Introduction
The management of human capital has become a highly debated topic in contemporary entrepreneurial practices. In business, people are perceived as assets that can be increased in value through either the creation or identification of investment opportunities. The embracement of human capital management (HCM) involves the constant provision of clearly defined performance expectations for the employees. The managers play a central role in the appraisal, rewarding, and promotion of the employees with a view of realising the explicit business goals, modernisation, and uninterrupted entrepreneurial development. Entrepreneurship is perceived as the ability and willingness, to strategise, organise, and manage a business taking into consideration the risks that come along with the generation of profits.
An entrepreneur is a person who incorporates change while exemplifying high attitude in any business situation. An entrepreneur comes up with an idea of a product or service and gathers the courage to take the risk to do whatever it takes to turn it into reality. On the other hand, human capital management entails the strategic approaches used to assign business roles to people in an organisation. The management of people is conducted in a manner that promotes the sustainability and competitiveness of the business. The practice of human capital management helps organisations align the goals of the business with individual abilities and experiences. Indeed, a primary goal of HCM is the promotion of employee engagement in the accomplishment of the overall organisational goals. This report provides an overview of the management of human capital and entrepreneurship in contemporary business institutions.
Literature Review and Critical Analysis
Unger et al. (2011) posit that human capital helps organisations to predict the propensity of new business opportunities. The growth of entrepreneur human capital in an organisation is an enduring solution to the accomplishment of short-term, intermediate, and long-term business goals and objectives. According to Stokes (2010), entrepreneurship is the process of identifying opportunities and communicating them efficiently with a view of realising a tenable economic value of a business. Viable ideas can relate to either a service or a product. Stokes (2010) reveals that the identification of the product or is the initial stage of entrepreneurship. The importance of managing human capital cannot be underestimated when it comes to the realisation of entrepreneurial goals. Numerous researchers and business analysts theorise that entrepreneurs bring to new business opportunities qualities that are largely based on various resources such as education level, cognitive skills, talent, and experience among others (Unger et al. 2011).
However, the implementation of any business idea requires proper communication leadership strategies (Hatten, 2012). Successful entrepreneurship is determined the establishment of sufficient communication channels with the clients, staff, and other stakeholders. A research conducted by Martin, McNally, and Kay (2013) showed that communication is broken down to 9 per cent writing, 16 per cent reading, 30 per cent speaking, and 45 per cent listening. The research also indicated that listening was an important facet in every communication aspect. Business communication can be delivered in many ways, including the use of non-verbal cues. An entrepreneur should capture these cues because they send a clear message on what the client desires.
The management of human capital is considered important in the entrepreneurship world. Employees create a link between the organisation and its clients. The accomplishment of tasks within the specified timeframes is critical for the realisation of not only the individual and organisational goals but also customer satisfaction. According to Bridge and O’Neill (2012), the ability to communicate under stressful conditions is vital in becoming a successful entrepreneur. For example, in a place of work where two or more employees are involved, disagreement on certain issues can arise. The impending negotiation process brings communication into use.
Entrepreneurs should constantly assess the underlying advantages of indulging in new business activities prior to abandoning ungainly ventures. The economic value of a new idea should be analysed with a view of improving the profitability of the organisation. Measuring the economic value of the business is based on factors such as consumer preferences, political climate, and industry experience, among others. It is believed that consumers are the best judges of what they require. As a result, the economic value of a product is based on individual opinions. For example, some people prefer perfume included in their bathing soap while others prefer the pure product. Such an incidence shows that people have different preferences.
According to neoclassical economists, human capital can be used to refer to the stocks of knowledge, skills, and experiences that prompt human capital to build economic value. The implementation of the division of labour concept is a clear indication of the management of human capital in contemporary organisations. Most businesses employ individuals who are specialised in particular tasks. This practice significantly improves the economic value of the service or product delivered to the consumer (Crook et al. 2011). Economic value can be altered easily by the quality and price of goods and/or services. In this case, there is a need to relate human capital and the labour market if businesses have to remain relevant in the contemporary competitive environment (Main 2011).
Martin, McNally, and Kay (2013) reveal that successful companies deem employees as the most valuable assets to the accomplishment of business objectives. Small, medium and large businesses strive to manage employees in a variety of aspects such as work involvement, job satisfaction, and continuous improvement. A survey of over 1200 human resource leaders conducted by Martin, McNally, and Kay (2013) showed that approximately 50% of their tasks were to manage human capital in the organisation. However, the management of human capital is a task that requires the adoption of various strategies such as the creation of employee profiles, onboarding, performance appraisal, unconstrained paid time-offs, and embracement of flexibility in the workplace among others (DeTienne 2010). At the outset, the creation of employee profiles plays as a vital role in the management of human capital. This approach to HCM allows the managers to gather, analyse, and store important information on aspects such as employee performance, openness, and comradery, among others.
In addition, Martin, McNally, and Kay (2013) reveal that onboarding is a technique that focuses on showing the significance of the company to the employee. The establishment of a reliable system to streamline employee onboarding using modern human resource management technology is crucial to the collection, analysis, storage, and monitoring of employee behaviour and performance (Hoque 2013). Besides, it helps in the promotion of socialisation through online networking portals such as Facebook, Twitter, and LinkedIn among others. Nahata (2008) posits that the entrepreneurial practices save the organisation both time and money since information on hire training, employee performance, and disbursement of wages among others can be stored and retrieved easily.
Furthermore, performance appraisal is a commonly used approach to the management of human capital in contemporary organisations (Martin, McNally, & Kay 2013). There is a need to adopt simple performance appraisal methods. The strategy can involve the interrogation of the employees by concentrating on core skills. The simplification of the appraisal systems can be realised using software HCM technology. The managers should also offer unlimited paid time-offs (PTOs) regardless of the fact that it is still a new concept in the corporate business sphere.
Martin, McNally, and Kay (2013) also suggest that managers should ensure flexibility in the workplace. Mobility is an aspect that offers both the employees and employers an opportunity to work from many places. For instance, a recent study that was conducted by Davidsson and Gordon (2012) exposed that the world had more than 1.5 billion smartphone users. Today, mobile applications have become useful even in the workplace. This experience has enabled many companies to improve the management of employees, especially in situations that demand immediate feedback. As a result, barriers associated with money, time, and location are reduced significantly. Besides, communication is greatly simplifies as the exchange of information takes place using versatile mobile tools and software applications.
Human Capital Strategy
According to Nahata (2008), human capital revolves around seven interrelated aspects that include leadership, change management, recognition, performance management, work confidence, values, and competence. These resources are aligned with the desired business goals to improve productivity (Dimov 2010). The first characteristic an entrepreneur should have is proper leadership. Planning is vital because it requires the entrepreneur to lay down any business situation, analyse the generated profits, and draw conclusions on issues that should be addressed. For example, if a business desires to sell ten cars in a day, the manager has to look for a suitable market, set a favourable cost, and decide how much profit will be made after undertaking the business transactions. However, this strategy should be guided by proper leadership principles that embrace feasible human capital management approaches.
Moreover, the employees in an organisation come from cultures that hold diverse values and beliefs. Dimov (2010) posits that the appreciation of different cultures and values is a first step towards the promotion of diversity inclusion in an organisation. This human capital strategy is paramount to the creation of a class of proficient managers and staff. It is believed that the embracement of diverse cultures and values in an organisation improves the perceptions of the workers on its image (Dimov 2010). In addition, the adopted HCM strategies should bring about both individual and team confidence in the performance of duties. This objective can be realised by minimising vices such as workplace conflicts.
Managers should aim at showing genuine concerns for the development of their personnel by establishing a relaxed working environment that promotes communication (Dimov 2010). This set of circumstances boosts employee morale thereby ensuring their satisfaction. Furthermore, apt human capital management also demands the managers to employee recognition by offering them rewards. This practice also encourages them to work even harder towards the accomplishment of both the individual and organisational goals. The recognition of employees is closely related to performance appraisal. Rewards are offered to the employees after their performances are evaluated.
A good entrepreneur should also create both individual and team confidence (Teece 2010). Those who have this quality achieve more even under pressure. They can analyse and evaluate huge challenges with a view of converting them to business gains and personal rewards (Longenecker et al. 2013). Most people think that success comes easy, but the truth is one has to put in a lot of effort before the desired goals are accomplished. When other people see a possible challenge, an entrepreneur should see the finish line, product, and the impending rewards. However, the accomplishment of this objective requires the managers to adopt HCM strategies that aim at creating a high level of work confidence in the employees.
According to Lombardi and Laurano (2013), performance measurement and management is a crucial undertaking in any organisation deemed to succeed. The human resource department is charged with the role of recruiting, training, and developing reliable workforce with a view of helping the organisation to realise both its short-term and long-term goals. The development of the employees requires the creation of a proper working environment that encourages the improvement of interpersonal relationships among them (Chrisman et al. 2012). Performance management is a critical success factor in the development of the workforce. For instance, good managers ensure that performance appraisals are conducted frequently with a view of rewarding the best employees and reinforcing the skills of those who are less productive through training (McGrath 2010). This situation creates a powerful corporate culture that promotes the accomplishment of the business goals in the organisation.
Conclusion
In the wake of globalisation and the ever-changing technological landscape, entrepreneurs should identify the key issues that influence the management of human capital. The management of change in an organisation is a core facet of HCM as it arrests rapid shifts in business strategies, concentration, and workforce mobility among others. Therefore, the handling of employee behaviour, attitudes, and perceptions is paramount to the creation of a free working environment that allows them to maximise their potential to accomplish the overall entrepreneurial goals.
Business Plan
Business Description
Treetops Hotel and Conference centre will be reasonably priced 62-seat restaurant that will deliver exceptional meals to diverse consumers. The hotel will also provide facilities such as presentation space, meeting, and conference rooms. Besides, it will offer outside catering services for different functions such as weddings, family gatherings, funerals, and graduation parties among others. Besides, the hotel will provide specialty choices such as hamburgers, salads, and wraps among others on the menu.
Various primary objectives of the Treetops Hotel and Conference Centre are listed below.
- To offer high-quality home-style cuisines at reasonable prices with exceptional customer services
- To be a superior 4-star hotel in Nottingham city, England
- To realize Prime Cost Ratios (PCR) not exceeding 65-percent
- To attain cover ratios of approximately 1X during peak hours
Our mission is to provide high-class dining experience with exemplary services. This mission will be accomplished by ensuring that the menu integrates superior ingredients at realistic prices. The staff and management will also be expected to treat customers with dignity to promote repeat business (Barrow, Barrow, & Brown 2008)
Background of the Idea
The company will be started in a location that has a minimal number of 4-star hotels. Besides, there is a large population of people who can be targeted as clients.
Business Identity
The high standards of our hotel management team will strive to ensure a high level of satisfaction to our customers. Both the conference and accommodation facilities will be designed to meet the highest standards in the hotel industry. Besides, special cuisines will be prepared upon request and customer’s requirements. For this reason, the hotel is deemed to offer a very high profile product mix. This undertaking will be aimed at improving the customer’s experience (Markovic & Raspor 2010). It is designed to be a home away from home.
Entrepreneurial Characteristics
According to Ward (2011), the entrepreneur must have passion for the hotel business. Since the business is sensitive to social, political, and economic factors, the businessperson should also be ready to take risks besides having a resourceful and an open mind.
Business Opportunity
The business opportunity in this area is quite high. There are two four-star hotels within a 30-kilometre radius. This position offers the new hotel an opportunity to enter the market with a chance to prosper. There is an indication that the hotel will attract, satisfy, and retain its customers.
Opportunity for the Idea
The nearby four-star hotels offer their services at a very high rate. Therefore, the Treetops Hotel and Conference centre will deliver high-quality services and products at slightly lower prices to lure the attention of many customers to the facility. Discounts will also be offered on special days such as holidays.
Macro Environmental Analysis
The hotel will serve as a landmark since people around the area will have something they can use as a reference point (Down 2010). The hotel will also serve the community by offering employment opportunities to the residents in the area.
Industry Analysis
The hotel industry is characterised by strong competition. The last ten years have seen new players enter the industry with unique products and services. Most four-star hotels offer conference, swimming, restaurant, partying, and catering, and recreational facilities. Similarly, the Treetops Hotel and Conference Centre will offer these services at comparatively lower prices to gain a competitive edge in the industry.
Market Analysis
The market analysis involved conducting interviews to potential customers. Other methods included the collection of booklets, magazines, price lists, catalogues, and brochures of the competitors with a view of analysing information on business support groups (Stutely 2010). In the regional analysis, the size of the market in the area is between 50% to 90% occupancy throughout a whole year (Burns 2010).
Marketing Strategy
A marketing strategy provides an overview of the planned business goals. Target customers will be put into consideration to ensure that the client profiles are identified (Wright & McMahan 2011). For example, their age, gender, preferences, and relationship with the hotel will be identified. The pricing and positioning strategy will also be taken into account. The hotel will have a distribution plan that will encompass strategies to reach customers in addition to retaining them for a long time (Wright & McMahan 2011).
Offers
The hotel will price its products and services as compared to those offered by the competitor companies. The offers will include discounts for different packages, free trials, and money-back guarantees. During special occasions such as holidays, free packages will be provided. This strategy is perceived to lure the attention of many customers to the hotel (Sadgrove 2015).
Marketing Materials and Promotion Strategy
Various marketing materials including websites, brochures, business cards, fliers, and catalogues will be used to promote the business. Particularly, the Internet and media will play a central role in the advertisement of the hotel business to reach a large population. The promotion sector is one of the most vital parts of the marketing strategy that entail putting up advertisements on the television, newspapers, and radio (Brinckmann, Grichnik, & Kapsa 2010).
Online Marketing Strategy
In this section, there are four main steps to be followed. They include the key word strategy, search engine optimisation, paid online advertising, and the social media tactics (Finch 2010).
Conversation Strategy
Various techniques will be used to turn the prospective customers into paying repeat clients. These strategies will include showing the testimonials of past and satisfied customers. Availing the records of our rising sale rate will also help to pull a number of customers to our business.
Marketing Mix
The Price
The marketing mix makes the sales revenue and extra costs. Setting the price of a product or service is an important determinant of the value of overall sales volume. The price will assist in determining the perceptions of the customers on the value of the services and products in the hotel.
The Place
The place is mainly concerned with various transportation modes and storage of goods in the hotel. The choice of the distribution and transportation in the hotel will depend on various circumstances. For instance, the distance between the source of the raw materials and the hotel will influence the delivery time. However, such goods will be procured in time to avoid unnecessary delays that can arise.
Projected Sales
The business is deemed to realise a sales projection of about 1100 customers per week. This position will generate weekly sales above $16,500 ($792,000 annual sales). This value translates to approximately $252 annual sales. As a result, the hotel will offer a profitable business opportunity in a table service market that considers $200-325 per square foot cost-effective. For this reason, the business can be regarded as an appropriate investment. A time-series projection will be put into consideration where the future sales will be based on the sales from the past. A market-based forecast is necessary since it will assist in the determination of the market demand, customer base, and their likelihood to revisit the hotel repeatedly.
Operations and Human Resource Plan
Form of Ownership
The hotel is a family business that will include ten relatives. They will have equal shares in the business. Therefore, each of them is expected to contribute an equal amount of capital. Three members of the family have pursued careers that relate to the hotel industry; hence, they will provide adequate guidance and information on the establishment and maintenance of the business (Hung, Shang, & Wang 2010).
Location of the Business
The 4-star hotel will be located Nottingham city, England. This location has been selected because of the image, surrounding environment, location, size, and ease of accessibility. In addition, Nottingham city has few 4-star hotels as compared to other cities and large towns in England.
Equipment
The hotel equipment will include conference rooms that will accommodate up to 200 people, sidewalk tables, checkrooms, elevators, free wireless Internet access, and standard technology.
Handling of Material
Waste reduction and efficiency are directly related (Yang 2010). As a result, any product that is purchased and used in the hotel should be less harmful to the environment.
Human Resource Team
The human resource team will include the board of directors, general manager accounting officer, chief engineer, housekeeping director, room assistant, director of marketing services, accounting staff, and the chefs. Other staff will include the security, food, and beverage manager.
Credentials of Top Management
The top management team should have a high level of education to understand how to run the hotel (Tajeddini 2010). They should have bachelors, masters, or a doctoral degree obtained from a relevant field of study such as hotel management and hospitality.
Responsibilities of the Top Management
The role of the top management in the hotel will be to determine the objectives of the organisation (Zarutskie 2010). The management will also be involved in the making of a frame policy will determine the quality and variety of services offered in the hotel. Besides, they will collect information and analyse the prevailing market demand. The hotel will need a marketing policy that will be designed by the top management team. This policy will ensure that adverts, sale promotions, commissions, and performance appraisal take place effectively (Dominici & Guzzo 2010). The execution of the plans is mandatory. This move will see the top management assume an active role to ensure that the objectives and goals of the hotel are met (Tari et al. 2010).
Strategy to Recruit, Motivate, and Reward Employees
Recruitment will be based on key qualifications and accurate job descriptions for each position in the hotel. Advertisements for job opportunities will be advertised on the television, radio, newspapers, and the Internet. Interested candidates will be required to apply for the job vacancies online prior to interviews. The motivation of employees will be realised by conducting continuous performance appraisal with a view of rewarding them using promotional strategies.
Financial Plan
Starting Funds
The initial capital will come from the ten members of the family where every member will contribute $8970. The remaining balance $109,560 will be raised by securing a bank loan.
Source of Funds
Running of the business will be facilitated by ploughing back the profits gained from the sales. The hotel will also sell shares to investors since they do not require interests.
Returns offered
Since the hotel business is sensitive to the nature of goods used, returned goods will not be acceptable. However, a refund will be offered to customers who show genuine concerns.
Revenues, Expenses, and Financial Control
The revenues obtained from the business will help in the identification of further sources of funding for future goals. A proper analysis of the generated revenues and expenses will result in the doubling of profits with minimal workload. The expenses will be identified with a view of reducing them by cutting unnecessary cost that will arise. The control of finances will evaluate progress towards the financial goal of the company.
Break Even Analysis
The analysis will assist in identifying whether it will be possible for the hotel to pay its expenses while maintaining a reasonable profit margin.
Financial Accounts
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