Concept of Timmon’s Model in Business

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Table of Contents

Introduction
Literature Review
Conclusion
List of References

Introduction

Timmon’s model constitutes a framework that explains the entrepreneurship process, from the identification to the eventual evaluation of venture potentials. The entrepreneurship process, as defined by Timmon, helps in ascertaining whether new business models are viable and emphasising the rigor within opportunity assessment.

The most important aspect of the Timmon’s model is the fact that it is influenced by opportunity, although matched balance is inevitable with regard to the available resources, as well as an entrepreneurial team that is highly evolved. Creativity (Minniti, 2007, p. 13), on the other hand, is required to moderate the strengths of opportunity, the team, and resources relationship.

Additionally, leadership and communication should work jointly with the creativity to moderate the three important factors of the entrepreneurial process. The present fits and gaps inherent among the three components of opportunity, team, and resources require the operationalisation of business planning exercise. Investors pay a lot of attention to the attributes that can be controlled and manipulated in the process of entrepreneurship.

This is also referred to as the analysis stage, where the investors and founders carefully assess the due diligence process with the view of scrutinising the possible risks, as well as determine the possible changes that if implemented could improve the chances of success of a particular venture (Minniti, 2007, p. 14). Most enterprises fall into the trap of failing to progress owing to perceptions relating to lack of resources.

The Timmon’s model is significant for enterprises because it consists of highly complex foundations that illustrate how dynamic the entrepreneurship process can get. This essay analyses the Timmon’s model, drawing a comparison with other similar entrepreneurship frameworks. It provides the advantages, as well as the disadvantages of the model that could potentially limit the effectiveness of an enterprise.

Literature Review

Advantages of the Timmon’s Model

The Timmon’s model identifies three important factors that make up the entrepreneurial process, which include the opportunity, the entrepreneur and his management team, as well as the resources for the enterprise. For any entrepreneur, dividing the entire process resulting in the three important factors makes it easy to apply the much needed focus for each phase to achieve the desired results (Shane & Venkataraman, 2000, p. 217).

In other words, the approach adopted by the Timmon’s model is normative in nature, where the entrepreneur is recognised as the most critical player who requires adequate and effective knowledge to influence the entrepreneurship process. The model helps in establishing five crucial aspects that drive the performance of any given enterprise.

Firstly, it identifies the fact that enterprises are opportunity driven, thus the success of the business will depend on how its players identify the opportunities. Secondly, the model bestows the key role of driving enterprises to both the entrepreneur, as well as the entrepreneurial team. Thirdly, the concept is overly resource parsimonious, but creative in the sense that the enterprise should focus mostly on spending less of its available resources but achieve tangible creativity as the ultimate goal.

Subsequently, Timmon’s model emphasises on the need for enterprises to focus on attaining the right fit and balance with respect to the opportunities, resources, and the team (Shane, 2000, p. 448). Finally, it is an integrated and holistic concept where all the important factors that shape an enterprise have been identified and given the much needed concentration and focus to achieve perfect results.

Another critical aspect of the model is the fact that it is flexible compared to other entrepreneurial concepts and theories. It identifies components that are easy to control, and which can easily be assessed, manipulated, moulded, as well as altered to provide entrepreneurs with the opportunity to change risk-to-reward equation and attain positive and favourable results. The basing of its argument from the entrepreneurs’ point of view makes the Timmon’s model more effective and result oriented.

The entrepreneur, thus, is tasked with identifying opportunities, transforming the opportunity to establish a business venture that is of high potential, and looking for the right teamwork combination to achieve the results. In doing this, the entrepreneur must always remember to pull all the necessary resources required to eventually establish a business venture that optimises on the available opportunity fully.

As (Minniti, 2007, p. 14) establishes, the process of initiating a new business venture places a lot of risks on the entrepreneur’s self-employed career, including his net worth and the personal cash flow. However, the onus is on him to manage the business well through the coordination of the efforts involved, if at all he wishes to earn good rewards.

Opportunity

The Timmon’s model identifies opportunity among the three critical factors that shape the entrepreneurial process (Bygrave & Zacharakis, 2011, p. 56). However, in contrast to other similar models, Timmon’s concept does not consider business plan, money, teams, strategy, or networks as the most crucial. Instead, much of the model’s emphasis is placed on opportunity as the main force of influence.

This is important because for any aspiring entrepreneur, the model helps in his planning especially on how to determine the right opportunity. This, in turn, ensures the enterprise’s long-term success. All parties involved in the entrepreneurial process must play their roles to the full to create a favourable entrepreneurial environment. From Timmon’s model, an aspiring entrepreneur is able to realise the fact that great business does not occur only as a result of a good idea (Bygrave & Zacharakis, 2011, p. 83).

Instead, great business performance results from market demand. The entrepreneur has to ensure that his product or service idea is positioned in a way that creates value to consumers and remains attractive. Additionally, the business idea has to come up at the right time and be durable.

Timmon’s model opposes the notion that funding is the most significant requirement of a business entity. Instead, the argument provided in this model stresses the fact that attaining business funding relies on the quality and effectiveness of the business idea, which in turn depends on the identification of opportunity.

Resources

While other entrepreneurial models signify how important resources are as the basis for good business performance, the Timmon’s model holds a contrasting view of the notion (Bygrave & Zacharakis, 2011, p. 125). This model implores on the entrepreneur, instead, to consider bootstrapping or the venturing into business with only minimum available resources. Bootstrapping enables the business to achieve several advantages in the sense that it reduces the cost of operation.

Production in any firm is likely to remain expensive if no efforts are made to enhance effectiveness. In this regard, bootstrapping enables the organisation to operate in a lean way through the imposition of discipline, especially in the way in which the organisation spends its financial resources.

Bootstrapping also influences the maximisation of resource use where the underlying principle of the organisation is to achieve better results using limited funds and resources. In applying the bootstrapping technique, the organisation may resolve not to buy and own assets permanently, especially the highly expensive ones. Instead, the resolution is to use leased property only.

Team

The third and final entrepreneurial factor, the entrepreneurial team, comprises of the best talents for the organisation. Such talents, nevertheless, can only be gathered after an opportunity is identified and plans made on how to transform the same into a profitable venture. The team is important in this process because it represents the knowledge database of the firm (Bygrave & Zacharakis, 2011, p. 199).

Having a great team in place is profitable to the organisation because it helps the entrepreneur in making effective decisions for the organisation. Having a good team makes it possible and easier for the enterprise to determine the highly potential resources that can push for better results.

The Timmon’s model emphasizes on the importance of teams in the entrepreneurial process as a perfect means of reducing or eliminating the uncertainty that may be surrounding the available opportunity altogether (Politis, 2005, p. 399). This mainly happens through enhancing creativity. Teams also provide the needed leadership in an enterprise, which manages the resources by integrating them with the external forces that manipulate a business.

Disadvantages of the Model

The Timmon’s model depicts the entrepreneurial process as comprising three phases, which he identifies as opportunity determination, identification of resources, and team establishment. However, the argument provided in this model insists that these phases are not occurring in isolation. This is confusing for an aspiring entrepreneur because the process has to have its start or beginning point to make it clear for planning and execution (Sarasvathy, 2001, p. 243).

For instance, while it is true that an entrepreneur has to have a business idea to venture into business, it is not possible to make the idea realistic without having the resources in place. Thus, the arguments propounded in the model lack continuity and cannot be practically employed in an easy way.

It is not possible to establish a highly effective team that is comprised of great talent within a short time of initiating a business. In actual sense, the entrepreneur will need to identify his business idea and find the resource to support it before seeking to establish the team. If the nature of the enterprise is such that the entrepreneur has to work with a team almost immediately, then there is no guarantee that the team will be effective in its operations (Littunen, 2000, p. 295).

Because teams are made up of several people, achieving its objective may still require more time even if its members are highly skilled. People have to learn about their colleagues and understand what factors make it easy for the team to perform excellently.

They must also learn about the opportunity through experimentation, which may require significant time. It may not be easy for the enterprise to pick up as may be anticipated because of the inherent conflicts and time needed for the team to learn about the opportunity. In this regard, team establishment should not be considered as a critical factor in the same level with an opportunity and resource.

Conclusion

The Timmon’s framework seeks to make the entrepreneurial process an easy task by breaking the entire procedure into three important phases. The initial phase involves the identification of opportunity, where the aspiring entrepreneur considers the most practical business idea to venture in. The basic principles in opportunity identification involve establishing product or service ideas that add value to consumers.

The second critical factor in the model is resource identification. The Timmon’s framework, nevertheless, does not place much emphasis on the resource size because it assumes the nature of the opportunity and the resulting business plan is capable of ensuring that the firm attains adequate funding. Finally, the model establishes the need for the entrepreneur to formulate a team of experts to help in the running of the enterprise.

Overly, I agree with the Timmon’s framework because it offers very practical ideas about business formation. No business can initiate its operations without establishing the opportunity available in the market and optimising on its returns in the long run. Additionally, resources are always scarce, thus the entrepreneur has to identify ways of limiting the use while at the same time optimising on the returns.

The business team is crucial because it determines the strategy of the enterprise. Any enterprise has to anticipate its future and lay plans in advance that will make it perform effectively. This strategising role is achieved by the business team, which works in cooperation with the lead entrepreneur. The model further identifies the need for the entrepreneur to achieve a perfect fit of all the three critical factors to register positive results.

Nevertheless, the model has limitations on its formation that may hinder effectiveness. The three critical factors do not need to appear in a sequential manner where opportunity is given the greatest priority. Teams may only be critical once the enterprise has gone through its formation stages, but not necessarily at the beginning.

List of References

Bygrave, WD, & Zacharakis, A 2011, Entrepreneurship, John Wiley & Sons, Hoboken, NJ

Littunen, H 2000, ‘Entrepreneurship and the characteristics of the entrepreneurial personality’, International Journal of Entrepreneurial Behaviour & Research, vol. 6, no. 6, pp. 295-309.

Minniti, M 2007, Entrepreneurship: The engine of growth, Praeger Publishers, Westport, CT

Politis, D 2005, ‘The process of entrepreneurial learning: a conceptual framework’, Entrepreneurship Theory & Practice, vol. 29, no. 4, pp. 399-424.

Sarasvathy, SD 2001, ‘Causation and effectuation: toward a theoretical shift from economic inevitability to entrepreneurial contingency’, Academy of Management Review, vol. 26, no. 2, pp. 243-63.

Shane, S 2000 ‘Prior knowledge and the discovery of entrepreneurial opportunities’, Organization Science, vol. 11, no. 4, pp. 448-469.

Shane, S, & Venkataraman, S 2000, ‘The promise of entrepreneurship as a field of research’, Academy of Management Review, vol. 25, no. 1, pp. 217-226.

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