The term ‘Entrepreneur’ is derived from the French word ‘Entreprendre’ which means ‘to undertake’. Thus, the person who undertakes the risk to run the business is called an Entrepreneur. An Entrepreneur is a person who sets the business activities for achieving the profits. Entrepreneur identifies the possibilities and challenges and then solves these challenges. He ensures the financial stability, builds the diverse skills set, identifies the problems to solve and solving the problems.
Entrepreneurship – It is the process that launches and designs the activities of new business such as small business. Entrepreneurship is described as the capacity to develop, manage and organize the business venture in order to cover the risks and generating the profit. It is a purposeful activity of an individual, group of individuals and the group of associated individuals that initiates and manages the business for the purpose of achieving profit. In an economic term, Entrepreneurship is an entity that finds the opportunities and acts upon the opportunities for innovating the new products.
According to J.A. Timmons
“Entrepreneurship is the ability to create and build something from practically nothing”.
Timmons model of Entrepreneurship
Timmons model is developed by Jeffery Timmons of Babson College in Massachusetts. This model of Entrepreneurship constitutes the three important critical factors named Opportunities, Teams, and Resources. The success of this model depends upon the capability of the entrepreneur to balance these three critical factors. For starting the business, the entrepreneur looks for the net worth and cash flow of their business and risks his career. The first factor is the opportunity, second is Team factor and the last is the Resource factor in this framework.
1. The Opportunity – Timmons Model defines that the entrepreneurship is Opportunity driven and does not involve any business plan, strategy, team, and money. This model is based on the fact that Entrepreneurship is nothing but opportunity driven. The opportunities are important than the competence of team and entrepreneur. Reason being, the opportunities ensure long term survival and success of the business. Any good idea does not reveal an effective opportunity.
In addition, the heart of every business is to create and recognize the opportunities effectively. The new products and services need to be developed by focusing the market readiness, consumer trends and behaviors. This model states that the financing of the business leads to the success of the business (Schwartz & Teach, 2000).
2. The Team – After identifying the factors of opportunity and gathering the information regarding the opportunity, the leading Entrepreneur must put the best-talented team in its organization. An entrepreneur starts the business by collecting information about adequate resources. The size and scope of the team depend upon the nature and size of the opportunity. The success of the business organization depends by creating equal balance in the resources by applying effective communications, creativity, and leadership. Timmons model defines that a good team can lead to great success and an ineffective team leads to the failure of the company that means the disaster of any business. An effective team can bring high potential with an opportunity and manage the pressure related to growth. Thus, the major success of the business depends on the ability of the entrepreneur for building an effective team.
Role of the team is defined as –
•Providing leading activities to manage the resources effectively and to interact with exogenous forces
•By applying creativity, reducing uncertainty and ambiguity
However, the quality of the team depends upon the –
•Commitment and persistence
•Track record and relevant experiences
3. The Resources – Timmons model develops the resources that help in reducing the risk of starting a business venture and encourages the bootstrapping in order to achieve competitive advantage. Bootstrapping can be used in leasing rather than buying equipment. It includes working in Garage rather than rented space.
Different advantages of Bootstrapping are defined as -
•It drives to reduce market cost.
•It develops leanness and discipline in the organization.
•It maximizes the creative resources for the achievement of money and other resources
In businesses, an entrepreneur works to ‘minimize and control’ instead of ‘maximize and own’. An entrepreneur manages the resources which include to build good resources and implement the business plan by adopting ‘Fit and Balance’ method. This method balances the available resources with the potentials of the team. Apart from it, the Timmons model focuses on the major role of an Entrepreneur which affects the resources of the business (Santos, Caetano & Curral, 2013).
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