How To Start a Business: Enterpreneurship

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 Entrepreneurship 

Entrepreneurship is the process of creating an innovative business with an aim of making profit under conditions of risks. It involves generating an idea,getting the necessary resources, organising them and creating a profitable business. 
An Entrepreneur is a person who Identifies a business opportunity and Obtains the resources necessary to initiate business activity. 

Importance of  entrepreneurship to the economy 

1. Job creation 

Entrepreneurs create jobs for themselves and for others, thus reducing the problems of unemployment in the country. 

2. Promotion of an entrepreneurial culture. 

Entrepreneurial culture is an environment that prepares the community to take advantage of available business opportunities in the society. Entrepreneurs employ other people to work for them. 

3.Creation of market for goods and services 

 Entrepreneurs create markets for goods and services produced locally, eg. Raw materials. This enables the local producers to expand production. Entrepreneurs utilise local resources and increase their value.

4.Promotion of technology 

Entrepreneurs develop new and innovative ideas. This contribute to development and utilisation of technology to make production easy.

5.Contributes towards equitable distribution of resources 

Entrepreneurs locate their business in various parts of the country. This enhances balanced growth in rural and urban areas. It also contribute towards reducing poverty and reduces Rural-urban migration. 

6. Improving people's standards of living 

People are able to acquire various goods and services provided by entrepreneurs and make their lives better. People who are employed are able to provide for their families thereby improving their lives. 

7. Encourages the use of local resources 

The Entrepreneur makes it possible to use the available and affordable resources .

8. Saves on imports

Entrepreneurs produce goods and services that are used by local people which reduces importation. This helps a country to reduce money paid for such imports.

9. Formation of capital for the economy 

Entrepreneurs create wealth by paying salaries to their employees, savings in banks and use the profits to expand businesses. This lead to formation of capitals for the economy leading to economic development. Salaries and wages paid to employees act as a source of capital for them. 

Characteristics of entrepreneurs

1. Risk taker

An Entrepreneur is ready to take risks. Taking risks involves venturing in an activity or business whose outcome is not known. An Entrepreneur plans how a business will operate hoping to make gains without losses. They assess situations so that the business can succeed. 

2. Innovative 

Entrepreneurs think creatively and come up with new ideas which they put into practice. They develop new products and improve the existing ones. 

3. Competitive 

An entreprenuer should strive to beat the existing standards of quality in order to compete well in the market. This is because in a competitive market only the best products are likely to sell.

4. Patience 

Entrepreneurs are patient when implementing business ideas since it takes time before success is achieved. 

5. Determination 

Entrepreneurs consider a problem as a challenge and use it as a learning experience for improvement. 

6. Networking 

Entrepreneurs love interacting with other people to make business contacts. Through these network, they are able to learn more about business activities. 

7. Time consciousness 

An entreprenuer should be able to use time wisely and avoid wasting it. Timely decisions should be taken and implemented. 

8. Problem solving 

An entreprenuer is expected to work with determination and find solutions to problems even under difficult situations.

9. Self confidence 

Entrepreneurs believe themselves and they are positive when undertaking tasks. 

10. Efficient 

Entrepreneurs avoid wasting resources, instead they use them economically to benefit themselves and others. 

11. Result oriented 

An entreprenuer is Result oriented in that he or she set goals and strives to achieve them.

12. Goal oriented 

Entrepreneurs are achievers who work towards set goals or objectives and ensure that the goals set are achieved. 

How to start a business 

Procedure of starting a business 

The following are steps followed when an Entrepreneur is starting a business. 
  • Identification of a business idea
  • Development of a business plan 
  • Location of a business 
  • Registration of the business 
  • Start up and management of business. 

1. Identification of/ generating a business idea

An idea is a plan for action. It is the response of a person or organisation to solving an identified problem or to meeting perceived needs in the environment. Creativity is the ability to design, form,make or do something in a new or different way . The ability to come up with creative solutions to needs/ problems and to market them often makes the difference between success and failure in business. To be creative you need to have your mind and eyes open as  you work through the various sources of business ideas. Finding a good idea is the first step in transforming the Entrepreneur's desire and creativity into a business opportunity. 

Sources of business ideas 

There are many ways of generating business ideas. Some of the sources of business ideas include. 

. Building on your hobbies or interest 

A hobby is a favourite leisure time or occupation. Many people in pursuit of their hobbies or interest have founded businesses. Example in cooking the business ideas include home catering, restaurant,outside catering etc.

. Building your personal skills and experience 

Over half of the ideas for Successful business come from work place. For example a mechanic with experience of working in a large garage who eventually sets up his or her own car repair or used car bussiness. Thus the background of Entrepreneurs play s crucial role in the decision to go into business as well as the type of venture created ,thus you can convert your knowledge and skills into business. 

. Copy and improve an existing business 

Many successful businesses are based on innovative and original ideas. However a completely new untried and untested business idea may be risky. Thus one can eliminate in the risk of failure by copying and improving somebody's idea. In this case one can analyse the weaknesses of existing business and look for solutions to the weaknesses. Bad customer care is an example. You can also review failed ideas in the existing business ie an idea many have been prematurely put into practice and failed and now time might have come for it to succeed eg. Solar cooking stores. In addition you can benefit from existing business by offering various services to them. For instance some large scale producers would be happy to sub contract certain jobs to small businesses eg building and construction industry. 

. Survey

The focal points for a new bussiness idea should be the customer. The needs and wants of the customer which provide the rational for a product or service can e ascertained through a survey. A survey can be conducted informally or formally by talking to people ussually using a questionnaire or through interviews and by observation. 

First you may start by talking to your family and friends to find out what they think is needed for wanted that is not available or whether they are are dissatisfied with an existing product or service and what improvements or changes they desire. 

Second you can move on and talk to people who are part of the distribution chain ie manufacturers, wholesalers, distributors, agents and retailers. It would be useful to have before hand a set of questions which might be put on a questionnaire or used in an interview. 

Finally you should talk to as many customers as possible both the existing and actual customers. The more information you can get about them the better. 

Observation is another way of gathering information besides talking to people. Example in deciding whether to open a shop on a particular street, you can observe and count the number of people going past on a given days and compare to other sites or if  interested in an area frequented by tourists you may be able to set up or market products from a craft business. 

. Sporting a market niche

Entrepreneurs usually look for gaps in growing markets. They try to identify needs of sections of markets which are not being met by existing business. However spotting a gap in the market may not be necessary easy. One way is to identify trends and translate them into business ideas by identifying a possible need associated with the trend.

. Attribute listing

This method is based on changing the way you look at something in order to find new uses for it. This method also attempt to answer a question ie what could we do with this product?. Example with an old car tyre the business idea include swings for nursery schools, hold down tents, make sandals, tunnels for nursery school games, giant signs,borders for land scaping,protective barriers etc.

. Listening to what people say/complaints

Complaints Frustrations on the part of customers have led to many new products or services, thus you need to identify peoples problems. A problem can be an  opportunity that is looking for a solution as you might  make business while trying to help people. Listening to what people say could be enhanced by actual interviewing people to collect their complaints and desires. A questionnaire could be circulated. If enough people say the same thing then that could be a market niche. 

. Brainstorming 

This is the process of lifting the mind free to come up with business ideas. During Brainstorming you are ideally answering questions such as what one can do with this product or how else could we handle this?.Brainstorming is best done in a group or among two people. One procedure is to identify a key word or product or a picture and let the kind lose in thinking about possible business ideas associated with the word,product or picture.

. Reorganising needs 

A need can be an opportunity. A customer buys a product not for its technical attributes but for its ability to satisfy his or her needs 

. Gaining from waste/Garbage recycling 

Waste materials from one production activity can be used as a basis of business idea. For example scrap metals can he used to make jikos, saw dust -chip boards,waste paper-toilet papers etc.

. Mass media 

The mass media is a great source of information, ideas and often opportunity. Newspapers, magazines, televisions and the Internet are examples of mass media. Commercial advertisements in a newspaper or magazines may offer business for sale and one way to become an entrepreneurial is to respond to such an offer. There may be advertisements calling for the provision of certain services based on skills eg. Accounting, catering or security. 

2. Business plan

A business plan us a document that convincingly demonstrate that your business idea can sell enough of its products and services so as to make satisfactory profit and attractive to potential financiers. It is a document written by an Entrepreneur showing aims and objectives of a business. It also shows the activities to be undertaken to achieve the objectives. It is a road map you can follow to start and manage a successful business. It shows step by step on how to start, fund,manage, monitor and evaluate a successful business. 

Uses of a business plan 

  • Help the entreprenuer to outline the competition 
  • Provide guidelines for opening a new bussiness or expanding an existing one
  • Obtain loans from banks and other financial institutions. 
  • Facilitate business evaluation to assess progress 
  • It is used as a tool for management. 
  • To identify strengths and weaknesses of a business 
  • It motivate employees working in the business. 
  • It is a tool to control planning as it involves setting of standards against which performance is assessed. 
  • It communicate to outsiders about the goals, objectives and activities of a business. 

Benefits of a business plan 

  • It helps to guide the decision making process needed to operate a business. 
  • It Assists  in identifying the potential customers, the right price,promotional activities, distribution channels and the competition  strategies for business success. 
  • It helps to identify the number of employees needed, the skills they should possess, the task they will perform and the method of payments to adopt. 
  • It acts as a motivation tool. It communicate to employees in the  business and makes them aware of the direction to be taken  by the business which motivate them towards that direction. 
  • It establishes the financial needs of a business and suggests the possible sources of financing. 
  • It exposes the entreprenuer to planning and budgeting which are necessary for starting and running a successful business. 
  • It helps an Entrepreneur to avoid a business that will fail. An entreprenuer Identifies the mistakes that can lead to a business failure and correct them. 










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