Entrepreneurs are the seeds of organisation development. Entrepreneurship drives the economy in numerous ways such as thecreation of employment to the youth, creates revenue to the government through income taxes, export duties and import duties, creates high standards of living and raises people saving and creates balanced regional development (Chen, 2017).The phrase entrepreneur is coined out from a French word meaning ‘to undertake’. It refers to individuals who risk creating new enterprises. An entrepreneur is an individual always in search of new ideas and exploits ideas into profitable opportunities by accepting the uncertainty and risk with the business (Cantner, 2014).
Characteristics of entrepreneurship
Dynamic and economic activities
Entrepreneurship is an economic action since it involves the operation and development of business with the aim creating wealth or value by ensuring optimum use of scarce resources (Mathews, 2014). It is adynamic force since value creation is carried out progressively in the midst of uncertain enterprise environment.
Related to innovation
The process involvesan endless search for new ideas. It compels a person to evaluate the existing modes of the enterprise operations to adopt more effective and efficient systems (Cantner, 2014).Entrepreneurship optimises performance in firms.
Profit is the likely level of compensation to the entrepreneur for involving the risk of creating an idea into an enterprise venture (Cantner, 2014). Without profits, the efforts of the entrepreneur remain a theoretical leisure involvement.
The importance of entrepreneurship is the will to assume risk generated from implementation and development of new ideas. New ideas are sensitive, and their results may be positive and instantaneous. Entrepreneurs have to patient to see their efforts bear repercussions. An individual has to assume risk during the intervening period (Mathews, 2014). For an entrepreneur to be successful, they have to take on the risk.
Importance of Entrepreneurship
There are various reasons why women become entrepreneurs such as:
- The creativity that does not fit the corporate sector.
Individuals may come up with new ideas to begin businesses and leave the corporate world of being employed (Moghaddam, 2016).
There is much flexibility to entrepreneurial lifestyle than in a situation where an individual is employed. Entrepreneurship requires hard work, but one can shape his/her life based on their fit (Joshi, 2015).
Entrepreneurs are never satisfied with the education they have but always seek for more opportunities to gain more knowledge. Entrepreneurs always seek for new opportunities everywhere they look.
Entrepreneurs are people who change the universe. They see the world as they desire but not as it is.However, they pursue opportunities that most people deem as crazy. According to entrepreneurs logic is small, but alternative ideas can transform things (Moghaddam, 2016).
The investigation of meaning and performing tasks that transform the universe is essential to every entrepreneur(Joshi, 2015). Entrepreneurs learn through activities and explore with a vigorous appetite.
Types of enterprises
Depending on the level of developing innovative ideas, there are different kinds of women entrepreneurs such us:
Imitating women entrepreneurs
These entrepreneurs follow the path generated by other entrepreneurs. They may follow ideas of innovative entrepreneurs since the environment they reside in are do not permit them to have innovative and creative ideas (Chen, 2017). These entrepreneurs are found in states and conditions marked with weak institutional and industrial base which hinder them from generating new ideas. Examples of imitating entrepreneurs are small shop owners and small car manufacturers.
These women entrepreneurs generate newer, economical and better ideas of enterprise management and organisation. They are the enterprise contributors and leaders to economic advancement in a state (Ledyaeva, 2014). Examples of innovative entrepreneurs are mobile phone developers, theintroduction of small cars to the automotive industry and organised retailing by Kishore Biyani.
These are women entrepreneurs that are satisfied with the speed and mode of enterprise activity and show no interest in attaining market leadership (Chen, 2017). They are die-hard conservatives and are ready to suffer or lose their businesses.
Impact of small businesses on the economy
Small businesses create a huge percentage of employment. Small organisations tend to be more labour intensive. For example,employmentcreated by Trinidad and Tobago gives them an economic benefit over some other Caribbean states, particularly in the retail and manufacturing sector. In most economies employment are being developed through expansion of small businesses (Storey, 2016). Although employment rates are higher in small enterprises that in large businesses, small firm experience high mortality and birth rates and may even fail to grow.When comparing thesmallfirm to large organisations, small firms are ready to accept low returns and remunerations during therecession to prevent closure.
Addition of revenue
Gross Domestic Product (GDP) is defined as the total of value added of a particular sector in the domestic economy over a given time span. The process of value added is essential in calculating GDP through the output method since it avoids double counting. Small enterprises are expected to make significant contributions to the GDP mainly due to their income generation and large numbers. Income is through salaries and wages paid to employees as contributions directed to the entrepreneurs (Saynor, 2016).These small businesses play a great response in servicing localised markets. Moreover, in respect to intermediate value added, most small enterprises exist to serve specific needs in the case of consumable products for which diverse tastes exists. Small businesses are critical suppliers of particular intermediate products such as products utilised for production of other products. Thus, thegreat essence is the small business effects on the processing sector as it relates to sub-sector processing GDP. It is important to consider firms sub-sector due to its highly innovative products such as steelpan (Chen, 2017).Although its influence on value added is currently seasonal and low at best, great potential is available with regards to exports. The risk taking motive of small enterprise steelpan manufacturers appears small although their skills of innovative are huge.
Linkages, diversification and foreign trade
Entrepreneurship creates opportunities for people who may feel blocked in established organisations. Therefore, small enterprises play an essential role in the development of new services and products (Storey, 2016). In the twentieth century, the local market was largely protected. This encouraged competition among small enterprises to increase and maintain market share, which resulted to no or little linkages between them. In the late twentieth century,the foreign market competition opened due to structural adjustment. Small enterprises found it necessary to increase their linkages. They reformed and formed liberalised export markets. The general openness of foreign trade provided threats and opportunities for local small business enterprises. Competition in the home and foreign market should awaken creativity and risks among entrepreneurs (Saynor, 2016).
Small businesses have great flexibility as compared to huge firms hence can accommodate short-term fluctuations in prices. By acting as buffers to requirement shocks, small firms satisfy temporary need increases without causing asharp adjustment in prices. Thus, small businesses provide high flexibility and competition across firms helping in keeping inflationary pressures at their minimum level (Storey, 2016). Moreover, small business enterprises cannot compete with massive marketing strategies of large organisations which cause the customers to buy higher price products when small enterprises substitutes are cheaper. Such consumers making decisions with incomplete data may be overcome by small business enterprises by pooling resources and participating in shared marketing systems such as organisation advertising (Saynor, 2016).
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