Entrepreneurial Process

1. Entrepreneurial Process • When starting a new business, there is an entrepreneurial process that is often followed. • An entrepreneur must find, evaluate, and develop an opportunity by overcoming the forces that resist the creation of something new. • The entrepreneurial process has four distinct phases: • (1) identification and evaluation of the opportunity, • (2) development of the business plan, • (3) determination of the required resources, and • (4) management of the resulting enterprise.

2. Even though the four phases are meant to show a progression from step 1 to 4, entrepreneurs will realize that each phase is connected, and will not be totally completed before work on other phases occurs. • For example, to successfully identify and evaluate an opportunity (phase 1), an entrepreneur must have in mind the type of business desired (phase 4).

3. Phase 1: Identify and Evaluate the Opportunity • Most good business opportunities do not suddenly appear; most result from an entrepreneur’s alertness to possibilities. • Networking with consumers, business associates, or technical people can help identify these opportunities: • For example, one entrepreneur asks at every cocktail party whether anyone is using a product that does not adequately fulfill its intended purpose. This person is constantly looking for a need and an opportunity to create a better product.

4. Evaluating Opportunities • Each potential opportunity must be carefully screened and evaluated. • This evaluation is perhaps the most critical element of the entrepreneurial process because the entrepreneur needs to know whether the specific product or service will provide enough return based on the amount of resources required. • This evaluation process involves: • looking at the length of window of opportunity, • its real and perceived value, • its risks and returns based on the market, competition, technology , and amount of capital involved • its fit with the personal skills and goals of the entrepreneur, and • its uniqueness or differential advantage in its competitive environment.

5. It is particularly important that the entrepreneur be able to put forth the necessary time and effort required to make the venture succeed. • Although many entrepreneurs feel that the desire can be developed along the venture, typically it does not materialize. An entrepreneur must believe in the opportunity so much that he or she will make the necessary sacrifices to develop the opportunity and manage the resulting organization.

6. Opportunity Assessment Plan • An opportunity assessment plan, unlike a business plan, is shorter and focused on the opportunity, not the entire venture. It helps to make the decision of whether or not to act on the opportunity and includes the following: • a description of the product or service, • an assessment of the opportunity, • an assessment of the entrepreneur and the team, • Specifications of all the activities and resources needed to translate the opportunity into a viable business venture, and • the source of capital to finance the initial venture as well as its growth. • The assessment of the opportunity requires answering the following questions: • What market need does it fill? • What personal observations have you experienced or recorded with regard to that market need? • What social condition underlies this market need? • What market research data can be used to describe this market need? • What patents might be available to fulfill this need? • What competition exists in this market? How would you describe the behavior of this competition? • What does the international market look like? • What does the international competition look like? • Where is the money to be made in this activity?

7. Phase 2: Developing a Business Plan • A good business plan must be developed in order to exploit the defined opportunity. • This is a very time-consuming phase of the entrepreneurial process. An entrepreneur usually has not prepared a business plan before and does not have the resources available to do a good job. • A good business plan is essential to developing the opportunity and determining the resources required, obtaining those resources, and successfully managing the resulting venture.

8. Phase 3: Determine the Resources Required • The resources needed for addressing the opportunity must also be determined. • This starts with an appraisal of the resources that the entrepreneur currently has. • Also, resources that are critical should be differentiated from those that are just helpful. • Do not underestimate the amount of variety of resources neededand understand the downside risks resulting from insufficient or inappropriate resources • The next step is to Acquire the needed resources in a timely manner while giving up as little control as possible. An entrepreneur should strive to maintain as large an ownership position as possible, particularly in the start-up stage. As the business develops, more funds will probably be needed to finance the growth of the venture, requiring more ownership to be relinquished. • Alternative suppliers of these resources, along with their needs and desires, need to be identified. By understanding resource supplier needs, the entrepreneur can structure a deal that enables the resources to be acquired at the lowest possible cost and the least loss of control.

9. Phase 4: Manage the Enterprise • After resources are acquired, the entrepreneur must use them to implement the business plan. • The operational problems of the growing enterprise must also be examined. This involves implementing a management style and structure, as well as determining the key variables for success. • A control system must be established, so that any problem areas can be quickly identified and resolved. • Some entrepreneurs have difficulty managing and growing the venture they created.

10. Regional Economic Development Boards (REDBs) • Community economic development is a process which focuses on creating wealth and jobs, developing business and co-operative relationships, and enhancing viable opportunities viability for the community, the region and the province. • The functions of REDBs include: • Developing and coordinating the implementation of strategic economic plans (SEPs) in each zone (NL has 20 zones) • Coordinating business development support in each zone; • Providing support to organizations and communities within the zone as they develop activities towards the zone’s strategic economic plan; • Coordinating social and economic initiatives relating to regional economic development in each zone; and • Promoting public participation and community education related to regional economic development.

11. Zones • St. John’s falls in the REDB zone 19 which is the Northeast Avalon Regional Economic Development Board (NEAREDB) (view other zones at http://www.nlreda.ca/content.php?cid=48&nav=111) • The NEAREDB does not provide funding, but they can assist entrepreneurs in identifying the appropriate funding sources for their business. • They also have resources for writing a business plan, finding a job, writing proposals, and exporting. • To summarize their strategic goals, The NEAREDB aims to use community research on economic trends to help advocate for viable opportunities. As a result, they will help promote, facilitate, and support the growth of business and communities to enhance their zone’s economy .

12. Community Business Development Corporations (CBDCs) • The Community Business Development Corporations (CBDCs) are a network of autonomous, not-for-profit companies working to meet the needs of small business. There are 15 CBDCs in Newfoundland and Labrador, each dedicated to the development of small business and job creation in their communities.CBDCs assist in the creation of small businesses and in the expansion and modernization of existing businesses by providing financial and technical services to entrepreneurs.

13. Youth Ventures • Youth Ventures (YV) can do a ton of things for you and your business. YV started back in '92 and since then, we've helped more than 4300 participants start many, many different businesses! There are 22 coordinators located throughout NL that help young business owners and wannabe's start their businesses. These Coordinators can help you with: * Coming up with a business idea* Writing a business plan* Marketing your business, advertising, brochures, business cards* Working out the financing you're going to need to get your business up and running* Hiring the right employees* Getting advice from a mentor • Angel Investors program http://www.abdp.ca/http://www.youthventuresnl.com/

14. Self Employment Assistance Program • The SEA Program allows participants to continue to receive their EI Benefits while they are getting their business up and running. • Individuals qualifying for this program receive income support and business counselling (group training sessions as well as one-on-one business counselling) following their acceptance into the program. • Income support is usually in the form of bi-weekly payments from the EI program. • You are eligible if you are an unemployed individual: • Who has a current EI claim; or • Whose EI benefit period ended within the last three (3) years; or • Who has established a benefit period within the past five (5) years prior to the date of requesting assistance, was paid parental or maternity benefits, and are re-entering the labour force after having left it in order to care for a newborn or newly adopted child. • http://www.hrle.gov.nl.ca/hrle/lmda/sea.html

15. Other programs • CBDC Innovation Loan : To assist in the development of the knowledge-based economy in the adoption and commercialization of technology by rural businesses. • Financial Assistance CBDCs assist entrepreneurs who may have had difficulties accessing capital from traditional lenders and are unable to qualify or meet the credit standards of the conventional lending institutions. • Business Loan Program provides financial assistance to new or existing businesses to a maximum of $150,000 in the form of Loans, Loan Guarantees and Equity Financing. CBDC loans are fully repayable and are negotiated at competitive interest rates. For more information please call us at 1-888-303-CBDC (2232). • CBDC General Business Loan The CBDC General Business Loan is designed to assist entrepreneurs to obtain financing for their business, when traditional avenues of financing are not available. It can be used for key events in the business life cycle such as business creation, purchase, and business succession planning. • CBDC First-Time Entrepreneur Loan Targeted financing for those first-time entrepreneurs starting or purchasing their very first business. • CBDC Social Enterprise Loan Tailored financing designed to assist social enterprises in rural based communities in Atlantic Canada. • CBDC Youth Loan Tailored business solutions for young entrepreneurs ages 18-34 interested in starting, expanding or modernizing projects that require financing to get the business moving. • Skills Training Tailored skills training in special areas such as market development, bookkeeping, feasibility studies and business analysis. • Business CounsellingCounselling is the most common type of assistance and is usually in the form of advice to the new entrepreneur as well as the established business person.

16. Newfoundland and Labrador Organization of Women Entrepreneurs • NLOWE helps women entrepreneurs start, grow and advance successful, leading-edge businesses that capitalize on emerging economic opportunities. They understand that women face unique challenges and opportunities and they can provide the support that needed to develop and grow a business. • While NLOWE seminars and events are aimed at women in business and are focused on issues pertaining to women business owners, men and non-business persons may attend our events.

17. Services • In addition to the advocacy and promotion of women in business, professional development events, mentoring and networking opportunities, and seminars and workshops that are available to all clients, NLOWE offers confidential, one-on-one services, including: • Business support and advice • Information on financing • Referrals • Access to subsidies • Operational support and guidance • Assistance with business plan development • http://www.nlowe.org