The most important lesson I have learned when coming up with a business plan is carrying out a feasibility study. This study is very vital and it is a great determinant to any type of idea that an entrepreneur wants to execute. Commencing business by putting into implementation an idea that has not been well researched and studied is likely to lead to failure in entrepreneurship leading to waste of the resources gathered. A feasibility study involves a research in all aspects that make up a business like the availability of ready market, sources of raw materials required in production, sources of funding, how the operations of the business will be executed, people’s culture, legal matters relating to the business among others.
Market feasibility is aimed helping the entrepreneur ascertain the availability and the extent of market for his/her products. This will provide a guideline on the quantity of the products to produce and the rate of production depending on availability of willing customers and their and their rate of consumption (Jones & English, 2004). The entrepreneur must assess both local and international markets and establish the best way of delivering the products or services to the customers to ensure they are fully satisfied. In the case of international market, it is essential to do a study and determine the best way to export the products either directly or indirectly by involving an agent. Doing a study on contractual internalization methods like franchising, joint ventures, strategic alliances and licensing will guide the entrepreneur on the best method to ensure profitability in business. For instance, if forming a joint venture is the best option, then the entrepreneur should search and find the best partner dealing in the same line of business to sign a joint venture contract with. If it is necessary to enter into a franchising business, then he/she should do a detailed research on the best franchisers around the world and make an approach to sign a contract.
Assessing the availability of raw materials and their costs will enable one to determine if he/she will be able to implement an idea into practice. The person should approach several suppliers and inquire about their terms and conditions relating to prices, delivery and the means of payment that they accept. It is important to identify a supplier that delivers raw materials on a continuous basis to prevent stock run outs and delayed delivery which will interfere with production pattern and by extension delay the goods from reaching the customers on time (Zahra, 1991). The source of capital is another vital aspect of the feasibility study that needs to be assessed critically. This involves parties that can provide capital to start up a business in form of a loan. Approaching financial and money lending institutions is the first step a prospective entrepreneur should make. He/she should make inquiries on terms of lending including the maximum period allowed to repay the loan, the rate of lending and other terms that need to be brought to the attention of the entrepreneur. This study should be done both locally and internationally because some countries have institutions that offer loans at favorable rates than others and it is rational to approach these institutions for purposes of saving costs and having an easy time to repay the loans. It is also necessary to find institutions that offer loans on a very short notice because business conditions require one to be very flexible in sourcing funds. By reading his/her business plan, interested funders will be able to approach him/her and hold conversations that will lead into signing loan contracts.
Cultural feasibility should be done in details because it is the people’s culture that will determine if an entrepreneur will sell the goods produced or not (Hynes, 1996). Cultural assessment is mostly done in the locality of setting up the business where the person must ensure that the culture of the people in that area will allow them buy his products or services. For instance, starting up a business to sell pork in a Muslim community may not work out because their culture doesn’t allow them to prefer pork. This kind of research will involve approaching people directly and holding a one on one discussion with them to find out what their culture dictates about the product or service to be sold. Culture goes hand in hand with people’s lifestyle in a particular environment which is determined by their levels of income and consumption patterns (Peterman & Kennedy, 2003). There is need to find out if the purchasing power of the targeted people will allow them afford the product or service intended to be sold to them. If the idea conceived will call for consumers with a high income, then the owner of the idea has a task to find a locality where people earn such kind of income so that he/she does not inject a substantial amount of capital into the business and ends up lacking people to buy the product or service just because they cannot afford. These studies will guide him to communicate clearly to interested parties who will read the business plan.
Legal feasibility study seeks to find out if the idea conceived is in line with the government policies and business regulations in a certain country. It further entails intellectual property rights i.e. patents, trademarks and copyright. A person who has developed an idea that he seeks to implement must do research and ensure that nobody has ever come up with an exact idea which is already in place because adopting someone’s work without permission amounts to an irregularity that will be followed by a legal consequence. Approaching governmental offices that register these intellectual property is the best step because one will be taken through the databases for all the ideas that have been registered and know the correct position of his/her idea concerning ownership (Rasmussen & Sørheim, 2006). Lastly, a prospective entrepreneur must carry out operational feasibility study to gain a perspective of how he/ she will run the business on daily basis. This will involve the kind of staff to employ like accountants, plant operators, marketers who will take up roles to ensure proper running of the business in order to realize profits. He will do a detailed research on the salary scales for specific classes of people to employ and ascertain his ability to pay. This will enable the readers of his business plan to understand his policies on employing people in terms of working hours and remuneration.
The entrepreneurial theories learned are of great importance to any person willing to start up a business with the aim of succeeding in the long-term. The Uppsala model which suggests that small businesses intensify their operations in foreign market in stages has guided me in understanding the need to go global as an entrepreneur (Forsgren, 2002). This theory gives one of the best solutions to reduce risks when engaging in business as an entrepreneur. It is essential for entrepreneurs to go global as a way of expanding and minimizing risks. This can be achieved through forming strategic alliances and joint ventures in which the parties involved share the risks reducing the risk each party would have suffered if operating independently. Obtaining licenses and entering into franchising contracts is another way through which entrepreneurs can develop without necessarily owning a product or brand name (Vahlne & Johanson, 2013). For instance, many business people around the globe have obtained licenses to use the brand name of Coca-Cola Company in selling their products and pay a fee in return. To develop a small business into a big entity, it starts with engaging representatives in exporting one’s products and grows into signing contracts with international organizations.
I have learned the need to network with different parties around the globe as a way of achieving success. Networking is very necessary because entrepreneurs get new ideas of running their businesses more so in areas of production, financial management, management information systems, taxation, financial reporting and auditing (Wincent & Westerberg, 2005). This theory advocates for developing good relationships with customers, suppliers, lenders, professional bodies and many other stakeholders in the business sector in order to get the best out of running a business. Networking as an internationalization tool, helps firms identify potential markets and learn new technology which improves their operations contributing much to profit increase. I have learned that for international development to be realized, small scale business owners must commit a large portion of their resources to global dealings by interacting much with firms outside their localities and countries. Developing good relationships with regulatory bodies and professional organizations is beneficial to medium and small size organizations because the owners will have an enabling environment to carry out businesses across boundaries without tight restrictions. For instance, entrepreneurs within the European Union have freely and easily interacted across borders due to the reduced restrictions by the union enhancing their ability to execute promising business contracts that are aimed at maximizing returns.
Through studying the born global phenomenon, I have learned that many small scale businesses are rising at a faster rate due to introduction of technology. It is, therefore, essential for any entrepreneur to also carry out technological feasibility study to find out which type of technology will best suit his/her operations to ensure faster growth of the business and avoid stagnation. Technology has largely reduced the size of the world where both well established and new firms can interact instantly from all corners of the globe (Rogerson & Mushawemhuka, 2015). By saying born global, the proposers of this theory refer to business organizations which internationalize in a period of less than a year after their establishment. The outcome of these firms’ internationalization has been an increase in returns due to widening the market and minimizing risks. For instance, research in Malaysia has shown that most small and medium firms that were formed in 2013 and went global in the same year reported an average of 10% increase in profits (Cavusgil & Knight, 2015). This is a clear indicator that one of the ingredients of profitability increase is going global.
I evaluate myself as a potential entrepreneur because I put in practice the features that define an ideal entrepreneur. I have learned and understood that for one to be an effective entrepreneur he/she must have good foreign orientation which can be obtained through education. In this module, I have learned many concepts relating to internationalization and how they should be put into practice to produce results in business. I have also understood the concept of business and risks and I know that an entrepreneur should be very skillful and take caution when it comes to taking risks and the best way to reduce risk is going global. Networking at school level is an activity that I have engaged myself in and I have gained quite a number of ideas from friends and acquaintances even those I never imagined they have good thoughts. Having practiced networking, I believe I am in a good position to conceive an idea and implement it with the purpose of making profits.
Commitment is another skill that I have practiced throughout my schooling up to this level and I understand that it is one of the traits that define an entrepreneur. I have shown commitment when attending to my classwork with assignments being one great thing I have paid my attention to. Having been a group leader in several discussion groups, I have learned to be attentive to every detail concerning discussion questions and mobilization of my group members. Time management is also another skill that I have learned through attending seminars and workshops with entrepreneurship being one of the topics of discussion. Positive attitude towards things is a trait that I have been taught by my mentors, my teachers and parents included. I have always struggled to identify the best in people and in different aspects of life knowing that how I perceive them matters a lot. Continuous practice of these skills makes me consider myself a potential entrepreneur.
References
Jones, C. and English, J., 2004. A contemporary approach to entrepreneurship education. Education+ training, 46(8/9), pp.416-423.
Zahra, S.A., 1991. Predictors and financial outcomes of corporate entrepreneurship: An exploratory study. Journal of business venturing, 6(4), pp.259-285.
Hynes, B., 1996. Entrepreneurship education and training-introducing entrepreneurship into non-business disciplines. Journal of European Industrial Training, 20(8), pp.10-17.
Peterman, N.E. and Kennedy, J., 2003. Enterprise education: Influencing students’ perceptions of entrepreneurship. Entrepreneurship theory and practice, 28(2), pp.129-144.
Rasmussen, E.A. and Sørheim, R., 2006. Action-based entrepreneurship education. Technovation, 26(2), pp.185-194.
Forsgren, M., 2002. The concept of learning in the Uppsala internationalization process model: a critical review. International business review, 11(3), pp.257-277.
Vahlne, J.E. and Johanson, J., 2013. The uppsala model on evolution of the multinational business enterprise-from internalization to coordination of networks. International Marketing Review, 30(3), pp.189-210.
Wincent, J. and Westerberg, M., 2005. Personal traits of CEOs, inter-firm networking and entrepreneurship in their firms: Investigating strategic SME network participants. Journal of Developmental Entrepreneurship, 10(03), pp.271-284.
Cavusgil, S.T. and Knight, G., 2015. The born global firm: An entrepreneurial and capabilities perspective on early and rapid internationalization. Journal of International Business Studies, 46(1), pp.3-16.
Rogerson, J.M. and Mushawemhuka, W.J., 2015. Transnational entrepreneurship in the Global South: evidence from Southern Africa. Bulletin of Geography. Socio-economic Series, 30(30), pp.135-146.
