This research paper explores the concept of entrepreneurship from the perspective of Timmon's Model of Entrepreneurship. It provides useful insights of factors that promote entrepreneurship

1. 1
MANAGING HUMAN CAPITAL ENTREPRENEURSHIP USING TIMMON MODEL
OF ENTREPRENEURSHIP
By
Samuel Gibbs

2. 2
Table of Content
..........................................................................................................................................................1
By.....................................................................................................................................................1
Table of Content..............................................................................................................................2
Introduction......................................................................................................................................3
Literature Review.............................................................................................................................3
Timmon’s Model..........................................................................................................................3
1.Opportunity ...........................................................................................................................3
2.The entrepreneur....................................................................................................................5
Entrepreneurial Team Formation .............................................................................................7
3.Resources ..............................................................................................................................7
Figure 1: Timmons model................................................................................................................9
Critical Analysis ..............................................................................................................................9
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

3. 3
Managing Human Capital Entrepreneurship
Introduction
Entrepreneurship is a process that results in the creation of new venture that meets certain
needs and create value. Entrepreneurship is a key driver of economic growth as it leads to job
creation, and wealth creation (Fisher, 2009). However, the entrepreneurship process is often
viewed as unpredictable and disorderly. Various models have been established in attempts to
explain this process. Timmon’s model is one of the theoretical models that have been developed
to explain the entrepreneurial process. According to the model, three elements are necessary for
the start a successful new business; the opportunity; the entrepreneur, and the resources needed
to start the company and make it grow (Bygrave and Zacharakis, 2011).
Literature Review
Timmon’s Model
Entrepreneurship is a complex process. According to Timmon’s model, the entrepreneurial
process comprises of three major components; the opportunity, the entrepreneur, and resources.
1. Opportunity
The entrepreneurial process begins with the capacity of the entrepreneurial individual to
recognize opportunities. An opportunity is generally an idea (Klein, 2008). However, not all
ideas are opportunities. According to Timmon (2009), there are several characteristics that an
idea must possess in order for it to be considered an entrepreneurial opportunity. The first
characteristic is attractiveness. The idea must present an attribute that is desirable to the
entrepreneur (Kruger, 2004). One of these attributes is the size of the market. The market for the

4. 4
opportunity must be large and growing in order for it to be considered attractive. Another
characteristic that defines attractiveness is cost. The costs associated with developing the
opportunity must be low enough to justify investments. Where costs are high, the return must
also be high enough to justify investment.
Durability is also a critical characteristic that an idea must possess in order for it to be
considered an opportunity (Klein, 2008). This implies that the idea must present sustainable
benefit to the entrepreneur. Ideas that present short term benefits may not be suitable in terms of
supporting entrepreneurship. Durability can be viewed in terms of the concept, marketing,
management, growth, replicability, scalability, and other attributes (Kruger, 2004). Replicability
refers to the level to which the ideas can be reproduced. For an idea to be durable, it must be
possible to replicate this idea in different environments. Replicability also means that the idea
should enable standardization so at it can be produced in the absence of the entrepreneur (Smith,
Mathews & Schenkel, 2009). McDonalds is one of the organizations that have excelled thorough
the ability to replicate their idea. McDonald has replicated the vision and concept developed by
the founder among thousands of entrepreneurs around the world through training. Scalability
refers to the level to which the idea can be implemented in large scale (Smith, Mathews &
Schenkel, 2009). It is similar to replicability, but scalability is largely concerned with reducing
the cost of production. An idea that can be produced in large scale will enable the entrepreneur to
recover cost and make profits. An idea that requires the personal touch of the entrepreneur has
limited scalability. The idea must also be easy to sell. This is what marketing is about. The
concept and benefits of the idea must be easy to communicate to the potential customers (Smith,
Mathews & Schenkel, 2009). Growth implies that the idea should enable sharing with other in
order to create additional wealth to investors. The idea should also be easy to manage.

5. 5
An idea must also be timely in order for it to be considered as an opportunity (Belgrund,
2007). This implies that it must come at a time when it is needed most in terms addressing the
need of a market. It must respond to the existing conditions within the business market. For
instance, Microsoft’s idea of developing the operating system was timely because it came at a
time when the computing technology was gaining impetus. An opportunity must also be founded
on a product or service (Timmon, 2009). This implies that it must add value to customers. The
product must also be affordable to consumers.
Many people have the misconception that entrepreneurship entails the invention of new
products. However, this is not the case. It may entail producing existing product using new
technology thus delivering the product at affordable prices (Rumelt, 2010). It may also entail
discovery of a new method of distribution that adds value to the customer or a new method of
packaging products that also add value to the consumer.
2. The entrepreneur
The entrepreneur plays a significant role in the entrepreneurship process. He is the
initiator of the idea. Without the entrepreneur, the enterprise cannot be conceived (Mazzarol,
2008). The entrepreneur is also the dynamic force that brings together all the other components
of the entrepreneurial process. They are considered as key agents of creativity, who lead to the
development of new opportunity or new growth. They are highly innovative, and growth
oriented. Kruger (2004) argues that entrepreneurs have cognitive structures that are oriented
towards entrepreneurial events. These structures enable them to make sense out of uncertain
events. They are able to distinguish opportunities from ideas, exploit these opportunities, and
turn them into valuable goods and services.

6. 6
Risk taking is one critical skill that defines an entrepreneur (Burdus, 2010). Generally,
people can be classified as risk takers and risk avoiders. Entrepreneurs identify new business
opportunity and take risks with the hope of making profits and achieving growth. Another
critical skill that defines an entrepreneur is market timing (Gompers & Covner, 2008). An
entrepreneur must have the skill to know the right time to venture into an area. Entrepreneurs
must also posses the skill to analyze the market, segment customers and select the most suitable
customers to target. This requires skills in terms of conducting market research and identifying
the needs of the market. The entrepreneur is also responsible for identifying technologies that
will be used to meet the needs of the market. The propensity of taking risk develops when a
person develops the ability to understand uncertainty. Douglas and Shephers pointed out that
while development of entrepreneurial skills is critical in the making of an entrepreneur the most
critical requirement is the development of entrepreneurial attitude (Kruger, 2004). This is
because, while skills and abilities can be improved through training, it is very difficult to change
a person’s attitude.
Entrepreneurs are also responsible for managing the enterprise (Burdus, 2010). They
establish the vision of the organization and inspire members of the organization to rally behind
the vision. They also establish strategies for ensuring that the vision of the organization is
realized. Kruger (2004) argues that effective entrepreneurial behavior is founded on development
of strategic orientation and awareness. The entrepreneur must have the ability to develop suitable
strategies for sustaining his enterprise. They are also able to blend imagination and creative
thinking with logical and realistic ways of viewing things (Levine & Rubinstein, 2013). They
possess adequate skills in organizing, coordinating and managing the activities of the

7. 7
organization. They are not only people who establish new business, but can also be found among
employees of an organization.
Entrepreneurial Team Formation
Timmon’s model also identified entrepreneurial team formation as a critical part of the
entrepreneur process. While the lead entrepreneur is responsible for recognizing the opportunity,
he needs to form an effective team in order to ensure that the new venture is able to make
optimal use of the opportunity. Minniti, et al (2006) noted that many enterprises are stated
without the mobilization of a skilled and experienced team. In emphasis on the critical role of the
entrepreneurial team, Minniti et al (2006) stated that it is better to have a grade B idea, but have a
grade A team. This is because right people will always find ways of changing the idea into the
right product. The entrepreneurial team drives the start-up and expansion of the new enterprise.
The strategy of team formation needs to be mapped with the opportunity (Tihula, 2009).
3. Resources
Resources are also a critical part of the entrepreneurial process. Rumelt (2010) defined
entrepreneurship as a process that entails organizing resources in a new way in order to create
some element of novelty. Once an individual has identified an opportunity, he must mobilize
resources including finances and human resource in order to take advantage of the opportunity.
The entrepreneur has the responsibility to attract investment including finances, physical assets,
knowledge, brand names, and goodwill. Many scholars only emphasize on the need to mobilize
financial resources. However, other resources are also critical to the development of the
enterprise. The entrepreneur must acquire the right skills in order to implement his or her

8. 8
strategic plan. He must also acquire equipment and technologies that are needed in order to
convert the opportunity into goods and service.
Resources are also important in terms of giving an enterprise a competitive advantage
(Kruger, 2004). The modern business environment has become extremely competitive. New
ideas are copied by other organization as soon as they hit the market. Copying of ideas hinders
the entrepreneur from leaping returns for efforts and investments made. In order to avoid this,
entrepreneurs need to develop distinctive characteristics that make it difficult for competitors to
replicate their ideas. Resources can be an essential source of distinctiveness. Minniti, et al (200)
defined entrepreneurship as opportunities that are delivered through systems and competencies
that differ significantly from existing organization. Thus, distinctiveness is a critical
characteristic that defines entrepreneurship. The entrepreneur is expected to combine his
resources and capabilities in order to create unique patterns making it difficult for other
organization to copy ((Bryson, Ackermann & Eden, 2007). While the resources of the
organization entrepreneur may not be unique, the entrepreneur can create unique patterns by
combining different resources and capabilities.
One of the utmost misconceptions is that an individual must have all the essential
resources so as to establish an enterprise. This is not the case. Once a person has identified good
opportunities, finding money and other resources is not a significant challenge.

9. 9
Figure 1: Timmons model
Critical Analysis
Timmons model gives fluid boundaries to the process of entrepreneurship. It points out
that the foundation of the entrepreneurship process lies in the entrepreneur’s ability to recognize
opportunities, marshal resources, and create an effective team. It views entrepreneurship as
means of integrating resources, team and opportunity. The model also gives a holistic view of the
entrepreneurial process (Minniti, 2006). It highlights how the three components of the
entrepreneurship process must work collaboratively so as to establish a successful enterprise.
One of the elements that has been emphasized in Timmon’s model is the ability to balance
between the three components; resources, opportunities, and team. The model points out to the
importance of realizing a balance among the three components of the entrepreneurship process.
A risk develops where there is an imbalance between the three components. Similarly, an impact
Opportunit
y
Resourc
es
TEAM
The Entrepreneur
Leadership
Communication
Creativity

10. 10
on one of the three components affects the other two components. For instance, the
entrepreneurship process will stall where the entrepreneur is able to identify an opportunity but is
unable to mobile the resources required to exploit these opportunities.
Another element that has been emphasized in Timmon’s model is the role of leadership,
creativity and communication (Bygrave, & Zacharakis, 2009). According to the model,
individual leadership is a critical component in the development of the entrepreneurship process.
It is the responsibility of leader to ensure that all the three components of the entrepreneurial
process are able to fit into each other. The leader must find a balance between the venture
variables. The leader is also responsibility for establishing the vision and communicating this
vision to the rest of the team. Without the vision or poor communication of the vision, the
entrepreneurial team becomes paralyzed by ambiguity (Smith, Mathews & Schenkel, 2009). The
entrepreneur leader is also responsible for setting creating the work climate and ensuring that the
team is highly motivated. Creativity is also a critical part of the entrepreneurship process. The
entrepreneur is engaged in constant experimentation and improvisation.
The only limitation of Timmons model is that it emphasizes on the role played by
personal factors in promoting the success of the entrepreneurship process (Nassif, et al, 2010). It
highlights the entrepreneurship process as a phenomenon that originates from the
entrepreneurship skills, abilities, and traits that enable him to organize the other components of
the entrepreneurship process. There are other models that have expressed different views from
that of Timmon. One of these models is the Carol Moore’s model. Moore’s model of
entrepreneurial process suggests that the entrepreneurial process is not influenced by personal
factors only (Neergaard, 2007). The process is also influenced by environmental and sociological
processes. The model implies that an individual can get an idea for a new venture either through

11. 11
deliberate action or by chance. Therefore, sociological and environmental factors also play a
significant role in the development of entrepreneurship. Moore refers to these factors as trigger
events. Trigger events may include lack of better career prospects or poor salaries working for
someone, role models, creativity, competition, government policies and resources.
Figure 2: Carol Moore Model
Moore’s model of entrepreneurship provides a realistic view of the entrepreneur and the
entrepreneurship process (Bygrave, 2009). It acknowledges that entrepreneurship does not
always emerge from factors that are innate to the entrepreneur but is also brought about by social
and environmental factors. Unlike Timmon’s model, Moore’s model does not take a snapshot
Personal
Locus of control
Tolerance
Risk taking
Personal values
Education
Experience
Sociological
Networks
Teams
Parents
Family
Role Model
Organizational
Team
Strategy
Structure
Culture
Products
Environmental
Opportunities
Role models
Creativity
Raw materials
Environmental
Competition
Resources
Incubator
Government policy
Environmental
Competitors
Customers
Suppliers
Investors
Bankers
Lawyer
Personal
Entrepreneur
Leader
Vision
Manager
Commitment
Innovation Trigger event Implementation Growth
Personal
Job
dissatisfaction
Education
Age
Risk taking
Job loss

12. 12
approach in defining the entrepreneurship process, but takes a dynamic and comprehensive
approach (Nassif, et al, 2010).
Conclusion
Entrepreneurship is the bedrock of economic development in all countries of the world
(Burdus, 2010). Timmon’s model provides a structured approach of evaluating and
understanding the entrepreneurial process. This model suggest that the entrepreneurial process
comprises of three main components; the entrepreneur, the opportunity, and resources. In order
for a new venture to thrive, there must be a balance between these three components. The model
also emphasizes on the role of leadership in the entrepreneurial process. The leader is responsible
for creating a vision and communicating this vision throughout the enterprise. He is also
responsible for coordinating the three components of the entrepreneurial process.

13. 13
References
Berglund, H. (2007). Opportunities as Existing and Created. Journal of Enterprising Culture. 15
(3): 243- 273
Bryson J. Ackermann F. & Eden C. (2007). Implementing the Resource Based View Strategy.
Public Administration Review.
Burdus, E. (2010). Fundamentals of Entrepreneurship. International Comparative Management
Review. 11 (1): 33- 42
Bygrave, W. & Zacharakis, A. (2009). The Portable MBA in Entrepreneurship. USA. John
Wiley & Sons
Bygrave, W. (2008). The Entrepreneurship Process. Retrieved from
http://catalogimages.wiley.com/images/db/pdf/0471271543.excerpt.pdf
Fisher, E. (2009). The State of Entrepreneurship in Canada. Retrieved from
http://www.ic.gc.ca/eic/site/061.nsf/vwapj/SEC-EEC_eng.pdf/$file/SEC-EEC_eng.pdf
Gompers, P. & Kovner, A. (2008). Performance Persistence in Entrepreneurship. Harvard
Business School
Klein, P. (2008). Opportunity Discovery and Entrepreneurial Action. Strategic Entrepreneurship
Journal. 2: 175- 190
Kruger, M. (2004). The Entrepreneurial Process. Retrieved from
http://upetd.up.ac.za/thesis/available/etd-08242004-145802/unrestricted/03chapter3.pdf
Levine, R. & Rubinstein, Y. (2013). Does Entrepreneurship Pay? Retrieved from
http://faculty.haas.berkeley.edu/ross_levine/Papers/2012_7SEP_entrepreneurship.pdf
Mazzarol T. (2008). Strategic Management in Small Firms. Retrieved from
http://www.cemi.com.au/sites/all/publications/Mazzarol%20SEAANZ04%20paper.pdf

14. 14
Minniti, M. et al (2006). Entrepreneurship: The Engine for Growth. Greenwood Publishing
Group
Nassif, V. et al, (2010). Understanding the Entrepreneurial Process: A Dynamic Approach.
Brazilian Administration Review
Neergaard, H. (2007). Handbook of Qualitative Research Methods in Entrepreneurship. USA.
Edward Elgar Publishing
Rumelt, R. (2010). Theory, Strategy, and Entrepreneurship. Retrieved from
http://hadjarian.net/esterategic/tarjomeh/2-89-karafariny/2.pdf
Smith, B. Mathews. C. & Schenkel, M. (2009). Differences in Entrepreneurial Opportunities.
Journal of Small Business Management. 47 (1): 38- 57
Tihula, S. (2009). Entrepreneurial Teams vs Management Teams. Management Research News.
32 (6): 555- 556
Timmons, J. (2009). Opportunity Recognition. Retrieved from
http://www.aitel.hist.no/fag/ent/lek02/Kap2.MBA.pdf