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Challenges of young Romanian entrepreneurs with promoting their start-ups

Research Paper (postgraduate), 2016

50 Pages

Simona Vasilache (Author)

Excerpt

Table of Contents

List of Figures and Tables ... 1

Introduction ... 2

Theorethical perspective ... 3

1.1 Common challenges for new entrepreneurs ... 4

1.2 Challenges of promoting a start-up ... 11

1.3 Challenges of Romanian Entrepreneurs ... 15

Methodology ... 19

2.1 Interview as a research method ... 20

2.2 Descriptive statistics ... 25

Interviews analysis ... 29

3.1 The coding process ... 30

3.2 Processing of interviews in Nvivo ... 36

Conclusions ... 42

References ... 45

Annex ... 48

List of Figures and Tables

Figure 2: Labeling of the first three questions from the interview ... 31

Figure 3: Labeling of the questions 4,5,6 from the interview ... 31

Figure 4: Labeling of questions 7,8,9 ... 32

Figure 5: The importance of the three categories of codes in the case of Anaide ... 37

Figure 6: The importance of the three categories of codes in the case of Anaide ... 38

Figure 7: The importance of 'Difficulties encountered' for all the interviewe es ... 39

Figure 8: The importance of 'Attitude' for all the interviewe es ... 40

Figure 9: The importance of 'Promotional activities' for all the interviewees ... 41

Table 1: Sources of financing - advantages and disadvantages ... 7

Table 2: Data about the entrepreneur - Diana Mirea ... 26

Table 3: Data about the entrepreneur - Bogdan Ivan ... 26

Table 4: Data about the entrepreneur - Robert Oros ... 27

Table 5: Data about the entrepreneur - Alexandru Dudulea ... 28

Table 6: Data about the entrepreneur - Algayyim Zaid ... 28

Introduction

The current study consists of three parts.

In the first chapter of this study we aimed to perform a deeper research regarding the

main challenges faced by young entrepreneurs. We used the information obtained from

discussions with entrepreneurs as a basis for our research, in order to search for more ideas

and details in books and articles dedicated to this subject. At the end of this chapter we

wanted to know exactly which are the main categories of obstacles faced by young

entrepreneurs, and the activities they should perform in order to avoid or reduce the negatives

effects of these difficulties. Since the subject of our paper is quite broad, we covered in this

chapter three aspects:

· Challenges faced by entrepreneurs in general.

· Challenges of promoting a start-up.

· Challenges faced by Romanian entrepreneurs at this moment.

The second chapter of the research was dedicated to present the method of research

used for this study. We mentioned previously that we had the opportunity to discuss with

many entrepreneurs about the way they succeed to manage their businesses. Since

wemaintained the contact with them, we wanted to highlight and take advantage of this source

of knowledge and experience in order to improve our own knowledge regarding the

entrepreneurial experience. Therefore, the purpose of this chapter is to present the way we

managed to achieve the aforementioned objective.(Estrin,Mickiewicz, Stephan,2016)

The third chapter aims to present the results of our research. We will focus on

explaining the way we reached to these results and the criteria based on which we selected

the most important information obtained from our research. Also, we are interested in

obtaining some best practices to be transferred onto other potential entrepreneurs.

1. Theorethical perspective

These days, the business environment seems to be favorable for potential

entrepreneurs to put their ideas into practice. At the first look, this favorable environment is

characterized by increasing globalization, increasing use of information and communication

technologies, an increase in the number of funding sources, communities with people around

the world where they share stories from which anyone can learn, an increased attention

placed on entrepreneurial education in universities, the development of emerging markets, and

so on. (Prajogo, 2016) Moreover, each country has strong reasons for encouraging people to

start their own business, because small and medium enterprises play a significant role in the

growth of any econoour. (Staniewski, Szopinski, Awruk, 2015) Of course, stating that the

small and medium enterprises are important in the econoour's growth might be considered too

general, because these enterprises reach the aforementioned purpose through a series of

smaller roles, such as: creating new jobs, bringing innovative products on the market, selling

more customized or personalized products than large companies, and so on.

Nevertheless, the opportunities mentioned above could represent also challenges for

the entrepreneurs, reason for which they need continuous help from governments. Regardless

of the fact that entrepreneurs can use information and communication technologies in order to

implement their business ideas, they still have to face by themselves difficulties related to

finding financial resources, hiring the right employees, creating an innovative product that

meets the customers' needs, finding partners, and so on. (Liu, Almor, 2016)Without distinction

of the country where entrepreneurs develop their activities, the path of entrepreneurship

assumes challenges. Since this is a subject for great interest for entrepreneurs, researchers

aimed to identify reasons for which entrepreneurs face challenges, and in the following lines

WE will present two perspectives.

Wincent and Ortqvist (2009) stated that at the base of these challenges lay the role

expectations assigned to entrepreneurs by stakeholders. In their research, the two authors

came to the conclusion that these role expectations lead to three role stressors, and these are

the following:

- Role conflict This role stressor is determined by those situations when different

categories of stakeholders have opposite expectations from an entrepreneur. One example in

this sense could be the case when the product created by the entrepreneur has all the necessary

characteristics to meet the customers' needs, but it does not respects the legislation related to

the protection of environment. As it can be observed, there is a conflict betwe en the

customers, who are satisfied with the properties of the product, and the government or NGOs,

who want to avoid possible harmful effects to the environment. Therefore, the entrepreneur

faces difficulties in finding a solution in order to respect the requirements of both categories

of stakeholders.

- Role ambiguity It refers to situations where the entrepreneurs do not have enough

information regarding the expectations of stakeholders, reason for which they are not able to

fulfill some of their roles as founders of the entrepreneurial venture. For example, one person

has technical expertise in order to come up with a product that meets the customers' needs,

but, on the other side, he/she does not have the necessary knowledge for implementing the

business idea in order to sell that product. In this case, role ambiguity could determine that

person to give up to the idea of creating and selling an innovative product due to the fact that

he/she is afraid of failure. (Cacciotti, Hayton, et al, 2016)

- Role overload This final role stressor refers to those cases where the entrepreneur

has to work very much or to put together many resources in order to fulfill the expectations of

stakeholders. One example for this role stressor, could be the situation in which the

entrepreneur has to implement the business idea in a limited period of time, because he/she is

conditioned by an investor who decided to finance this person. Due to time pressure, the

entrepreneur has to do a lot of work, and to comply with the expectations of all the categories

of stakeholders, who are directly interested in the business, such as financial institutions,

customers, government, and so on. Again, the fear of failure might arise and it could affect

emotionally the entrepreneur.

Barringer and Ireland (2015) affirmed that a lot of new businesses fail due to a

phenomenon known as the liability of newness. The liability of newness indicates that

entrepreneurs are not able to adapt fast to their responsibilities because they do not have

enough experience with buyers and suppliers.

1.1 Common challenges for new entrepreneurs

As stated at the beginning of this chapter, every entrepreneur has to face some

challenges, either they are experienced entrepreneurs, or they just want to start their first

business. The most common challenges for experienced entrepreneurs are related to building a

brand, to maintain the competitiveness of the business, or to ensure that the business is

profitable. For new entrepreneurs there are some specific challenges, that WE am going to

develop in the following lines, and these include (Cacciotti, Hayton, et al, 2016):

- Abandon their job.

- Find external funding for their business.

- Employ the right people and determining them to work as a team.

- Manage the rapid growth of the business.

- Take care of the administrative tasks of the business, such as setting rules.

One of the first challenges for young entrepreneurs is the fact that it is hard for them to

have in the same time a business and a job. Actually, a person can manage both of them when

the business is at the beginning, and the entrepreneur can take care of it during his/her free

time. Nevertheless, as the business grows, that person is forced to give up to the job, in order

to have enough time to take care of the business. The moment when the entrepreneur has to

take this decision is difficult, because a business might not ensure enough revenues for

him/her, while a job, brings a secure salary as long as that person will hold it. (Chakraborty,

Thompson, et al, 2016) Of course, the difficulty of this decision is increased when the

entrepreneur has a family to take care of, or when he/she puts the lifelong savings in this one

business idea.

A second challenge for young entrepreneurs that WE mentioned above is to find

external funding for their business. Many entrepreneurs lack experience in raising financial

resources for their businesses, and usually, they are not aware about the possible alternatives

for solving this issue. (Walter, Block, 2016) The most common reason for which

entrepreneurs do not inform themselves about raising capital alternatives is because they start

the business with the intention to use only internal funding. Nevertheless, in time, they realize

that they incur more costs than planned, thus they need external funding from investors or

from financial institutions.

According to Barringer and Ireland (2015), entrepreneurs might encounter one of the

following situations when they have to raise capital: difficulties with the cash flow, high

investments made in the business, long periods of research for creating a product. Cash

challenges occur in those periods when a venture has costs with purchasing equipment or

hiring employees, but it does not earns revenues from selling products/services. Although it is

normal for a new venture to incur losses at the beginning of its activities, sometimes this

could be the cause why some of them fail. Regarding the investments made in the business

(capital investments), these include purchasing equipment, purchasing land or buildings, and

so on. Some entrepreneurs prefer to lease or to use the resources of their partners in order to

avoid allocating a high percentage of their financial resources to capital investments.

(Chakraborty, Thompson, et al, 2016) Lastly, the long periods for creating a product are

specific to some industries, and these periods might last even for decades.

The appropriate financing is very important for the success of a start-up. As options

for financing, entrepreneurs can chose from several options: their own funds, financing from

family and friends, loans from banks, EU funds in the case of countries from EU, and so on

(Staniewski, Szopinski, Awruk, 2015). In the following table WE presented some sources of

financing for entrepreneurs, with advantages and disadvantages for each one.

Table 1: Sources of financing - advantages and disadvantages

Advantages

Disadvantages

Personal sources

· Flexible and low cost.

· The owner is in control.

· Stronger commitment for the

venture.

· The entrepreneur's resources

are at risk.

· Limited funds.

Bank loan

· It does not affect the ownership.

· Long-term finance.

· Increased security.

· Hard to obtain by a new

venture.

· The bank may require a

security.

· Interest payable for a long-

term.

Venture capitalist

· Access to expertise and contacts.

· Availability of a large amount of

funds.

· Loss of ownership control.

Friends and family

· It is possible to not lose ownership

control.

· Flexible.

· Personal disputes migh

occur.

· They might want to

influence

the

business

decisions.

Retained profit

· No loss of ownership control.

· Flexible and cheap.

· It might be large if the profits are

high.

· It might be hard to use them

financial

resources

because

ventures

have

difficulties

obtaining

profit.

· Possible

disputes

with

shareholders.

Source: Coduras, Alvarez, et al, (2016), pp. 3.

For experienced entrepreneurs this is not a difficult issue, because they might have

capital from previous businesses, they have connections with partners who are willing to

invest in their business, or they have the possibility to obtain funds from financial institutions.

Actually, experienced entrepreneurs have more chances to obtain capital from financial

institutions because these institutions are able to see the results obtained by that entrepreneur

in his/her previous business experience. In the case of a new entrepreneur, it is easier to obtain

fund from partners, than from financial institutions, reasons for which they have to focus on

networking. (Bredvold, Skalen, 2016) Nevertheless, in the following lines WE will present

shortly the financing options mentioned above.

One way to finance a new venture is by using personal financing, which includes

personal funds, sources from friends and family and bootstrapping. (Barringer and Ireland,

2015) The personal funds is a source of financing preferred by most of entrepreneurs, but

many of them cannot manage with it, thus they have to supplement with swe at equity (time

and effort put by the entrepreneurs). In the case of funds from friends and family, there is a

risk of spoiling relationships with lenders in the case when the business will fail and the

founder is not able to pay back the loan. Bootstrapping refers to creative methods

implemented by entrepreneurs in order to avoid using financial resources from investors or

financial institutions. Some examples of bootstrapping methods are the following: lease or

buy used equipment, ask customers to pay in advance, share the space with other businesses,

and so on. (Chakraborty, Thompson et al, 2016)

The second way to raise capital for a venture is to use debt or equity financing. This

alternative requires the entrepreneurs to prepare a plan with the approach used in order to

obain the necessary capital. (Walter, Block, 2016) There are several reasons for which a plan

is needed: the founders should not ask

for more capital than they realy need because they have

to pay for this money, and they want to make a good impression during their presentation in

front of investors or lenders by knowing exactly what their business needs.

The most common challenges of entrepreneurs when attempting to raise equity

financing could be the following: a reduced number of ventures are funded by investors

because they are interested in business ideas with high growth potential; investors will have a

part of the venture's shares meaning that they will influence the decisions of the founders; the

entrepreneurs might get discouraged when they are refused repeatedly by investors. (Coduras,

Alvarez et al, 2016) In the cases when the entrepreneurs want to raise debt financing they

might face a higher degree of reluctance from banks because these institutions are interested

in those ventures presenting the minimum risk in paying back a loan. For this reason, a

venture considered to be reliable for receiving a loan should have a good management,

financial statements, a good cash flow, and many times a new business does not meet these

criteria. New businesses usually lack the needed funding to purchase the necessary

technology or resources in order to perform its activity we ll, to grow and to be profitable.

A third challenge mentioned above is for entrepreneurs to form a venture team that wil

implement the business idea into a successful venture. A venture team is formed of founders,

employees and other professionals who help the business to grow, through offering direction

and advice. (Barringer and Ireland, 2015) The difficulty in building such a team consists in

the fact that the members are found in time. Gathering a team of talented and experienced

people will help the entrepreneur to reduce the effects of the liability of newness (a term that

WE explained above), therefore to reduce the mistakes he/she would make. Another

advantage could be the fact that the entrepreneur could take advantage of the relations of the

team's members in order to esablish contacts with different parties, such as investors,

customers, and so on. Lastly, a we ll built team is a proof for investors that the business

will

be successful because it will receive good advice from experienced people.

The first issue to consider when building a team is the size of the founding team.

(Barringer and Ireland, 2015) The entrepreneurs should decide whether to start a business

alone or to find partners and to form a founding team. The advantages brought by a founding

team are the following: more resources, ideas and contacts, and more psychological support.

In the same time, there are some pitfalls associated with a founding team. (Liu, Almor, 2016)

Firstly, if the members of this team did not collaborate before for other projects, it is a high

probability that they will not get along in the future. Secondly, conflicts could appear betwe

en members when it comes to chose the chief executive officer, especially if the members

start the business on equal positions.

The second issue in building the venture team is to find the right employees and to

determine them to work as a team. Entrepreneurs should be aware about their limitations,

reason for which they should hire persons who present complementary skills. In other words,

the employees should help entrepreneurs to avoid mistakes that they will do from lack of

experience and the entrepreneurs should be openned to the advice and solutions formulated by

employees. (Ilya, 2015) Of course, the entrepreneur has to be carefull about the perspective

from which employees formulate their solutions. Some of them might have the intention to

speak in order to prove they are right and to impose themselves as experienced and

knowledgeable professionals, while others are really interested in formulating good advice for

the business. Nevertheless, there are also entrepreneurs who have difficulties in accepting the

fact that they need experienced people, because they like to hold control over the people and

the business.

Entrepreneurs have different approaches in finding the right employees for their

ventures: look for candidates in the network of contacts, use the services of a specialized firm.

This task is challenging because it is time consuming and entrepreneurs have to perform a lot

of other tasks, and the new employees should have a valuable contribution because the

business does not have enough financial resources at its beginning, and every investment

counts. Further on, after choosing skillful candidates, entrepreneurs will continue to be the

visionary, and to find ideas and solutions when the team has to face obstacles. The challenge

to be the visionary is a difficult task for them, in the sense that they have to be creative, and to

come up fast with solutions and ideas, in a context where they do not have enough time and

experience for this type of tasks. All of the statements mentioned in this paragraph emphasize

the fact that entrepreneurs face loneliness, especially if they start the business without

partners. (Barringer, Ireland, 2015) This loneliness is felt in the sense that the entrepreneurs

have to take decisions by themselves, they cannot rely on colleagues of a team as they would

do if they would be employed in an organization, they have to work more than their

employees, and they have to keep some distance from their employees.

A fourth challenge mentioned was to manage the rapid growth of the business. The

rapid growth of the business represents a challenge for entrepreneurs because it leads to

changes in the scale of activities and in the goals of the organization. There are a series of

problems that might occurr as a result of the rapid growth of the business, such as: more

employees and equipment are needed in order to fulfill the demand, the misunderstandings

that will occur betwe en employees when new persons will join the team, the need to identify

additional resources or funding in order to sustain the growth, the resistance of entrepreneurs

to change the strategies of their ventures, and so on. (Nixon, 2005)

The last challenge that WE listed above refers to the administrative tasks that

entrepreneurs should take care of while running their ventures. An entrepreneur should

establish rules regarding the behaviour of employees during work, the number of free days for

employees, the way employees should treat customers, and so on.

As it can be noticed from the short presentation delivered in this subchapter, there are

a lot of challenges, of a smaller or greater importance for the entrepreneurs and their ventures.

In order to conclude the observations mentioned untill this stage of the study, WE will make

reference to another statement performed by Wincent and Ortqvist, the two authors mentioned

above. Wincent and Ortqvist (2009) affirm that entrepreneurs should be careful to the way

they face all these challenges because they have to fulfill some role expectations. In other

words, the position of the entrepreneur in an organization assumes certain roles and

behaviours that the he/she has to carry out. The authors offered as examples for this statement,

several common activities performed by entrepreneurs, such as: finding opportunities to

develop the business, finding resources for the business, promoting the products, and

maintaining the relationships with stakeholders. All the stakeholders have some expectations

from the entrepreneur. For example, customers expect high quality and low prices, suppliers

want to receive as fast as possible the money for the supplies, investors expect to receive high

returns on their investments. The roles that the entrepreneur should fill for each category of

stakeholders might represent a source of stress for him/her, especially if numerous obstacles

arise in carrying on each role.

The aim of this study is to emphasize the challenges faced by entrepreneurs in the

moment when they have to promote their business and their products. Therefore, in the

folowwing subchapter, WE will focus mostly on this aspect.

1.2 Challenges of promoting a start-up

In this subchapter WE will analyse the challenges of promotion that entrepreneurial

ventures have to face. There are several important steps that the founders should take into

consideration regarding this subject: chosing a target market, decide over the way the venture

will position in the mind of consumers, building a brand, establish the marketing mix.

(Barringer and Ireland, 2015) Each step has its challenges, but it has also its importance in the

success of the business.

The first thing the entrepreneurs should think of when implementing their business

idea is to select a market and establish a position, which involves three steps: segmenting the

market, chosing a niche market, and decide over the positioning. (Aparicio, Urbano, et al

2016)

Segmenting the market helps the entrepreneurs to select the target market that will be

served by the business, since the new venture

does not have enough resources in order to meet

the needs of all customers in a certain industry. The following step is to chose a niche market

such that the venture is able to serve we ll. When focusing on a niche market, the

entrepreneurial venture has the possibility to specialize on the needs of that market in order to

create products or services of high value. The challenge most entrepreneurs have to face in

this case is to chose a market that is attractive for them, meaning a market where the venture

can be successful and different from competitors. Another fact that entrepreneurs should be

careful about is to monitor continuously the attractiveness of the chosen market, especially the

changes in customer preferences. (Kotler, Armstrong, 2013)

Regarding the positioning of the venture, this term refers to the image that customers

should have when thinking about that particular business. In order to build this image, the

entrepreneurs use a tagline or a motto, which is reminded in all the advertisments of the

business. Another thing related to positioning is the fact that it should emphasize the benefits

offered by a product, rather than on its features. Even though the entrepreneurs want to focus

on the features of the product, for which they put a lot of effort, customers are only interested

in the way the product/service will improve their lives. (Aparicio, Urbano, et al 2016)

The way entrepreneurs transmit a message about the features of their products/services

is by building a brand. According to Barringer and Ireland (2015), a brand makes reference to

several attributes of a business that people associate with when they think about its

products/services. By building a brand, entrepreneurs are able to improve the loyalty of

customers. Building a brand represents a challenge for entrepreneurs because they have to

create a personality of the venture that fits to the category of customers they address. The

personality of the firm should have certain characteristics that make it different from

competitors, and bring benefits to customers, such as: lowe r prices, quality, fun, and so on.

(Vilcov, Dimitrescu, 2015)

After establishing the way their business should be perceived by customers,

entrepreneurs have to decide about the methods used in order to build the brand. The most

common such methods

are the following: advertising (logo of the business, we bsite),

sponsoring different events or social causes, public relations, word of mouth, positive reviews

in magazines, and so on. (Kotler, Armstrong, 2013) Out of these alternatives, expert believe

that entrepreneurs should not focus more on adevrtising than on the other ways of promotion.

Customers and journalists are not interested in the way a company is better than its

competitors, but they want to emphasize the story of that business, and story that should set it

apart from other

start-ups. Even though building a brand is takes a lot of effort and time, there

are several benefits that can derive from it: the value of the business increases in the case the

founders want to sell it, and the entrepreneurs can set higher prices for the products/services

in order to match with the image they bring to the customer.

The following step after building a brand is to think about the marketing mix. (Kotler,

Armstrong, 2013) This concept refers to the tools used by a venture in order to determine the

consumers to respond to its efforts the way it wants. Usually, when we think about the

marketing mix, there are four words that spring into our mind: product, price, promotion and

place (the 4Ps).

The product refers to the goods or services sold by a business. The product chosen to

be sold by a business determines the willingness of investors to help the entrepreneurs with

capital. Usually, investors express their preference for ventures that come up with innovative

products, because customers will pay more for these since they feel the benefits more

intensely. (Barringer, Ireland, 2015) Nevertheless, regardless of the fact that entrepreneurs sell

a breakthrough product or an usual product, they have to be carefull about several aspects.

Firstly, they have to make the difference betwe en the core product and the actual product,

which refers to the packaging or the design that are added to the core product. Secondly, new

ventures face the challenge of determining customers to try their products instead of buying

from we ll-known businesses. The most common solution used for this problem is to ask a

customer who already used those products, to give a testimonial/feedback, in order to

convince other people to try these. Of course, the entrepreneurs should offer the product for

free or with discount, in order to attract the first customers, but their feedback could be used

in brochures or other type of advertisement, or they can advocate for the business.

The price refers to the amount of money that the customers pay in exchange for a

product. (Kotler, Armstrong, 2013) The price reflects the image associated with a product, and

for which customers are willing to pay. One temptation of entrepreneurs is to establish low

prices for their products in order to attract customers, but this is not a recommended practice

because they will have a small profit. (Barringer, Ireland, 2015) Moreover, consumers usually

judge the quality of a product based on its price. Therefore, if a product has a low price,

consumers will assume that it will have a low quality. On the other side, if a premium price is

charged for a product, then this price must be justified by one or more reasons such as the

following: a high demand for the product, its positioning as a luxury product, the use of a

breakthrough technology, and so on. Of course, when setting a high price, the entrepreneurs

should match the positioning and the branding according to it.

The promotion comprises those activities undertaken by a business in order to inform

potential customers about its products, the ultimate purpose being to convince them to

purchase that particular product. (Thorgren, Siren et al, 2016) Even though entrepreneurs have

a wide variety of activities through which they can promote their business, they face the

difficulty of chosing only some of these, due to the reduced financial resources they have.

(Aparicio, Urbano et al, 2016) Several examples of promotional activities are the following:

advertising, public relations, participation in trade fairs, sponsorships, viral marketing, and so

on.

Lastly, place refers to the activities performed with the purpose to make the products

to reach to customers. This last element of the marketing mix involves selecting one or more

distribution channels, and whether to reach customers directly or through intermediaries.

(Barringer, Ireland, 2015) Each of the options bears its own challenges. For example, if the

entrepreneurs chose to sell through intermediaries, they may encounter difficulties, such as:

losing control regarding the way products are sold, the occurrance of the channel conflict (the

roles of selling channels are contradictory).

After presenting the steps for any entrepreneur to promote his/her business, WE want

to emphasize several aspects regarding this subject. As it can be seen from the above

presentation, in order to succeed, entrepreneurs have to build a brand around their business

idea. Globalization and the Internet help people to have access to products and services from

all around the world, therefore, the only way for entrepreneurs to have loyal customers is to

determine them to be emotionally attached to the business. Therefore, it is easy to understand

the importance of branding, which can be understood as a way for entrepreneurs to convince

customers and to communicate with them. (We bb, Ketchen et al, 2010)

In order to build a brand, entrepreneurs have to combine the online and offline

communication tools. Usually, when it comes to promotion, most entrepreneurs believe that

they do not have enough resources. (Kotler, Armstrong, 2013) Nevertheless, nowadays it is

easier for them to promote their business, with the help of information and communication

technologies. These days, most of the people use the Internet on their phone or tablets in order

to find out more information about the things they are interested of. The idea of having an

online presence is to be found easily and fast. Moreover, there is a high probability that one

can find information about any business, but it is very important to control that information,

and to create the image or the brand the business owner wants to transmit to people.

The first step that entrepreneurs perform for promoting their business in the online

environment is to make their presence known on social media, such as Facebook, Twitter,

Tumblr, and so on. (Andy Aditya, 2015) The goal of marketers who use these tools is to

remove the geographical and emotional barriers betwe en a business and its customers, but

this aspect did not change the fact that the customer is the king. (Kudeshia, Sikdar et al, 2016)

The social media platforms became a convenient tool to be used by entrepreneurial ventures

in order to reach to more customers, to communicate with the actual customers, and to build a

brand. These platforms are convenient

because the entrepreneurs do not have to spend a high

amount of money on promotion, but if they manage to reach to as many people as possible

through this tool, then the entrepreneurs are able to increase their selling opportunities.

One example of a way in which social platforms help businesses to increase their

brand awareness, is the fan page that can be created on Facebook. Fan pages allow the users

of Facebook

to follow the pages of certain businesses and to recommend these to their friends.

When a person likes a fan page, this fact can be seen on his/her profile and it will be seen by

his/her friends also. Kudeshia, Sikdar et al (2016) performed a research with the purpose to

find out if there is a link betwe en following a fan page of an entrepreneurial venture, and

brand love and purchase intention. Their research revealed that following a business on

Facebook, increases the attachment of followe rs towards that particular brand, as we ll as

their intention to purchase products of that business. The researchers discover also, through

their research, that liking the page of a company on Facebook, has different influences on men

and women, as it follows: for men it was noticed an increased word of mouth effect, and for

women a more intense purchase intention.

There is also the possibility for entrepreneurs to pay for sponsored advertising in order

to attract more followe rs on the channels of social media. Nevertheless, this option presents

some problems. (Benthaus, Risius et al, 2016) First of all the followe rs might not be real

persons, but computers. Secondly, more and more people who are present on social media use

a special technology that blocks the sponsored advertising. Anyhow, in the case when people

allow social media to show sponsored advertising, the entrepreneurs should create advertising

that stirs the curiosity of followe rs.

Even though entrepreneurs do not need financial resources in order

to promote on

social media, they have difficulties in attracting and convincing people to follow their

profiles. In this sense, Aditya (2015) recommends the practice of other promotional activities

in order to attract people and to convince them to follow the updates of a venture on social

media. Some examples of other promotional activities are the following: glossy brochures,

outdoor poster campaigns, promotional products, flyers, and so on. In order for your brand to

become easily recognisable, entrepreneurs should combine the online advertising, with the

offline promotion and public relation activities.

Starting from the information presented in this subchapter, WE will continue this

study with an analysis of the challenges encountered by Romanian entrepreneurs when they

start a business, as we ll as their techniques for promoting the products, building a brand, and

communicating with customers.

1.3 Challenges of Romanian Entrepreneurs

This last subchapter is dedicated to analysing the situation of Romanian entrepreneurs

taking into consideration the challenges they have to face. The last point of this part of the

study is to identify, in general lines, solutions of new Romanian entrepreneurs for promoting

their businesses. According to the data provided by the Global and Entrepreneurship Monitor

(GEM), Romania was characterized by an increasing number of entrepreneurs in the previous

years. Most of the entrepreneurs started their business by identifying an opportunity.

Regarding the future scenarios, GEM expects that the number of persons who are going to

start a business in the following three years will increase as we ll, but, it is believed that these

businesses will not be started with the purpose to introduce an innovative product on the

market. The most important trait of Romanian entrepreneurs is the fact that they have

confidence in their skills, when it comes to open their own business, but, in the same time,

they are afraid that they will fail.

According to GEM, the entrepreneurship in Romania is enabled by a series of factors,

such as: the favorable legislation, the market dynamics, and the commercial infrastructure.

Also, there are numerous progammes supported by the Government and from European

funds, that promote entrepreneurship and improve the skills of those who want to become

entrepreneurs. On the other side, there are also constraints and challenges for Romanian

entrepreneurs, such as:

- The financial resources necessary to start a business are hard to obtain. People who

want to start a business, have difficulties in obtaining external funding from financial

institutions, government, business angels, and so on.

- Entrepreneurship is not a subject very we ll studied during school. This means that

Romanian people are not used with the idea of becoming entrepreneurs, thus they will show

no attempt to follow this career path.

As it can be seen, the Global Entrepreneurship Monitor emphasizes few challenges

met by Romanian entrepreneurs. Further research performed by Zaman, Vasile, et al (2012),

and Toma (2015), suggests that the most important challenges of entrepreneurs in Romania

are the following:

- The difficulty of obtaining external funding - This problem is especially available in

the case of young entrepreneurs, because the financial institutions do not trust to lend them

money to start a business. This issue was also mentioned earlier in this chapter, where WE

emphasized the fact that financial institutions lend money to the experienced entrepreneurs,

who proved to be reliable, or to those businesses showing through their financial statements

that they are able to pay back the money.

- The lack of financial knowledge The Romanian entrepreneurs face difficulties in

administrating the cash flow or in finding external funding for growing the business. Some of

the solutions identified by them are the following: finding a business partner who has

knowledge in this field, improving their own knowledge, or participating in special programs

that encourage start-ups.

- Managing the team Even though many entrepreneurs have the oportunity to study

in university the way employees should be managed, they understand the management only in

the moment when they have to practice it. For a new entrepreneur, management involves all

the actions from finding the best employees for the new venture, untill convincing them to

stay in a business with an unsure future.

- Measuring and evaluating the efficiency of employees and processes If the

founders of a business aim to have a long-lasting business, with growth potential, they have to

evaluate the results.

- Presenting a strong and convincing business plan The entrepreneurs have

difficulties in writting the business plan, but also in the moment when they have to present it

in front of a possible business partner or investors.

- Sales problems The main problems related with this issue refer to promoting a new

product on a market where it did not exist before, convincing the customers to purchase it,

and dealing with those clients who are very demanding.

- The fear of entrepreneurs to fail - This challenge is especially available for women,

and, as mentioned before, men are more willing to assume risks for their businesses.

- Responsibilities involved with having a family - This challenge is also applied more

in the case of women, because they have to raise the children and to manage the household.

As it can be observed, Romanian entrepreneurs encounter similar challenges with the

ones presented in the first subchapter. This leads us to the idea that, regardless of the business

environment in which the entrepreneurs implement their business idea, the decisive factor in

succeeding, is their experience and continuous development. In other words, if entrepreneurs

invest in their knowledge and relationships, then they will be prepared to face the difficulties

that might incur on their entrepreneurial path.

Cassar (2010) found another explanation for illustrating the way entrepreneurs should

react in order to face the challenges aforementioned, and this is through having high

expectations for achieve success with their business idea before starting to implement it. As

the author stated, the overoptimistic expectations of entrepreneurs determine them to continue

with the business idea even if they do not have results according to their expectations. The

overoptimistic expectations are achieved by individuals through a plan/view/forecast of the

business. Having a plan of how the business idea will be implemented and developed, means

to take into account obstacles that might occur, and to create scenarios, and all these help

entrepreneurs to continue their activity. Moreover, the optimism of entrepreneurs is increased

when they use the formal business planning and projected financial statements, even if they

have the tendency to not be realistic in setting sales forecasts.

To sum up, the challenges of entrepreneurship should be perceived by entrepreneurs as

opportunities for them to develop their skills, to acquire new knowledge, or even to extend

their network of partners. The entrepreneur is the only person who should perform all these

actions, because he/she has a vision about the business idea, and he/she is the only person

who understands this vision and knows how to achieve it.

The final aspect to be discussed in this subchapter relates to the techniques

implemented by entrepreneurs with the purpose to promote their ventures. It was mentioned

earlier that entrepreneurs should aim to build a brand around their business ideas, in order to

distinguish themselves from other ventures or from large companies.

The Romanian young entrepreneurs identified many ways for promoting their

businesses, because the Romanian business environment is open to adopting trends and

successful practices of large companies present at international level.

One such successful trend is the use of social media. Actually, social media is the first

promotional tool used by most of the new entrepreneurs due to the fact that the costs are very

small, they can reach to many customers from everywhere in the country, and they can

establish o more personal relationship with customers. Social media can be used also as paid

advertising, in the sense that entrepreneurs pay for promoting their businesses to as many

customers as possible.

Romanian entrepreneurs focus also on offline promotional activities, and sometimes to

a higher degree than it is the case of online promotion. Some examples in this sense, could be

the following actvities:

Participation to fairs Fairs are organized in the larger cities of Romania, for

different reasons. There are fashion fairs, fairs for natural products, Christmas fairs, and so on.

These fairs are an opportunity for entrepreneurs to meet new customers, to obtain feedback

about their products and about the price, to interact with other entrepreneurs, and so on.

Advertising in specialised magazines There are specialized magazines for many

field of activity, and entrepreneurs take advantage of this opportunity in order to promote their

activities. In the case of magazines, entrepreneurs have two alternatives: either they pay for

advertising in that magazine, or they receive free advertising if their story impresses the

authors who write articles, and these authors decide to present the entrepreneurs as role

models for other in the same industry.

Word of mouth / Recommendation Some entrepreneurs rely on the

recommendations made by their satisfied clients. This applies in general for those businesses

where the relationship with clients is more personal, and the entrepreneur is not interested to

have many clients.

Sponsorship Some entrepreneurs decide to sponsor charitable, sportive,

educational, and other types of events. In this way, they manage to get known by more

customers. Also, this type of activities create a positive image of the business.

As it can be seen, the Romanian entrepreneurs combine the online and offline

promotional activities for their businesses. This may happen because of several reasons:

specific promotional activities of the industry; resources available; evolution of their business;

the type of customers they target, and so on.

Anyhow, there is little research regarding this subject applied in the case of Romanian

entrepreneurs, reason for which WE decided to analyse it during the present study. In order to

see the promotional tools used by Romanian entrepreneurs in order to communicate with their

customers, WE organized a series of interviews. The results of our research will be presented

in the following chapters.

2. Methodology

The present study aims to offer some insights regarding the challenges faced by young

entrepreneurs, when it comes to promote their business. In the first part of this study, WE

mentioned some challenges identified by researchers, referring not only to promotion, but also

to other aspects of a business, such as finding the right employees, raising the necessary

funding, managing the growth of the business, and so on. For the rest of our study WE will

perform a research and WE will focus only on the promotion of a start-up.

The research will be based on five interviews with young entrepreneurs, who studied

in the Bucharest University of Economic Studies, and who started a business during their

studies, or shortly after finishing the studies. The time period in which the interviews we re

performed is betwe en March and May, 2016.

WE selected these entrepreneurs because of several reasons. Firstly, they are young

persons who succeeded very fast in achieving success with their businesses. Secondly, they

have ventures in different fields of activity, and this allowe d me to see whether different

promotional practices depending on each industry. Thirdly, they started the businesses with

their own resources or with financial help from family and friends. Since they did not dispose

of large funding for starting their businesses, they had to come up with creative solutions for

promoting their businesses. Therefore, the sample is relevant for our research because it offers

me the possibility to see how these entrepreneurs managed to come up with solutions for

promoting their businesses. (Premand, Brodmann et al, 2016)

Therefore, before starting to explain the results obtained from interviews, WE will

present some aspects regarding the interview as a research method. Afterwards WE will

present some data about the entrepreneurs whom WE interviewe d, and in the following

chapter, WE will develop the observations performed after organizing the interviews.

2.1 Interview as a research method

According to Edwards and Holland (2013), the interview is one of the most common

methods for performing qualitative research. The aim of performing an interview is to identify

the people's perception regarding aspects of their life or experiences. In general, an interview

can be structured, semi-structured or unstructured.

A structured interview comprises a series of questions, which are addressed in a

particular order and they are the same for all the persons interviewe d. In other words, a

structured interview is similar with a questionnaire. This type of interview might contain

closed questions or open-ended questions. In the closed questions, the interviewe r

enumerates several possible options from where the respondent has to chose. The open-ended

questions have the purpose to capture more information, but the interviewe r should take into

consideration that more information will require more time to analyse the results. The

structured interview is used in those situations when the interviewe r is interested in obtaining

information from a high number of respondents, reason for statistical methods of analysis

might be applied to the results obtained. (Greco, 2016)

Regarding the other two types of interviews, semi-structured and unstructured, they

are considered more appropriate for obtaining a qualitative research. The semi-structured

interview contains a series of questions to be approached, but they serve as a guide, in the

sense that the interviewe r can ask these questions in whatever order he/she prefers and he/she

can ask additional questions. The structured interviews encourage the interviewe es to better

express answe rs by using their perspectives as point of reference. Since the questions are

open-ended, the interviewe e might encounter problems in finding answe rs. Therefore, the

interviewe r should offer some hints that will guide the interviewe e in formulating an answer.

(Rosenthal, 2016) Usually, this type of interviews are created with the purpose to gather

information regarding the attitude of respondents, and the subjects approached cannot be

expressed in closed-questions, due to the fact that the interviewe r does not have enough

information in order to enumerate alternatives.

An unstructured interview does not have a structure. It usually starts with one or two

questions, and it continues with additional questions addressed by the interviewe r depending

on the discussion's direction. The purpose of such an interview is to approach few topics, but

the respondent should offer a lot of details for each topic discussed.

After presenting the types of interviews, we would like to develop the possible ways

in which an interview can be performed, which might be the following: face-to-face, through

telephone, online and focus groups.

The interviews performed face-to-face require a lot of effort, but they provide the

highest quality of the information gathered. (Greco, 2016) Such interviews are performed in

those situations when there might be long or lengthy questions, or when the topic approached

is a sensitive one. Face-to-face interviews should offer a high degree of flexibility, but, on the

other side, the interviewe r has the role to find ways for encouraging respondents to develop

the topic. In this sense, some of the actions that the interviewe r can perform, could be the

following: offer clarifications in case of misunderstandings, set a direction during the

discussion, research carefully the answe rs, and so on.

The interviews performed through telephone present some specific advantages. Such

interviews involve less costs, and they can be used for respondents who live in separate

geographic areas. On the other side, one disadvantage could be the fact that the interviewe r is

not able to show visual elements to the respondents while asking the questions. Nevertheless,

the interviewe r could send the visual materials before the interview to take place. (Rosenthal,

2016)

In the case of focus group interviews, the information is gathered from several persons

in the same time due to different reasons. One reason could be the fact that the researcher

cannot implement other methods of research in a given context. Other reasons could be the

fact that the researcher was able to find a group of people having a common characteristic, or

group discussions might lead to a better approach of the topic.

There are several stages of an interview (Edwards, Holland, 2013):

· To locate the respondent The interviewe r has the option to chose the persons to be

interviewed, or he/she might be given a predetermined list. Anyhow, the location and

timing of the interview should be established in agreement with the interviewe es, and

they have to be informed regarding the duration of the interview.

· Obtain the interviewe e's agreement The agreement should be expressed in writting

as a result of an invitation sent to the interviewe e. This invitation should contain

information regarding the following aspects: the purpose of the research, a

specification that the participation is voluntarily, an assurance regarding the

confidentiality and anonimity of the information obtained, information regarding the

reason for performing the study and for chosing the respondent.

· Asking the questions The interviewer has to respect several rules during the

interview. In the case of a structured or semi-structured interview, the interviewe r

should respect the order of the questions to be asked, he/she should not express his/her

personal opinion, and he/she should be consistent during the interaction with the

interviewe e.

· Record the answers The way answe rs are recorded after an interview, depend on

the type of interview. In the case of structured and semi-structured interviews, the interviewe r

should write the answe rs obtained. In the case of unstructured interviews, the interviewe r has

the possibility to record the discussion, and in this way, he/she is able to listen carefully to

what the interviewe e has to share, and to ask questions appropriate for the topic debated.

In order for the interview to develop we ll, the interviewer has several responsibilities

to fulfill. (Greco, 2016) Firstly, the interviewers should have good communication skills, such

that even a structured interview would look like a relaxed discussion. They should avoid

expressing their personal opinion during the discussion, they should offer clarifications, and

listen more than talk. Secondly, the interviewe rs should establish a rapport with the

interviewe e. This is possible through several actions: explain the purpose of the research,

listen to questions from the interviewe e, display a body language that encourages the

interviewe e to feel relaxed. Thirdly, the interviewe rs have to analyse the information

obtained from interviews. There are different approaches for quantitative and qualitative data.

The quantitative data is based on numbers. As in the case of questionnaires, the

researcher has to use a software in order to analyse the data. After introducing the data and

chosing the operations to be applied, the researcher has the possibility to compare results and

to draw some conclusions. (Edwards, Holland, 2013)

The qualitative data is based on texts, and it is obtained from semi-structured and

unstructured interviews. Since the focus is on quality and not on quantity, the researcher

should not state that a certain number of interviews have a particular perspective. The focus

should be on explaining why and how the answe rs obtained differ from each other. The first

step in analyzing qualitative data is to obtain transcripts of the interviews' records. The

transcripts are helpful in comparing the responses obtained, and in paying attention to those

details that the interviewe r forgot after the interview.

In the analysis of qualitative data, the most effort is required when the researcher has

to perform a content analysis, which means to identify the common ideas that we re specified

during interviews. This activity will require also a lot of time, because the interviewe r has to

read each transcript and to write notes there where he/she identifies the main ideas. Further

on, the researcher should look for differences betwe en the opinions of the interviewe es, and

he/she should identify the reasons behind these differences. From this moment, the researcher

will pass to the next level, from analysing the data to developing theories for explaining

his/her observations. In order to check if the results obtained illustrate the true meaning of

interviewe es' answe rs, the interviewe r might ask the persons interviewe d to express their

opinion regarding the results obtained. (Edwards, Holland, 2013)

As it can be seen from the above presentation, interviews are used in order to obtain

qualitative data, fact which is indicated by the amount of time and effort involved in order to

organize an interview, and to draw conclusions based on the answe rs received. Our

motivation for chosing this research method was to obtain qualitative information from where

to improve our knowledge regarding this subject. Moreover, WE considered that an interview

is more appropriate for the purpose of our research due to the fact that each entrepreneur has

his/her own approach regarding the promotion of their business, adapted to the context,

resources, personality, objectives, and so on.

The use of interview is relevant for our research because it allowed us to analyze more

deeply the experience of the entrepreneurs we interviewed. Some of the advantages that the

interview, as a research method, presents for this study, are the following:

we managed to discuss freely with the interviewees and to ask them for details when

we needed more information.

During the interview we realized that we did not think about all the aspects that we

should have asked, but, given the fact that we were discussing with the interviewee,

we were able to adjust the questions.

Interacting with the interviewe es offered us the opportunity to understand their body

language, to observe those ideas that they repeated several times, meaning that these

were important for them, and so on. In other words, we were able to see behind what

they aimed to transmit through words.

In terms of disadvantages presented by the interview, as a research methods, we can

mention the following aspects from our own experience:

The interviews are time consuming.

Sometimes we faced difficulties in finding the right moment when we could take the

interview.

The processing of answers received is more complicated than in the case of interviews.

To sum up this sub-chapter, we will say that the interview presents advantages and

disadvantages as a research method, but for our case, it was the most appropriate instrument

to gather the information we needed. This instrument of research allows an interviewer to

have a free discussion with the persons interviewed, to adapt the questions to the case of the

person interviewed, to analyse the body language of that person.

In our case, taking interviews allowed us to learn from the experience of the

interviewed entrepreneurs, to identify specificities for each of them, and to improve our skills

as interviewers. As stated earlier, we consider that the interview was the most appropriate

research tool for this study.

2.2 Descriptive statistics

As mentioned earlier, we chose as subjects for our research several entrepreneurs who

graduated from the Bucharest University of Economic Studies. They are young entrepreneurs,

who started small businesses either during the faculty or after they finished it. We had the

opportunity to get in contact with them during lectures or through participation to special

events dedicated to entrepreneurship. When chosing these entrepreneurs for our interviews,

we based our decision on several criteria:

Impressions gained after discussions with these entrepreneurs. Since we are interested

in this field, we discussed very much with the entrepreneurs that we know in order to

learn from their experiences, but also to share with them fears and questions in order

to understand the way they managed to pass over all these.

Lessons learned during the discussions. Our intention was to share in this study the

lessons that we learnt from them.

They are doing business in different fields of activity. WE considered that it will be

interesting to analyse challenges imposed by different domains, and whether there are

similarities in the promotional tools used by them.

We aimed to chose mostly entrepreneurs who started their businesses with a small

capital, obtained either from personal savings, or from family and friends. We were

interested in those entrepreneurs who benefited from a small capital, and who were

forced to find creative ways to promote their businesses and to get involved personally

in promoting themselves.

The interviews we re taken face to face, and in the case when we needed extra

information in order to better understand the answer, we asked for details from the

entrepreneur through social media. The interview was semistructured, in the sense that several

questions contained options from where to chose, but there we re also questions allowing the

interviewe es to develop their answe rs without any constraint. The questions of the interview

are available in the Annex. We interviewed the following five entrepreneurs:

1. D.M. Anaide;

2. B.I. Petrolhead;

3. R.O. Interactive Digital Labs;

4. A.D. Louiscafe;

5. A.Z. Square Beauty Concept;

We will present in several lines their object of activity in order to better understand

the meaning of their answe rs regarding ways to promote their businesses, and challenges

faced on the entrepreneurial path.

Anaide is a small business opened by D.M. in 2015, during her first year of master.

She is 24 years old, and she graduated from the Faculty of Business Administration, and the

Master of Entrepreneurship and Business Administration from the Bucharest University of

Economic Studies.

Her business activity is to design and tailor personalized dresses for evening, special

events or we dding dresses, of high quality. She obtained the necessary capital for starting this

venture from personal savings and parents. Most of the costs came from renting and

decorating the space where dresses should have been displayed (showroom), from the costs

with the labor force and from purchasing the initial raw materials. WE chose her for the

interview because she is successful without investing a high capital in the traditional

marketing tools, even though she is doing business on a very competitive market.

Table 2: Data about the entrepreneur D.M.

The entrepreneur

Activity

24 years old

Faculty of Business Administration

Master of Entrepreneurship and

Business Administration

Anaide showroom

Dresses for evening, special events,

we dding dresses

Petrolhead is an online magazine that presents news and articles related to cars. At this

moment, the founders do not sell the printed version of the magazine. We chose to interview

one of the founders, B.I.. He is 24 years old, and he studied at the Faculty of Business

Administration, and at the Master of Entrepreneurship and Business Administration.

B.I. was one of the persons that we interviewed because we had some previous

discussions with him regarding his business, and these discussions helped us to gained some

insights regarding his challenges to promote this business. In fact, he is one of the few

interviewees who really invested in marketing, therefore we considered that it will be

interesting to learn from him.

Table 3: Data about the entrepreneur B. I.

The entrepreneur

Activity

24 years old

Faculty of Business Administration

Master of Entrepreneurship and

Business Administration

Petrolhead a magazine dedicated to

cars

Interactive Digital Labs is a business established by R.O. in 2015. He has 23 years old,

and he finished the Faculty of Marketing and the Master of Entrepreneurship and Business

Administration in the Bucharest University of Economic Studies.

Interactive Digital Labs helps other businesses to build an online presence, or to

improve their existing presence in the online environment. The necessary capital for starting

this business was very small, since the founder had the needed kowledge and equipment for

doing business. Even though the founder is a specialist in online marketing, we realized

through discussions with him that he promotes this business not only in the online

environment, but also through traditional practices. The interview that WE took from him

helped me to get a deeper insight of this case.

Table 4: Data about the entrepreneur R.O.

The entrepreneur

Activity

23 years old

Faculty of Marketing

Master of Entrepreneurship and

Business Administration

Interactive Digital Labs

Helps other businesses to build an

online presence

Louiscafe is a small business started by two students in 2015. The two founders are

A.M. and A.D., and they started this venture in their first year of master. Their business idea

was to sell coffee to students from the Bucharest University of Economic Studies, by placing

a tricycle with coffee in front of one of the buildings of this University. The two students

invested approximately 5000 euros in opening this business, their main costs being with

creating the tricycle and with obtaining the necessary permits from the local authorities.

We decided to take an interview to one of the founders, A.D., because we were

interested to find out what promotional tools they use, knowing that they sell coffee only in

front of this University. A.D. is 24 years old, and he studied the Faculty of Cibernetics,

Statistics and Informatics, and Master of Marketing.

Table 5: Data about the entrepreneur A.D.

The entrepreneur

Activity

24 years old

Faculty of Cibernetics, Statistics

and Informatics

Master of Marketing

Louiscafe

Selling coffee to students

Square Beauty Concept is a business started by A.Z.. He is 21 years old, he originates

from Iraq, and he finished the Faculty of Business Administration.

Square Beauty Concept was established in 2015, from the capital of the owner, and it

has three employees: two persons working for hairdressing, and one person working for

manicure and pedicure. The salon offers several types of services, such as the following:

hairdressing, make-up, manicure, pedicure, and so on. The owner wants to enlarge the variety

of services offered by adding solarium tanning and hena tatoos.

Table 6: Data about the entrepreneur A.Z.

The entrepreneur

Activity

21 years old

Faculty

Business

Administration

Square Beauty Concept

Services offered: hairdressing,

make-up, manicure, pedicure, etc.

These are the five entrepreneurs that we interviewed for our research. As it can be

seen, they started businesses in different fields of activity, which makes the research even

more interesting because from each of them we learned new things.

The results obtained from interviews will be presented and analyzed in the following

chapter. The aim of the current chapter was to introduce the reader to the research method

used for this study, to present this method and to offer some information regarding the

subjects of our research.

Therefore, for the current research we used a semi-structured interview. The interview

allowed us to obtain qualitative information, regarding challenges faced by entrepreneurs in

promoting their business. If we would have opted for a questionnaire, we would have not

been able to find out so much information on this subject, to identify particularities for each

of these businesses, and to make connections betwe en the answers obtained and the actual

situation of these businesses. Through the interview we managed to ask more details in those

areas that we found interesting, or to encourage the interviewee to develop an idea that

attracted our attention. The result of these interviews was that we learnt new things from all

the interviewed entrepreneurs, and it stirred our curiosity to watch more entrepreneurs and to

learn from discussions with them.

The following chapter is dedicated to anaylzing the responses obtained from

interviews, based on which we will formulate several thoughts and recommendations.

3. Interviews analysis

The aim of this chapter is to reveal the information obtained with the help of

interviews. We want to state from the beginning of analysis that taking interviews to young

entrepreneurs represented a challenge for us from several points of view. Firstly, it was

difficult for us to chose the interviewees, since we know quite a lot of entrepreneurs.

Nevertheless, our objective was to chose persons doing business in different fields, because

we wanted to gather knowledge from multiple fields of activity.

The second challenge was the interview itself. We do not have experience in this kind

of activity, and even though we interacted with persons whom we knew, it was difficult to

approach them as business persons. Especially during the interview, we found it hard to

establish a logic between the questions, and to come up with new questions in order to obtain

a better understanding of what the interviewee wanted to communicate.

The analysis of answers obtained from interviews consists of several steps (Burnard,

Gill et al, 2008):

· Reading the notes written during the interviews. We will quickly review the data

gathered in all the interviews and we will write some first impressions.

· Highlighting the information that attracts our attention, such as words, sentences,

paragraphs, and so on. The pieces of data that are labeled, could refer to activities, opinions,

concepts, anything that is relevant for our research. There are several aspects indicating

whether some data is relevant, and these are: the data is repeated; it has an impact over the

interviewer; it is emphasized by the interviewee; the interviewer is familiar with the concept

from previous research. (Kent, 2013)

This step is known as coding. The result obtained at the end of this step is information

selected by the interviewer, because he/she considers that it is important.

· Classifying the codes in categories or themes. The categories may refer to

processes, differences, concepts, and so on. Anyhow it requires creativity and openness to

new possibilities, because data is transformed into concepts.(Hamdani, Valcea, Buckley,

2014)

· Identifying the connections between categories and determining which are the most

important. Firstly, we should label the categories by giving them names such as: seeking

information, adapting to changes, etc. Secondly, connections should be established between

these categories. The result obtained is in fact, the most important output of our research. This

result brings knew knowledge to those who will read our analysis, knowledge that is provided

through the perspective of interviewees. (Kent, 2013)

· Proposing some options. Here, as researchers we might establish a hierarchy

between categories identified, or create a figure that better emphasizes the results of

our study.

· Presenting the results. In this section, we will have to perform two actions. Firstly, we

will reproduce the results by trying to stay objective, such that the readers will not get

the idea alterated by our interference. Secondly, WE will create a discussion part

where WE will express our opinion and interpretation. Of course, here WE can

perform a comparison with results presented in other scientific studies, or with

concepts identified during our studies. (Burnard, Gill et al, 2008)

3.1 The coding process

In this sub-chapter we will explain how we performed the steps of the coding process.

We will start with presenting the step in which we highlighted the important

information from the answe rs received during the interviews. This step suposses to label the

relevant pieces of the information from interviews. In the pictures below we illustrated the

information that we extracted from the records of the interviews.

Figure 1: Labeling of the first three questions from the interview

It can be seen that for the first question, most of respondents stated that they try to be

open to opportunities regarding the way they should promote their businesses. On the other

side, time represents an issue for them, since they have to take care of all the aspects of the

business. Regarding the most used promotional tools, the interviewe d entrepreneurs prefer

those activities that do not require high investment, such as: social media, networking,

recommendations.

In the following figure, we illustrated another set of questions from the interview.

Figure 2: Labeling of the questions 4,5,6 from the interview

Through the fourth and fifth questions of our interview we wanted to find out whether

the entrepreneurs we interviewed invested in their own knowledge or they paid for the

services of a specialised firm. As it was expected, most of them learned by themselves about

the promotional activities they wanted to implement, by watching tutorials or discussing with

specialists in the field. They say that they do not have in mind a certain set of promotional

activities, and they just try and see what works best for them.

Regarding the time allocated for promotion, the interviewes stated that they dedicate

as much time as it is needed, but it is difficult for them to find that time available.

Figure 3: Labeling of questions 7,8,9

As it can be seen in the notes, time is an important issue for entrepreneurs, because

they have to manage all the aspects of the business. Most of the interviewes stated that they

cannot trust employees to do very we ll their job, reason for which they should be supervised.

Moreover, employees are specialized on a certain type of activity, and only the entrepreneur

knows how to manage all the aspects of the business.

When asked about the degree of satisfaction that the interviewes have for their

promotional activity, most of them graded themselves with 3. Each one expressed some

intentions regarding the future projects of their businesses. Some examples in this sense we re

the following: flyers, collaborations with business partners, business cards, and so on.

The third step refers to creating categories of codes. The categories that we identified

are the following:

· Attitude Attitude is very important for a young entrepreneur, especially in the

case of the ones interviewed by us, because they started with their own funds, most of them

do not have a business partner, therefore they took all the decisions and performed most of

activities.

· Difficulties Having a business is definitely a challenge and difficulties appear

each and evey step. Of course, through the interview, we wanted to identify mostly those

difficulties related to promoting the business. Nevertheless, our intention was to look further

and to see other difficulties encountered by entrepreneurs, and how they prioritize these

difficulties when having to allocate time and resources for implementing solutions.

· Promotional activities This is a special category due to the fact that young

entrepreneurs do not dispose of enough financial resources in order to promote their

businesses, therefore they have to use their creative and to come up with innovative solutions.

The results obtained in this category are not applicable to all the businesses, since the

promotional activities used by these entrepreneurs are specific to their cases.

There is a strong connection between these three categories. We would say that

attitude is the most important category from the three proposed above. A certain attitude offers

an orientation regarding the activities performed by the entrepreneur. In the interview, we

asked the interviewees to chose between several options regarding the attitude they adopted in

business, and these are the following:

· They assume risks.

· They are open-minded and say yes to every opportunity.

· They like to control everything.

· They lack trust in themselves.

It is believed that all the respondents chose the second option, but in reality they did

not. Of course, most of them stated that they are open to new perspectives in an attempt to

find better solutions for their businesses, but there also respondents chosing the third option.

Some of them stated that they would like to control everything because the competition is

high and they have to fulfill several functions in the same time. Therefore, time management

is an issue, taking into account that they cannot afford to hire more employees.

The attitude category is important from other perspectives as well. For example, one

can think about the attitude of an entrepreneur towards difficulties. Some of them might be

relaxed, thinking that they will find a solution for everything, while others might be very

nervous and stressed about the obstacles they have to face. Another example could be the fact

that some persons invest time and effort in order to find a solution, by reading articles or

books, exchanging experience with other entrepreneurs, asking the advice of a specialist,

consulting with employees, etc. Other entrepreneurs might chose to take a decision based on

their knowledge and experience.

Finally, attitude is important in chosing the promotional activities. During our

research, some respondents stated that they like to use their creativity and to adapt to

possibilities, others select promotional activities based on the results obtained by other

entrepreneurs or based on their experience, and others wait to obtain the necessary finances.

To sum up this part of the study, we would say that the above statements are strong

arguments for indicating that the attitude category is the most important one, representing the

source of all decisions made in the other two categories. Of course, we were not able to assess

the attitude of respondents based on the question mentioned above, but during the entire

interview. As the interviewee understood the point of our research, and opened himself/herself

to us, we were able to identify some insights regarding his/her attitude as an entrepreneur. The

additional questions helped me greatly to achieve this objective. Now, when we analyse the

results, we would say that the attitude chose by entrepreneurs at the first question, is different

from the attitude they actually displayed during their activity, and which we were able to

identify based on their information.

The second category refers to difficulties. For this category we allocated two

questions, but, as in the case of attitude, we were able to identify many more difficulties from

the answers provided during the entire interview.

The purpose of the first question was to identify whether the promotional activities

chosen by the entrepreneur represented a difficulty from the point of view of needed

knowledge, time or financial resources. Some of the respondents recognized that all of these

three aspects we re difficult to deal with. All of them are young, and they lacked the necessary

experience in managing a business. Therefore, they had to learn from scratch everything

related to promotion and not only, they we re forced to manage their time very we ll, and they

had to adapt to the available financial resources. Anyhow, WE believe that time is the most

difficult issue to deal with because they either work in order to sustain themselves, or attend

university. Besides work and studies they have to administer the business: maintain a good

relationship with clients, looking for partners, supervising employees, and so on.

The second question addresses the issue mentioned above: whether these

entrepreneurs manage we ll their time. In this case, all of them stated that it is quite difficult to

manage all the aspects of a business (quality, employees, funding). They have to deal with

everything connected to the business, and they are forced to spend a lot of time in the location

of their business in order to make sure that employees work. What is of greatest concern for

them is the fact that they cannot find employees to work fast and according to their standards,

or their current employees are not as serious as they should be. Consequently, if these

entrepreneurs really want to be successul, they have to get involved directly, because no one

will put as much passion as they do.

Other difficulties that were not explicitly stated relate to the following things:

· Seasonality There are seasons when the products/services are not requested very

much, therefore they have to come up with discounts, special offers.

· Difficulties with collaborators Sometimes, the persons with whom they want to

collaborate are very demanding or they have a contract with another business. Two of the

respondents stated that they could not print their logo on the business cards. Consequently,

they are not able to share business cards since they cannot print them.

· Obtaining funding for promotion. Usually, depends on the field of activity. For

example, in fashion, beauty and auto industry, the respondents need large amounts of money

in order to sustain a marketing campaign or to buy equipment.

· Collecting feedback from clients.

The third category of codes refers to promotional activities. For this category we

allocated six questions.

The first question was aimed at finding out whether the entrepreneurs invest in their

own knowledge when they want to promote their business, or they use the help of a

specialized firm. The answers obtained from respondents indicate that most of them prefer to

invest in their own knowledge by watching tutorial or by discussing with specialists in

marketing. Anyhow, none of them used the specialized services of a marketing company.

The second question refers to the promotional tools used, their costs and the benefits

they deliver. The respondents affirmed that the promotional tools that deliver the most

benefits are social media, personalities who present the products, networking and

recommendations. The promotional tools reuiring the highest investment are videos and

photoshooting.

The third question refers to the way in which the entrepreneur decides over the

promotional tools to be used. Most of respondent stated that they read books, they follow the

example of successful entrepreneurs, or they try alone new ideas and they observe which idea

works best for their business.

The fourth questions looks to find out the amount of time dedicated by entrepreneurs

for promotion. Most of them stated that they are willing to grant as much time as it is needed.

Some of time have to dedicate more time for promotion during certain periods of the year,

such as holidays.

The fifth question aims at finding out the degree of satisfaction felt by entrepreneurs

towards their promotional efforts. The average grade chose by them, on a scale from 1 to 5,

was 3. Each of them expressed different ideas regarding how they would like to improve the

promotion. In general they are looking to diversify the promotional activities, but they lack

time and financial resources.

The sixth question included in this category refers to promotional activities that

entrepreneurs would like to do in the future. Most of them knew at the moment of the

interview, the promotional activities they would like to do in the future. In general, they want

to focus on social media, but also on offline activities, such as flyers, business cards, printed

T-shirts.

To sum up, this was the coding process applied to our interviews. This process helped

me to identify the main ideas that we re at the basis of the questionnaire. After applying this

process to our case, we came out to the conclusion that it is an interesting step to be

performed in the analysis of the interview.

In the following sub-chapter, we decided to take further steps in analysing these

interviews, and we used a special software, named Nvivo.

3.2 Processing of interviews in Nvivo

In this last part of our research we aim at withdrawing some conclusions by processing

the answe rs obtained during interviews with the help of Nvivo.

Nvivo is a special software wich supports combined and qualitative methods reserach.

The software helps in organising, analysing and finding insights in unstructured and

qualitative data as: (Buchanan, Jones, 2010)

- Interviews;

- Articles;

- Survey responses;

- Social media.

The main benefits of using Nvivo for processing qualitative data is to save time while

doing this processing, and to manage easily the the data introduced as output. The software

will present very fast the connections betwe en the findings of the interviews and to withdraw

conclusions based on these. (Auld, Diker, Bock, 2007)

In the case of our research, using Nvivo helped us to:

· Save time;

· Organize data;

· Identify new connections;

· Back-up our findings with evidence.

Regarding our research, we started to use Nvivo after the coding process explained

previously. We inserted in the software the three categories of codes that we identified in the

previous sub-chapter: atttitude, difficulties and promotional activities. The below graph

displays the percentage for each of these categories, in the case of Anaide.

Figure 4: The importance of the three categories of codes in the case of Anaide

It can be seen in the above capture from Nvivo the percentages allocated for each

category of codes. Consequently, the category 'promotional activities' has the highest

percentage of 59%, followed by 'difficulties' with 30%, and finally the 'attitude of

entrepreneur' with a 10%.

This shows that the answers offered by interviewee reflect a great concern of the

entrepreneur for promotional activities, followed by the difficulties encountered while doing

business, and finally, the entrepreneur's attitude.

We applied the same process for another start-up, which is Square Beauty Concept, in

order to see the ranking of categories in this case. The following graph illustrates the results

obtained in Nvivo.

Figure 5: The importance of the three categories of codes in the case of Anaide

In the case of this interviewee one can notice a different situation from the previous

respondent. The category registering the highest percentage is the 'difficulties encountered in

business', with 29%, followed by 'promotional activities' with 23% and the 'attitude of

entrepreneur' with a 8%.

Another action that we performed in NVivo was to the determine the importance of

each category for all the interviewe es in the same time. In the chart below it can be seen the

example obtained for the category 'difficulties encountered'.

Figure 6: The importance of 'Difficulties encountered' for all the interviewe es

It can be noticed that the answers from all the interviewees related to 'Difficulties

encountered' obtained a percentage of approximately 30% in each case. Anyhow, these

category presents different degrees of importance for each entrepreneur, the highest degree

being recorded by Anaide, followe d by Interactive Digital Labs, Square Beauty Concept,

Louis Cafe and Petrolhead.

In the next chart we performed the same operation for 'attitude of entrepreneurs'.

Figure 7: The importance of 'Attitude' for all the interviewe es

This graph shows that 'attitude' has a smaller degree of importance for interviewe es,

as the values are comprised betwe en 6% and 8%. Anyhow, attitude has the highest degree of

importance for Louis Cafe, followed by Square Beauty Concept, Anaide, Petrolhead and

Interactive Digital Labs.

The last aspect analyzed in NVivo was the 'promotional activities' category, illustrated

in the following graph.

Figure 8: The importance of 'Promotional activities' for all the interviewees

From the previous graph we can deduct that answers related to the topic ,,Promotional

activites" had the highest percentage of 60% for three start-ups: Anaide, LouisCafe and

Interractive Digital. Afterwards, Petrolhead obtained 35% for this category, and Square

Beauty Concept obtained 25%.

To sum up the aspects presented in this sub-chapter, the processing of data in Nvivo

was useful in determining the importance of different aspects related to running a business.

The fact that we performed an interview instead of a questionnaire, allowed me to go deeper

in our research and to find out more information regarding the aspects that we wanted to

analyse.

This last part of our analysis, performed with the help of Nvivo was relevant for our

research because we manage to see the differences betwe en each business based on the

affirmations made by interviewees. Anyhow, we want to emphasize the fact that the results

obtained in NVivo are available for this research, not necessarily in general, because the

questions formulated in the interview were aimed at emphasizing the promotional difficulties

encountered by entrepreneurs. Consequently, in the processing of data, it came out that these

difficulties are the most important ones for entrepreneurs.

Nevertheless, if one looks at the entire analysis that we performed in this chapter, we

hope that he/she will see some usefulness in it, and that it can be used for further research. In

our case, the research that we performed delivered more results than we expecting. The

conclusions that we reached represent some important lessons of business for me, which we

hope that we will apply some day.

Conclusions

At the beginning of this research, we proposed to analyse the challenges faced by

young entrepreneurs when they start their new ventures. Since this subject of research may

refer to a wide category of aspects that could be studied, we decided to focus on the

promotional challenges with which the young entrepreneurs have to deal.

The content of this study was structured in a way that could allow me to answer to a

series of questions formulated at the beginning of this research.

In the first chapter, our intention was to identify the general challenges faced by

entrepreneurs, promotional challenges and difficulties of the Romanian entrepreneurs. Based

on the literature review, we found out that the main challenges of entrepreneurs could be the

following:

- Abandon their job.

- Find external funding for their business.

- Employ the right people and determining them to work as a team.

- Manage the rapid growth of the business.

- Take care of the administrative tasks of the business, such as setting rules.

Sometimes, it could be about one of these challenges, but sometimes it can be a

combination. In any way, these difficulties decrease the motivation of entrepreneurs to run

their businesses, as we ll as their effectiveness in making decisions and in working for the

development of the ventures.

In terms of the promotional challenges faced by entrepreneurs, we were able to

identify the following the following aspects:

- Selecting a market and establishing a position.

- Building a brand.

- Planning the marketing mix.

- Chosing the promotional tools.

Finally, the difficulties faced by Romanian entrepreneurs are quite similar with the

ones previously mentioned. For examples, some of the most common difficulties are the

following: the difficulty to obtain external funding; lack of financial knowledge; managing

the team; measuring and evaluating the efficiency of employees and processes; presenting a

strong and convincing business plan; sales problems; fear to fail; responsibilities involved

with having a family, and so on.

As it can be seen, there are many types of difficulties faced by entrepreneurs, and this

is due to the fact that they have to take care alone about all the aspects of the business. Even

though they might hire specialized employees, employees will not do their work very we ll

unless they are supervised, or they do not have knowledge and experience in other fields of

activity of the business.

The following step in prepaing this study was to perform our own research regarding

the promotional difficulties faced by entrepreneurs from Romania. In this sense, WE

performed several interviews.

Consequently, in the second chapter of this paper, we realized a presentation of the

research instrument used, which included the following: definition, importance for research,

advantages and disadvantages. Also, in this chapter, we detailed the way we performed the

interviews for this study, meaning that we referred to: period in which we took the

interviews, advantages and disadvantages for our research, relevance for the study, and the

presentation of the persons interviewed.

The results of the interviews we re presented in the third chapter. Since we had to

present the results of qualitative data, we used two methods to do so: the coding process, and

the processing of data in Nvivo.

In the first case, the coding process includes the following steps:

· Reading the notes written during the interviews in order to gather some first

impressions regarding the answe rs.

· Highlighting the information that is important such as words, sentences,

paragraphs, and so on.

The main ideas obtained at the end of the coding process we re used in order to extract

some of the lessons learn from these entrepreneurs.

The final thoughts that we would like to make at the end of this study consist of

several lessons that we learned from these interviews. The first thing that we learned from

them is the fact that an entrepreneur should know something about every aspect of their

business, because they are the only persons from the business who can make correlations

betwe en fact in order to take the right decisions for their ventures.

The second lesson learned from these interviews is that the entrepreneurs prefer to

invest in their own knowledge when it comes to different aspects of their businesses. We

noticed this thing while asking the interviewees to share with me the criteria based on which

they chose the most appropriate promotional tools. The answer of most of the interviewees

was that they prefer to try different promotional tools and see which one works better for their

businesses. Anyhow, they did not show any interest in asking for specialized help from a

marketing agency or something similar, because they do not have enough funding in this

sense, and they want to see by themselves what works best for them.

The final lesson that we learned from these persons is that, no matter how many

difficulties they faced during their entrepreneurial path, they continued to develop their

business, to learn more, and to plan the new activities they want to perform in the future.

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Annex

Questions of the interview

1. What kind of attitude do you adopt when promoting your business?

You assume risks.

You are a person open to opportunities.

You wish to have control.

You lack confidence in yourself.

Other.

2. Which of the following aspects represented a greater difficulty from the perspective

of promotion: knowledge, financial resources, time?

3. What promotional tools do you use? Which one requires a higher investment and

which one brings the most benefits?

4. When you performed promotional activities, did you invest in your own knowledge

or you used the services of a specialized firm?

5. How do you decide over the promotional activities of your business: changing

experience with other entrepreneurs, reading books, following the example of successful

entrepreneurs, using your creativity, etc?

6. How much time do you grant for promotion?

7. How do you manage to find an equilibrium betwe en all the aspects of the business:

quality management, obtaining external financing, the relationship with employees? (time

management)

8. On a scale from 1 to 5 how pleased are you with the promotion of your business up

to this moment?

9. What promotional activities would you like to do in the future?

Excerpt out of 50 pages

Details

Title: Challenges of young Romanian entrepreneurs with promoting their start-ups
Authors: Simona Vasilache (Author)Johana Maria Rînciog (Author)
Year: 2016
Pages: 50
Catalog Number: V336880
ISBN (eBook): 9783668268708
ISBN (Book): 9783668268715
File size: 854 KB
Language: English
Keywords: entrepreneurship, entrepreneur, Romanian entrepreneur, start-up

Quote paper: Simona Vasilache (Author)Johana Maria Rînciog (Author), 2016, Challenges of young Romanian entrepreneurs with promoting their start-ups, Munich, GRIN Verlag, https://www.grin.com/document/336880

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