Small Business and Entrepreneurship Essay


The universe of concern is altering at the velocity of the visible radiation. What is new today might be an disused piece of work tomorrow. This alteration can be tackled merely when the right individual tips the right concern theoretical account. The subject of entrepreneurship has caught the attending from board suites to universities all around the universe. They are seeking to reply whether an enterpriser is born or made.

This assignment is focused on placing who is an enterpriser, what is a concern theoretical account, the types of concern theoretical accounts and the pre requisites for little concern start ups. In order to efficaciously reply these inquiries a existent universe success narrative of an enterpriser and his concern theoretical account has been analyzed here. For the intent of this assignment the laminitis of Dell Computer Corporation was selected. Throughout this assignment the attempt has been focused on tracking the cardinal success factors of Michael Dell and his venerable concern theoretical account.

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During the last half of this assignment an huge attempt was taken to exemplify how a little concern start up should cover with assorted formalities upon puting it up in a more practical mode.

Finally the decision has been given after a thorough analysis of the dingle theoretical account and the cardinal success factors of Dell Computer Corporation.

Entrepreneur & A ; Entrepreneurship

Entrepreneurship is the undertaking of going an enterpriser which can be defined as funding and direction of concern in order to transform invention to economic goods.

We can happen several definitions on entrepreneurship as follows.

Entrepreneurship involves having and pull offing a concern entity.

Entrepreneurship is making something that did non be earlier.

Entrepreneurship is the procedure of get downing a concern, forming needed resources and set abouting the related hazards.

Schumpeter, [ 1934 ] emphasiss that No 1 is an enterpriser everlastingly, Entrepreneur merely exists when he innovates. No Oklahoman he stops introducing he stop himself from been an enterpriser.

Types of entrepreneurships

Business enterpriser – he is the 1 who turns thoughts in to world. He involves in both fabrication and trade of the concern. [ Small trading and fabrication concern ]

Trading enterpriser – undertakes trading activities and focused in selling.

Manufacturing enterpriser – undertakes merely fabricating activities. Major focal point is invention.

Corporate enterpriser – more interested in direction of the organisation, Exceptional organisation and organizing accomplishments can be seen.

Technical enterpriser – more focussed in production and posses advanced production accomplishments.

Non proficient enterpriser – focused on selling, distribution channels and schemes.

Michael Dell – The way of success

Today dell Computer Corporation is one of the prime PC brands both in and outside United States. Dell started his concern in a clip where IBM was ruling the market in a large manner. He who assembled Personal computers in his university residence hall within 20 old ages surpassed about all the cardinal participants in the concern. Here is a brief history of Michael Dell, the adult male behind the billion dollar Personal computer fabrication company.

Michael Dell was born in 165 in Houston in Texas. Although he did non demo involvement in school, he showed entrepreneur accomplishments from his childhood.

Dell at 12 – started his first concern venture by making a stamp auction. He advertised ‘dell ‘s casts ‘ in Linns stamp diary and earns $ 2000 from it. This is the first clip where he learnt the importance of extinguishing the jobbers.

Dell at 16 – he was selling newspaper subscriptions for Houston Post. This is where he learnt about the power of cleavage. At the terminal of the twelvemonth Dell had earned $ 18,000.

Dell at 18 – Enters the Texas University and sells upgraded high public presentation Personal computers at that place. He registers the company as ‘PC limited ‘ . Michael started Dell Computer Corporation with an initial investing of $ 1,000. He drops out from the university to to the full give to the company. His grandparents holding religion on his thought lend him $ 300,000 for the concern in order to spread out the company.

Dell at 26 – Becomes the youngest Chief executive officer of a company that was of all time to gain the luck 500 rubric.

One of the cardinal success factors of Michael Dell is his passion for computing machines. At the age of 15 he broke down his apple 2 computing machines and reconstruct it. By the clip goes on he realized that so market leader IBM was non doing Personal computers by IBM parts. They were stock parts from different sellers. This determination led him to piece Personal computers which were superior to IBM machines.

Michael besides advertised his usage made computing machines in celebrated computing machine magazines. While his monetary values were less than retail merchants the machines were straight shipped to clients.

Forces computing machine industry – An overview

By 1950s mainframe computing machines were the size of an full room. Possessing a computing machine was beyond world for many until 1970s. The first such a consumer computing machine was built by a company called MITS. In 1977 apple launched apple 2 which was believe to be the first true forces computing machine. By today the Personal computer has come a long manner from its beginnings to go one of the must hold consumer electronics for the modern twenty-four hours adult male.

Michael dingle became a success by turn toing the chief issues Personal computer makers faced in late seventies and 80s.

Followings are some of the cardinal characteristic in the Personal computer industry.

Average merchandise life rhythm of forces computing machines has been declined from 22 months in 1988 to 6 months in 1997.

Monetary value every bit good as public presentation doubled in 18 months doing extra stock list depreciate rapidly. Besides clients are ready to pay a premium on technically superior merchandises.

From early yearss public presentation of hardware was matched by turning complexness of package. This provides two deductions.

Excess stock list depreciate in value 10 % per month.

Technologically sophisticated machines have a higher demand and give a premium monetary value.

Therefore minimal stock list cost every bit good as conveying new engineerings rapidly assures higher net incomes for their organisations.

Most Personal computer makers use the indirect distribution channels as shown in figure 1. This is contrary to dell ‘s direct distribution channel.

FIG – 1 indirect distribution channel of the Personal computer industry.

Analysis of Dell ‘s concern theoretical account

As discussed antecedently dell became successful by turn toing the common dead ends faced by other makers in the industry. Since Dell started fabricating its ain Personal computers in 1985 it started a 24/7 hotline for ailments and assured cargo of replacing parts within 24 to 48 hours. In 1990 Dell started selling through retail merchants such as CompUSA, monetary value nine and circuit metropolis.

Despite quickly turning grosss dell experienced its first loss in 1993. As a consequence it decided to draw out from the retail channels and went in to its roots of direct merchandising. The move put the company back on path by bring forthing net incomes shortly.

Dell ‘s Business theoretical account

The kernel of dingle ‘s concern theoretical account is selling straight to the client and construct to order production.

Direct gross revenues

This attack has two elements. Direct client relationship and aiming distinguishable client sections. By accommodating direct gross revenues method it must either make clients by its ain gross revenues force or via advertisement and other selling tools.

Direct client relationship

The direct attack provides dell a 6 % cost advantage over the indirect Sellerss. It besides gives a greater penetration in to its ain clients while Dell ‘s rivals have to trust on secondary selling research to cognize their ain client base. [ Beginning: Curry, James, and Kenney, Martin. ( 1999 ) Beating the clock: Corporate responses to rapid alteration in the Personal computer industry. California Management Review 42 ( 1 ) , pp8-36 ]

Through direct attack dingle can place client tendencies. Therefore it can fleetly react by conveying coveted merchandises to the market before its rivals.

The direct attack makes it easy for clients to cover with Dell. For case dingle adapted Boeing ‘s IT system thereby doing it easy for Boeing to run dingle merchandises. Dell uses EDI to treat orders and for a federal authorities defence contractor like Boeing this makes life easy as it terminate the demand to link to the cyberspace thereby procuring secretiveness.

However deficiency of extended range of channels is a drawback of direct attack. To work out this by sectioning its market by size dingle has chiefly focused on big clients. Who could make straight by dingles ain gross revenues force.

Customer cleavage for gross revenues

Dell has 3 sections of clients as relationship, dealing and public international clients.

The relationship clients are fortune 1000 companies. These Numberss about 50 organisations which include Toyota, Goldman sacks, Exxon, Microsoft, Boeing, Wal-mart, sears, Shell oil, Ford. These companies purchase at least $ 1 million yearly and histories for approximately 70 % of Dell ‘s gross revenues. To derive and retain these clients Dell provides extremely customized services.

[ Beginning: Jason, D. and Kraemer, K. L. ( 1998a ) . Globalization in the computing machine industry: Deductions of the Asian production web for the U.S. Information Systems Research 9 ( 4 ) , pp303-322 ]

These relationship clients are served by field based gross revenues representatives in the client ‘s premises every bit good as an equal figure of telephone service representatives. For case Dell has stationed a staff of 30 people to take attention of Boeings 140,000 computing machines at Boeing. This squad in add-on to pull offing the machines forecast future Personal computer purchases for Boeing.

The 2nd section dealing clients account for 30 % of gross revenues are chiefly little and average endeavors. They are served by several thousand strong gross revenues force that analyze anterior purchase records and supports clients in taking their purchases. The office and place clients account for 10 % of the entire gross revenues.

The international market is catered by a combination of subordinates and distribution understandings. Since purchasing straight from the maker is still a new construct in most states a more flexible attack is used here. However Dell decided to come in the Chinese and Brazilian market with the direct attack with the assurance that these states would back up the method.

Built to order production

Dell ‘s production system uses rules of merely in clip production that was foremost used by Nipponese car manufacturer Toyota, extinguishing the demand for extra stock list. The physique to order goes a measure farther from thin production for the customized production. Since the attack requires specific parts for usage physique machines the gross revenues force and production section every bit good as its providers work manus to manus to fulfill the constituent demand. The physique to order is the most critical point in Dells concern operations.

The physique to order is carried out chiefly through Dell ‘s web site. When the clients place an order through cyberspace they are supported by constellation direction package that enables the client to choose from a bill of fare of package and hardware options. The bill of fare assures merely the compatible constituents are selected. After having the order online the constellation inside informations are sent to the makers where all the collection and testing of machines are carried out.

Following is the illustration of how the built to order is carried out

Customer orders the machine through Dell web site

Configuration inside informations sent to fabricating floor

The complete assembly is carried out

After hardware were installed all the package are installed

The complete system is boxed and shipped

An outside proctor provider receives email to provide the proctor

Merchandise development

Dells one-year disbursement on research and development is estimated to be $ 250 million. the chief aim is to developing cutting border engineerings and measuring their ability to be adopted by the current systems.

Following are some betterments which were taken topographic point in Dells R & A ; D during past few old ages.

The full system is barred by merely five prison guards to cut down wastage.

Shorten cables to do collection, replacing and mending easy.

Use of fibre optics thereby cut downing the package downloading clip by 75 % .

Declined figure of machine retouches via merchandise redesign.

[ Beginning: Dell Annual Report. 2006, 2007, 2008, ( Online ) , Available from: & lt ; hypertext transfer protocol: & gt ; ( Accessed on 05th March 2011 ]

Dell ‘s usage of information and engineering

Polishing the concern theoretical account

One of the cardinal success factors of dingle computing machines is its extended usage of engineering. Dell ‘s public presentation prosodies is a major discovery in its analytical abilities. It analyses production operations, stock list degrees, hard currency aggregation, market portion, chance every bit good as selling overhead per client section. Table 1 illustrates how dell takes advantage of IT to polish its concern theoretical account.

Table 1

Beginning: [ Source hypertext transfer protocol: // id=61791 ( Accessed on 06th March 2011 ]

Dell besides uses engineering to a great extent in pull offing relationships. Although client service is outsourced at Dell it acts as a span between clients and 3rd party upholders or TPM. With its anterior experience in hardware fabrication Dell knows what sort of jobs arise to clients and which parts gives more jobs. With this experience it has incorporated often asked inquiries and solutions in to their web site.

Another advanced usage of engineering can be seen in Dell order Management System [ DOMS ] where all the client orders are recorded. The undermentioned illustration explains how the DOMS plants.

[ Beginning: Kraemer, K.L. , and Dedrick, J. and Yamashiro, S. ( 2000 ) Refining and Widening the Business Model with Information Technology: Dell Computer Corporation Center for Research on Information Technology and Organizations ( CRITO ) ]

Customer orders online

Order goes to the finance section to verify payments

Gos to the technology for the proficient feasibleness of the order

Order arrives at works and checked for the handiness of constituents

The is assembled an despatch to the finish

Widening the concern theoretical account

Dells IT staff non merely refines the concern theoretical account but besides involve in widening the concern theoretical account. This means they strive to widen concern with bing clients, reach new clients, cover new geographical countries and offer new merchandises to these markets.

The extending of the concern theoretical account can be widely observed via dingle website. This enables the company to make clients in distant countries where it does non hold a range through its gross revenues force. The web site besides enables the client to easy acquire in to telesales if they are willing to reach a tele gross revenues representative via company web site.

Another illustration of Dell ‘s extension of concern theoretical account is its customized web pages for the company ‘s corporate clients. In its web site dingle has customized web pages for each of its cardinal clients where employees of those companies can log in to these web pages and entree information.

[ Beginning: Dell Computers, SmithKline Beechamout beginning logistics direction demands ( 1995 ) Traf. degree Celsius World, 27 February, pp. 41 ]

The little Business Start up usher

When it comes to a little concern startup it involves many formalities and elements prior to step in to the sphere. Here we propose a 10 measure process that would guarantee a smooth take off for a start up. It includes funding, gestating the thought, selling, research, providers, licencing etc.

Stairss 1 – find the right tantrum

A individual who wishes to get down a concern might be overwhelmed by dozenss of new thoughts. But he should make up one’s mind which concern is right for him. A anterior experience every bit good as a good background on a certain country has a higher chance to win. Besides a acute involvement on a certain country tends to give good consequences in the hereafter. For cases dell ‘s desire to travel with hardware every bit good as Bill Gates ‘ involvement in programming drew them to the pinnacle.

Therefore one needs to transport out a echt ego study on his endowments, accomplishments every bit good as avocations. The individual should besides concentrate on his personality factor. Whether the individual is surpassing or prefers to maintain to him and even whether he likes to work 24/7 or enjoys the down town every bit much as the work clip should be considered. Because every concern has its ain personality and it is really of import that one ‘s personality being following with the concern.

Measure 2 – research the thought

Many people have fantastic thoughts but their concern fail in the market due to non holding proper market audience for the merchandise. The research on concern thought should reply the undermentioned inquiries.

What solutions does the merchandise offer?

Who are the possible purchasers?

Why will they purchase it?

Fro where will they purchase it? [ Online, ace market etc ]

What is the right monetary value that assures a fine-looking net income and are the clients ready to pay that monetary value?

Who will be the rivals?

When it comes to a little concern it can non provide to everybody. Therefore specifying the concern every bit good as mark market is critical. It is even applicable to a much larger organisation. For case Wal-Mart caters to dicker huntsmans while Tiffany ‘s niche is upscale jewellery clients although both are in the concern of retailing.

To look into whether the concern thought has a opportunity to be successful one demand to make more research and this clip it should be more formal. A good thought is to run into t5he local little concern development adviser or a selling professor of a local college. In add-on with the aid of nose count bureau one can analyse tendencies, studies, statistics, every bit good as other informations to derive farther penetration in to the market.

Measure 3- ciphering the start up cost

It is important to make up one’s mind the sum of hard currency needed for the start up. One demand sufficient capital to cover all the disbursals until the concern reaches the breakeven point. Expert usually recommends a capital demand that covers at least six months of disbursals in front for a start up.

Following is a check list of outgo for a start up.

Equipment, supplies, furniture and people

Inventory, merchandise development, license fee, permits, working capital, legal or professional fee.

Monthly rent, revenue enhancements, public-service corporations, transportation

Employee rewards

It is wiser to mention to similar start ups in the industry for the intent.

Step 4- composing the concern program

The certification of a concern thought has a higher significance. This significance is beyond the ability to procure a loan bundle. It ‘s a papers that shows concern chances every bit good as troubles in front such as under-capitalization and deficiency of sufficient markets.

A typical concern program contains three parts.

1. The concern concept – the merchandise or service, the relevant industry, the construction of the concern every bit good as the stairss taken to do the concern a success should be included.

2. The market topographic point – analysing the possible clients, their geographical locations, purchasing purposes. Besides an analysis on possible competition every bit good as programs to undertake such competition should be included.

3. fiscal country – with the aid of an comptroller every bit good as a accounting package bundle one demand to fix hard currency flow statement, interrupt even analysis every bit good as balance sheet and fiscal ratios.

Measure 5 funding

After make up one’s minding the type of concern one should make up one’s mind the ways of financing the concern.

The most common manner is self funding. For enterprisers by ways of forces nest eggs, loans from household and friends every bit good as 2nd mortgages. Crowd support is another option of funding where networking with people online who are willing to put little amounts in start ups.

One might some tomes qualify for forte loans. For case organisations such as count me provides loans to adult females enterprisers from little amounts up to $ 50,000. Some big Bankss offer particular loan strategies for adult females, minority groups ‘ every bit good little concerns.

Angel support every bit good as venture capitalists are two other beginnings of support which are worthwhile sing. There are investors who are looking for great concern thoughts which can be turned in to gilded mines. Such people can be located via online directories, industry associations, referrals via forces contacts every bit good as trade group members. For case sir Richard Branson ‘s virgin group website has a particular country where anyone with a great concern thought can reach the company. There feasible undertakings are qualified for funding from the virgin group.

Measure 6 – calling the concern

One of the most of import determinations in a start up is calling the concern. An effectual name will take to a strong trade name individuality in the market topographic point. One can utilize the trade grade electronic hunt system, patent and trade grade office every bit good as Canadian and European hallmarks prior to happening a name. Geting the aid of a hallmark lawyer or a trademark house would salvage money by avoiding future differences over the company name.

Determine the legal construction of the concern is besides of import. One should take this from a scope of types from exclusive proprietary, partnership, corporation or a limited liability company as different concern signifiers comes with different revenue enhancement effects.

Measure 7 – developing the selling program

Without marketing the being of the concern is non known. A selling program includes schemes and tools that will be used to pass on to the mark audience.

The selling program starts with depicting the market, its sections, possible clients and rivals. Based on this the communicating tools should be selected from a broad scope of choice from Television, wireless, print, hoardings, societal media, web logs, direct mail, web streamers etc.

Then the client service program [ CSP ] should concentrate on developing relationships that are reciprocally good for both the parties. As repetition clients are the life line of the organisation the CSP must supply replies on entire client satisfaction. For this money back warrants, managing client ailments every bit good as purchasing inducements should be considered.

The inclusion of introductory monetary value scheme, free audience services, every bit good as teaming up with complementary concerns in to the selling program is recommended.

Measure 8 – Constructing the support squad

Even for a soloprenuer a support squad is critical. A start up should concentrate on a mixture of wise mans, professional equals, every bit good as fiscal advisers. This support squad in the signifier of consultative board should be a pool of endowments, accomplishments, cognition and besides resources.

When it comes to engaging people for a start up housemans, university undergraduates, or portion timers would be suit good. If the concern involves more portion clip workers sing independent contractors is besides recommended.

Measure 9 – Executing the selling program

The developed selling program at phase 7 should be implemented here.

Under this the web site, selling stuffs, concern cards should be ready for distribution. Puting up car responses for client enquiries via e mail every bit good as through client hot line is critical. Following is a list of actions in implementing the selling program

Mailing a imperativeness release to local media on the gap of the concern

Traveling to the xanthous pages

Co-op advertisement with makers

Making voucher offers

Sending particular offer station cards to possible purchasers

Measure 10 – licensing

When get downing a concern one should see obtaining many licences. These may include province, county or local licences.

Following is a list of such licence that vary from industry to industry and on the type of concern.

Basic concern operations license – this is the type of licence that should be acquired from the disposal of the metropolis or county which the concern operates.

Zoning and land usage permits – This is for some place based concerns every bit good as fabrication organisations.

Health section permits – this is for concern involved in fixing nutrient and drinks.

Gross saless revenue enhancement licenses – in order to sell any merchandise or service.

Fire section permits – for organisations that attract batch of clients such as dark nines and bars.

Particular licence issued by province – this is required if the concern involves in selling followerss.


Lottery tickets


Fire weaponries

Particular licence for professional outfits by the province – concern involved in following businesss should acquire these licenses.

Medical attention


Auto fix

Real estate

Insurance gross revenues

Tax services

[ Source hypertext transfer protocol: // id=61791 ( Accessed on 06th March 2011 ]


Dell computing machines have come a long manner since its beginning from a university residence hall in mid 80s to go one of the largest Personal computer makers on the planet. While its rivals are fighting to undertake the clip based competition the company has managed to boom continuously. Dell ‘s secret expression of success is simple in nature but is extremely complicated in implementing it. Direct merchandising to the client and physique to client order are the kernel of Dell ‘s venerable concern theoretical account.

Dell ‘s extended usage of IT is besides a cardinal factor in its success. The usage of IT is seeable in every juncture from procurance, logistics, production, service and support. The usage of web site for direct merchandising, DOMS system every bit good as public presentation matrix for analytical intents has mostly contributed to company ‘s success.


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