Nowadays, entrepreneurship is largely associated with the economic development of countries. To better explain this process AML, in the frame of FEMME project, has identified four main phases transversal to any entrepreneurial system[1]:
- Identify and evaluate the opportunity: This process begins with the identification of an opportunity and analysis of its potentiality. Through evaluations of market needs, competition, and the product life cycle, it is important to test the idea or concept of business with potential customers, assessing their willingness to purchase the product or service. This evaluation will allow the entrepreneur to formulate conceptions about the size of the market and how it is (growing, stable or stagnant), to know the competition, and to evaluate the strengths and weaknesses, threats and opportunities.
- Develop a business plan: The business plan will summarize the entire business, addressing points such as strategy, market, competition, critical success factors, economic and financial analysis, investments, expenditures, financing, among others. This planning will be of extreme importance for the success of the business, since it is fundamental that the entrepreneur plans the actions to be carried out and outlines strategies to follow.
- Determine and capture required resources: The entrepreneur’s planning and negotiation skills will be critical at this stage to determine what resources are needed for the implementation of the business, as well as for its subsequent funding. The success of this phase is very dependent on the previous phase. Funding can be obtained through various sources, such as bank credit, microcredit, business angels, state aid, venture capital, personal savings, family and friends, among others.
- Managing a Business: After identifying a business opportunity, developing a business plan in detail, and capturing the resources needed to start activity, the entrepreneur debates the administrative and management issues throughout the process. At this stage, the entrepreneur must identify its limitations, recruit its work team and plan the actions, in order to combine efficiency and effectiveness, leading a business to success.
Although the four phases of the entrepreneurial process are represented sequentially, they are not immutable. One entrepreneur may not complete one of the phases and immediately start the next, or even have to repeat several times a set of phases to reach the last one.
[1] Adapted from IFDEP “Empreendedorismo Feminino, Um Olhar sobre Portugal”, 2014.
