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Understanding the Timmons Model of Entrepreneurship

According to the Timmons Model of Entrepreneurship the three critical factors of a successfulventure are opportunities, teams, and resources. The successful entrepreneur is one that canbalance these critical factors.

•  Jeery Timmons of Babson College in Massachusetts developed the Timmons Model of

Entrepreneurship as his doctorate thesis at arvard !niversity. "urther research andcase studies have since then enhanced this model as a guide for entrepreneurs toincrease their chances of success.

 The Timmons model bases itself on the entrepreneur. The entrepreneur searches for anopportunity, and on #nding it, shapes the opportunity into a high$potential venture by dra%ingup a team and gathering the re&uired resources to start a business that capitali'es on theopportunity. (n the process of starting the business, the entrepreneur ris)s his or her career,personal cash *o% and net %orth. The model bases itself on the premise that theentrepreneur earns re%ards in commensuration %ith the ris) and eort involved in starting or#nancing the business.

The Opportunity Factor

 The Timmons model of entrepreneurship states that entrepreneurship is opportunity driven, orthat the mar)et shapes the opportunity. A good idea is not necessarily a good businessopportunity and the underlying mar)et demand determines the potential of the idea. An ideabecomes viable only %hen it remains anchored in products or services that create or addvalue to customers, and remains attractive, durable, and timely.

• !nli)e conventional entrepreneurship models that start %ith a business plan and

identify an opportunity, the Timmons model starts %ith a mar)et opportunity. Thebusiness plan and the #nancing receive secondary importance, and come only afteridenti#cation of a viable opportunity. The model holds that a sound businessopportunity %ould readily receive #nancing, and identi#cation of the opportunity #rstma)es the business plan failure$proof.

  The Team Factor

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+nce the entrepreneur identi#es an opportunity, he or she %or)s to start a business byputting together theteam and gathering the re&uired resources. The si'e and nature of theopportunity determines the si'e and shape of the team.

 The Timmons model places special importance on the team and considers a good teamindispensable for success. A bad team can %aste a great idea. Among all resources, only agood team can unloc) a higher potential %ith any opportunity and manage the pressurerelated to gro%th.

 The two major roles of the team, relative to the other critical factors are

• -emoving the ambiguity and uncertainty of the opportunity by applying

creativity.

• roviding leadership to manage the available resources in the most eective

manner by interacting %ith e/ogenous forces and the capital mar)et conte/t that)eeps changing constantly.

 The Timmons model holds the entrepreneur0s ability to con1ure up a great team as a ma1orfactor of business success. 2reat teams, ho%ever, al%ays remain scarce and the responsibilityis on the entrepreneur to coach team members to e/cel.

  The Resources Factor

 The Timmons model discounts the popular notion than e/tensive resourcesreduce the ris) ofstarting a venture and encourages bootstrapping or starting %ith the bare minimalre&uirements as a %ay to attain competitive advantages. The advantages of bootstrappinginclude

• 3rives do%n mar)et cost

• (nstills discipline and leanness in the organi'ation

• Encourages creative resources to achieve more %ith the limited amount of

money and other resources available

4ome of the practical applications of bootstrapping include leasing instead of buyinge&uipment, %or)ing out of a garage instead of rented space, and the li)e.

5i)e the formation of the team, the si'e and type of opportunity determine the level ande/tent of resources re&uired. 6hile good resources remain scarce, businesses %ith highpotential opportunities and a good management team %ill have no problem attracting moneyand other resources.

 The entrepreneur %or)s to 7minimi'e and control8 rather than 7ma/imi'e and o%n.9 The roleof the entrepreneur in managing resources includes building a good resource base to dra%from %hen re&uired and dra%ing up a business plan through a 7#t and balance8 method thatbalances the available resources %ith the opportunity and the potential of the team.

  A Reality Check 

Many entrepreneurs try to have all resources in place before starting a ne% venture. The Timmons model of entrepreneurship discounts this notion and holds only three factors ascrucial a mar)et driven opportunity, availability of a good team and adequate resources.

 These three critical factors of entrepreneurship remain interlin)ed, %ith any change in onefactor having an impact on the other t%o.

 The reality is that opportunity, team, and resources seldom match. The Timmons model

considers the ma1or role of the entrepreneur to eect a match of the three critical factors ofentrepreneurship at the correct time. 4uccess of the business venture depends on the abilityof the entrepreneur to ensure balance by applying creativity and leadership, and bymaintaining eective communications.

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References

•  Timmons, Jery, A.: ;achara)is, Andre%, and 4pinelli, 4tephen. <=>>?@. Business lans

 That 6or) A 2uide"or 4mall Business. Mc2ra% ill.

• ceotactics.net. The Entrepreneurial rocess art The Timmons Model

• Minniti, Maria, et. al. <=>>@. Entrepreneurship The Engine of 2ro%th. raeger

erspectives

• (mages by the author D Dayab

My "irst tas) is to analyse the Malcino case using Timmons entrepreneur frame%or)<entrepreneur$opportunity$resources@According to The Timmons Model of the Entrepreneurial rocess the most signi#cant part ofany business is the entrepreneur himself. (n addition to the entrepreneur it consists of theteam, available opportunities and e/isting resources li)e ( stated earlier the entrepreneur isthe )ey ingredient.alin is an e/tremely good entrepreneur ( )no% this for a number of reasons that ( %ill discuss."irstly alin is not afraid of ta)ing ris)s in the sense that he does not )no% goals of hisbusiness <ho% much pro#t he can attain@. o%ever this does not stop him, alin 1umps right inand orders his cheese and li)e a good entrepreneur he controls his means rather thanob1ectifying the goal.4econdly, he goes the e/tra mile, %hat ( mean by this is %hen he needed #nancing and he gotturned do%n he continued to )eep calling till he gathered his re&uired amount. To bac) thisup, alin did not attain funds from a ban) or an investor he follo%ed the entrepreneur0s pathand used the ?"0s <family, friends, fool and founder@Another reason alin meets the criteria of good entrepreneur is again based on the fact thathe does not ob1ectify the goal but controls the means. This %as clearly visible %hen here&uested storage from the butcher %ho refused him a secondary )ey and clearance to theinventory as %ell as access to the store %hen he himself %as not present. This ho%ever didnot stop alin, he 1umped on the positive side of the opportunity and signed the deal %ith thestranger.

The Timmons entrepreneurship is a model that considers opportunities teams and

resources aaila!le to an entrepreneur and holds that success depends on the

a!ility of the entrepreneur to !alance these critical factors" #hen applying the $rst

part of the Timmons model to the Malincho case% &alin got the idea of importing

feta cheese and selling it to fellow 'ulgarians on the East coast of America who

were hungry for a taste of home"

Once he identi$ed this opportunity% he set to work putting together the necessary

resources to make his !usiness a reality" (e had to $nd a good supplier to order

large )uantaties of )uality cheese and hae it shipped to him" This also meant a lotof research on the U"*" Customs +epartment import regulations% restrictions and

fees associated with food imports" #hen he needed to raise the ,-.%... to order

the /0%... pounds of cheese% he called all his friends who e1pressed interest and

encouragement in his !usiness enture" (e een called a family friend in 'ulgaria

to ask her to join into the !usiness as well and to make sure his product was

purchased and shipped to the U"*"

2n order to take his !usiness to the ne1t phase of early stage3growth% &alin should

look for ways to deelop" (e must do this to aoid competitors from growing and

taking the market share from him% which could weaken his position" Timing is

critical to the success of any growth strategy" &alin needs to access whether his!usiness can cope with e1pansion% if he has the resources and systems in place to

carry on the e1isting !usiness while e1panding elsewhere and if new initiaties are

likely to disrupt e1isting performance" #orking with the customer current customer

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following he has% he must $nd ways to please his current clientele while !uilding

resources to attract new ones"

&alin was ery smart to start up a we!site for e1pansion" This gae him the

opportunity to add other gourmet products and !e a!le to !e a!le to"""

M2**2O4 *TATEME4T

The mission of malincho"com is to proide )uality products to consumers while

deeloping lasting and trusting relationships"5OA6* 7O'8ECT29E*:

; To maintain a professional image 7to !e perceied as highly successful:

  ; To hae pro$t

  ; To continue the e1tension of Malincho resulting in reduction of de!t

  ; E1pansion of company to hire employees and create a storefront

; To gain consumer<s trust

  ; To proide )uality products for a low price

*TRATE52E*3

="=" COR>ORATE *TRATE5?3 2mporting of European food products with the

intent of resale"

="/"=" 5rowth3 To open a storefront while maintaining the internet sales% andhiring employees"

  ="/"/" *ta!ility3 Use trust !ased !usiness to secure longeity of consumers

  ="/"@" Renewal3 To assess situation as it progresses% and make adjustments as

necessary

7i"e" switch !ack to cash !ased sales":

  ="/"-"=" Retrenchment3 Retrenchment strategy was not presented in the

case"

  ="/"-"/" Turnaround3 Add additional products to online stock to drie

addition sales" 2mplementing online cash sales for weary consumers"

  ="/" 'U*24E** *TRATE5? 

  ="@"-" Focus *trategy3 Malincho is focused his on a niche market which is the'ulgarian population" *#OT analysis"""

+epartments

Cheese% Meats And *eafood *preads And *alads Chocolate #afers And Cookies

Candy 5rains% >asta Cereals *nacks *pices CoBee And TeaFruit 8ams And (oney

 8uices And #ater

+etergents And Cosmetics Other >roducts

malincho"trael

"ind consolidatorF airline tic)ets for cheap airfare on *ights to Bulgaria and international*ights. +nline Bulgaria airline tic)ets boo)ing. "ly to Bulgaria for less.

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