Objectives On successful completion of this assessment, students should be able to: develop a budget for a business idea presented in unit 4, projecting costs associated with the venture,analyze the f

ENTREPRENEURSHIP 7

Entrepreneurship

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Maximizing success and profit is the goal of all companies across the globe. No company would like to make losses. Therefore, for any company to be successful and be on the right track of doing business, it is significant for such companies to focus on five main areas, which entails: short versus long term investment strategies, cash flow and financial plan, marketing plan, market research and analysis, and competitive analysis. Below are a broad explanation of the five mentioned areas.

According to Allen et al. (2020), the primary goal of the competitive analysis is to determine competitors' weaknesses within the market. Research provides both the context of defensive and offensive strategies to identify threats and opportunities. In addition, it helps the business to evaluate potential markets accurately and to identify potential customers. Albastics & Hamdan (2019) show that competitive analysis helps companies find a place for their competitors compared to potential customers. The importance of customer comfort and time will be helpful when setting up a business somewhere. However, the essential purpose of conducting a competitive evaluation is to identify value propositions for a business or company competitors. Analyzing these suggestions can help you determine what you need to gain customers' value for your proposals.

The primary purpose of conducting market research and analysis is to describe the market situation or situation that the business wants to enter into. As Srinivasan & Venkatraman (2018) has pointed out, it includes a description of the market the business or company is entering, how other companies have failed or succeeded in the past, and the current needs in the market. Therefore, direct market research and analysis, the more basic information, the better. The basic premise is for a company or business to make sure that it is clear from the world's perspective and that the business and potential partners or stakeholders agree on market speculation.

As Allen et al. (2020) reported, market analysis compels the business to become familiar with all the defining market features. The company can be placed in that market. It is always good for companies to reduce target markets to a manageable size as many companies make the mistake of trying to recruit more targeted markets (Albastiki & Hamdan 2019). The company should do thorough research and include the following information about the targeted market: What percentage of the market share and the number of customers do you expect to find in a specified area? Target market size - How much market share can you earn? Are there seasonal shopping trends or cycles that could impact your business? What are the demographics of the group, and where are they found? Are those needs being met by current competitors? Distinguishing features - What are the critical needs of your potential customers?

Customers are the lifeblood of any business worldwide, and marketing creates new customers and keeps existing ones (Srinivasan & Venkatraman 2018). The marketing plan is an opportunity for the industry to explain how it will change things. From this point on, the company decides what to do with the results. It is the same process that a business will introduce various products and services to the market. Therefore, any business needs to articulate its marketing strategy clearly. So it is at the heart of a modern business plan. According to Allen et al. (2020), the main reason for launching a project is to change something, and the business needs to know what it will do and how it will affect the company and customers. However, the overall marketing strategy should include four distinct components:

The most important part of a marketing strategy for a business is winning its initial customer base and where most new businesses fail. It is also essential for the industry to develop a system that will help it earn and maintain the corporation or business reputation (Albastiki & Hamdan 2019).

Business growth is essential for all businesses across the globe. Therefore, some of the strategies that the company can use to build its brand and grow entails: how you will take customers from competitors, a franchise strategy for branching out, an acquisition strategy such as buying another business, and how to increase your human resources (Srinivasan & Venkatraman 2018).

The business may have different distribution channels, including retailers, distributors, internal sales force, and original equipment manufacturers (OEMs).

The business aims to identify customers with their various products and services in their area. Companies come up with a combination of strategies to reach different customers. These include printed items such as flyers, catalogues or brochures, marketing, social relations, advertising, social media, and promotions (Allen et al., 2020).

The last part is about money. A business aims to make a profit, and profit is money. Companies should ask themselves details about what the cash flow plan looks like, how it will be used, and how much it needs (Albastiki & Hamdan 2019). Therefore, the two components of a financial plan will make or break your business. These are probably the essential factors in a business failure. The first is an estimate of the business's income as a part-time job, determining how much it will need to continue its operations (Srinivasan & Venkatraman 2018). The second is how long it will take for the company to reach a state of consistent stability, and this includes comparing all business operating costs with the revenue earned.

An entity needs to take steps to ensure that it makes a good budget update compared to the actual at least once a month through cash flow, expense, and sales (Allen et al., 2020). After analyzing the market and setting clear objectives, an entity should develop a speculative financial category. After doing this, the company will allocate resources appropriately to the business's operations. Whether they are just starting or growing, all companies will be required to provide potential financial data. Business debtors will often want to see what they expect promptly. Annual documents should include capital expenditure budgets, cash flow statements, balance sheets, and predicted revenue statements (Albastiki & Hamdan 2019). In the first year, the business should set monthly estimates. Once a company has made assumptions in its forecast, it is essential to summarize all beliefs.

The business offers two additional essential recommendations. The first focuses on the short term and the short term, and the short term is between eighteen and twenty-four months. It is important to note that three to five years should be issued if the potential partner or business lender needs it. However, it is challenging to predict any certainty over two years. The second step is to make the business plan a living book. An entity should review its financial plan at least monthly. However, Srinivasan & Venkatraman (2018) recommends weekly for the first two months of a new start-up business. Some parts of the plan should be reviewed and updated quarterly, especially if any problems are identified in the financial system review results.

References

Albastiki, N., & Hamdan, A. (2019, September). Financial illiteracy and entrepreneurship success: a literature review. In European Conference on Innovation and Entrepreneurship (pp. 28-XVIII). Academic Conferences International Limited.

Allen, J. S., Stevenson, R. M., O'Boyle, E. H., & Seibert, S. (2020). What matters more for entrepreneurship success? A meta‐analysis comparing general mental ability and emotional intelligence in entrepreneurial settings. Strategic Entrepreneurship Journal.

Srinivasan, A., & Venkatraman, N. (2018). Entrepreneurship in digital platforms: A network‐centric view. Strategic Entrepreneurship Journal, 12(1), 54-71.