The entrepreneurial process Essay

Assignment Question:

“Describe the Entrepreneurial Process and how this procedure can be applied within SME’s.”

During this essay I will discourse precisely what the Entrepreneurial Procedure is and will so travel onto discuss the definition of a Small to Medium Sized Enterprise ( SME ) and how the Entrepreneurial Procedure can be applied within a SME.

First a SME can be officially be describe as a house which has no more than 250 employees, a maximal one-year turnover of no more than ?11.2million and a maximal one-year balance sheet of no more than ?5.6million. The old figures are the maximal to sort a medium sized concern, nevertheless for a smaller size concern they vary somewhat. A little sized concern can be classified as holding a upper limit of 50 employees, maximal one-year balance sheet of ?1.4million and a maximal one-year turnover of ?2.8million, these stats are in coherency with the ‘UK Companies Act 1985 ‘ .

UK national statistics show that SME ‘s in Scotland employed 84,130 in the twelvemonth 2007 with a entire sum of 292,330 endeavors SME ‘s within Scotland entirely in the twelvemonth 2007 besides. All SME endeavors within Scotland in the twelvemonth 2007 contributed to a turnover of ?160,720 million.

SME ‘s rely to a great extent on the personality and influence of directors towards clients whether they are enterprisers or non. Harmonizing to Deakins and Freel ( 2009a ) “small houses have comparatively little portion of the market topographic point and are independent, in the sense of non being portion of a big enterprise.” The definition of what a little concern really is, can be varied and ‘depend ‘ on certain things i.e. Aston Martin ( although non an SME ) employs 700 people which can be described as being ‘small ‘ when compared to other companies such as Ford or Honda, nevertheless when comparing Aston Martin to its cardinal rivals such as Caterham it is considered to be comparatively big.

The Entrepreneurial Process harmonizing to Bolton and Thompson ( 2007a ) consists of 10 procedures. These procedures range from the first phase of being motivated, to the most of import phase of making capital. Capital can be split into 3 chief classs ; Financial, Social and Aesthetic. The diagram below shows the full theoretical account of the Entrepreneurial Procedure:

Phase one is being ‘motivated to do the difference ‘ , this is a really of import phase and I feel that this is what can truly specify and do a concern successful. If the enterpriser is motivated plenty to truly do a difference in a specific market so he/she will interrupt into that market and accomplish whatever ends they have set out to accomplish. Paul Burns ( 2007a ) provinces that “motivation is about animating clients and moneymans so that they understand where the concern is going” . In my sentiment if person is non willing to travel through with an thought and does non hold a successful thrust to pass on their thought efficaciously to others so he/she will non do it.

There are many ways to depict an enterpriser and the features of one, nevertheless the one which I prefer the most comes from Burns ( 2007b ) “Entrepreneurs are extremely self-motivated… and this is driven by their exceptionally strong inner need for achievement.”

The 2nd and 3rd phases of the Entrepreneurial Process go manus in manus because ‘Creativity and Innovation ‘ can merely be thought of by ‘Spotting and creatingopportunities ‘ . Joseph Schumpeter ( 1996 ) created a theoretical account which consists of 5 forces to assist specify precisely what invention is, 2 of the forces can be described as ; “The debut of a new product/service, the conquering of a new beginning of supply of natural stuffs or half-manufactured goods… ” Being advanced should be a chief aim to any house if it desires to maintain up with the fast moving modern times. For illustration a little computing machine hardware production concern can non perchance last if it ‘s still purchasing natural stuffs that are no longer desired as much, such as floppy disc thrusts. The company should possibly be looking at buying more USB thrusts which have become much more popular pieces of hardware in modern times. As antecedently stated this goes manus in manus with staining and working chances, as the computing machine hardware company will necessitate to descry and work the chance for put ining more USB hardware to computing machines. Paul Burns ( 2007c ) provinces that “Innovation is a nucleus feature of an entrepreneur.”

The following four phases of the Entrepreneurial Process are all ways of pull offing obstructions which any concern will confront during its life rhythm. Fourthly the concern should ‘find the needed resources ‘ this could be done by utilizing the 5th phases of ‘using webs extensively ‘ . Networking is a really of import factor particularly for SME ‘s as they normally require more aid to vie with the big, and better reputable companies. Richard Branson laminitis of Virgin famously built up a big figure of webs to assist set up his company to where it is at now. Networking has many benefits to a company such as ; cost and hazard sharing, rushing merchandises to markets, moving as a vehicle for obtaining entree to external cognition ( Deakins and Freel 2009c ) .

Mentions:

· UK Companies Act ( 1985 ) The Companies Act 1985 ( Accounts of Small and Medium-Sized Enterprises and Audit Exemption ) ( Amendment ) Regulations 2004 [ Online ] . Available: hypertext transfer protocol: //www.opsi.gov.uk/si/si2004/20040016.htm [ 2 April 2010 ]

· David Deakins and Mark Freel ( 2009a ) Entrepreneurial activity, the economic system and the importance of little houses. Entrepreneurship and little houses 5th erectile dysfunction. McGraw-Hill Education: Berkshire, pp30

· Bill Bolton and John Thompson ( 2007a ) Specifying the Entrepreneur. Entrepreneurs Talent, Temperament, Technique2nd erectile dysfunction. Elsevier: Oxford, pp33

· Paul Burns ( 2007a ) Growth and Decline. Entrepreneurship and Small Business2nd erectile dysfunction. Palgrave Macmillan: Hampshire, pp223

· UK National SME Statistics ( 2007 ) Department for Business Innovation & A ; Skills [ Online ] . Available: hypertext transfer protocol: //stats.berr.gov.uk/UKSA/ed/sa20080730.htm [ 1 April 2010 ] .

· Paul Burns ( 2007b ) Heros and Super-Heroes. Entrepreneurship and Small Business2nd erectile dysfunction. Palgrave Macmillan: Hampshire, pp38

· David Deakins and Mark Freel ( 2009b ) ( Joseph Schumpeter 1996 ) Invention and entrepreneurship. Entrepreneurship and little houses 5th erectile dysfunction. McGraw-Hill Education: Berkshire, pp133

· Paul Burns ( 2007c ) Making Growth Happen. Entrepreneurship and Small Business2nd erectile dysfunction. Palgrave Macmillan: Hampshire, pp304

· David Deakins and Mark Freel ( 2009c ) Invention and Entrepreneurship. Entrepreneurship and little houses 5th erectile dysfunction. McGraw-Hill Education: Berkshire, pp147