Entrepreneurship as a Process-.com

Question: Anayze the various aspects of Entrepreneurship. Answer: Introduction In the era of twenty first centuries, Entrepreneurship has become one of the major factors. Entrepreneurship refers to the process to design, launch and run a new business (Kuratko 2016). Entrepreneurs offer the society with different kinds of innovative products and services in order to fulfill the different needs of people of society. Thus, it can be said that entrepreneurs play a crucial role in developing a modern society where customers different needs are fulfilled with innovative products and services. At the time of setting a new business, the entrepreneurs have to follow certain steps and they have to take high risks as no one can guarantee about the success of their business. Thus, starting with an innovative business idea is the major steps towards success. Some other factors the entrepreneurs need to consider are market validation, risk, cost, opportunity and environmental factors (Moroz and Hindle 2012). Development of Business Idea At the time of developing the new business ideas, the entrepreneurs have to go through certain crucial stages and all these stages are interconnected. The first step is to make a market research. The Taxi or Cab industry in Australia is a major industry and it is related with the territory sector of the Australian economy that has association with the taxis and cabs in different Australian cities and states. There are many companies in Australia that provides taxi services to the customers. As it is a territory based industry, these companies provide taxi within a particular territory like within city. The passengers have to face difficulties when they want to travel to outside the city like from one city to another city or one state to another state. Most of the existing taxi companies either do not provide this service use to charge a big fare for this. Thus, the passengers have to use other transportation services. However, the new business idea is the solution of this problem for the commuters. The proposed business idea is to provide taxi services for the passengers that will travel between cities or states with a reasonable fare. The company will have its own website where contact numbers will be given. The passengers can book their rides by calling in the provided numbers. In addition, online application of the company will be available through which the passengers can book their rides with the help of internet. The booking system will have transparency as the price will be informed to the passengers. After the development of this business idea, a market survey has been organized with the citizens of some of the major cities of Australia like Melbourne, Sydney and Adelaide. As per the market survey, it has been seen that the people of these cities will warmly welcome the introduction of this service as there is not much taxi services like this (Srensen 2012). In the initial stage, this taxi service will be introduced among the above mentioned three cities. Apart from this, no new taxis will be purchase at the time of launching. Taxis will be hired from the owners on a contract basis as this process will reduce the risk factors. Based on the initial business and feed from the customers, the business will be expanded. Market Description The taxi fare industry of Australia is one of the major industries and it significantly contributes towards the Australian economy. From the below figure, it can be seen that this industry has a large customer base that creates significant business opportunities for all the companies operating in this industry. In this situation, the new proposed business will be gainful from this industry. Apart from this, there are not many companies that provide city to city or state to state taxi services. Thus, there is a fare opportunity for the new business to gain necessary competitive advantage. However, it is needed for the adoption of effective price of the service so that people from all financial class can afford the service of this new company. Table 1: Taxi Market Description of Australia (Source: atia.com.au 2017) Risk Assessment There are three major risks that the new business needs to consider at the time of starting the business operations; they are Market Risk, Financial Risk and Management Risk. Market risk refers to the moving away of current market trend from the new service. In case of this new business, the business plan has developed by matching the current market trend of Australian taxi fare industry. However, it is required for the new business to continuously update the business model with the current market trend (Haimes 2015). The next and probably most important risk is the Financial Risk. Financial risk refers to the lack of capital in various business stages. Thus, it is required for the entrepreneur to project the financial budget for the new business. Fewer gaps between projected and actual budget determines the financial success of the new businesses. In addition, the entrepreneur needs to make sure that there are enough startup funds for the business (Aloini, Dulmin and Mininno 2012). The last risk is Management Risk that can be occurred due to lack of management expertise of the entrepreneurs. The entrepreneur needs to be able to manage the day-to-day business operations of the new company and this process will reduce the management related risk of the new business. These are three major risks that the entrepreneur needs to manage in an effective way (Bahr 2014). Cost Structure The relevant costs of the new business are shown below: Particulars Amount AUD$ Start-up Expenses Legal Expenses 5000 Stationary Expenses 2000 Market Survey Expenses 7000 Rent for Cars and Office 20000 Equipment Expenses 10000 Total Start-up Expenses 44000 Start-up Assets Cash Balance on Starting Date 100000 Other Short-term assets 20000 Total Short-term assets 120000 Long-term assets 10000 Total Assets 130000 Total Requirements 174000 Table 2: Cost Structure of the New Business (Source: As Created by Author) From the above table, it can be seen that there are two types of cost requirements; they are cost for various start-up expenses and cost for assets. The entrepreneur needs to take all these costs into consideration for the business. Opportunities The untapped Australian city to city taxi market will provide fare business opportunities to this new business. From Figure 1, it can be seen that various states of Australia have large passenger base and this will help to boost up the business of the new company (Robertson 2013). In addition, the use of various technologies like internet navigation, online booking and other will create massive business opportunities for the company. All these aspects will provide necessary competitive advantage to the new taxi ride business (Witt, Suzor and Wikstrm 2015). Environmental Factors As this is a territory based business, the Australian government rules and regulations will play an important role on this business. As per the government regulations, the company has to pay a large amount of license fees for the taxis and it has massive effect on the business (Wang, Chen and Chen 2012). The company needs to comply with all the required rules and regulations of the government. Technological environment has its effects on this business as the use of new technology will increase the efficiency of the business (El-Gohary 2012). The company needs to comply with all the environmental rules and regulations as carbon emission from the taxis is a major environmental issue. These are the major environmental factors that the new business needs to take into consideration (Zeng et al. 2012). Recommendations Based on the above analysis, some recommendations are provided below: The entrepreneur needs to make it sure that the business model of the new business must match with the current market trend of Australian taxi fare industry. Coordination with the market trends will provide the company with necessary business advantages. It is recommended that the entrepreneur should asses the business risks of the new business to ensure the business success. He/she needs to assess all three types if risks that are market risk, financial risk and management risk. Assessment of risk will provide proper insight of the industry to the entrepreneur. It is recommended that the entrepreneur needs to make sure that there is sufficient start-up capital to meet all the required expenses of the business. In the absence of adequate start-up capital, the new business can suffer from massive financial turmoil. It is recommended that the entrepreneur needs to consider the effects of various external environmental factors on the business operations. Some of the major factors are political factors, economic factors, technological factors and environmental factors. Conclusion From the above discussion, it can be observed that at the time of setting up of a new business, the entrepreneurs need to take certain steps. First, they need to do a thorough market survey to determine the industry tread. Assessment of various business risks is the next step. After that, the entrepreneur need to develop the cost structure of the new business as it is a crucial part. Measuring the effects of various external environmental factors is another step. After getting positive signal from all these aspects, the entrepreneurs can start the business operations. References Aloini, D., Dulmin, R. and Mininno, V., 2012. Risk assessment in ERP projects.Information Systems,37(3), pp.183-199. ATIA. (2017).Taxi Statistics | ATIA. [online] Available at: https://www.atia.com.au/taxi-statistics/ [Accessed 12 Aug. 2017]. Bahr, N.J., 2014.System safety engineering and risk assessment: a practical approach. CRC Press. El-Gohary, H., 2012. Factors affecting E-Marketing adoption and implementation in tourism firms: An empirical investigation of Egyptian small tourism organisations.Tourism management,33(5), pp.1256-1269. Haimes, Y.Y., 2015.Risk modeling, assessment, and management. John Wiley Sons. Kuratko, D.F., 2016.Entrepreneurship: Theory, process, and practice. Cengage Learning. Moroz, P.W. and Hindle, K., 2012. Entrepreneurship as a process: Toward harmonizing multiple perspectives.Entrepreneurship Theory and Practice,36(4), pp.781-818. Robertson, S., 2013. Campus, City, Networks and Nation: Student?Migrant Activism as Socio?spatial Experience in Melbourne, Australia.International Journal of Urban and Regional Research,37(3), pp.972-988. Srensen, H.E., 2012. Business development. InPalgrave Encyclopedia of Strategic Management. Macmillan Publishers Ltd. Wang, C.H., Chen, K.Y. and Chen, S.C., 2012. Total quality management, market orientation and hotel performance: The moderating effects of external environmental factors.International Journal of Hospitality Management,31(1), pp.119-129.1185. Witt, A., Suzor, N. and Wikstrm, P., 2015. Regulating ride-sharing in the peer economy.Communication Research and Practice,1(2), pp.174-190. Zeng, S.X., Xu, X.D., Yin, H.T. and Tam, C.M., 2012. Factors that drive Chinese listed companies in voluntary disclosure of environmental information.Journal of Business Ethics,109(3), pp.309-321.