Entrepreneurial Process

Entrepreneurial process can be defined as the steps taken in order to establish a new enterprise. It is a step-by-step method, one has to follow to set up an enterprise.

There are mainly five steps one needs to follow. These steps are −

  • Preliminary steps
  • Decision-making steps
  • Planning steps
  • Implementation steps
  • Managerial steps

Preliminary Steps

Preliminary steps are the initial steps one has to follow for establishing a firm. At this stage, the to-be entrepreneur should be able to make a decision that is going to affect the company.

We can say that an entrepreneur is born at this stage. An entrepreneur searches for business opportunity and collects information/data from all sources available.

Decision-making Steps

Decision-making steps can be defined as those steps or say the lessons learnt by an entrepreneur to make decisions efficiently.

In this step, the entrepreneur is seen consulting with DIC (District Industrial Centre) and MSME (Medium Small & Micro Enterprise). Some of the decisions to be taken are −

  • Decision of acquiring fund from banks or financial institutions.

  • Acquisition of permission, recognition, application.

  • Making of PPR (Preliminary Project Report).

  • Decision regarding land, building, plant, machinery, labor, raw material, fuel, energy, water supply, filtration, etc.

In order to make effective decisions that is adaptable and comfortable for the company, the clients and all those who are directly or indirectly linked to the decision-making step play a very vital role.

Planning Steps

Planning is an assumption or prediction of business requirements and outcome in the future. It provides a space to review the best strategy to run the business by cutting expenses and maximizing profit.

Some of the planning steps include −

  • Planning for infrastructure like plant and building.

  • Getting permission and recognition from the government or any other reputed authority.

  • Applying for environmental clearance.

  • Purchasing of land and licensing of mines, if necessary.

  • Applying for electric connection and water supply.

  • Planning the final feasibility, technical feasibility, and operational feasibility.

  • Study of PPR and preparation of Detailed Project Report (DPR).

  • Getting loan and/or capital investment.

  • Acquisition of machineries and planning for installation.

Now, let us move forward to see how this planning step is further transformed to implementation steps.

Implementation Steps

Implementation is the execution of plan; it is the action taken to implement the plan so that something actual happens.

Given below are some steps that will help us get a clear picture of how actions in planning steps are groomed into implementation steps −

  • Acquisition of land, setting up building, and purchasing raw materials.

  • Installation of plant and machineries, and arranging human resource.

  • Receiving permission and reorganization letter, and receiving capital investment.

  • Starting operation and production.

  • Arranging fuel, electricity, and water supply.

  • Making infrastructural development, i.e. road, hospital, school, residence, etc.

Implementation is the most important and difficult step, during implementation the actuals come to figure and something of real value is generated.

Managerial Steps

We have seen about the roles and duties of an entrepreneur. Managerial duties are also very important for an entrepreneur as well as the organization. Some of the managerial duties to be taken care of are −

  • Preparing market policy and strategy.

  • Managing promotion of product or services.

  • Formulating pricing policy.

  • Managing wholesalers and retailers.

  • Deciding the profit margin.

  • Managing marketing strategy, managing advertisement of product or service, managing distribution system for efficient distribution.

  • Warehouse management.

Each step has its own importance and its own role in the development as well as deterioration of a company.