1. Introduction
In the contemporary era and increased dynamics of the business market, it is important for companies to develop an innovative culture within an organisation and ensure that their employees are engaged in developing new products and services. When an individual generates an idea of developing a product, they need to take into consideration a wide range of aspects. This study sheds light on explaining the feasibility of AI upgraded software in banking services and the process which will be followed for developing and launching it. The study appraises theories & practices of enterprise, entrepreneurship & innovation. Opportunities for entrepreneurial activity have been investigated in the national, local & global economies for existing & start-up organisations. Internal & external factors that affect the development & creation of an entrepreneurial culture are included. The process of a business start-up from conception to execution has been discussed. The impact on growth & sustainability of innovation, idea or creative solution is included.
2. Feasibility of the product selected
In the age of digitisation and the emergence of new technologies, companies have been able to carry out their operations in a seamless manner and deliver error-free outcomes. In the finance industry, banks have been at the leading edge of integrating innovation for providing assistance with several activities (Schulte & Liu, 2017). The AI upgraded software will be a unique and innovative integration for banks and will be able to gain a wide range of benefits. One of the primary benefits of having an AI upgraded software is that it saves the hassle of employees in keeping the applications involved in the banking sector updated and keep on providing quality and error-free services to their customers. Along with that, having AI upgraded software will also allow banks to speed up their services and enhance their overall productivity. Hence, it can be revealed that the product selected by the entrepreneur is feasible and unique.
3. Appraising practices and theories of entrepreneurship, enterprise and innovation
Innovation theory
Figure 1: Schumpeter’s theory of innovation
(Source: Based on Malerba & McKelvey, 2020)
Innovation theory as proposed by J.A. Schumpeter states that an entrepreneur is primarily an innovator who introduces new combinations. In practice, five cases are being covered by a new combination theory. Firstly, the introduction of new and unique products which the consumers are not familiar with and is not yet tested by a batch of manufacturers. As per the statements of Malerba & McKelvey (2020), developing and launching a new theory deals with gaining access to a new market and needs acquiring raw materials for the purpose. In the following case, the new product will be AI upgraded software for banks which will allow them to automatically search for new updates available for applications that are being used and update them to its latest version. In this manner, the banking employees will no longer need to invest their time in updating their apps and will have in place one integrated with the latest features. The banks in turn will be able to provide seamless, faster and error-free services to their customers and make them satisfied.
Need for achievement theory
Figure 2: McClelland Need for achievement theory
(Source: Based on Saif & Ghania, 2020)
Need for achievement theory, developed by David C. McClelland was primarily concerned about the economic growth and factors influencing it. In this attempt, he has identified certain internal factors like human motives and values which allows them to capture opportunities available for them and take advantage for ensuring the success of their business. As per the statements of Saif & Ghania (2020), the following theory has provided the importance of innovative characteristics in entrepreneurship and an entrepreneur is concerned with achieving something. The achievement refers to a desire to do something for the sake of feeling personal accomplishment and not for social recognition or prestige. The introduction of AI upgraded banking software will be valuable for banks in terms of providing quality services to their customers. It therefore will provide the entrepreneur with a sense of personal achievement and will be motivated to keep on improving it. The entrepreneur while developing, launching and marketing their application will not be motivated by any kind of monetary incentives in accordance to McClelland’s theory.
4. Investigating opportunities for entrepreneurial activities in global, national and local economies
Global Economies
In global economies, an entrepreneur will be provided with a wide range of opportunities that they can capture for launching a successful business. Parente, Geleilate & Rong (2018) highlighted that when an entrepreneur is entering a global market, they will be able to invest in a number of businesses, acquire several investors, crowdfund, promote their products and services amongst a large base of customers as well as boost their overall business growth. While investing in a number of businesses would not be an option for the entrepreneur but when going global, they will be provided access to a large number of banking and finance institutions to which they can offer their product. In this manner, there will be a high probability that some of the banks are adopting the software. Moreover, they will be able to present their new and unique idea to a wide range of investors who will be willing to fund their products. In this manner, they will be able to develop an efficient and successful product which will be launched for their customers.
National economy
While operating in the national economy, if entrepreneurs are able to convince the potential customers of a product, that is banks, by informing them about the benefits of their product, they will be able to acquire investments from them or from the government. If the banks of a country are performing in an effective manner, it will ultimately benefit the national economy. Hence, it will be easier for the entrepreneur to acquire their funding from banks and governmental institutions along with the necessary support for developing the product in a successful manner.
Local economy
When an entrepreneur is launching their new and unique products in the market they will be provided with a wide range of opportunities which need to be effectively captured. One of the primary benefits of operating in a local economy is that they are fully aware of the market conditions and its customers. It has been pointed out by Hechavarría & Ingram (2019) that when an entrepreneur is well versed with the market in which they are operating, they will be able to develop unique and effective strategies accordingly. The entrepreneur will be well aware of the functions and operations that are carried out by the local banks and can modify their software. In this manner, they will ensure to gain the trust of their target audience and ensure the effective launch of their new product.
5. Exploring behaviours, skills and characteristics of successful entrepreneurs and evaluating them against the entrepreneur
A wide range of factors is involved in starting a new business which includes a unique idea, planning and initial funding. The most important element of a successful business is an entrepreneur who is responsible for turning the idea into a fully operational business. As per the statements of Henley et al., (2017) successful entrepreneurs possess and demonstrate a wide range of skills, abilities and competencies. These include curiosity, adaptability, risk-taking ability, team-building, problem-solving, persistence and decisiveness. Successful entrepreneurs like Steve Jobs and Elon Musk have a sense of curiosity which allows them to seek opportunities on a continuous basis. These entrepreneurs tend to ask challenging questions and seek varied opportunities for further expanding their business in the market. With the ever-changing nature of businesses, successful entrepreneurs have the ability to adapt to new opportunities and challenges which are presented to them. Successful entrepreneurs have the ability to evaluate any kind of situation which might arise and adapt themselves for ensuring that their business keeps on moving forward without facing any major challenges. With the new opportunities available for the entrepreneurs in the market, they need to have the ability to take calculated risks and follow a planned approach for ensuring the overall growth of their business (Kerrin, Mamabolo & Kele, 2017). When the entrepreneurs are able to successfully deal with the challenges and take planned risks for capturing the opportunities, they are able to ensure the success of their business over a longer period of time. If an entrepreneur possesses all the above-mentioned abilities and skills, they are able to launch a successful business.
The entrepreneur developing AI software upgrade for banks has in place certain qualities and skills but lacks in certain areas which need to be improved for ensuring the success of its venture. For instance, creativity skills are fully inherent within the concerned entrepreneur as he has been able to apply his creative ideas for developing a unique product that will be beneficial for banking institutions. This means that the concerned entrepreneur has ingrained a curious approach and has the ability to ask challenging questions. It has been highlighted by Boldureanu et al., (2020) that entrepreneurship is fundamentally associated with risks and an entrepreneur needs to have a risk tolerance ability. It means that an entrepreneur is able to tackle the risks associated with launching a new business and also take steps to minimise them. The concerned entrepreneur has calculated the risks which might be associated with the new venture and have taken the necessary steps for dealing with it. Although having such abilities which are required from a successful entrepreneur, he does not have persistence and long term focus which might affect the future progress of the business. In case of any failures, it will be important for the concerned entrepreneur to be comfortable with it and view it as an opportunity. If the entrepreneur fails to stay persistent, their business might not be able to achieve the success, as intended.
6. Internal & external factors affecting development & creation of an entrepreneurial culture
Inspired from the views of Ferreira & Pinheiro (2018), internal factors affecting the development & creation of an entrepreneurial culture involves employees & managers, money & resources as well as company culture.
- Employees & managers: The first internal factor involves employees & managers. They are the ones who will have to perform the activities that are mentioned in the business plan. If the employees & managers are efficient then the entrepreneurial culture will be very effective.
- Money & resources: The second internal factor involves money & resources. In the absence of money & resources, it is not possible for an organisation to operate with its new business plan (McKenzie, 2017). Therefore, the entrepreneurs work hard to collect the required money & resources.
- Company culture: The third internal factor involves company culture. Companies having poor cultures can never yield benefits from entrepreneurship which can be seen across the globe. On the other hand, companies that have good culture motivate the development of entrepreneurship.
On the other hand, external factors affecting the development & creation of an entrepreneurial culture involve the economy, competition from other videos as well as policy & culture.
- The economy: The first external factor involves the economy. In a poor economy, even the well-run businesses might not be able to survive let alone the small business. As commented by Li, Qian, Chen & Zhang (2019), if the customers lose their jobs or source of income they would barely support entrepreneurship.
- Competition from other businesses: The second external factor involves competition from other businesses. If the intensity of competition is very high in the industry then entrepreneurship would fail.
- Policy & culture: The third external factor involves policy & culture. Entrepreneurship is not possible when the nation or economy has poor policy & culture. In such economies, entrepreneurship fails badly.
7. Process of a business start-up from conception to execution
As per the ideas put forward by Wu, Yuan & Pan (2018), the process of a business start-up starts with initial market research looking for relevant information on the basis of which plans can be made. Once information is collected, the entrepreneur prepares plans for the new business which is used to achieve organisational goals. Once the plans are made the company then acquires resources from different sources with the help of funds. Generally, funds are collected from two sources debt capital or equity share capital whichever is preferred. As commented by Li, Qian, Chen & Zhang (2019), the owner needs to create strategic links with the suppliers, creditors, investors and shareholders. In addition, the business requires monitoring tools with the help of which all the activities can be monitored by the owner.
8. Impact on growth & sustainability on an idea, innovation or creative solution
As per the views put forward by Wu, Yuan & Pan (2018), the impact of growth & sustainability on an idea, innovation or creative solution can be seen. The better the idea is the better chances are there that it would survive, grow and sustain within the industry. On the contrary, the worse the idea is the lesser chances are there that it would survive, grow and sustain within the industry. Creativity is very important for companies so that they can sustain the competition and industry for a long period of time.
9. Financial Plan
In order to set up the business, it is important to estimate the requirements related to income, expense and capital. Below, the budgeted income statement, cash flow statement and balance sheet of the company has been prepared.
Budgeted Income Statement:
| BUDGETED INCOME STATEMENT | ||
| Items | Amount (000) | Amount (000) |
| REVENUE | ||
| Sales | $ 21,620 | |
| Interest Income | $ 5,000 | |
| Total Income | $ 26,620 | |
| (-): EXPENSES | ||
| Accounting cost | $ 1,800 | |
| Advertising cost | $ 1,200 | |
| Bank Charges | $ 1,320 | |
| General costs | $ 1,800 | |
| Insurance cost | $ 1,200 | |
| Maintenance cost | $ 1,800 | |
| Light and Power cost | $ 1,800 | |
| Legal cost | $ 1,560 | |
| Software Cost | $ 3,600 | |
| Printing cost | $ 1,800 | |
| Rates cost | $ 1,200 | |
| Rent cost | $ 2,400 | |
| Repair cost | $ 1,200 | |
| Taxes | $ 1,200 | |
| Telephone cost | $ 1,800 | |
| Total expenses | $ 25,680 | |
| NET PROFIT | $ 940 | |
Table 1: Budgeted Income Statement
(Source: Created by Author)
It has been estimated that the business plan will generate net profit worth $ 940000 as calculated above.
Budgeted Balance Sheet:
| BUDGETED BALANCE STATEMENT | ||
| Items | Amount | Amount |
| CURRENT ASSETS | ||
| Bank Balance | $ 5,940 | |
| Accounts Receivable Balance | $ 2,000 | |
| Inventory Balance | $ 1,000 | $ 8,940 |
| NON CURRENT ASSETS | ||
| Equipment Balance | $ 10,000 | |
| Software Balance | $ 11,000 | $ 21,000 |
| TOTAL ASSETS | $ 29,940 | |
| CURRENT LIABILITIES | ||
| Accounts Payable Balance | $ 2,000 | |
| LESS NON CURRENT LIABILTIES | ||
| Long-Term Loans | $ 20,000 | |
| TOTAL LIABILITIES | $ 22,000 | |
| EQUITY | ||
| Opening Balance | $ 1,000 | |
| Capital Introduced | $ 6000 | |
| Net Profit | $ 940 | $ 7,940 |
| TOTAL LIABILITIES & EQUITY | $ 29,940 | |
Table 2: Budgeted Balance Sheet
(Source: Created by Author)
Cash Flow Statement:
| CASHFLOW FORECAST | |||||||||||||
| ITEMS | JAN (000) | FEB (000) | MAR (000) | APRIL (000) | MAY (000) | JUNE (000) | JULY (000) | AUG (000) | SEPT (000) | OCT (000) | NOV (000) | DEC (000) | TOTAL (000) |
| Income | |||||||||||||
| Sales | 1500 | 1800 | 1950 | 1750 | 1900 | 1900 | 1550 | 1500 | 1800 | 1920 | 2100 | 1950 | 21620 |
| Total Income | 1500 | 1800 | 1950 | 1750 | 1900 | 1900 | 1550 | 1500 | 1800 | 1920 | 2100 | 1950 | 21620 |
| Less: Expenses | |||||||||||||
| Accounting cost | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 1800 |
| Advertising cost | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 1200 |
| Bank Charges | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 1320 |
| General costs | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 1800 |
| Insurance cost | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 1200 |
| Maintenance cost | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 1800 |
| Light and Power cost | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 1800 |
| Legal cost | 130 | 130 | 130 | 130 | 130 | 130 | 130 | 130 | 130 | 130 | 130 | 130 | 1560 |
| Software Cost | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 3600 |
| Printing cost | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 1800 |
| Rates cost | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 1200 |
| Rent cost | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 2400 |
| Repair cost | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 1200 |
| Taxes | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 1200 |
| Telephone cost | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 1800 |
| Total Expenses | 2140 | 2140 | 2140 | 2140 | 2140 | 2140 | 2140 | 2140 | 2140 | 2140 | 2140 | 2140 | 25680 |
| Opening Bank | 10000 | 9360 | 9020 | 8830 | 8440 | 8200 | 7960 | 7370 | 6730 | 6390 | 6170 | 6130 | 5940 |
| Surplus/Deficit | -640 | -340 | -190 | -390 | -240 | -240 | -590 | -640 | -340 | -220 | -40 | -190 | |
| Closing Bank | 9360 | 9020 | 8830 | 8440 | 8200 | 7960 | 7370 | 6730 | 6390 | 6170 | 6130 | 5940 | |
Table 3: Budgeted Cash Flow Statement
(Source: Created by Author)
It has been estimated that the business plan will generate a closing cash balance worth $ 5940000 as calculated above. In addition, the initial capital requirement will be $ 5000000 which will be collected through the issue of shares and bank loans.
10. Conclusion
The study helps in concluding that in order to sustain the existing competition; companies are required to come up with innovative ideas for their business. Therefore, the idea to be considered in this study as a part of innovation involves Artificial intelligence upgraded software in the banking sector. In the global economies, entrepreneurs will be provided with a wide range of opportunities that can be captured for launching a successful business. When entrepreneurs are able to successfully deal with the challenges and take risks, they are able to get success for their business for a long period of time. It has been estimated that the business plan will generate a net profit worth $ 940000 and a closing cash balance worth $ 5940000. The initial capital requirement will be $ 5000000 which will be collected through issue of shares as well as a bank loan. The business plan will be affected by different internal and external factors.
References
Ferreira, F. M., & Pinheiro, C. R. M. S. (2018). Circular Business Plan: entrepreneurship teaching instrument and development of the entrepreneurial profile. Gestao & Producao, 25, 854-865. https://www.scielo.br/j/gp/a/Y5WyLGyYpd46BwYR5Wz5RLD/?lang=en&format=html
Hechavarría, D. M., & Ingram, A. E. (2019). Entrepreneurial ecosystem conditions and gendered national-level entrepreneurial activity: a 14-year panel study of GEM. Small Business Economics, 53(2), 431-458, https://www.researchgate.net/profile/Diana-Hechavarria/publication/324195249_Entrepreneurial_ecosystem_conditions_and_gendered_national-level_entrepreneurial_activity_a_14-year_panel_study_of_GEM/links/5b18e1b745851587f297e441/Entrepreneurial-ecosystem-conditions-and-gendered-national-level-entrepreneurial-activity-a-14-year-panel-study-of-GEM.pdf
Henley, A., Contreras, F., Espinosa, J. C., & Barbosa, D. (2017). Entrepreneurial intentions of Colombian business students: Planned behaviour, leadership skills and social capital. International Journal of Entrepreneurial Behavior & Research, 12-45, http://orca.cf.ac.uk/106477/1/Henley%20et%20al%20Entrepreneurial%20intentions%20IJEBR%20final%20post-print.pdf
Li, R., Qian, Z. C., Chen, Y. V., & Zhang, L. (2019). Design Thinking Driven Interdisciplinary Entrepreneurship. A Case Study of College Students Business Plan Competition. The Design Journal, 22(sup1), 99-110. https://www.tandfonline.com/doi/pdf/10.1080/14606925.2019.1602993
McKenzie, D. (2017). Identifying and spurring high-growth entrepreneurship: Experimental evidence from a business plan competition. American Economic Review, 107(8), 2278-2307. https://openknowledge.worldbank.org/bitstream/handle/10986/22437/Identifying0an0ess0plan0competition.pdf?sequence=1
Saif, H. A., & Ghania, U. (2020). Need for achievement as a predictor of entrepreneurial behavior: The mediating role of entrepreneurial passion for founding and entrepreneurial interest. International Review of Management and Marketing, 10(1), 40, https://pdfs.semanticscholar.org/9213/86f56f2da53f101989278122fef6c33deacc.pdf
Wu, Y. J., Yuan, C. H., & Pan, C. I. (2018). Entrepreneurship education: an experimental study with information and communication technology. Sustainability, 10(3), 691. https://www.mdpi.com/2071-1050/10/3/691/pdf
