Understanding the Timmons Model of Entrepreneurship

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

Jeffery Timmons of Babson College in Massachusetts developed the Timmons Model of

Entrepreneurship as his doctorate thesis at Harvard University. Further research and
case studies have since then enhanced this model as a guide for entrepreneurs to
increase their chances of success.

The Timmons model bases itself on the entrepreneur. The entrepreneur searches for an
opportunity, and on finding it, shapes the opportunity into a high-potential venture by drawing
up a team and gathering the required resources to start a business that capitalizes on the
opportunity. In the process of starting the business, the entrepreneur risks his or her career,
personal cash flow and net worth. The model bases itself on the premise that the
entrepreneur earns rewards in commensuration with the risk and effort involved in starting or
financing the business.

The Opportunity Factor

The Timmons model of entrepreneurship states that entrepreneurship is opportunity driven, or
that the market shapes the opportunity. A good idea is not necessarily a good business
opportunity and the underlying market demand determines the potential of the idea. An idea
becomes viable only when it remains anchored in products or services that create or add
value to customers, and remains attractive, durable, and timely.

Unlike conventional entrepreneurship models that start with a business plan and
identify an opportunity, the Timmons model starts with a market opportunity. The
business plan and the financing receive secondary importance, and come only after
identification of a viable opportunity. The model holds that a sound business
opportunity would readily receive financing, and identification of the opportunity first
makes the business plan failure-proof.

The Team Factor

Once the entrepreneur identifies an opportunity, he or she works to start a business by

putting together theteam and gathering the required resources. The size and nature of the
opportunity determines the size and shape of the team.
The Timmons model places special importance on the team and considers a good team
indispensable for success. A bad team can waste a great idea. Among all resources, only a
good team can unlock a higher potential with any opportunity and manage the pressure
related to growth.
The two major roles of the team, relative to the other critical factors are:

Removing the ambiguity and uncertainty of the opportunity by applying

creativity.

Providing leadership to manage the available resources in the most effective

manner by interacting with exogenous forces and the capital market context that
keeps changing constantly.

The Timmons model holds the entrepreneurs ability to conjure up a great team as a major
factor of business success. Great teams, however, always remain scarce and the responsibility
is on the entrepreneur to coach team members to excel.

The Resources Factor

The Timmons model discounts the popular notion than extensive resourcesreduce the risk of
starting a venture and encourages bootstrapping or starting with the bare minimal
requirements as a way to attain competitive advantages. The advantages of bootstrapping
include:

Drives down market cost

Instills discipline and leanness in the organization

Encourages creative resources to achieve more with the limited amount of

money and other resources available

Some of the practical applications of bootstrapping include leasing instead of buying

equipment, working out of a garage instead of rented space, and the like.
Like the formation of the team, the size and type of opportunity determine the level and
extent of resources required. While good resources remain scarce, businesses with high
potential opportunities and a good management team will have no problem attracting money
and other resources.
The entrepreneur works to minimize and control rather than maximize and own." The role
of the entrepreneur in managing resources includes building a good resource base to draw
from when required and drawing up a business plan through a fit and balance method that
balances the available resources with the opportunity and the potential of the team.

A Reality Check

Many entrepreneurs try to have all resources in place before starting a new venture. The
Timmons model of entrepreneurship discounts this notion and holds only three factors as
crucial: a market driven opportunity, availability of a good team and adequate resources.
These three critical factors of entrepreneurship remain interlinked, with any change in one
factor having an impact on the other two.
The reality is that opportunity, team, and resources seldom match. The Timmons model
considers the major role of the entrepreneur to effect a match of the three critical factors of
entrepreneurship at the correct time. Success of the business venture depends on the ability
of the entrepreneur to ensure balance by applying creativity and leadership, and by
maintaining effective communications.

References

Timmons, Jeffry, A.; Zacharakis, Andrew, and Spinelli, Stephen. (2004). Business Plans
That Work: A GuideFor Small Business. McGraw Hill.

ceotactics.net. The Entrepreneurial Process Part 3 The Timmons Model

Minniti, Maria, et. al. (2006). Entrepreneurship: The Engine of Growth. Praeger
Perspectives

Images by the author N Nayab

My First task is to analyse the Malcino case using Timmons entrepreneur framework
(entrepreneur-opportunity-resources)
According to The Timmons Model of the Entrepreneurial Process the most significant part of
any business is the entrepreneur himself. In addition to the entrepreneur it consists of the
team, available opportunities and existing resources like I stated earlier the entrepreneur is
the key ingredient.
Kalin is an extremely good entrepreneur I know this for a number of reasons that I will discuss.
Firstly Kalin is not afraid of taking risks in the sense that he does not know goals of his
business (how much profit he can attain). However this does not stop him, Kalin jumps right in
and orders his cheese and like a good entrepreneur he controls his means rather than
objectifying the goal.
Secondly, he goes the extra mile, what I mean by this is when he needed financing and he got
turned down he continued to keep calling till he gathered his required amount. To back this
up, Kalin did not attain funds from a bank or an investor he followed the entrepreneurs path
and used the 4Fs (family, friends, fool and founder)
Another reason Kalin meets the criteria of good entrepreneur is again based on the fact that
he does not objectify the goal but controls the means. This was clearly visible when he
requested storage from the butcher who refused him a secondary key and clearance to the
inventory as well as access to the store when he himself was not present. This however did
not stop Kalin, he jumped on the positive side of the opportunity and signed the deal with the
stranger.
The Timmons entrepreneurship is a model that considers opportunities teams and
resources available to an entrepreneur and holds that success depends on the
ability of the entrepreneur to balance these critical factors. When applying the first
part of the Timmons model to the Malincho case, Kalin got the idea of importing
feta cheese and selling it to fellow Bulgarians on the East coast of America who
were hungry for a taste of home.
Once he identified this opportunity, he set to work putting together the necessary
resources to make his business a reality. He had to find a good supplier to order
large quantaties of quality cheese and have it shipped to him. This also meant a lot
of research on the U.S. Customs Department import regulations, restrictions and
fees associated with food imports. When he needed to raise the $40,000 to order
the 28,000 pounds of cheese, he called all his friends who expressed interest and
encouragement in his business venture. He even called a family friend in Bulgaria
to ask her to join into the business as well and to make sure his product was
purchased and shipped to the U.S.
In order to take his business to the next phase of early stage-growth, Kalin should
look for ways to develop. He must do this to avoid 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. Kalin needs to access whether his
business can cope with expansion, if he has the resources and systems in place to
carry on the existing business while expanding elsewhere and if new initiatives are
likely to disrupt existing performance. Working with the customer current customer

following he has, he must find ways to please his current clientele while building
resources to attract new ones.
Kalin was very smart to start up a website for expansion. This gave him the
opportunity to add other gourmet products and be able to be able to...
MISSION STATEMENT
The mission of malincho.com is to provide quality products to consumers while
developing lasting and trusting relationships.
GOALS (OBJECTIVES)
* To maintain a professional image (to be perceived as highly successful)
* To have profit
* To continue the extension of Malincho resulting in reduction of debt
* Expansion of company to hire employees and create a storefront
* To gain consumers trust
* To provide quality products for a low price
STRATEGIES1.1. CORPORATE STRATEGY- Importing of European food products with the
intent of resale.
1.2.1. Growth- To open a storefront while maintaining the internet sales, and
hiring employees.
1.2.2. Stability- Use trust based business to secure longevity of consumers
1.2.3. Renewal- To assess situation as it progresses, and make adjustments as
necessary
(i.e. switch back to cash based sales.)
1.2.4.1. Retrenchment- Retrenchment strategy was not presented in the
case.
1.2.4.2. Turnaround- Add additional products to online stock to drive
addition sales. Implementing online cash sales for weary consumers.
1.2. BUSINESS STRATEGY
1.3.4. Focus Strategy- Malincho is focused his on a niche market which is the
Bulgarian population. SWOT analysis...
Departments
Cheese, Meats And Seafood Spreads And Salads Chocolate Wafers And Cookies
Candy Grains, Pasta & Cereals Snacks Spices Coffee And TeaFruit Jams And Honey
Juices And Water
Detergents And Cosmetics Other Products
malincho.travel
Find consolidator* airline tickets for cheap airfare on flights to Bulgaria and international
flights. Online Bulgaria airline tickets booking. Fly to Bulgaria for less.

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