Describe about the Management Skills and Entrepreneurship for Business Activity?.
To set up a new business, there should be opportunity in the market to continue the business activity. For example, there should be proper demand for the produced goods and services; proper infrastructure and support from the society as a whole. Resources are an essential part of the business, as without sufficient capital a business cannot be established. Along with capital, human resource is a major component of a business. The entrepreneur forms a team to give a shape to the business. Entrepreneurship creates value and in this process, the persons go after possibilities and opportunities that are relatively exposed to risks (Timmons, and Spinelli 2013). Proper approach of entrepreneurship can create potential high rewards. The risk associated with the entrepreneurship of a new business is that the targeted customer according to the expectation does not recognize the value created. This leads to face financial and other difficulties of the entrepreneurial team. In contrast, if the target customers recognize the value then the entrepreneurship attains higher level of success. The process of value creation is mostly opportunity motivated. The approach of entrepreneur is led by entrepreneur and entrepreneurial team follows the entrepreneur (Hammad 2013). The success of the entrepreneurial approach depends on the creativeness and it is constraint due to limitation of resource. To enhance the possibility of success, “Timmons Model” can be adopted for continuation of a business model. This model is one of the most recognized models for developing a new business. This paper will focus on analyzing the three components for a successful new business. It will provide evidence from academic literature to understand the topic. Further, the paper will explain the types and need for resources; and how these are used. It will critically discuss whether the start-up has sufficient resources or not, in order to analyze the resources allow the entrepreneur to take full advantage from the opportunity available.
According to the Timmons model, the process of entrepreneurial does not start with business plan; team; strategy or money. He emphasizes on three underlying forces behind a successful business, that are, opportunity; entrepreneur and resources. By maintaining this framework, risk can be minimized.
This model emphasizes on the role of opportunity as a driving force of the entrepreneurship. Opportunity is crucial than knowledge or talent of the lead entrepreneur and team, as only opportunity can ensure log-term success of the firm (Moroz and Hindle 2012). Timmons Model starts with opportunity that is contrast to any traditional models starting with business plan. Opportunity refers to idea to create value to a business venture. It has been opined by many scholars that an excellent idea cannot bring success to the company. An idea is recognized to be successful when the product is positioned in the market; remain attractive; durable and has created value (Foss, Lyngsie and Zahra 2013). As the model starts with identifying the opportunity, it is good only if the market demand is satisfactory. The opportunity is given high priority as it has capability of receiving financial resources and a good opportunity can stable the business plan. The opportunity must be attractive; timely and durable. Timmons model then emphasizes on entrepreneurship. Entrepreneurship approach cannot be successful without proper leadership. The leader has significant impact on success, as his commitment and eagerness is the key driver of the success of the business (Leyden and Link 2015). Most of the individual do not prefer to engage in entrepreneurship because of the risk involvement in creating the value. Many academics focused on the solving the risk and lack of proper framework for the entrepreneurship. Timmons started to spread entrepreneurship across the world through his framework. The leader manages the resources in an efficient manner by cooperating with exogenous forces and the constantly changing capital market. The role of entrepreneur is difficult, as they have to identify the opportunity first; utilizes proper resources and makes a team to control the functioning of the business. They focus on understanding the utilizing of opportunity in order to create value. Entrepreneur is the centre of new venture creation process (Kuratko 2016). The entrepreneur is one who identifies the opportunity and selects an effective team. The role of team is also essential, as the tem removes the ambiguity or uncertainty of prospects in the market by its creativeness. An “A” graded team has more successful idea than the “B” graded team. Therefore, it can be said that the idea with high potential is not is not enough if it is not executed properly by a team. A bad team can demolish the value of excellent idea (Hui-Chen, Kuen-Hung and Chen-Yi 2014). First rated idea cannot be successful through second-rated management team. Moreover, the size of the team depends on size of the venture. The lead entrepreneur must have abilities of learning new things and teaching the members of the team. He or she must be able to deal with any kind of adverse situation. The leader must be flexible and must show integrity and honesty. However, the team also should possess some qualities to assist the entrepreneurial aspects; like, tolerance to risk and uncertainty; determination; creativity and motivation. The entrepreneur gather best talent and form a best team, which unlock the high potential out of any opportunity (Sullivan and Meek 2012). The final element of this model is the resources. Timmons focuses on importance of resources in a business proceeding. The differences in few resources can make huge differences in a business. The major resource that first comes to mind before starting a venture is the financial resources (Vanacker, Collewaert and Paeleman 2013). However, this model considers, entrepreneurs and opportunities are crucial resource to start a business. Moreover, the capital resources follow the high prospective opportunities and strong team. By paying attention in maximizing the value of shareholders; liquidity and capital efficiency etc, the resources can be controlled properly. At the initial period of launching, the resource is used at a minimum level. The framework of Timmons encourages utilizing available resources through creativity. This helps to bring the market price at lower level. The amount of resource is dependent on the opportunity size of the firm. This model is focused on “minimize and control” approach (Nordqvist, Wennberg and Hellerstedt 2013).
There are many more models of entrepreneurship, apart from Timmons Model, where there are several elements are considered in addition to the elements discussed in the Timmons model. Implementation and growth of the business are some elements of success of a business. Moreover, environmental and social factors and personal factors give rise to a new business. Moore’s model of entrepreneurial process focuses on innovation; implementation of innovative ideas and growth of the business (Mihalache et al. 2014). Therefore, it can be said that the model of Timmons missed out the social perspective of the entrepreneurship. It only focuses on personal thoughts and market opportunities and ignored the possibility of environmental and social factors that accelerate the new ideas and change. Entrepreneurial process also involves evaluation and identification of opportunity; decision about exploiting the innovative ideas; putting effort for arranging and obtaining particular resources and developing strategy to execute new business venture. According to the Shane’s Model, people who discover opportunities have better access of information about those particular opportunities. Moreover, it is believed that, those people also have past experience of life; better social surrounding. According to this theory, entrepreneurial opportunities depend on psychological and demographical factors along with the environmental factors (Koltz et al. 2014). These elements lead to innovation and utilization of scopes and implementing the strategy formulated for the organization. The Timmons model focuses on balances all activities to make a business successful. In contrast, Shane’s model states that opportunities emerge from individual and environmental factor to exploit opportunity and execute the business in a successful manner (Chell 2013).
The major weak point of the Timmons’ framework was that, it stated resources should be in place while establishing a new business, especially in terms of cash. Moreover, he also focused on complete balance between the activities of the model and all activities should be given equal importance. Many have opined that even if the emphasis is given on each activity, it is impossible for the business to have finances. Therefore, there is an imbalance between all opportunities in the beginning of a new venture (Chandra, Styles and Wilkinson 2012). Hence, the Timmons model put less emphasis on initial investment. The less focus on resource is the reason behind the imbalances in the process of entrepreneurial process. According to the Timmons model, the entrepreneurial team drives the start-up and growth of a new business. He also connects the opportunity and resources with team. However, since there are imbalances or less emphasis in terms of resources and lack of opportunity, it also affects the performance of the entrepreneurial team. According to the Adams and Stephen (2012), less emphasis on other element leads to weakening of the team that in turn affects the overall business plan and the execution of the new venture. Therefore, many scholars criticize the concept of dependency of the elements of Timmons model.
The Timmons framework highly focused on being creative and finding business opportunity. Critiques have pointed out that this is a weak point of this model. This is because, entrepreneurs may waste too much time on finding the best idea to start the business. They have opined that this is a misconception that the idea should be unique to establish an successful business. One idea of an entrepreneur can be used by other entrepreneurs (Renko et al. 2015). The waste of time is a big issue; because, every day 80% of business plans are rejected and only one or two of them attracts the investors and funded by them. Therefore, searching for unique ideas will get them nowhere in the competition. Therefore, it can be argued that, finding opportunity is not a major element of entrepreneurial process, unlike the framework of Timmons model. However, proponent of Timmons model also states that, many entrepreneurs compete to have all resources before starting new venture, which is practically not possible (Hammad 2014). Therefore, having adequate resources is enough to start-up a new business. It discounts the concept of having all resources and encourages starting business with bare minimal requirements in order to attain competitive advantage. The advantage of this approach is that it instills leanness and discipline in the organization. Further, it also persuades creative resources in order to achieve more success in the business with limited money and other accessible resources (Dunkelberg et al. 2013). Timmons opined that instead of buying all the equipments to start a business, it is better to take lease. This model is appreciated because; resources may remain scarce, but through good management team and potential opportunity the organization can attract finances and other resources.
The paper emphasizes on explaining the entrepreneurial process of an organization. It has discussed about the Timmons model, which puts emphasizes on the elements like, opportunity; team and resources. According this model, the role of opportunity of a business is crucial in the way of a business’s success. Innovative idea for business is the key to success, according to this model. Without proper opportunity or idea, business venture cannot be started. Then the model prioritizes the entrepreneurship. It states that without good management it is not possible to implement an excellent idea. Entrepreneurs have high risk associated with the success of the business. In addition to this, the model of Timmons recognizes the role of resources in a business. It has been opined that a business venture can be started with adequate resources and after a while, the firm will own all the resources. However, even if it does not have resources, opportunity and teamwork will attract investors for financing. However, the paper has reviewed the literature on Timmons Model and compared this model with two other models, such as, Moore’s Model and Shane’s Model. The paper has also critically pointed out the drawbacks of this model like, wasting time on finding opportunities; less emphasis on initial investment. However, the positive aspects of this paper have also been discussed. It can be concluded that the Timmons model has ignored many important factors or elements behind the success of a business.
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