The challenges for business start-ups

Introduction Pace of progress has brought intense competitiveness, which means enterprising organizations necessarily must innovate to survive, establish and to grow. Traditional classical view of innovation implies that strategies should be developed, processes established in order to encourage newer ideas, products, services and processes through which organization can develop and grow. Traditionally entrepreneurship is viewed as small number of people like Gates, Richard Branson and some other similar charismatic individuals who have commercialized new ideas and established their own organizations. n reality there are many entrepreneurial people present in every type of organization who have succeeded in implementing their own ideas. These people will continue to be innovative within the auspices of the organizations they work in and if the concerned organization stifles their entrepreneurial skills these people would move on. !ntrepreneurs and innovators are both creative in different ways and work for many different types of organizations. "ommercial success comes from innovations that meets market re#uirements and adds value to the customers and thus maintains organizations$ viability (%owe and &arriot, '(()*. Creativity The new business environment demands that organizations be adaptable to new rules and structures. +or an organization to succeed and fit with the new environment, it has to ad,ust, adapt, and evolve with the new rules. "reative thought and innovation help in creating newer ideas. "reation is done by an individual, what is at the background of that individual is knowledge or e-pertise. &umford .'(((* contends that creative solutions re#uire actively searching for the different from normal behavior, combining and separating, reorganizing them in a different fashion leading to fresher insights into the problem at hand / innovation and creativity needs the basis of knowledge as well as concerned sub,ect e-pertise. "reativity re#uires balancing the three aspects of synthesis 0 to synthesize information, generate new and novel ides1 analytic ability to critically evaluate ideas to separate the wheat from the chaff 1 practical ability to crystallize the theory into pragmatic .2ternberg, 344)*. n other paper 2ternberg calls creativity a confluence of ability to re define problems and insightful thinking. 5pdated knowledge is essential so that the manager can go beyond the knowledge and look with broadened vision. "reative people are fascinated by formulating new problems and looking at problems with a new angle and perspective make. Risk taking is essential to

discover things beyond the e-istent paradigm and finally confidence and belief in self make the attributes of creative person .2ternberg et al 3446*. Innovation Defined nnovation provides ability to see connections, find opportunities and capitalize on them. Tidd et. al. .'((7* gives e-ample of how Robert "lifford spotted need for bridging demand for increased ferries in 8ustralia and how he provided drinks to fulfill need of thirsty commuters. %ater Robert "lifford was successfully able to progress into ferry business by developing fast catamaran ferries by continuing to foster innovation. nnovation management re#uires developing a learning process that integrates key behaviors into effective routines of the learning cycle. 2ome of the key behaviors that need to be incorporated are9 !-perience sharing 0 so that success and failures of others are fed back into the loop enabling better decision making1 regular introduction of newer methods and new ideas about tools1 continual e-perimentation 0 trying different combinations and approaches1 structured reflection or benchmarking, is another important element allowing reflection about e-isting processes, identifying successes and need for improvement, if re#uired in e-isting processes. 2outhwest 8irlines has achieved remarkable speed of turnaround at airport terminals 0 it drew inspiration from rapid pit stop turnarounds at Grand Pri- car racing. Reflection or auditing does not have to be while comparing with other organization1 it can be also done against established mode of good practices, to see how the organization comes up or falls short of. Advantages and Examples of Innovation :amel .'(()* believes that management innovation can create long lasting changes in organization and gives competitive advantage and also allow practicing companies to reach new performance thresholds. &anagement innovation can be defined as being radically different from traditional management principles or even departure from e-isting or customary ways of doing work. The more unconventional management innovation is the more difficult it would be for competitors to catch up. :amel .'(()* gives e-ample of Toyota which empowered its front line staff to solve problems as they arose and also head off problems before they occurred. 6& has a 3(( year old history and has a clear reputation as ma,or innovator. 6& has successfully managed to create an environment which nurtures innovation and allows development of numerous products through lucky accidents. 6& has avoided putting in place structure that would constrain innovation. The key elements of work processes at 6& include '

various schemes and awards for acknowledging innovative activity. nnovation is stressed by placing premium value on members who have been innovating productively consistently. !mployees are given special time for working on pet pro,ects 0 some of which might provide breakthrough products. 8cceptance of mistakes that occur as part of risk taking are accepted, as mistakes .within reason* allowing burgeoning initiative, encourage free and active interchange of information together with empowerment so ideas have a chance to cross fertilize and nurture .Tidd et. al. '((7*. Innovation 8ccording to ;rucker .'(('* une-pected successes and failures are sources of innovations as businesses are not comfortable with une-pected behavior. 2ystematic innovation begins with analysis of new opportunities, and re#uires that would be innovators are using both sides of their brains and work out analytically what innovation would be to satisfy e-isting opportunity. !ffective innovation has to be simple, focused and delivers the core ob,ective unambiguously otherwise it would confuse people. !ffective innovations have small footprints initially and effective innovation re#uires knowledge and focus. Talent itself would not produce results unless it is focused and delivers the re#uired results. nnovation does re#uire talent, endeavor and knowledge but the critical element is dedicated purposeful work 0 it is diligence and persistence that delivers the promise. nnovation could be described conceptually in different dimensions amongst them / incremental, radical and disruptive are amongst most important ones. 2chumpeter describes innovation as creative destruction. 2chumpeter further distinguished between inventions and innovations, citing innovations as inventions that are economically useful and earn profits .!rwin '((<*. Different Types of Innovation ncremental vs. radical innovation are different treatments of innovation1 incremental innovation builds upon e-isting resources and is competence enhancing. Radical knowledge will re#uire new resources or knowledge. &iron/2pektor et al. .'((=* considers innovation as a composite of e-ploration and e-ploitation. ncreased e-ploitation may provide incremental innovation yet may decrease radical innovation while separation of e-ploratory vs. e-ploitative units would result in enhanced radical innovation. !-ploitation according to the author has two facets1 attention to detail, which provides improved #uality and outcome orientation which reduces costs and focuses more on meeting time constraints .balancing innovation attention*. 6

>an .'((7* suggests that innovation as introduced by 2chumpeter denotes five different kinds of possible new approaches including new products, new production technologies, new markets, new organizations and newer inputs. nnovation is the interplay between the environment and individual action 0 innovation has the source to provide ma,or changes to the markets and organizations. ;issemination is one of the most important aspects of innovation and without dissemination knowledge looses most of its utility. Promoting innovation and invention re#uires embracing uncertainty and innovation can be described as an act of taking decisions in an uncertain environment coupled with an attitude of risk taking. nnovation has created a bridge between researches carried out in academia with application oriented enterprises. This was the prime reason that Palo 8lto research facility was formed 0 to foster links with the academia and who$s who of the 2ilicon ?alley. Kick-Starting a Business of our !"n 8s :annon .'(3(* mentions more and more workers are e-iting secure corporate life to start one$s own business. Being an entrepreneur may look very glamorous, however there are lot of pointers, some small, some big that should be considered before venturing out on this path. @nly half of the persons who set out on this field will survive beyond 7 years. 2ome of the things that one can do to ensure success are finding a mentor 0 someone in the field who can provide correct guidance. :annon .'(3(* points out two resources 2tartupAation.com and 2"@R! .www.score.org* 0 sites that provide education to entrepreneurs. ;oing preparatory work is important as one has to understand basics of marketing, finance, and employment law. %ine up sources of funding, authors advises so that there is sustainable cash flow. 8gain the advice is to get cheap sources on which high interest is not re#uited. Personal saving may be good source, while home e#uity loans might be a good option as funds are available lump sum which can be paid later, while another option may tapping friends and relatives where money may be available interest free or at a low rate. "redit cards should be the last resort as they are the most e-pensive source of funding with potentially double digit interest and a very high cost of capital / author advises. 8nother essential is hiring an accountant$s services as careful record keeping is essential, and having a professional to guide will come in handy for the accountant will advise on which business e-penses are ta- deductible.

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#uide to Starting and $unning a %e" Business ;eliberating further :arris .'(()* suggests that market analysis should be carried out prior to starting as this step would tell if there are customers for the product as without customers, however salable is the idea there would not be simply li#uidity to sustain the business. The problem that the business startup aims to solve should be serious enough that customers may want to spend money to get the solution and that the product or service will be of value to the customers, so they may come back for a repeat purchase or tell others about benefits of your solution. The solution that the new business presents should be acceptable to all stakeholders that will be affected. The ne-t step is determining potential market size and your market share. This knowledge may be estimated from regional statistics, but the important thing is to find numbers for the segment where the product or service is to be sold. +or each of the customer segments or groups identified one should determine potential customers that can be targeted and are within range. %ocal government resources or even internet can provide this information #uite accurately. +urther there are local or regional government services that offer advice on small scale startups and may also offer local market intelligence. 2ome type of government grant may also be available for start up companies. &arket size data may be available which will help in determining how market has changed over previous 7 to3( years may be and assess possible forecasts about market that may also be available. This indicator of the market environment will be useful for selling the startup venture concept to potential investors. The initial assessment will tell if there are sustainable number of potential customers that are within reach and that market growth is sufficient to provide opportunity for the venture to grow and the trends identified and analyzed will help in providing stability to the venture. 8lso another important #uestion at this time might be assessment of other potential market sectors that be e-ploited in the future to sustain venture$s growth. Ae-t #uestion is determining ease of entry in the market. 5sing Porter$s mode of five forces9 !ase of !ntry1 2upplier Power1 Buyer Power1 Threat of substitutes1 "ompetitive rivalry need to be considered to determine the position of e-isting sellers 0 if there is a monopolyB t has to do about finding regulatory environment and if there are specific mandatory standards and accreditations before the proffered service may be sold and finally it has to with intellectual property. @nce the initial assessment has shown realizable market for 7

productCservice1 then comes the #uestion of how the productCservice can be protected from competition. ntellectual Property Rights issue should be consulted with professionals. t is important to understand options available to oneself and the processes for formally protecting ideas at the outset. This would ensure two things 0 this would ensure that ideas and your rights are protected and further it will also ensure that someone else$s rights are not infringed upon. The marketing plan for the proposed venture should be written down as it would help in focusing thoughts and provide deliberate thought to ,ustify any decisions undertaken. &arketing plan should have detailed description of each of the potential markets where the idea might be commercialized. +or each of the identified segments it is worthwhile to pen down how the product or service would meet customer re#uirement and what would the customer in respective segments be looking from the product or service on offer. +or each segment it is advisable to find potential market size and how the market segment is behaving .growing, dynamic or static etc.*. "hoice of the target market should be vetted out through analysis of potential customers, price levels they would be willing to pay, the e-isting supplier for the customer and how the new proposed product is e-pected to better meet customer needs. "ompetition similarly needs to be mined 0 their products researched and prices investigated. Through research of competitor websites and any other available information identify own strengths and what might give your product edge over competitor. +urther analysis and scenario building of competitor responses to your entry into the market should be done and how and what would you do to cope with competition. Try to find out who are the opinion leaders in your potential customers where they socialize and network and if there is a specific meeting place or club where potential customers fre#uent than this place should be ,oined. Ae-t identify the market segments where you would enter initially and plan entry route. Ae-t comes financing part/ either the venture might be financed through own resources until revenues start trickling in and then reinvest the profits back into the business, thus growing the business organically. This model works well in business where upfront costs are a minimum and no need for e-pensive offices or e#uipment and where one may start selling immediately. The second way is to bring cash in the business, either through selling e#uity in the business or undertaking debts or by winning grants and wards. This is the more common

of the two methods. n this model developmental period bridges the gap between business inception and start of incoming revenues. Grants are money inputs which do not need to paid back yet have stringent conditions that must be followed for grant disbursal. ;ebt can be of many types, yet there is always repayment of principal along with added on interest while e#uity investment is portion of the company that is sold to investor who hopes to see good payback on his investment .:arris, '(()*. Conclusion nnovation and entrepreneurship are linked together like hand in glove. By being creative many employees have been able to generate many innovative ideas which have helped their respective organizations. n some cases persons stifled by organization$s ability to allow creativity seek to venture out on their own. "omplete inventory of issues pertinent to start up businesses is presented along with how to handle them for a successful entrepreneurial career.

$eferences ;rucker, P. + .'(('*. DThe ;iscipline of nnovation$. ssue E !rwin, ;ouglas :., Frakauer, ;avid ". .'((<* nsights into nnovation. Science . ?ol. 6(<, ssue 7)=< Harvard Business Review, ?ol. E(,

:annon, F. .'(3(* GFick/2tarting a Business of Hour @wnI. U.S. News & World Report, ?ol. 3<=, ssue 6

:amel, G. .+eb'(()* The Jhy, Jhat, 8nd :ow @f &anagement nnovation, Harvard Business Review, ?ol. E< ssue ', p='/E<, 36p :arris, T. .'(()* Start-up A Practical Guide to Starting and Running a New Business 2pringer/?erlag Berlin :eidelberg >an, %. .'((7*. nnovation and Fnowledge9 Theory and Regional Policy. European Planning Studies ?ol. 36, Ao. E. 3/3=

%owe, R. and &arriot, 2. .'(()* Enterprise Entrepreneurs!ip and "nnovation, Butterworth :einemann9 5F &iron/2pektor, !., !rez, &. 8nd Aaveh, !. .'((=*. Balancing nnovation 8ttention/To/ ;etail and @utcome @rientation To !nhance nnovative Performance. Acade#$ o% &anage#ent Proceedings. p3/=.

&umford, &.;. .'(((*. G&anaging "reative People9 2trategies 8nd Tactics +or nnovationI, Hu#an Resource &anage#ent Review, ?olume 3(, Aumber 6, pp 636 / 673 &orris, &. .'((7* Starting a Success%ul Business, 7th ed., Fogan Page %imited9 5F

2ternberg, R. > K %ubart, T. .. .3446* G nvesting in "reativityI, Ps$c!ological "n'uir$, ?ol. < ssue 6, pp ''4/ '66 2ternberg, R. > .344)*. G nvesting in creativity9 &any happy returnsI, Educational (eaders!ip, ?ol. 76 ssue <, pp E( /E< Tidd, >., Bessant, >. and Pavitt, F. .'((7* &anaging innovation integrating tec!nological) #ar*et and organi+ational c!ange. 6rd ed. >ohn Jiley K 2ons9 5F

$eflective Statement !ntrepreneur mind set re#uires curiosity, innovation, confidence in own abilities and risk taking attitude. Reflection is concerned with e-tracting learning from e-periences and acknowledging that knowledge is part of e-perience. 2elf reflection helped in identifying my key strengths and how my development is taking place and plan how my professional advancement will take place. dentifying core skill set meant self reflection and taking to recourse to aptitude identification surveys, available both online and in various books in the library. 2ome of the core #uestions asked myself were LJhat do already know and do wellB Jhat additional skills do needB :ow can be more effective in my work and create more impactB 8nd finally1 Jhere am headed in my career #uestBL dentification of skill set gave me confidence about potential and how to align my potential abilities with studies to achieve synergy. had to develop learning and development strategy as a proactive learner to assimilate learning for the corporate world 0 learning that would help me build up on my special talents. Reflective practice leads to an individual, specific and clearly defined professional development plan at the same influencing student achievement through identification of core strengths 0be it skill or knowledge strengths so that skill set is efficiently utilized. Reflective practice also leads to innovative practices by setting goals and goal attainment as constant striving for goal achievement leads to growth as practices are revitalized through self reflection and refinement and fine tuning for goal achievement .Jagner, '(()*. Reflection connects e-perience and feelings to intuitive senses so those lessons are available to us when we have to make decisions without complete information availability. "artwright, .'((<* recommends choosing a ,ournal with unlined pages so te-t can be written as well as images drawn. >ournal is useful for recording intuitive hunches so they could be commented on later. t is therefore important not to let analytical censor delete the recording as unfeasible so free noting is essential. Recording and revisiting the recorded statements is good way to encourage intuition flow and right brain thinking. ;eveloping communication and other soft skills like persuasion and negotiation skills were important additions that were re#uired to support the main set of skills. :ence planned and attended specific courses on communication skills, handling people, proactive and faster reading, as reading helped me shortcut the knowledge and techni#ues of what others before me had gone through and learn from my predecessors and peers. Fnowledge management is e-pected to be the key skill for the '3st century, hence to assimilate knowledge better re#uired

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imbibing information in all available formats, and be it print, audio or multimedia. 2elf developmental courses, virtual classrooms and broadband has given access to information from all around the world, so university$s library is the key resource now and in the future to bring up to speed re#uired knowledge. found that competencies that was re#uired to master were composed of three separate layers1 interpersonal, businessCmanagement, and personal each with its own sets of specific aspects that needed to be mastered to hone up the concerned competency. nterpersonal competencies comprised of building trust to transpire confidence in interactions with others1 effective communication both in compelling way and the converse ability to listen actively to inspire support and following1 ability to leverage the diversity of employees work strengths and networking to conspire confidence in coworkers and peers. &anagerial competencies included that of analysis and development of business acumen while engendering the ability to think strategically while personal development and adaptability formed the cornerstones of personal competency that .;avis et al, '((<*. 8ll knowledge and skills, that complemented by positive and proactive attitude. Reflecting on my future career found out that would prefer to work for an organization would initially like to work as Gan that empowered its employees for effective decision making and allowed Gout of the bothinkingI for resolution of work problem and issues. apprenticeI learning practical business skills and finding where my skills were put to best use. "urrently haven$t thought of running my won business yet definitely would be happy to work for organization that supported innovation and creativity. was supposed to deliver had ac#uired in business degree was

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$eferences

"artwright, T.. '((<* ,eveloping -our "ntuition.A Guide to Re%lective Practice. "enter for "reative %eadership9 Team%ib ;avis, P. 1 Aaughton, >.and Rothwell, J. .8pril '((<* GAew Roles and Aew "ompetencies for the Profession9 8re Hou Ready for the Ae-t GenerationBI /&,. ?olume9 7E, ssue9 <, pp ')M. Jagner, F. .'(()* GBenefits of Reflective Practice9 8 Reflective 8ssessment Jill :elp Hou "elebrate Hour 8ccomplishments, !valuate Hour 2kills, 5se Hour 2trengths &ore !fficiently and "ontinue to 2et and 8ttain GoalsI (eaders!ip ?olume9 6). ssue9 '. Page Aumber9 6(M.

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