Timmons Model of the Entrepreneurial Process

      The key factors in the Timmons model (see below) are the entrepreneur and the founding team, the opportunity, and the resources that are mustered to start the new organization. Put simplistically, the Timmons model is normative. The key ingredient is the entrepreneur. If the entrepreneur has the right stuff, he or she will deliberately search for an opportunity, and upon finding it, shape it so that is has the potential to be a commercial success, or what Timmons calls a high-potential venture. The entrepreneur then gathers the resources that are necessary to start a business to capitalize on his or her opportunity. Explicit in the Timmons framework is the notion that the entrepreneur and the provider of capital will be rewarded with profits, and that both are commensurate with the risk and effort involved in starting, financing, and building the business. The entrepreneur usually risks career, personal cash-flow, and some or all of his or her net worth. In an ideal situation, all this is quantified in a business plan before the business is operational.

The Opportunity Factor

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

The Resources Factor

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 the resources include 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 resource with the opportunity and the potential of the team.

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Reference

•  Adapted from Business Plans That Work: A Guide For Small Business, by Jeffry A. Timmons, Andrew Zacharakis, Stephen Spinelli, McGraw Hill, 2004

• Understanding the Timmons Model of Entrepreneurship , written by: N Nayab (source:Timmons, Jeffry, A.; Zacharakis, Andrew, and Spinelli, Stephen. (2004). Business Plans That Work: A Guide For Small Business. McGraw Hill.)