Running head: ENTREPRENEURIAL

The Entrepreneurial Process

Timothy A. Walters
American Military University

ENTREPRENEURIAL

Entrepreneurs attempting to begin a new business venture will find that the process is
complicated, time-consuming, and involves a number of aspects which must be considered in
order to be successful (Hisrich, Peters, & Shepherd, 2005). The process of becoming an
entrepreneur involves five steps which will increase the likelihood of success as long as each
step is applied to the individuals business strategy. According to Kaplan and Warren (2013), the
five stages of the entrepreneurial process include: conducting an analysis of potential
opportunities, creating a plan and establishing the company, acquiring sources or partners for
funding purposes, determining the necessary financial resources and putting the plan into action,
and harvesting or scaling the business venture.
The first stage of the entrepreneurial process requires a great deal of time, research, and
attention to deal. The entrepreneur must take their initial concept and create a vision which will
allow them to determine the probability of success (Jerinabi & Santhi, 2012). This stage also
requires that a business model be created to avoid being overthrown by competitors. Conducting
an opportunity analysis is a process which can take a year or longer in which the entrepreneur
must develop detailed strategies in regard to sales and pricing.
The second stage of the entrepreneurial process is to develop an outline for a business
plan and to establish the company. As with the first stage, this stage can be time consuming as
well. According to Hisrich, Peters, and Shepherd (2005), the creation of a business plan is vital
as it provides an opportunity for the business venture to flourish, assists the entrepreneur in
determining which resources they will require, explains how those resources will be obtained,
and details plans for future management. This stage allows the entrepreneur to implement some
ideas into their business plan outline while discarding or creating new ones and making changes
which are the best fit for the vision from stage one.

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The third stage is the time when the entrepreneur secures funding to begin their company.
The entrepreneur has a number of funding options available to them, though each funding source
will differ in their requirements and how much financial backing they are willing to provide.
Typically, a funding source requires that they maintain a percentage of ownership rights to the
company they are backing. The entrepreneur must be fully aware of what is required before
deciding where their funding should derive otherwise; they may risk losing a large percentage of
ownership rights within their own company.
The fourth stage of the entrepreneurial process is that of determining the necessary
financial resources and putting the plan into action. The entrepreneur must prepare the company
for successful operation and growth by understanding how to make financial and accounting
based business decisions. They will also be required to prepare financial statements for their own
records as well as those of investors. This stage is also where an entrepreneur should protect their
business idea by means of acquiring licenses, patents, copyrights.
The final stage of the entrepreneurial process is scaling and harvesting the venture.
During this stage, the entrepreneur must learn how to motivate others to be as excited by the
venture as the entrepreneur. This support system plays a major role in the success of the company
as the entrepreneur cannot run the business without help from others. Managerial skills are also
developed during this stage while control systems are developed to ensure swift resolution to any
potential issues. If the entrepreneur decides to part ways with the company, this is the stage
where they will consider the options and choose the one which best fits their particular situation.
The entrepreneurial process exemplifies the progression of entrepreneurs in their effort to
be successful business owners. The most determined entrepreneur will constantly strive to create
something new while overcoming a seemingly never-ending resistance from those around them.

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The five stages of the entrepreneurial process not only explain what entrepreneurs must endure to
start their company, but provide a framework which can be used to guide them on their path to
success.

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5
References

Hisrich, R.D., Peters, M.P., & Shepherd, D.A. (2005). Entrepreneurship (6th ed.). Boston, MA:
McGraw-Hill/Irwin. Available from http://www.amazon.com/Entrepreneurship-EditionInternational-Hisrich-Shepherd/dp/0071111433
Jerinabi, U. & Santhi, P. (2012). Creativity, innovation, and entrepreneurship .Mumbai, IN:
Allied Publishers. Available from https://books.google.com/books?
id=fQaJAwAAQBAJ&dq=five+stages+entrepreneurial+process&source=gbs_navlinks_s
Kaplan, J. M. & Warren, A. C. (2013). Patterns of entrepreneurship management (4th ed.).
Available from http://1118476085.reader.chegg.com/reader/book.php?
id=93e2a5225c163e7e4efabf97d02ffeea