Entrepreneurial Industry Model

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7.0 Entrepreneurial Industry as a mean of economic growth model
In their research, Arcs and Armstrong (2003) have established the strong positive correlation between entrepreneurship and employment growth. It also considered as a vehicle to incorporate human capital, enhancing research and development and bring along innovation in an economy (Glaser, 2006).
As per Schumpeter’s concept of entrepreneurship, the advancement of the entrepreneurship industry is a valid indicator of innovation. Therefore, improving the entrepreneurship policies and promoting innovation programs would lead to sustainable and economic development.
Lindstrand (2003) earmarked that in the actual competitive and challenging business environment, the success of any firm
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• Going beyond the business plan
 It is important to plan judiciously before launching a new business. However, the preparation is not limited to preparing a business plan. Bachenheimer proposes three planning methods that can be adopted namely The Apprentice Model; which consist of gaining direct industry experience. The Hired-Gun Approach; this has to do with the business partnering with experts who has already proven records in the industry. Lastly, The Ultra-Lean School of Hard Knocks Tactic; which consist of finding out a rapid way to test the product and bring amendment to the model at the lowest cost possible.
• Testing the Idea
 Prior to launching a new business, research is of prime importance. Records has shown that 60% of new business fail within three years because too often people rush into a business before checking their
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What technology will be used? etc. Less is being said about the potential customer but in the end , the customers will be the primary determinants of the success of the firm. One of the most important aspects to understand is the customer’s buying behaviour which will determine the cash inflow for the survival of the firm.
• Financial Resources
 Cash is the life blood of any business. Some owners will want to inject their own capital in the business while others shall look for investors. However, the cash flow forecast shall be of utmost importance as it will determine how much capital will be needed for the business growth. Owners shall ensure not to rely too much on long term debts. A well balance debt/equity ratio shall ensure the going concern of the business.
• Having the right business structure
 Right at the start, it is recommended to think about the business structure of the firm as this shall have an impact on the fixed overheads of the firm and other legal implications. Start-ups often fail because their structure is too heavy. On the other hand, opportunities can be lost if the firm is not well

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