Evaluation of a Business Idea

The field of business encompasses different activities that have a general aim of profit-making. Economies depend on the field of business to survive. The report discusses several aspects that take place in a business environment. The first part gives relevant definitions such as enterprise, entrepreneurship and intrapreneurship. Then skills, behaviors and attributes necessary for an entrepreneur are discussed in detail. The skills are shown to revolve around risk-taking and risk management in the process of identifying and evaluating a business opportunity. Then, the stages of evaluating a business idea are discussed where the general process of coming up with a business plan is highlighted. Finally, a summary is provided on the report, with recommendations being provided on the efforts required for the success of a business idea.

Definitions

The main idea behind starting a business is to make profits. The primary entity in the field of a business is referred to as an enterprise that defines a profit-making project that is started for entrepreneurial activities. The definition of an enterprise, however, changes depending on the situation at hand. For example, an enterprise may be defined as a human skill or a business that aims at making a profit. An enterprise is defined as a human skill when an individual uses their skills to engage in entrepreneurial activities. A skill qualifies to be referred to as an enterprise if the individual carrying out the activity faces a risk irrespective of the research that an individual does before the activity. Generally, a business venture faces risks from different perspectives and the strategies that an entrepreneur employs to overcome the risks to determine whether the enterprise will be successful or will fail. Also, the individual should be willing to try new ventures in a bid to make things happen. Generally, a commercial enterprise is a business or a company. Moreover, the enterprise is the starting point for entrepreneurship.

Entrepreneurship is defined as all the activities that revolve around solving an existing problem but to make a profit at the end. The definition of entrepreneurship varies among people depending on the activities that they engage in and the goals they aim at achieving (Carter and Tamayo, 2017, n. p). For example, an individual who engages in charity work may not be termed as an entrepreneur, whereas another person who engages in the same activity to make profits is termed as an entrepreneur. Generally, entrepreneurship is a factor of production alongside land, labor, and capital. A key characteristic of entrepreneurship is that an opportunity is found, and exploitation follows. Also, risk-taking is seen to be a significant aspect of entrepreneurship, with entrepreneurs having to come up with strategies to overcome the associated risks. The risk aspect of entrepreneurship comes as a result of the need to venture into new opportunities. The new ventures come along with significant risks that require sufficient funding, and entrepreneurs have different methods of financing. For example, entrepreneurs may use their money, capital from lending institutions, or even from family inheritance. Generally, entrepreneurship revolves around the identification of a business gap and coming up with a strategy to exploit the gap.

Intrapreneurship is a select type of entrepreneurship, only that it does not involve most of the characteristics of entrepreneurship. Intrapreneurship occurs where an employee is allowed to operate as an entrepreneur within an organization or a company (Cadar and Badulescu, 2015, n. p). Generally, intrapreneurship is founded on self-motivation, proactiveness, and action-oriented individuals. Intrapreneurship works by creating an environment of entrepreneurship where both the company and the intrapreneur benefit at the end of the deal. Intrapreneurship involves the strategy of a company to take advantage of its employees to come up with strategies of exploiting the available opportunities. However, the identification of an intrapreneur is always a challenge because intrapreneurs are self-starters, and motivation does not always work for individuals who have not made the initial decision to become intrapreneurs.

Skills, Attributes, and Behaviors of Entrepreneurs

Entrepreneurship is a demanding venture that requires outstanding skills, behaviors, and attributes to get over the risks that come up during the process of coming up with ventures. Besides, opportunities exist everywhere, and only focused individuals can spot opportunities. Also, risks exist alongside the existing opportunities, and confident individuals manage to get over the risks without having to worry about the outcomes. Generally, risky ventures have higher returns hence the move by entrepreneurs to consider the riskier opportunities at the expense of the less risky ventures. The skills required for successful entrepreneurship are developed around opportunity and risk-taking.

The skills required for successful entrepreneurship revolve around risk-taking and opportunity identification. First, not all opportunities are effective, and caution should always be taken before attempting to exploit an opportunity. An entrepreneur requires excellent research skills that will enable them to identify what opportunities to undertake and those to leave out.       The choice of an opportunity should be based on the cost of taking the opportunity and the return expected. Besides, every opportunity requires a significant amount of capital, and an entrepreneur should be in a position to come up with the required capital. Access to capital requires banking skills to identify the financing institutions that provide affordable capital where other sources of capital are not available. Also, entrepreneurs have to have risk management skills to avoid losing out on the impacts of risks. Generally, the skills owned by entrepreneurs are useful in venturing into entrepreneurial activities. Moreover, several attributes and behaviors are associated with entrepreneurs.

Entrepreneurs are expected to associate themselves with a set of attributes and behaviors that differentiate them from other employees. First, employees are opportunists who see a chance of an opportunity wherever a gap exists. The closure of a business gap involves coming up with a project that is profitable in the end (Witte, 2016, n. p). The opportunism nature of entrepreneurs enables them to identify high-potential opportunities and come up with feasible strategies to exploit opportunities. Also, entrepreneurs tend to be influential and visionary in that they continually influence the relevant stakeholders to support their business ideas. Generally, entrepreneurs behave following the interests of their potential market. Moreover, entrepreneurs are used to risks and thus are comfortable with uncertainty.

Entrepreneurs use the advantage of risk and uncertainty to venture on opportunities that have been deserted by most people. For example, an entrepreneur will start a grocery in a new location despite knowing that the products are perishable.  Therefore, entrepreneurs generally appear comfortable around uncertainty and do not desist from engaging in uncertain activities. Also, entrepreneurs tend to operate in teams and know the right members typically to select for their teams. The team-work attribute allows entrepreneurs to contact research on the available opportunities before venturing on the activities. Also, the team-work attributes are essential in helping entrepreneurs to create significant networks that make business more efficient. Moreover, entrepreneurs have efficient decision-making skills and attributes that enable easy identification of opportunities.

The decision-making ability of entrepreneurs helps them to easily identify opportunities and come up with strategies to exploit them. Also, entrepreneurs have excellent skills in sales and have typical business-oriented minds whenever an opportunity is presented. Generally, the entrepreneurs should not allow any business gap to go unexploited if capital is available. Besides, entrepreneurs can find solutions for more than one existing problem by developing many business ideas. Furthermore, the existence of several business gaps gives entrepreneurs a chance for diversification; hence, the risks associated with business ventures are mitigated effectively.

Stages for Evaluating a Business Idea

The identification of a business idea may not be a challenge to most entrepreneurs. The strengths and weaknesses of the venture necessitate proper planning that comes up with the objectives of the business. However, the evaluation process determines whether or not a venture will be successful. Great business ideas lead to great businesses, while effective evaluation of an idea creates a uniqueness in the competition. Entrepreneurs follow a series of steps while evaluating a business idea. Every stage in the evaluation process is equally processed, and overlooking any of the stages may have disastrous impacts on the business. The first two stages in the evaluation of an already established business idea are the writing of a business plan and assessing the target market.

A good business starts with a properly written business idea that considers the needs of the target market. Entrepreneurs may easily procrastinate about the business if a business plan is not in place. Therefore, the entrepreneur should identify the target market, the company type, and location, as well as the founders of the business, will be a partnership (Lee and Lee, 2017, 172). A business plan saves an entrepreneur from unexpected setbacks in the middle of the business process, which may lead to severe losses. Generally, a business plan is a chance to assess the numbers that will be involved in the entire business. Besides, the idea of starting the business is to make a living, and thus, planning has to be done on the amount to be spent and the expected returns. Moreover, the target market should be evaluated before-hand.

A successful business depends on demand and the loyalty of customers. Before implementing the business idea, an entrepreneur should know the kind of customers that will be found on the ground. The demand is assessed by considering the type of business gap and the challenges that the population is facing due to the business gap (Mueller and Shepherd, 2016). Besides, a business will struggle to survive where there is no demand. Also, have prior knowledge of the type of customers to expect plays a crucial role in creating a successful business. The knowledge of customers ensures that an entrepreneur takes care of customer interests without unnecessary conflicts. After the demand has been assessed, and the customers known to the entrepreneur, competition is assessed.

Competition is a crucial aspect of the success of any business. An entrepreneur should have prior knowledge of the kind of competition to meet on the ground. For example, healthy competition will motivate an entrepreneur to continue with their idea while unhealthy competition will turn away potential entrepreneurs. After the competition has been assessed, the entrepreneur should seek feedback from potential customers before going on with the implementation of the idea. Feedback is crucial in preparing the entrepreneur for possible risks and the necessary precaution measures.

Summary and recommendations

An entrepreneur is an individual who identifies a business gap and views it as an opportunity to come up with a business idea. Generally, entrepreneurship plays a crucial role in the development of an economy since it ensures a smooth flow of revenues and production of goods. Organizations have also been in a beneficial position by employing entrepreneurship strategies in the places of work. Intrapreneurship comes to help the organizations to exploit the skills possessed by the employees by allowing them to carry out entrepreneurial activities within the organizations. Moreover, the evaluation of a business plan takes a series of equally important stages.

When a business opportunity is identified, the entrepreneur comes up with a plan that helps them to identify the strengths and weaknesses in the proposed idea. The objectives of the business are highlighted before the entrepreneur engages in the implementation of the business idea. Generally, entrepreneurship revolves around the identification and evaluation of business opportunities for the benefit of respective economies.

An entrepreneur should always be a risk taker but with risk management skills. Also, risky ventures should involve sufficient planning to avoid huge losses that may come along with the risks involved. Furthermore, the interests of the customers should be the primary concern of every entrepreneur because the customers determine how long a business will remain alive.