GROWTH AND FACTORS AFFECTING ENTREPRENEURIAL GROWTH

In the world of entrepreneurship, success is not only measured by how much profit is derived from the business or how well you’re able to dominate the market, but also the ability to sustain the business, carry on and survive in the market. Progression is key especially for a start up entrepreneur. Making the profit is more like a short term goal and as an entrepreneur who is proactive, he/she must be able to think about the future and long term success of the business. That includes developing strategies or plans to help keep the business in the market after several years and how to also expand operations.

Growth for entrepreneurs, especially start ups, is like moving from one point in the business to yet another high point in the business. Most start ups create their businesses from the scratch and as always recommended, most of them start small. When an entrepreneur starts small, the goal is to expand operations and move big. Take for instance, an entrepreneur who starts up a fish farm on a small scale. Whatever this individual does is in small amounts. Location, labor, and capital is small. But as profits come in, the idea is to try to increase output and ultimately work to have a bigger location for operation and also expand operations beyond the areas they currently serve.

GROWTH AND FACTORS AFFECTING ENTREPRENURIAL GROWTH

The concept of growth is almost inevitable for some businesses, however, it is not always easy. Some factors or several conditions play a role in how well this growth can be achieved at the quickest time possible. Most times these factors hinder the growth of an entrepreneurship venture and it all comes down to how the entrepreneur handles these problems and work with some of them to be able to attain the growth. Growth depicts a high level of success for entrepreneurs and as such, they are always looking forward to the future to try and get it.

In the next sub heads I’ll be discussing a number of important factors that affect entrepreneurial growth.

DIFFERENT FACTORS AFFECTING ENTREPRENEURIAL GROWTH

The factors that affect growth in any entrepreneurship venture is always divided into two. Economic and Non Economic factors. The Economic factors includes things like capital, labour, and resources while the Non Economic factors include things like personality, social and religious beliefs. I’ll go through these factors in the next subsequent paragraphs.

• ECONOMIC FACTORS

1. CAPITAL

Right from the start, entrepreneurs have to worry about capital and even at the point of seeking growth, it is still determinant on how much money is available in the business. Capital is one of the most important factor of production and is considered highly important for the success of the business. Even before the success comes, the capital has to come in first and help with developing the business. The capital is so important that it determines the capacity the business can take. For example, with a small amount of capital, entrepreneurs will be able to only start up small while larger amounts of capital will help entrepreneurs start on a large scale..

Capital is always regarded as a “lubricant to the process of production”. Available capital is what is used to acquire the land or shop or whatever location is to be used by the business, to buy the equipments and machinery needed to operate, and also get supplies, resources or raw materials needed to achieve the finished product. Capital plays a role in all the processes involved in fully developing the business. As a quick fix to the capital problem, entrepreneurs mostly use personal savings, or loan from family members or friends or loan from banks.

2. LABOR

This is yet another factor of production that is highly important in the success of any entrepreneurship venture. Now, when it comes to labor, it’s not about how many workers you can get to do what you want but the number of workers who actually know what to do and will get things done. Simply put, quality is more important than quantity. You can put up 100 workers on a project and it still turns out to fail if the workers do not have the skills required to take up the roles they are given.

At times, problems of not getting the skilled ones arise. This can be difficult especially in countries with low population and also those with poor education systems. For a business that needs the use of labor, getting the ones with actual skills is what will help achieve success.

3. RESOURCES OR RAW MATERIALS

Raw materials are important to the production process. They typically kick start the business fully as every other thing must have been available at that time. The raw materials include things that are actually needed to start up. For a small scale juice business, it is the fruits and the sweeteners and every other thing needed to bring the juice to light. For a small scale fish farm, it is the fish, their feeds and other supplies that makes the fish available for sale after a period of time. When these things are not available, it is almost impossible to start up any business or even think of introducing anything to the market.

Unavailability of raw materials can be caused by inflation or in some cases, shortage. This happens in cases where the material needed are to be imported into the country and also cases where the materials are limited and are only available during a particular period of time.

4. MARKET

The first thing to do before starting a business is taking a proper look at the industry which also includes studying the market for the product you’re about to develop. Studying the market gives you the chance to know the requirements to set up in the market, know what to expect upon starting the business and coming up with strategies to help you survive in the market. It is also important to know the kind of marketing approaches currently in place and how it works and how you can implement your own strategies.

The market analysis is also important to get you an idea of the rewards in the business and also the risks involved. Level of competition is also one important thing. When you’re starting up a business, if there is a high level of competition, it could be determinant on the success of the business. Low level of competition or none at all could potentially boost the success of the business though it comes with its own risks considering you’re the only one with the product in the market.

• NON ECONOMIC FACTORS

1. EDUCATION

In some cases, this might prove to be unimportant but the benefits of education are not to be underestimated. Education provides and equips individuals with certain skills that are able to help an entrepreneur properly run the business. These skills are skills that are vital and can only be learnt after years of study. Experience also, they say is the best teacher and the lessons learnt from previous experiences should be able to guide entrepreneurs into making right decisions and minimize the occurrence of past mistakes.

2. CULTURAL AND RELIGIOUS BACKGROUND

As funny as it may sound, some people actually have beliefs that prevent them from making huge amounts of profits or putting so much money into business. Several cultural and religious beliefs also play a role in the development of an entrepreneurship venture. In some cultures, people are not allowed to get involved into some particular kinds of business, so even though an individual has passion for it, they can’t set up because it doesn’t correspond with their beliefs. Also, some religions have it in their principles not to make huge profits or spend such money. In cases where an individual starts up a business and decides to sell the goods for a slightly high price in order to get profit,  it is not allowed.

Other factors which may also affect entrepreneurial growth includes personal reasons which includes when an individual doesn’t posses the skills required to be a successful entrepreneur and lastly, the society or community. Some societies have their preferences and if what they want doesn’t align with what you create, there will definitely be a problem. Entrepreneurs who are just about to venture into a business should be aware of these factors and seek ways to solve and find a way around them.