Managing New Ventures - Essay Example

Managing New Ventures Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date An enterprise in regards to this context can be regarded as a business. An enterprise can also be defined as an action taken by a personality who shows initiative by taking a risk by setting up, investing in and running a business. This gives birth to the term entrepreneur who takes initiative and makes things happen through risk taking. A business enterprise can further be seen as an activity or a project that produces services or products. There are mainly two types of enterprises namely business and social enterprises. Business enterprises are mainly run with an aim of making profit for a private individual or group individuals. On the other hand, social enterprises functions to provide services to individuals and group in the community (Beard & Desks, 1981 pp108). When setting up new ventures, be it a business venture or any other, there are important ingredients which are essential. These ingredients include activities that need to be done and steps which need to be followed in the process of establishing a new venture. The processes and activities that lead to establishment are called pre start up while those that follow after establishment are referred to post start up (Allen, 2002 pp 65). Therefore, these processes and activities require high-quality management and critical planning so that competent and maximum yielding ventures can be established. At the initial stage of startup, a preliminary plan should be prepared and then as new venture develops, the plan is finalized. Many different types of plans may be part of any business process for example monetary, marketing, manufacturing, and sales plan. A plan is therefore of paramount importance in pre start up stage for the reason that it provides guidance and structure to manage in a rapidly changing market environment. A business plan describes all relevant external and internal elements involved in setting up a new venture and addresses both short term and long term decision making. After drawing a plan, activities geared towards implementation of the plan should be commenced. Implementation of a business enterprise requires finances, getting a product or a service to sell in the market, finding prospects, selling and making exchange. There are a number of sources of a business start up money which aids in plan implementation and facilitation of activities that helps to establish a new venture. These sources include, but not limited to personal pocket money, a line of credit, a start up business loan, a start up business loan from a business-related or government sponsored organization, and family friends. Proactive learning prior to startup of any business venture is positively related to long run business survival. Additionally, it can provide insights on how to adopt or react in case of any changes. Thus, learning results from pre-start up planning can increase business adaptability. Through planning, the process of new ventures pre-startup includes assessment of alternative scenarios and development of contingency plans done before the startup process (Porter, 1980 pp 201). Pre-startup planning also enhances post-startup efficiency in at least two ways. To begin with, communication of a plan to members of a new business association may result in saving costs through enhanced coordination or synchronization of activities (Grinyer, 1986 pp 132). Second, less time is spent after the startup working out details that could have been addressed before overhead and other costs increased with the business startup. Before setting up an enterprise, a number of items need to be put into consideration to help in making a decision whether to start a new venture or not. To begin with, one should tell whether the new venture is disruptive or will cause any harm to the surrounding society. If it doesn’t have such an effect, then one should move on with plan implementation or start the enterprise. It is also necessary to predict how soon or how fast a product and a service will come and be accepted in the market. After that consideration, a question of what level of risk associated with startup should be paused and if there are higher level of risks associated with start up, then one should reconsider that venture although it is a proven fact that, the higher the risk, the higher the profits. In general, all considerations concerning opportunities and potentiality of any business venture should be identified (Bourrgeois, 1981 pp 143). Conventional wisdom is that a new venture or a business be planned prior to their startup as mentioned earlier. Nevertheless, research on value of planning in general and on pre-startup planning in particular, has generated mixed results among different scholars, but all in all, research is a very instrumental activity to be undertaken before setting up an enterprise. Taking a consideration of old days, people were influenced so much by culture in setting up of businesses bearing in mind that by then there were no advancement in technology. This has changed gradually as a result of globalization and technological advancement which have created many opportunities to be ventured. In today’s world, there has been an increase in acquisition of entrepreneur skills so as to maintain customers, for long run survival of an enterprise in tough economic situations and making profit. Entrepreneur skills mainly fall under five divisions or they take other forms or divisions. The first one is sales and marketing skills. These are two most important skills that one should have when a plan to start a business is in question. If in any case a business is to make profit, then it must have customers and who need to be attracted through marketing of products in question and then sold. For successful marketing, marketing officers should posses excellent written and oral communication skills which definitely helps in selling more products and services (Bresser & Bishop, 1983 pp17). Secondly, one should have financial know how since the main objective is to make profit. Financial knowledge like budgeting for available funds makes an enterprise survive for long and at the same time it clears away the possibility of collapsing of an enterprise. Through financial knowledge, pricing of goods and services dealt in becomes easier hence the final results or returns for products become pleasing. Thirdly, an entrepreneur needs to be self motivated since there is nobody to give instructions or what needs to be done. Everything rests on the entrepreneur from as far as thinking source of money to fund the business, developing products, determining strategies on how to reach customers, up to final stage of selling the product in question. Therefore to succeed in business, one must have confidence and trust ideas that he or she bring in a business. More importantly, one must be willing to focus on all processes and exercises that will lead to successes of any business enterprise (Walker, 2009 pp 67). Time management is also among the entrepreneur skills. The ability to plan activities in a day and to manage time is mostly important for home businesses. Before setting up an enterprise, one should make sure that he or she is able to multi –task some activities which will reduce costs. In a case of a business enterprise therefore, it is vital for one to be a very good time manager. Finally, administration skills cannot be left since in the same way they contribute to success of any business enterprise. For example, one needs to file all receipts so that taxation procedures can be easier. These skills are also applicable in; billing, printing invoices, collecting payments, and managing inflows. Entrepreneur skills are therefore important as far as managing an enterprise is concerned both in pre- startup level and post start up level (Walker, 2009 pp 99). Having the entire above mentioned entrepreneur skills will not only ensure success of any enterprise, but they will, at least, lessen the pain of start-up process which will give a greater chance and opportunity to the growth and prosperity of any new venture. Business registration is another activity that should be done before any new venture starts to operate. This is legal requirement that any interested person should not escape. Registration of business enterprises is one way through which governments of different nations earn revenue. The process also protects against illegal businesses and ensures that local produ8cers are protected against competition. The most salient challenges in process of creating new enterprises are as follows. The first one is inadequate funds since any enterprise requires many assets in place for example physical capital among others. Although there are many sources of finance, not many people have benefited from this opportunity because many are not informed and others lack securities and collaterals to obtain loans. Moreover, those who acquire those funds do not have necessary entrepreneur skills to manage and at the same time budget for the funds (Bresser & Bishop, 1983 pp 109). Secondly, there are those entrepreneurs who have ambiguous business plans which are not attainable or would take a long period of time to be achieved. Due to this very reason, most business that has been started end up being stopped on the way after realizing that they are not achievable. This challenge can only be overcome by planning critically before starting up a business, followed by effective implementation. Thirdly, innovation and creativity is another potential challenge to business enterprises. Competition calls for business entrepreneurs who are more innovative and creative. This would help in making of new and cheaper products in the market. As much as innovation and creativity depends on respective persons and sometimes depends on inborn knowledge of a person, it requires more finances its initial stage. The other problem with innovation is that once new technology is introduced, or a product is introduced in market, it only takes short time for that product to be a monopoly and there after people starts to use that technology (CNN, 2008). This approves that knowledge is non rival not unless there are monopoly rights put in place to avoid technological faking. In conclusion, the whole process of creating and managing a new venture before its establishment (pre-startup) and after its establishment (post start-up) needs to be taken seriously since it is through that process a good venture can be established. Planning before and even after establishment of an enterprise is cannot be neglected in this process since it spells out the main goals of setting any enterprise. Besides that, it helps in the coordination of activities in the business. Entrepreneur skills are also very essential in the beginning of this process and at the final end which in this case is making profit (CNN, 2008). Without entrepreneur skills, post start-up stage would not yield much because entrepreneur skills provide financial knowledge, marketing and product promotion skills among others. Individuals should therefore strive to acquire entrepreneur skills so as to set up ventures that are much profitable. Bibliography Allen, M. 2002, The Corporate University Handbook: Designing, Managing and Growing a Successful Program, AMACOM group, New York. Available from: http://www.ashgate.com [Accessed: February 24, 2012]. Beard, D. & Desks, G. 1981, "Corporate-Level Strategy, Business-Level Strategy, and Firm Bourrgeois, L. 1981, "On the Measurement of Organizational Slack", Academy of Management Review, vol. 6, no. pp. 29-39. Bresser, R. & Bishop, R. 1983, " Dysfunctional effects of formal planning: Two theoretical explanations", Academy of Management Review, vol. 6, no. pp. 30-33. CNN, P. 2008, CNN BUSINESS. Available from: http://edition.cnn.com [Accessed: February 24, 2012]. Walker, P. 2009, Sample Pages/Handbook_Corporate_University_Development_C. Read More