The entrepreneurial approach in this matter is superior to the administrator process. Entrepreneurs are able to find opportunities faster and capitalize on them more successfully than administrators.
Where are the opportunities?
Opportunities are generated from external changes in the market. Therefore, entrepreneurs are constantly attuned to environmental changes that may suggest a favorable chance.
Entrepreneurs see changes as opportunities, and that mindset helps them to react with creativity and innovation.
Some of these external changes that produce and stimulate entrepreneurs to recognize opportunities are:
- Technology, which opens new doors and closes others.
- Consumer economics, which alters both the ability and willingness to pay for new products and services.
- Social values, which define new styles and standards of living.
- Political action and regulatory standards, which affect competition.
Independently of what these external factors are, entrepreneurs embrace the necessity of change, unlike their administrator counterparts.
A note on why administrators may be worst in this area
Administrators focus on how to not lose their comfort and status. That proves to be problematic in the long term, but in many cases, these restraints are imposed by internal pressures. Between these pressures are the following:
- The “Social Contract”: Managers feel a responsibility to employ human, manufacturing, technological, and financial resources once they have been acquired.
- Performance Criteria: Few executives are fired for neglecting to pursue an opportunity compared with the number punished for failing to meet ROI targets. Capacity utilization and sales growth, the typical measures of business success, are almost always based on the use of existing resources.
- Planning Systems and Cycles Opportunities do not show up at the start of a planning cycle and last for the duration of a three- or five-year plan. Better formal planning is often the enemy of organizational adaptability.
How do I capitalize on opportunities?
A crucial factor in capitalizing on opportunities is to move quickly. Creativity and innovation are useless without execution.
However, merely moving quickly does not guarantee success. Industry expertise is also necessary.
Entrepreneurs must know the territory or industry they operate in. They must also be able to recognize patterns as things develop.
Successful risk-takers have the confidence to assume that the missing elements of the pattern will take shape as they expect. It is impossible to have this confidence without extensive knowledge of the industry.