Essay: What ingredients do the entrepreneur need to establish and run a business successfully?

INTRODUCTION
Business generally involves the development of an idea of making profit from offering goods, services or both to consumers by an individual, private organization or government. It has been defined in a number of way by different scholars.
According to Hughes and Kapoor (2012: 10), “Business is the organized effort of individuals to produce and sell for a profit, the goods and services that societies uses to satisfy their needs.
In the words of Brown and Petrello (1979) “Business is an institution which produces goods and services demanded by people”.
The definitions sited here see business both as an activity (Hughes and Kapour), and as an institution (Brown and Petrello). Be it an institution or an activity, business involves the creation of utility in exchange for profit for private organization or creation of society welfare by the government for the citizens of a state.
Every successful or potentially successful business requires the right idea and resources in the right quality and quantity. These requirements have been summed up by Jeffery Timmons (2004) to include “the opportunity, the entrepreneur (and management team; for a high potential venture), and the
resources required to start and sustain the business. According to Timmons, the availability of these factors in their appropriate amount and quality of these factors is the major determinant to whether a business will be a success.
An entrepreneurial process “involves all the functions, activities, and actions associated with perceiving opportunities and creating organizations to pursue them (Bygrave, 2004), while Wickham (2001) defined the entrepreneur as the “individual that lies in the heart of the entrepreneurial process”. He identify business opportunity, exploit it for profit by bearing and managing the risk thereof.
How can an entrepreneur successfully build a business and keep it successful? We shall examine the Timmons model of entrepreneurial process as it applies to setting up a successful business, vis-a-viz other works that have been put forward as the ingredients needed for a business to thrive.
LITERATURE REVIEW AND CRITICAL ANALYSIS
The quest to set up and sustain a business, like any other venture is one that possesses numerous, and sometimes unforetold challenges to people (entrepreneurs). Identifying and selecting the right opportunities for new businesses are among the most important attribute a potentially successful entrepreneur must possess. (Stevenson et al., 1985).
What ingredients do the entrepreneur need to establish and run a business successfully? How viable is the identified opportunity? What are alternative enterprise opportunities available to a prospective entrepreneur? At what time is most appropriate to set up a new business? Providing answers to all of these questions is necessary for one to exploit a business opportunity, set it up and run such business successfully.
In answering these questions on what is most required to set up a business and successfully run it, a number of authors and experts have provided models of what is required. “Which model is most appropriate?” is a question of its own.
THE TIMMONS FRAMEWORK
Jeffery Timmons in his doctorate dissertation, at Harvard Business School, identified three factors that are necessary for a successful business to be established.
According to Timmon’s framework there are three components of a successful business: the opportunity, the entrepreneur (and the management team, if it’s a high potential venture ), and the resources needed to start the company and make it grow.” ( Bygrave and Zacharakis, 2011 ).
According to him, “a successful entrepreneurs is one who is able to balance these three critical factors in the establishment and sustenance of his business, by first identifying an opportunity, bringing the right people together (the team) and pulling the required resources to establish the business”.
The model is presented diagrammatically below:
OPPORTUNITY
RESOURCES
TEAM
FIG I: THE TIMMON’S MODEL
ENTREPRENEUR
THE OPPORTUNITY: To Timmons, a potentially successful business is not one that has a business idea (plan), resources and manpower (team) before looking for an opportunity to explore, rather it is one that identifies an enterprising opportunity and goes ahead to pull the necessary team and resources together in ensuring that the identified opportunity is exploited successfully. The opportunity is placed ahead of any other factor, including “the talent of the lead entrepreneur, the strength of the team and the resources needed to start up the business.” Research shows that entrepreneurs discovers opportunities related to their prior knowledge and experience (Shane, 2003; Uchasaran et al; 2000; Uchasaran and Westhead, 2002).
THE TEAM: A team is a group of individual that creates the new organization (Gartner, 1988). The Timmons model sees a talented, sound and responsive team as key to a business success. Haven identified an opportunity, the entrepreneur should now go ahead and form a team that is purpose driven, that will key into his vision, and bring in their human resource capacity to help start the business and ensure its success.
RESOURCES: Timmons model identified resources as one among the three key factors that are required for an entrepreneur to succeed in setting up a business. He posited that in as much as resources (money) is one of the requirements, thinking about it as a starting point is one big mistake that could even make a
business idea die on arrival. It is also more appropriate for a serious entrepreneur to think of applying minimal resources (bootstrapping) to ensure discipline than thinking about accumulating in excess of what is needed. The model therefore discard the notion that extensive availability and use of resources reduces the risk of business failure.
FINDING THE RIGHT MIX
Recall that Timmons thesis did not just put forward the requirements for an entrepreneur to achieve and sustain success in a new business venture, but also recognized the ability of the entrepreneur to find that right combination of these factors as key to the objective. The three main factors are interlinked in such a way that a distortion in one will have a direct effect on others. It therefore follows that finding the right balance in the formation of all and the subsequent changes in any or all of them is a key determinant factor on its own to ensure a business succeeds.
THE TIMMONS MODEL: A CRITICAL REVIEW
There have been advancement on the Timmons model. This is an indication that there could be some inherent defect of this model.
Considering Timmons assertion that the opportunity should come before every other thing in the entrepreneur quest to set up and run a successful business, it
begs to ask if this applies in all situations. Considering the fact that opportunity has time lag, will it be wise to pause capital and human resource accumulation while searching for a viable opportunity? What if the opportunity presents itself at a time in which resources are just not available to explore the opportunity so identified?
Bygrave (2004:12) posits that ”in order to recognize an opportunity, an individual must be prepared, as in any other profession”. “Luck is where preparation and opportunity meet”. What is the preparation here? That for a potential investor to begin to conceptualize all that is needed if an opportunity arise. It’s like having an idea in place and waiting for an opportunity for such an idea to materialize.
Timmons is also of the opinion that “if an entrepreneur has the right resources, he or she will deliberately search for an opportunity and, on finding it, develop it so that it has the potential to become a high potential venture” (Timmons, 1989).
Isolating the three factors has put forward by Timmons can be misleading if one is to consider the starting point of a potentially successful business. For instance an enterprising individual can recognize a business opportunity, have the resources and the manpower but lack the personal attributes to put them together.
Personal attributes, sociological factor, and environmental factors are some of the driving forces behind the motivation to embark on the entrepreneurial journey. Nico and Nicolene (2014:14). The seizure of the opportunity must coincide with the willingness and the ability to take advantage of the opportunity.
Nayab (2013) posits that “opportunity, team, and resources seldom match”. The Timmons model considers the major role of the entrepreneur to effect a match of the three critical factors of entrepreneurship at the correct time. Success of the business venture depends on the ability of the entrepreneur to ensure balance by applying creativity and leadership, and by maintaining effective communications.” This can imply that we should isolate the entrepreneurial talent and his competence vis-a-viz the three factors in Timmons model. An entrepreneur who lack the skills and competence to marry the three factors in Timmon’s model can hardly succeed in business.
In deviation from the strict presentation by Timmons, we assess the model developed by two experts Carol M. and Shane, S.
Personal
Achievement Locus of control Ambiguity Tolerance Risk taking Personal values Education Experience
Personal
Risk taking Job dissatisfaction Job loss Education Age Commitment
Sociological
Networks Teams Parents Family Role models
Personal
Entrepreneur Leader Manager Commitment Vision
Organizational
Team Strategy Structure Culture Products
Innovation Triggering Event Implementation   Growth
FIG II: CAROL MOORE MODEL (BYGRAVE, 2004:3)
Environment
Competitors Customers Suppliers Investors Bankers Lawyers Resources Government policy
Environment
Opportunities Role models Creativity
Environment
Competition Resources Incubator Government policy
Individual Attributes
Psychological factors Demographic
Execution
Resource assembly
Organizationa l design
Strategy
Entrepreneurial Opportunities
Discovery
Opportunity Exploitation
Environment
Industry
Macro- environment
SHANE’S MODEL OF THE ENTREPRENEUR PROCESS (VIRPI, 2005:19)
The models above were developed by Carol Moore and Scott Shane respectively. One problem with the Timmons model is that ones the three factors are in place and in the right mix, every other thing falls in place (VIRPI, 2005:18).
Moore’s models identified a process that starts with an innovative character leading to a triggering effect that gives birth to a new generation of business when implemented, with numerous socio-economic conditions obviously needed to be right. It simply tells us that succeeding in business in a dynamic world we live in is more than just identifying a business opportunity, building a team and accumulating the required resources. While opportunity, the team and resources are primary requirements that could make one to successfully set up a business, Moore and Shane have presented here a lot of contingencies that must be put into consideration for the factors put forward by Timmons to thrive. For instance, in the midst of an opportunity, the right team and the required resources, government policy can be a direct hindrance.
Among factors that could determine the success of a business is the entrant of other competitors.
CONCLUSION
Haven examined the Timmons model as it applies to the setting up of a business and sustaining such business, a number of conclusion can be drawn with regards to whether it is absolutely appropriate in setting up a successful business enterprise we discovered here that in as much as the factors identified by Timmons which include the business opportunity, the team, and the resources , existing theory and a critical examination has shown that there are other factors that are contingent to the success of the Timmons model. Such factors identified include the entrance of a competitor or competitors, putting identification of opportunity first which could make onward quest to organize the other factors (team and resources) not to be handy for such opportunity to be exploited at the appropriate time.
The entrepreneurial models presented by Carol Moore and Scott Shane showed that that is more than just focusing on the three factors identified by Jeffrey Timmons.
The entrepreneur must be fully prepared in his own right before embarking identifying opportunity that he will go further to exploit by putting his team and resources in motion. Without considering other factors that are contingent to the ones highlighted by Jeffrey Timmons, a potential business could hit a ditch on arrival or on the long run.
The question on whether it is more appropriate to consider identifying an opportunity before raising necessary resources has been answered to showing that it depends on other contingencies, given that opportunity is time- dependent. The time that will be required to put together a team of personnel and the required resources together in trying to actualize entrepreneurial opportunity may cause an entrepreneur to miss the opportunity entirely. It seems appropriate, therefore, for an entrepreneur to have some level of readiness in all the stuffs that are required to pursue an enterprising course.