User:Anastasia Barrat/sandbox

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Entrepreneurial Resources

Entrepreneurial Resources refer to the assets mobilised by entrepreneurs during the process of building a business, organisation, or other initiatives. These resources can be anything that would assist entrepreneurs when developing a business, ranging from sources of financing (i.e. investment capital and lines of credit) to more abstract assets (i.e. knowledge of a particular field and networks of contacts). Information about entrepreneurial resources acts as a general foundation for building an entity, that can be universally applied.[1]

Beijing Central Business District


Types of Entrepreneurial Resources

Entrepreneurial resources are divided into two main categories; tangible and intangible. An individual’s propensity to act in foresight, use their intuition and creativity to take advantage of the resources around them will determine the success of their initiative. [2]

Tangible

Tangible resources are classified as physical and measurable assets that can be used in an entity’s operations and development. To the benefit of entrepreneurs, tangible resources in most cases can be easily liquidated into cash, reducing the risk of not being able to meet financial responsibilities and allowing businesses to remain solvent. If a company’s tangible assets are of greater value then their owing’s or risks, the business will remain steady.[2]

Tangible resources are particularly important for entrepreneurs because they can be utilized as collateral security when seeking to obtain loans. Creditors are more willing to allow entrepreneurs to borrow more if tangible assets are available to claim if the businessperson faces financial distress. That is why companies with few tangible assets tend to borrow less from creditors.[3]

Examples include Cash, Lines of credit, Inventory, Coworking Spaces, Machinery.

Intangible

Intangible resources are classified as assets that lack a physical substance. Unlike a tangible resource, it is difficult to measure intangible assets worth. These assets are assigned a market value based on their predicted economic benefit to the entrepreneur’s endeavour over time. An income is expected to be generated by the asset through its assistance in mobilizing the development of an entity. [3]

Examples include Previous Experience, Knowledge of a particular field, Network of contacts, Patents, Copyrights.

Both tangible and intangible entrepreneurial resources can be further distributed into two categories throughout the enterprise - held by one or a few individuals—individual entrepreneurial resources—or dispersed among a team of individuals—team entrepreneurial resources.[2]

Purpose

Access to entrepreneurial resources directly correlates with the speed of entrepreneurial success. The greater the availability of tangible and intangible assets, the greater the opportunity for an entrepreneur to reduce the financial and social risks involved in developing a business or organization it used appropriately. [4]

A study conducted by the International Entrepreneurship and Management Journal in 2016 demonstrates the likelihood of benefiting from implementing various entrepreneurial resources into a business. Adopting the Cox Regression Model, the author of the study, Hao-Chen Huang, looked at 374 small and medium Chinese enterprises to test the hypothesis that pre-existing assets such as funding and corporate networks increase the rate at which a new business can grow and prosper. Based on empirical analytical results, the study concluded that those lacking in the personal and social capitals required in entrepreneurship were less likely to succeed.[4]

Applications

Utilising resource-based theory (RBT), evidence indicates that firms with any degree of resources can gain at least temporary advantages by using those resources to develop and implement product-market strategies. [5]

Limitations

There are limitations to not having a universally recognised, clear ‘checklist’ of entrepreneurial resources required for business success. The term encompasses a very broad spectrum of assets, making it difficult for an entrepreneur to know if they have the correct resources for the success of their unique entity.[6]

Developed by Professor Jay Mitra, ‘Entrepreneurship Scoreboard’ system can be adopted to combat this limitation, using multiple factors of enterprise, human resources, innovation, the social economy, initiative and knowledge to ensure businesses have the right combination of assets when beginning their new venture.[6]

References

  1. ^ "Definition: Entrepreneurial Resource". BusinessDictionary.com. WebFinance Inc. Retrieved 12 May 2019.
  2. ^
    ISSN 1047-7039
    .
  3. ^ a b Kenton, Will. "Tangible Asset". Investopedia. Retrieved 2019-05-12.
  4. ^ a b "International Entrepreneurship and Management Journal - incl. option to publish open access". springer.com. Retrieved 2019-05-12.
  5. ISSN 1097-0266
    .
  6. ^
    ISSN 0950-4222
    .
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