entrepreneurship

LEARNING OBJECTIVES

By the end of this topic, you should be able to:

• Explain the meaning of entrepreneurship
• Discuss the importance of entrepreneurship to an economy
• Describe the characteristics of an entrepreneur
• Generate business ideas
• Identify a business opportunity
• Explain the need for a business plan
• Discuss the causes of business success
• Recognize the need for ethical practices in business

An entrepreneur refers to a person who identifies a business opportunity, assesses the risks involved then provides and organizes the necessary resources to start and run a successful business.

Entrepreneurship is the process of identifying a business opportunity and organizing resources in order to start and run a successful business.

CHARACTERISTICS OF AN ENTREPRENEUR

They include;

• Risk-taker

He/she may incur a loss that befalls the business.

• Hardworking

 Entrepreneurs work very hard in order to make their businesses a success.

• Self-confident

Good entrepreneurs must believe in their abilities.

• Innovative

A good entrepreneur should be able to come up with new ideas and be flexible to accept ideas from other sources.

• Persistent and patient

Good entrepreneurs should not give up easily. They need to be determined and try different approaches to achieve their goals.

• Flexible

Good entrepreneurs should be adaptive to changes in business circumstances.

• Creative 

Entrepreneurs need to have a lot of ideas that they want to put into practice.

• Time conscious

Entrepreneurs need to utilize all the time in the best way possible.

ETHICAL ISSUES IN BUSINESS

Ethics refers to moral principles held by an individual or a group. Therefore, business ethics are principles and values in which the business is expected to operate to ensure fair play in business.

Examples of ethical issues in business include;

• Ensuring fair competition
• Selling safe products to consumers
• Avoiding sale of illegal commodities
• Avoiding discrimination in employing, training and promotion of staff.

IMPORTANCE OF ENTREPRENEURSHIP TO AN ECONOMY

• Creation of employment. A large number of people are employed through the formation of businesses.
• Formation of capital. The money that is generated by entrepreneurs is reinvested in different ventures.
• Utilization of available resources.
• Raises the standard of living. The money earned by entrepreneurs makes their lives better.
• Increased variety of goods. The variety of goods available to consumers increases.
• Leads to improved infrastructure. Roads, water and electricity are developed in the area of operation.
• Increased competition. An increase in competition leads to the provision of better services.
• It leads to the promotion of technology. Entrepreneurs make use of appropriate technology. Both new and old technology is adapted and improved.

GENERATING BUSINESS IDEAS

The major objective of generating business ideas is to get as many ideas as possible. These ideas are then evaluated in order to establish the most suitable one. The following are some ways in which you can generate business ideas.

• Setting out to solve a certain problem
• Analyzing existing business
• Gaining from waste products
• Listening to what people say
• Building one’s skills, hobbies and interests

BUSINESS OPPORTUNITIES

A business opportunity refers to any chance that a person may get which can be exploited by selling either a service or a product at a profit. A business opportunity occurs when there is a gap (a need) to be filled in the market. However, before exploiting the opportunity, the following have to be put into consideration;

• The unsatisfied needs
• Change in demand for goods
• Change in technology
• Change in government policy
• Change in fashion, taste, and preferences
• Opportunities due to disasters

BUSINESS IDEA

Business ideas are thoughts from which one identifies a business opportunity. Such thoughts can come from sources like;

• Media. For example, the internet, newspapers, magazines and radio.
• Shows and exhibitions.
• Surveys and events like floral services for a wedding and catering.

FACTORS THAT INFLUENCE ENTREPRENEURIAL PRACTICES

Finances. The availability of finance facilitates entrepreneurial practices. The unavailability of finance makes entrepreneurs lack the capital to start and run a business.

Level of technology. A company that embraces new technology is more likely to succeed than one that does not. Due to poor access to modern technology in developing countries, many businesses fail.

Infrastructure. Good infrastructure like roads, electricity, and water facilitates businesses to grow faster than in situations where it has not been developed.

Level of training. Some entrepreneurs lack relevant business management skills; thus their business does not do well.

Government policies. Some government policies encourage while others hinder entrepreneurial activities.

Level of competition. Competition may make businesses succeed by producing products of high quality or fail if they result in wasteful competition.

Existing entrepreneurial culture. This should be encouraged via education and government policies.

Business success refers to the ability to achieve the objectives of a business.