Today we will discuss entrepreneurship. What is entrepreneurship? Importance of entrepreneurship development. Characteristics and Concept of Entrepreneurship. Challenges faced by Entrepreneurs and Reasons why entrepreneurs fail.
Why Entrepreneurship? Importance of Entrepreneurship Development
An entrepreneur is a person who establishes an enterprise or work on his startup to give reality to his business idea. Entrepreneurship is the attempt to create value through recognition of business opportunity, the management of taking the risk, appropriate to the opportunity and through the communicative and management skills to mobilize, human, financial, and material resources necessary to bring a project to execution. The human being takes a calculated risk and derives benefits by setting up a venture.
Entrepreneurship is important because, through it, individuals use their innovative skills to build up new things, it generates employment opportunities, generates national income, good gadgets and tools improve the standard of living of people. It facilitates the transfer of technology, facilitates proper utilization of resources, market expansion. It promotes skill development among individuals, they put hard effort to find their piece of pie in the competitive industry. Every big company like Amazon, Apple, Samsung, Honda, Harley Davidsson and many more started with an idea and combined efforts of individuals. If the idea is good, the big organization invests in these startups and support them.
Reasons why Entrepreneurs fails
According to studies, 95% of the businesses fail within 2-3 years. Why do entrepreneurs give it up? What are the reasons behind their failure? Let’s discuss some of the reasons why entrepreneurs fail.
- Lack of Skills-You need skills to grow in any business, either you acquire skills yourself and hire the correct person to do the job for you. Skills are developed with time, with experience. You have to carefully analyze your market, and try to provide better services than your competitors. The more you work on your skills the more sooner your business starts raising, So start by writing those five skills you will need in the next 12 months and work steadily to achieving those skills.
- Lack of Motivation- The most common reason why entrepreneurs fail is lack of drive. Many a time things may not be on your side and try to knock you down, but you have to face these challenges and stand strong. Take regular feedback on your services from your customers and work to improve them. Every difficult situation teaches you something, drive motivation from that experience and keep working hard.
- Poor Planning- Planning is necessary to make anything possible in an efficient way. Many people just jump onto a business without any planning with a mindset that they will learn from experiences. But things do not work that way, before starting any business you have carefully plan everything this includes the money you invest, the market place you are targeting, with whom you are competing with, growth rate and many things.
- Wrong Reasons- You need to have the right intention to start a business. If you are thinking about making money than you will give up in less than a year. You need to work with passion, work on those things that really fascinates you and that small idea can make you successful. Don’t just do it for money, or your friend is doing that business and he is successful today, do things that will serve the market place.
Challenges faced by Entrepreneurs
Once you get started with your business you face many challenges and you have to stay strong and come up with a solution to all those problems. The most common challenges all entrepreneurs faces are:-
- Neglect- If you are making a lot of money out of your business then definitely you should not neglect it and relax. Work on new strategies and examine the future of your marketplace because time is not going to wait for anyone. Use your resources and time carefully and invest sensibly to rule your marketplace.
- Expansion- You should know the right time to expand your business. If you expand your business too early without much experience you may ruin it all, and, if you expand your business too late, maybe you are afraid of taking risks in this situation you may also lose your market value. So keep analyzing your growth rate and expand your business accordingly at the right time.
- Lack of Capital- Many entrepreneurs face this problem and this deploy them of running their business smoothly. You should either take a loan or sell your commodities to purchase your capital. You should have the belief in yourself, and work hard to pay all the installments and get back all your commodities.
- Poor Leadership- As an entrepreneur, you need to think about the people who work for you, as they will be the one with the help of whom you are going to be successful. For that, you have to work on your leadership skills. Make a team of skilled people and distribute different tasks to them, with a prescribed deadline. Do follow the principle of work hard party harder.
- Lack of Character- You have to be honest with your employs, your customers because if you are not honest with them they won’t be loyal to you either.
- Poor Location- The place where you have started your business matters a lot. If you start your business in an obscure town with about 1000 people living there, you may not get that success or profits as you expect of. Instead, if you start a business in a big town, then there are more chances that you achieve your goals in time.
Also, read: HOW TATA GROUP EXPANDED THEIR BUSINESS?