Becoming an entrepreneur in the 21st century
The rate of unemployment is increasing every year. However, various countries have different rates of employment that are caused by the internal challenges. Some of the causes of unemployment include; low rate of payment, low level of education, seasonal jobs among many others. Mostly, employees are paid according to their level of education, their experience, and their level of employment. These factors make two workers with the same qualification to get different salaries. Usually, when an employee feels that they are underpaid, they will resign or even move to another organization. Employees with degrees are paid less than those who are at masters level while those with more experience are paid much higher than those with less experience. On the other hand, some jobs are seasonal. In such cases, the workers are only employed for a certain time and after that, they are dismissed until there is a boom in the industry. Since such employees are engaged using short-term contracts possibly of about three months, such contracts need to be renewed after the time agreed on ends. In the recent years, the rate of literacy globally averages at 86.3%. Evidently, men have a higher rate of literacy than the females. The male’s level of literacy scores at 90.0% while that of the females is 86.3%. Such high rate of literacy means that most jobs have raised their minimum requirements for each employee. However, every year, learning institutions from across the world release just a few hundred thousand graduates who are supposed to join the job market. Still, the economy globally does not have enough jobs that can absorb them. Therefore, the rate of unemployment ranges from 2.5 % up to 10.8% and has an average of about 5.6% (Boyles 41). Without a doubt, unemployment is highest in developing countries and lowest in the developed countries. According to unemployment researchers, the increase in the unemployment has been caused by the imbalance between the number of graduates and the number of jobs created at a time. In reality, the number of graduates is very high compared to the forthcoming jobs annually. Therefore, there is need to encourage entrepreneurship in the society to solve the unemployment crisis.
Entrepreneurship is defined as the process of investing finances to venture into a new or existing business idea. However, when an entrepreneur decides to work on an existing project, they have to work on improving it. On the other hand, the idea may totally be new in the market where an entrepreneur tries to solve a problem in the society and still make profits. For example, an excellent entrepreneur will first do their research in the field they intend to venture. Subsequently, they will get into that particular venture to solve the problem and improve the lives of the people involved. Indeed, entrepreneurship has been known to create employment not only for the entrepreneur but also for other people employed in the new business. Also, it has the benefit of increasing the amount of revenues in the economy and improving the lives of the individuals who are served by the firm. However, in the 21st century, entrepreneurship has been faced with various challenges that have either discouraged investors or even slowed their rate of development.
Firstly, there are little or no new ventures starting. Therefore, the entrepreneur has to be more creative and improve the existing business ideas to serve their needs. Hence, it means that they will have to invest much cash for them to be successful and be better in the market. These finances are not often available especially for youngsters that are just from the schools. Also, the entrepreneurs lack adequate skills to help them start and run the business successfully, and they may decide to start a business that requires the resale of goods. However, the business will not have a financial specialist to manage the finances, and the owner might need to do all the work in the firm. Nevertheless, the entrepreneur might only be conversant with only one field and ignorant in all other areas of business, and incompetent management could lead to high losses. Moreover, competition has been high because there are many similar businesses while others offer the same goods and services, thus flooding the market and reducing sales. Therefore, these factors have made it challenging for different entrepreneurs to start and run a business successfully.
The nature of entrepreneurship is multidimensional. As such it is an economic activity, socio-economic and a culture setting. In essence, the nature of the entrepreneurship is highly determined by the task the business is meant to serve. Indeed, that is its core function. Conversely, most businesses are formed to make profits whose nature can be said to be economical. Therefore, the entrepreneur will not consider other factors rather than the high profits that they expect to gain from the venture. Such businesses are not encouraged in the society because they have no value for human life and are not intended in making the society better. For example, selling of drugs is a great entrepreneur activity that has high profits but lacks society interest at heart. Indeed, these businesses are labeled as illegal since they destroy the society more than they build it. They are viewed negatively by the moral society. In reality, socioeconomic perspective is when the business established solves a problem facing the society. Indeed, most of such firms only start after the authorities has identified a need in the society. Still, the entrepreneur must study the target market and decide if there is an identified common problem. The individual is then supposed to use the challenge to be a business niche that they need to fill. The advantage of such businesses is that they benefit both the entrepreneur and also the society. Further, entrepreneurship is a cultured setting meaning that it is something that has gone on in the past years. History states that in the ancient years, people used to initiate businesses. They would start and run these businesses using the various knowledge passed from one generation to the next. Therefore, entrepreneurship is not new in the society; it has always been there.
Entrepreneurship plays a great role in the running of business. One of the roles played is the handling of risks and uncertainty. More often than not, an entrepreneur will make decisions concerning the firm which sometimes involve high risks. Indeed, these are sometimes decisions that have the probability of high returns but also, can result in great losses. Also, an entrepreneur participates in the management of the businesses and innovations. However, business management is not always an easy task that can be h handled by anybody. It is a process that requires great care and caution. As such, one must understand the resources at hand and also, the outcomes expected. Besides, it is the role of an entrepreneur to ensure that they make the right decisions in the business. Essentially, the nature of the entrepreneurship demands the business relate well to the society. The latter is the target audience, and one needs to maintain a favorable relationship to ensure that venture makes good returns. Therefore, public relations is a great investment for the business to thrive successfully in any society.
However, managing a team of workers could be sometimes challenging especially if it is the first time for an individual. In fact, the weaknesses or the strengths of any employee is relatively equal to that of the business. Being an entrepreneur, one has to study the weaknesses and strengths of their employees to determine where everybody in the organization best fits. Therefore, the employees should be able to work in a team as it is much easier for them to accomplish the set goals and objectives. Also, communication is vital to the success of every business. Indeed, there should be a set channel to be used when communicating with employees. An employer could use professional communication channels like an internal memo or emails in case one needs to pass information without causing conflict. Having a set way to pass information makes it easier to manage the business. However, in some firms, the entrepreneur can decide only to make decisions and also have a fixed way managing the company without involving the employees. Others will prefer to have the employees make some of the decisions, be creative, innovative and also take some risks. All in all, these are two types of business settings that can lead to success in the firm. However, these factors should be included in the business plan.
Business plans give a rough idea of how the business will operate. The entrepreneur will make a projection on how the company will run from management to all the other departments. However, its success depends on how well the entrepreneur executes and organizes the laid business plan. Some of the elements to consider when evaluating a business plan to start up a company are:
It should fit the business needs
Clearly identifies the assumptions
Clearly defines responsibilities for implementation
A business plan should always be set to fit into business requirements. Always, every business has its set aims and objectives. These are goals that state what the company wants to achieve during its operations. However, a good business plan should be a blueprint to be used by the organization with a purpose to achieve better results. Also, it should provide a rough idea on how the business will achieve the outlined goals and objectives. If the plan of activities does not fit into the organization, its performance will be quite low. Therefore, it should be realistic such that it evaluates the variables of the business and gives the right analysis. For example, a business plan that states the production of a product that requires high capital but does not have a management team is poor. Its implementation may not be realistic and could lead to losses or even business failure. A successful business planner should state all variables to be used in the project quite clearly to avoid financial crises. These variables include; budget, time, and resources among many others. Also, the plan should clearly be outlined to ensure that by the time the project is complete, it is still valuable to the business. Also, budgets should be well planned since any mistake done can lead to the failure of the whole project. Indeed, the business plan should clearly outline the responsibility for implementation. It contains different implementation processes and stages. Every section and plan should be in such a way that every role in the organization is assigned a task to undertake. More so, it is important to avoid commotion and always ensure that all the tasks have been completed successfully (Hanna and Colin 50). Finally, if there are any assumptions made in the business plan, it should be stated clearly from the start of business. Also, some of the values that are not yet confirmed should be indicated as mere estimates rather than the correct figures. Some assumptions could be because the planners do not have the actual figures at hand during the planning process. However, some may be very far from being accurate while others are far from accurate. However, when assumptions are used as the real figures, the project may fail soon into running the business.
Nevertheless, the entrepreneurial environment is rapidly growing, but it faces many obstacles. However, various essential elements can be used to overcome obstacles and also manage rapid growth in the entrepreneur environment that includes:
Keeping up with the market
Cash flows and financial management
Skills and attitude
However, the market keeps on changing with time, and the business needs to be up to date with these developments. The changes are caused by the change of the customer’s preferences and also, the involvement of the competitors. Customers keep on changing their preferences because they need goods and services that will satisfy them. Therefore, business should change according to the client’s preferences because the customer are the buyers, and they are responsible for financing the business. Another factor that may cause a change in the market are the competitors. Indeed, they will try to do things differently so that to have a competitive advantage. Some competitors will improve the quality and even reduce the prices to have better sales performance. Therefore, the entrepreneur should study the competitive market and regularly to know which are the best ways to change.
Planning can be either short or long term. Short term planning is preferable on the market that keeps on changing while long-term planning is favorable for those activities that take long to change. A business plan is usually for long term planning. However, it is advisable that one continues updating the corporate plan as various business variables keep on changing. As such, planning is often done to ensure that there is a smooth flow of cash throughout the business over a certain and budgeting is part of the planning process.
Financial management and cash flow in the business are important for the business since they are the foundation of growth in an organization. Most transactions in the firm require adequate cash for them to be fully operational. Therefore, having a constant cash flow and also managing finances is important for the business to be productive. Having the capability to solve problems is important for the business to operate effectively. Every day the business is faced with various challenges that they have to capture. The ability of the business to solve those challenges maintains cohesion among the staff and also ensures that the company keeps on growing. Skills and attitudes are essential for the business to be fully operational. An entrepreneur should make sure that he or she chooses the right team to work with it. People with the right skills makes it easier for the organization to meet its aims and goals. Also, they are more efficient and produce high-quality products than the Newbies. Finally, positive attitudes can easily be created through motivation which might be intrinsic and extrinsic. Employees with the right attitude are much easy to manage and even work with them. Therefore, there is a need to motivate employees for better business success.
Any entrepreneur needs to obtain the appropriate information for them to be successful. Information is power. Therefore, getting the right information is vital for any successful business. The entrepreneur needs to get information from both the primary sources and the secondary sources. Information from research done in the recent years is essential since they cover different events that happened in relevant times. Some of the sources are:
An entrepreneur can obtain firsthand information by interacting with other successful entrepreneurs in the market. These people are very knowledgeable in the field and can be a useful source of information. Some entrepreneur events often take place and most ambitious people attend them. The entrepreneurs can use it as a chance to mingle with other people in the field and obtain more information. In some organization, the Human Resource department organizes training programs for the employees where they obtain refresher courses. Also, relevant information is available in such events. In such training, the employees are taught more on teamwork, communication skills, and all other skills that are needed for the business to succeed.
Additionally, the entrepreneur can get information from secondary sources such as the library, the internet, and the industrial data. Indeed, the library contains data recorded in books and journal of similar events that happened some time back. Just like the books, the internet also contains work from different authors globally. Finally, industrial data could be another information source which is mostly from government sources and non-governmental bodies. Such data give results on research done in the various areas and represented in graphs and other numeric values that makes it easy for an entrepreneur to work effectively. However, lack of the right sources of information has been a challenge to most entrepreneurs.
Boyles, Trish. «21st century knowledge, skills, and abilities and entrepreneurial competencies: A model for undergraduate entrepreneurship education.» Journal of Entrepreneurship Education 15 (2012): 41.
Hanna, Donald, and Colin Latchem. Leadership for 21st Century Learning: Global Perspectives from International Experts. Routledge, 2013.