keep an open mind with a welcoming attitude towards new and fresh ideas of the management operation and also with the products and services that are going to be available for the consumers (Jenkins, Wiklund, and Brundin 2014). At the inception of starting a business endeavor there is a little chance of earning profits hence the risk is way more than the gain. To combat with the risks associated with the business there has to be several methods that need to be implemented by the organization. New methods sometimes work and sometimes they fail at the beginning it is a bit of a risk to implement new and improved methods as if it fails it might cause harm but the risk is also associated with the positive outlook of the failure. Failure in terms of new methods provides with an insight about the industry and the market of operation. Risks and failure is a part of a business endeavor and should always be view with a positive mindset. One of the major issues that start ups face is that of the capital (Drucker 2014). To engage working capital and to get more and more monetary support following in the business there has to be creative ideas to pitch to the investors. This gives a perception to the investor that the entrepreneur has the research and the home work done, which in turn gives them the idea about the stability of the person and a faith in the value that they are going to be investing in the business (Schaper et al. 2014).

Type of Entrepreneur and Motivation

Imitative behaviors can also be helpful for a new entrepreneur who is starting a business. A new entrepreneur has to start somewhere and inspirations and motivation can be derived for the industry and firm’s who are already excelling in the field of business. It is a good place to begin the operations form and then move on to implementing new and innovative policies and structure to the business. While adapting to some of the policies the person should keep in mind to module it according to the functionality of his or her own business. As an individual no business enterprise is hundred percent alike hence the policies or the methods of operation has to be customized as per the operation of the business (Baum, Frese and Baron 2014). While forming the business model or creating a marketing mix the entrepreneur should keep in mind the short term goals backed up by the long term aim of the business and then find out the possible adaptable policies of the companies operating in the same industry and implement them to start off the business. For example: Google is an information technology company that is widely known for their work culture and their ease of the resources to have a very casual and colorful environment. According to the management this provides the staff to have an open mind and allows the staff to be more creative in the field and be more productive in their work. For a technical entrepreneur it is important and very crucial to have a developed skill in technical production. Production is one of the most important departments in the technical sector hence he or she has to put the prime focus in the production department from the very beginning. Most of the entrepreneur who wants to start a business in the technical field has a certain amount of experience in that industry and it is a good idea to implement the ideas for the individual to apply the skills and craftsmanship that he had developed in the past experience. This is crucial as it is going o help him or her develop and improve the quality of the product or services the company has to offer to the customers (Bae et al. 2014).   

The skates of starting a business form the scratch is very high, there is a lot of capital investment, a lot of leg work involved in the whole process and if the start up is on the shoulder of a single person then it is very important for the person to realize that he or she should have a certain skill set like sense of responsibility, leadership skills, management skills, knowledge of the production process and many more. Building a new idea and developing the company from the ground up and creating an entity form the first building block might seem like an exciting and adventurous task but it has a lot of factors of success involved. Careful steps are to be taken initially and the inception point has to be started off with a well thought out plan (Ratten 2016).

Benefits and Drawbacks of Each Option

Some of the challenges the person is going to face while starting a new business are construction of a solid customer base by making market segmentation in term of potential customers of the industry, promoting the new business, hiring staff and employees and start the cash flow within the organization (Carland, Carland and Stewart 2015).

Start ups are a new and trending word in the business world, which essentially means starting a business enterprise. Gathering venture capital is the most important and stark issue faced by a startup. Basically in order to start a business lump sum amount of money has to be invested for various purposes depending on the nature of the business, the scale of the business and the industry it wants to work in. the startup trend has given the space for new and innovative methods and products space to grow in the market and there are several successful start up examples in the world that can be look up to for inspiration (Chemmanur and Fulghieri 2013).

Buying an independent business on the other hand is different form a start up concept it means starting a new venture but not setting it up. It means buying an enterprise that is already set up by someone else. It involves a transfer in the ownership of the business that is already running. In this case much like a start up the capital is the main challenge and the propose of the transaction. There has to be a concrete idea about the enterprise that is being bought by the entrepreneur, which involves thorough research about the industry in which the business operates. It also requires business and background information about the company. Every legal aspect would be well versed by the entrepreneur who is buying the company and also by the one who is selling is. As so much of research and background search is going on prior to the conception of the endeavor the risks associated with the transaction can be anticipated and can also be minimized with policies and other tools as compared to starting a fresh business. To begin the research, if an entrepreneur wants to buy another business he or she should be looking into the industry that he or she is familiar with as it gives them an upper hand in understanding the operations of the business. Some of the other points to keep in mind while selecting an organization to buy is the size of business you are looking for, in terms of employees, number of locations and sales. Networking in the industry plays a key role in the buying and selling of business as the contacts will give the person who is interested in buying the business a true picture of the organization (Cai, Hughes and Yin 2014).

Buying an Existing Business vs. Starting One From Scratch

As an entrepreneur depending on the skills and talent of the person he or she should opt for either buying a business or setting up an organisation from the scratch. Both these options include their own set of challenges and privileges.

Buying a business brings a lot of add-ons with it. As the organisation is already running and making cash flows the entrepreneur does not have to work on starting the day to day operations of the business like a start up.

Not only the cash flow but the existing company will also have the basics choked out like the business model, marketing mix and the target market segmentation. Apart from that the company will also have an established customer back up. All these aspects can be redone but the preliminary base has already been created which makes it easy for the entrepreneur to start off. There will also not be the issue with hiring of the staff, yes if the person feels that more people are required he can take more people but there will already be a group of people who are already working for the organization. Along with these facilities the entrepreneur will also receive an already successful and running business policy and formula which he or she can later change and make amendments but then it is a good place to start. Buying a business is like buying a cake form the bakery it is already made for consumption one just has to carefully examine the perfect cake for that will meet the requirements while baking a cake requires all the elements to be put together and starting it from the beginning. The basic plan and the policies of the organization is already in place and hence it has a solid foundation to begin with. It gives a lot of leverage to the entrepreneur in terms of risk taking and risk management as the organization is already operating and will have a financial past which will help the entrepreneur anticipate the future better and to work towards betterment of the situation. It also forms a better position for the entrepreneur to pitch in front of the investors.

All the above claims of a buying a business is true regarded the condition of the business that is bought is on track. If the company that is being bought is running at a loss and is the reason why it is being sold then a lot of renovation has to be done in order to set the track it will almost be like starting from the scratch (Weller 2014). Change of the management of an organization is a big change for the employees being able to cope up with the newly formed management and the changes of the ideology and planning of the operation of a business which may give rise to internal conflict that in turn is bad for the organization to work on a daily basis. The biggest and the most obvious drawback of buying an operating business is that the capital invested in buying the business plus legal operation is a huge sum of money. Again if the company has a bad reputation among the business community then it will b every difficult for the new owner to change that image and bring about new and creative vision and outlook about the company (Grewal et al.  2015).

Recommendations

Family is the place where an individual seeks comfort and companionship mixing family with business may be a good idea but then it can also turn out to be disastrous (Benavides-Velasco, Quintana-García and Guzmán-Parra 2013). If only the equation among the family members are strong and the bond is steady then only one can venture into a family business, it can prove to be a success in no time because of the support and trust that people in the business share among each other (De Massis and Kotlar 2014). One key element of doing well in starting a family business is recruiting people from outside the family to get fresh new ideas and an outside insight on the company’s operation. Installing and implementing core values in the organization which will promote a sense of family among the employees and the staffs as well (Neubauer and Lank 2016).

A corporation is separate entity form that of the owner and hence it gives the founder of the company a benefit and leverage over sole proprietorship. The common norm is to start a business and when the business is running well and is generating enough cash flow to back up the operation, and then the company can go for the incorporation process. There are several legal procedures that have to be followed while incorporating a business in to a corporation (Aspara et al. 2013). Some of the advantages that a person will enjoy with starting a corporate business are that all the liabilities like the bad debt, raising capital, taxation and many more are a divided responsibility among the person and the corporation. While incorporation there is some points that has to be kept in mind like the name and address of the company is very important in this case because it has to be legally registered. The type of corporation also has to be selected, the directors of the company has to be determined along with the type of shares he or she wants to deal with (Ceccagnoli, Higgins and Kang 2017).

There are a lot of companies who have their operations all over the state or all over the nation. For example: Mac Donald’s franchise is all over the world. A set up business, which is generating cash flow and is gathering profit, allows a third person to continue the business in some other location and share the profit as per the terms and agreement that has been pre determined (Economics 2015). Even in buying a franchise research is important back ground check of the company and it is always a good idea to buy franchise of a company whose industry the buyer is familiar with. While starting a franchise is like beginning any other business because the entrepreneur has to follow all the procedures of a start up starting form venture capital to hiring people. After the company has generated cash flow enough to make decisions of starting a franchise or not entirely depends on the management of the business, looking in to the prospect of the business and the long term goal of the business (Lee et al. 2016).

Entrepreneurship and Set of Skills

As an entrepreneur of the operating business there are some major decisions he or she has to take for the future and the expansion prospect of the business. The business has to run with efficiency and has to generate enough cash flow to persist the operation of the company on a regular basis. These are some of the short term goals of a company. When these are attained the company looks forward to move towards the larger aim of the company which can be expansion, growth and diversification of the business. In order to do so the entrepreneur might take a decision of buying or acquiring a venture which he or she might feel will help in the growth and development of the company and also help the company gather more and more cash flow.

There is a lot of market research that goes with acquisition. There are several questions that an entrepreneur has to ask himself while taking a decision for acquisition of a venture. The first and foremost concern of the acquisition purpose is that why is the other business willing to sell, what was wrong that couldn’t be fixed with in an institution and hence it is being sold. The buyer should carefully observe the internal environment of the business (Sharma and Raat 2016).

Conclusion

An entrepreneur is not just an individual who is starting a business venture; it is an idea of a person with certain skill set and high spirit of motivation. To be a successful entrepreneur, it is important to understand that one must be a people’s person. Business has to deal a lot with human beings in the process and the one must be aware of the certain basic ethical principles and values as well.

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