Entrepreneurship - Nurses Revision

JOINT STOCK COMPANIES

Joint stock company is a voluntary association of persons incorporated into a business having joint capital divided into transferable shares of a fixed face value, with limited liability of members.

A joint stock company is a company whose stock is owned jointly by shareholders and can be bought and sold by them.

Each of the persons who contribute capital is known as a share-holder. The liability of shareholders of a joint stock company is limited to their capital contribution.

Features of a Company:

Voluntary Association of Persons in Cooperation: A company is formed by the voluntary association of two or more persons who come together to cooperate and work towards a common goal.
Artificial Person: A company is an artificial person created by law. It is distinct from its owners and has its own legal rights and liabilities.
Separate Legal Entity: A company is a separate legal entity from its owners. This means that the company can enter into contracts, own property, and sue or be sued in its own name.
Common Seal: A company has a common seal, which is used to authenticate important documents.
Limited Liability: Members of a company have limited liability, which means that their personal assets are not at risk if the company incurs debts or losses.
Transferability of Shares: Shares in a company can be easily transferred from one person to another. This makes it easy for investors to buy and sell shares in the company.
Assured Perpetual Succession: A company has assured perpetual succession, which means that it continues to exist even if one or more of its members dies or leaves the company.

Additional Features:

A company can raise capital by selling shares to investors.
The profits of a company are shared among its shareholders in proportion to the number of shares they hold.
A company is managed by a board of directors, which is elected by the shareholders.
A company is required to file annual financial statements with the government.

Advantages of Companies

More Capital: Joint stock companies are in a better position to mobilize large amounts of capital than sole proprietorships and partnerships due to the large number of shareholders who constitute them. This is because companies can issue shares to the public, which allows them to raise large sums of money from a wide range of investors.
Limited Liability: The liability of the members of a company is limited, which means that their personal assets are not at risk if the company incurs debts or losses. This is a major advantage of companies over sole proprietorships and partnerships, where the owners are personally liable for the debts and losses of the business.
Continuity: A company is a legal entity that continues to exist even if one or more of its members dies, becomes bankrupt, or withdraws from the company. This is known as the principle of perpetual succession.
High Profits: Joint stock companies have the potential to generate high profits due to their large scale of operations and economies of scale. They can also benefit from specialization and division of labor, which can lead to increased efficiency and productivity.
Shares are Freely Transferable: Shareholders of a public limited company can easily sell their shares on the stock exchange market without the consent of other shareholders. This makes it easy for investors to enter and exit the company, which can increase liquidity and attract more investors.
Strong Financial Position: Companies have a strong financial position because their capital cannot be withdrawn. This means that they can more easily secure loans from banks and other financial institutions.
Efficient Management: Joint stock companies can employ specialists in different departments, such as managers, accountants, and sales managers. This can lead to more efficient and effective management of the business.
Different Types of Shares: Companies can issue different types of shares to suit the investment habits of different types of people. This can make it easier for companies to attract a wide range of investors.
Encourage Savings: People can invest their savings profitably by buying shares in a joint stock company and receiving dividends (profits). This can encourage people to save and invest their money, which can benefit the economy as a whole.
Security: Public limited companies are required to publish their financial statements to the general public. This can help to protect investors from fraud and other financial irregularities.
Free Transferability of Shares: Shareholders can easily sell their shares to other investors, which makes it easy for them to exit the company if they wish.
Large Financial Resources: Companies can raise large amounts of capital from a wide range of investors, which gives them access to significant financial resources.
Economies of Scale: Companies can achieve economies of scale by producing goods and services on a large scale. This can lead to lower costs and higher profits.
Public Confidence: Public limited companies are required to publish their financial statements and other information, which can help to build public confidence in the company.
Tax Benefits: Companies may be eligible for certain tax benefits, such as lower tax rates or investment tax credits.
Diffused Risks: The risk of loss is spread among a large number of shareholders, which can make it less risky for individual investors.

Disadvantages of Companies:

Delays in Decision Making: Decision-making in companies can be slow and bureaucratic, as it often requires the approval of multiple stakeholders, such as the board of directors and the shareholders.
Oligarchies in Management: In some companies, a small group of powerful individuals may have too much control over the decision-making process, which can lead to a lack of accountability and transparency.
Lack of Secrecy: Public limited companies are required to disclose a significant amount of information to the public, which can reduce the company’s ability to keep its business strategies and financial information confidential.
Difficulty and Costly Formation: Forming a company can be a complex and expensive process, as it requires the preparation of various legal documents and the payment of government fees.
Lack of Motivation and Personal Attention: In large companies, individual employees may feel less motivated and less connected to the business, which can lead to lower productivity and innovation.
The Management of Public Companies Lies in the Hands of Hired Professionals: This can lead to a lack of accountability and responsiveness to the needs of shareholders and other stakeholders.
Excessive Regulations: Companies are subject to a significant amount of government regulation, which can increase the cost of doing business and reduce the company’s flexibility.
Social Evils: Some companies may engage in unethical or illegal activities, such as pollution, labor exploitation, or tax evasion. This can damage the company’s reputation and lead to legal and financial penalties.
Conflict of Interest: Directors and managers of companies may have personal interests that conflict with the interests of the company, leading to decisions that benefit them at the expense of the company’s shareholders or stakeholders.

Differences between a Registered Company and a Partnership:

Management: In a registered company, management is delegated to a board of directors, while in a partnership, all general partners share in the management.
Legal Entity: A registered company is a separate legal entity from its members, while a partnership is not distinct from its members.
Number of Members: A public company can have 7 or more members, while a private company can have 2 to 50 members. Partnerships are limited to 20 members for non-banking businesses and 10 members for banking businesses.
Binding Authority: Members of a company cannot bind the company, while partners can enter into contracts on behalf of the partnership.
Liability: In a company, liability is limited to the amount unpaid on shares or the agreed liability amount. In a partnership, except for limited partners, liability extends to personal assets.
Profit Distribution: In a company, undistributed profits cannot be added to share capital. In a partnership, partners’ shares of profits can be added to their capital.
Bookkeeping and Auditing: Registered companies are required to keep prescribed books of account and have annual audited accounts. Partnerships are not subject to these requirements unless agreed upon by the partners.
Public Inspection of Accounts: Audited accounts and directors’ reports of limited companies are open to public inspection. Partnership accounts are not subject to public inspection.
Business Scope: Companies can only pursue the objects for which they were formed. Partnerships can carry on any business agreed upon by the partners.
Continuation: Companies continue to exist despite changes in membership. Partnerships may terminate upon the death of a partner or the introduction of a new partner.

TYPES /CATEGORIES OF COMPANIES

I. Companies Incorporated under the Companies Act:

a) Companies Limited by Shares/Ownership:

Private Limited Liability Companies:

Limited liability for shareholders
Minimum of 2 and maximum of 50 shareholders
Shares are not publicly traded
Capital raised through sale of shares to family members and friends
Shares cannot be transferred without the consent of other shareholders

Public Limited Liability Companies:

Limited liability for shareholders
Minimum of 7 shareholders
Shares are publicly traded
Company is a separate legal entity from its shareholders
Capital raised through the sale of shares to individuals
Shares are freely transferable through the stock exchange market
Each shareholder has the right to vote in the general meeting
Accounts, balance sheets, and auditor’s reports must be filed with the Registrar of Companies annually
Formation requires extensive documentation
Continued existence, not affected by death, bankruptcy, insanity, or withdrawal of a member
Majority of shareholders have no say in the day-to-day running of the company, which is handled by directors

Government Companies:

Owned and controlled by the government
Established for public purposes

b) Companies Limited by Guarantee:

A limited liability company (LLC) is a business organization that has some benefits of a corporation and some of a limited partnership.

Liability of members is limited to the amount they guarantee to contribute in the event of winding up. Often used for non-profit organizations, such as charities and clubs.

Advantages of the LLC

LLCs do not require annual meetings and require few ongoing formalities.
Owners are protected from personal liability for company debts and obligations.
LLCs enjoy partnership-style, pass-through taxation, which is favorable to many small businesses.

Disadvantages of the LLC

LLCs do not have a reliable body of legal precedent to guide owners and managers, although LLC law is becoming more reliable as time passes.
An LLC is not an appropriate vehicle for businesses seeking to become public eventually, or to raise money in the capital markets.
LLCs are more expensive to set up than partnerships.
LLCs usually require annual fees and periodic filings with the state.
Some states do not allow the organization of LLCs for certain professional vocations.

c) Unlimited Liability Companies

Not recognized in Uganda

Members have unlimited personal liability for the debts and obligations of the company

II. Companies Incorporated under Statute/Acts of Parliament:

Established under specific laws or acts of parliament. Examples: Bank of Uganda, Uganda Revenue Authority, Civil Aviation Authority

III. Companies Incorporated under Special Royal Charter:

Originated from the United Kingdom with permission from the monarch. Examples: BAT Uganda, British South African Company (BSACo), Imperial British East African Company (IBEACo), British East Indian Company (BEICo)

Winding Up a Company

Winding up, also known as liquidation, is the process of bringing a company’s life to an end by selling off its property or assets and paying creditors. It can be either voluntary or compulsory.

1. Voluntary Winding Up:

Initiated by the shareholders or directors of the company
Shareholders pass a resolution to wind up the company
Liquidator is appointed to oversee the winding up process
Liquidator sells the company’s assets and uses the proceeds to pay creditors
Any remaining assets are distributed to shareholders

2. Compulsory Winding Up:

Also known as winding up by court order
Initiated by a petition filed with the court by creditors, shareholders, or other interested parties
Court appoints a liquidator to oversee the winding up process
Liquidator sells the company’s assets and uses the proceeds to pay creditors
Any remaining assets are distributed to shareholders

Reasons for Dissolution of Companies:

Bankruptcy: Inability to pay debts when they become due
Acting Out of Their Articles of Association: Violating the rules and regulations set out in the company’s articles of association
Agreement Among the Members to Change Line of Business: Shareholders may agree to change the company’s line of business, which may necessitate dissolution
Dissolution by Order of Court: Court may order the dissolution of a company for various reasons, such as fraud, mismanagement, or oppression of minority shareholders

COOPERATIVES

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Partnerships

Partnership

A partnership is a business owned and managed by two or more people.

Partners share the profits and losses of the business. This is the relations between two or more persons who have agreed to share profits of business carried on by all or any one of them acting for all. It may consist of two to twenty members except for banking where the law provides that the maximum number should be ten.

A partnership is guided by a partnership deed or a partnership act under the laws of the republic of Uganda.

There are two main types of partnerships:

General Partnership: In a general partnership, all partners have unlimited liability.
Limited Partnership: In a limited partnership, only the general partners have unlimited liability. Limited partners have limited liability, meaning they are only liable for the amount of money they have invested in the business.

Example: A law firm owned and operated by two or more lawyers, A construction company owned and operated by two or more individuals, A retail store owned and operated by two or more people.

Characteristics of Partnership

It is formed with a minimum of two and a maximum of twenty persons.
Capital is contributed by all the partners in agreed proportions.
Profits and losses are shared by partners in agreed proportions.
Any act or agreement made by an individual partner in the name of the partnership binds all the partners.
The burden of running the business is shared by the partners.
Unless specified in the partnership deed, the liability of the partner is unlimited.
Transfer of ownership and admission of a new partner is by the consent of all the partners.

Ways of Formation

A partnership is formed by mutual agreement, which may be oral or in writing.
Partnership Deed: On forming a partnership, an agreement is reached by the partners and put in writing. Such a written agreement among partners pertaining to the terms and conditions of their business is called a partnership deed or partnership agreement.

Contents of a Partnership Deed

A partnership deed is a legally binding agreement that outlines the terms of a business partnership.

The nature of the business to be conducted
The capital of the firm and the proportions to be contributed by each partner
The ratios in which profits and losses will be shared
The rate of interest to be allowed on capital or charged on drawings
The amounts, if any, partners may draw in advance before ascertainment of profits.
Partners’ salary, if any
Preparations and auditing of accounts
Admission of new members
Duration of partnership.
Regulations in case a member gets problems like death, insanity, among others.

Advantages of Partnership

A partnership has access to more capital than a sole trader since up to 20 persons can contribute.
It brings together people with different skills and therefore it can have a wide range of experience and ability, which encourages specialization.
Partners are not overworked since work may be shared among all partners. This reduces the workload for each partner.
A partnership finds it easier to obtain a loan from the bank or trade credit from suppliers to extend on their businesses unlike a sole trade.
Forming a partnership is fairly simple since there are no legal documents required, with the exception of registration.
In case of any difficulty in business, people can sit at a round table and come up with a solution unlike a sole trader who has no one to consult.
The partnership business can easily be expanded since new partners can be admitted in case there is a need for money.
Losses and liabilities are shared among many unlike a sole trader who takes up the whole burden alone.
The business may not easily collapse in case of death or retirement of a partner. This improves continuity.
Business secrets can be kept since it is not compulsory for partnership to publish their accounts and reports.
Ease of formation
Flexibility in management
Larger resource/capital pool
Spread of risks and combined abilities
Capacity for survival
Prompt decision making
Broader management base
Legal protection
Form of employment opportunity.

Limitations/Disadvantages of a Partnership

There is unlimited liability to the partners as the partners are all liable to the debts of the firm.
If one person makes a bad decision, makes a mistake, or any misconduct by a partner, it affects all partners, i.e., all partners have to suffer the consequences.
Since all major decisions must be taken by the consent of all partners, decision making and implementation may delay, sometimes resulting in failure to take advantage of an urgent deal.
Unlike a sole trader who is alone in business, partners are liable to disagree over certain business issues, which may retard the business’s progress.
If one partner works hard, the profits arising out of his labor are shared by all the partners. This often kills one’s morale to work harder.
Individual’s shares, interest or membership cannot freely be transferred to any outsider without the consent of the other partners.
Often the partnership relies on one or a few partners; if they leave or die, the firm can easily collapse.

Kinds of Partners

1. Active partners –The partners who actively participate in the day-to-day operations of the business are known as active or working partners. They contribute capital and are also entitled to share the profits of the business. They are also liable for the debts of the firm. E.G John and Mary are active partners in a construction company. They are both involved in the day-to-day operations of the business, such as managing projects, hiring and firing employees, and making financial decisions. They are also both personally liable for the debts of the company.

2. Dormant partners/ Sleeping Partners – Those partners who do not participate in the day-to-day activities of the partnership firm are known as dormant or sleeping partners. They only contribute capital and share the profits or bear the losses, if any. E.G Sarah is a dormant partner in a retail store. She has invested money in the business, but she is not involved in the day-to-day operations. She is still liable for the debts of the company, but she does not have any say in how the business is run.

3. Nominal partners/Quasi partners – These partners only allow the firm to use its name as a partner. They do not have any real interest in the business of the firm. They do not invest any capital or share profits and also do not take part in the conduct of the business of the firm. However, they remain liable to third parties for the acts of the firm. Get something like a goodwill for using their name. E.G Jose Chameleone, is a nominal partner in a clothing store. He does not have any money invested in the business, but he allows the store to use his name and image to promote their products. He is liable for the debts of the company, but he does not have any say in how the business is run.

4. Minor partners – You know that a minor is a person under 18 years of age who is not eligible to become a partner. However, in special cases, a minor can be admitted as a partner with certain conditions. A minor can only share the profit of the business. In case of loss, his liability is limited to the extent of his capital contribution to the business. Their decisions are not binding legally. E.G A 16-year-old student, John, is a minor partner in his father’s hardware store. He helps out in the store on weekends and during school holidays. He is not liable for the debts of the company(exceeding his capital contribution), and his decisions are not legally binding.

5. Partners by estoppels – If a person falsely represents himself as a partner of any firm or behaves in a way that somebody can have an impression that such person is a partner and based on this impression transacts with that firm then that person is held liable to the third party, the person who falsely represents himself as a partner is known as a partner by estoppels. E.G. If Robert represents himself as a partner in a law firm, even though he is not actually a partner. He meets with clients and discusses their cases, and he signs contracts on behalf of the firm. He is liable to the clients for any damages they suffer as a result of his actions.

6. Sub partners – gets some share of profit from one of the partners. He is a partner to one of the partners of the partnership. E.G Janet is a sub-partner in a catering business. She is not a partner in the business itself, but she has a contract with one of the partners to receive a share of the profits. She is not liable for the debts of the business.

7. The general partner – has unlimited liability for the firm’s debt. E.G David is a general partner in a construction company. He is personally liable for all of the debts of the company, even if the company goes bankrupt.

Rights of a Partner in Partnership Business:

Participate in day-to-day management.
Be consulted and heard in decision-making.
Access books of accounts and request copies.
Share profits equally or as agreed.
Receive interest on capital contributions and advances.
Be indemnified for payments, liabilities, and losses incurred for the firm.
Use partnership property exclusively for business purposes.
Act as an agent of the firm and bind it through authorized actions.
Continue as a partner unless ceasing under specific conditions.
Retire with consent and according to partnership deed terms.
Receive rights as an outgoing partner or legal heir of a deceased partner.

JOINT STOCK COMPANIES

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TYPES/NATURE/ FORMS OF BUSINESS ENTERPRISES

When an entrepreneur decides to start a business, he must decide what form of organization he will do it in. The entrepreneur may therefore choose on doing business either at individual level or as a group. These are some of the possible options left, sole proprietorship, company, partnership, cooperatives among others.

Sole Proprietorship:

A sole proprietorship is a business owned and managed by one person. It is the simplest and most common form of business organization in Uganda. The owner has unlimited liability, meaning they are personally responsible for all debts and obligations of the business. This is where business is run and owned by one individual with or without help of family members. In this form of organization, both the owner and the business are the same.

Example: A small grocery store owned and operated by a single individual, A bodaboda rider who owns and operates their own motorcycle.

Advantages of Sole Proprietorship Business

Easy decision making: The sole trader can make decisions quickly and easily without consulting anyone, allowing them to take advantage of opportunities and respond to changes in the market.
Easy to start: Starting a sole proprietorship is relatively simple, with minimal paperwork and legal formalities required. A trader only needs to obtain a trading license and can begin operating their business.
Direct motivation due to unshared profits: The sole trader enjoys all the profits of the business, which can provide motivation to work harder and increase profitability.
Flexibility: Sole proprietorships are flexible and can easily adapt to changes in demand or market conditions. The owner can quickly change the product or service offering or enter new markets as needed.
Freedom from government regulations: Sole proprietorships are generally subject to fewer government regulations compared to larger businesses, reducing the administrative burden and cost of compliance.
Direct customer contact: The sole trader has direct contact with customers, allowing them to build relationships and provide personalized service, which can lead to increased sales and customer loyalty.
Easy to manage: Sole proprietorships are typically small and easy to manage, with the owner having direct control over all aspects of the business. This can reduce the need for complex management structures and processes.
Cost-effectiveness: Sole traders do not incur expenses related to wages and salaries, as they typically work alone or with the assistance of family members. This can result in lower operating costs and increased profitability.
Convenient location: Sole traders can choose a location that is convenient for their customers, reducing the time and effort required for customers to access their products or services.

Disadvantages of Sole Proprietorship

Unlimited liability: The sole trader is personally liable for all debts and obligations of the business. If the business fails to meet its financial obligations, the owner’s personal assets can be used to satisfy the debts.
Poor decision-making due to lack of consultation: The sole trader may make poor decisions due to the lack of input and consultation from others, which can negatively impact the business.
Overwork and stress: Sole traders often work long hours and may experience stress and burnout due to the demands of running the business alone.
Difficulty in obtaining loans: Sole proprietorships may have difficulty obtaining loans from financial institutions due to the lack of collateral and the perceived higher risk associated with a one-person business.
Lack of continuity: The business may not continue to operate if the sole trader dies or becomes incapacitated, leading to the closure of the business.
Limited capital: Sole traders typically have limited capital available for investment and expansion, which can restrict their ability to grow and develop the business.
Lack of skilled labor: Sole traders may struggle to attract and retain skilled employees, as they may not be able to offer competitive salaries or benefits.
Difficulty in accessing resources: Sole traders may have difficulty accessing resources such as technology, expertise, and networks, which can limit their ability to compete with larger businesses.

Partnership

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BUSINESS IDEA/OPPORTUNITY

BUSINESS IDEA

Business idea is an identified situation that can be changed into a real and profitable activity or business.

It is a concept that can be used for financial gain that is usually centered on a product or service that can be offered for money.

A business idea is a concept that could be used to make money, and an opportunity has proven commercial value.

Coming up with a business idea for start‐up

Every business starts with an idea. That idea is further developed using a five step Process illustrated in the diagram below.

You can decide to take on a business idea because of the following considerations:

You have a great idea for a small business and you want to learn how to go about its implementation in order to create a successful small business.
You are already running your own small business and you want to learn about how you could make your business more successful.

Indicators of a viable business Ideas/Opportunities

Rate of Return on Investment: The business idea should have the potential to yield high profits, motivating entrepreneurs to pursue it.
Availability of Market: A viable business idea should have a ready market for its products or services.
Availability of Resources: The necessary resources, such as capital, equipment, and skilled labor, should be available to establish and operate the business.
Technical Skills: The entrepreneur should possess or have access to the technical skills required to produce the product or deliver the service.
Legality: The business idea should comply with all applicable laws and regulations. Some ideas are condemned by the laws of the land for instance operating a clinic targeting aborting girls or women is illegal.

Importance of Coming Up with Business Ideas/Opportunities:

You need an idea for a successful business venture, both to start a business and also to stay competitive afterwards. Sarah wants to start a boutique in her neighborhood. She knows that without a unique business idea, she won’t be able to attract clients and stay competitive in the crowded boutique market.
They respond to market needs, markets are always composed of customers with different needs to be satisfied. A local farmer notices a growing demand for organic produce in his community. He decides to start an organic farm to meet the needs of health-conscious consumers.
They respond to natural threats and scarcities that would affect the businesses and communities as a whole for example lack of water, fuel, pollution, pests, diseases etc. A company specializing in water purification systems sees an opportunity in areas affected by water pollution. By providing clean drinking water solutions, they address a critical need while also building a profitable business.
They also help in responding to changing fashions and requirements. For example, NOKIA responded by changing buttoned and small screened phones to smartphones that support research and other computer support services. In response to the declining popularity of traditional taxis and the rise of ride-sharing apps, a taxi company decided to develop its own mobile app to offer on-demand rides, staying relevant in the evolving transportation industry.
They help businesses in staying ahead of competition. Innovative business ideas can give businesses a competitive edge and help them differentiate themselves from competitors. A small bakery differentiates itself from larger bakeries by specializing in gluten-free baked goods, attracting health-conscious customers who appreciate the unique offerings.
It helps in exploiting technology to do better things in an effective and efficient manner. A healthcare startup develops a telemedicine platform that allows patients to consult with doctors remotely.
Spreading Risk and Allowing for Failure: Generating multiple business ideas allows businesses to spread risk and mitigate the impact of potential failures. A tech company exploring new product ideas invests in multiple projects simultaneously. While some projects may fail, others succeed, allowing the company to spread risk and learn from failures.
Catering to Specific Groups: Business ideas can be developed to cater to the needs of specific groups, such as the elderly, individuals with disabilities, or niche markets. A clothing brand focuses on adaptive clothing designed for individuals with disabilities. By catering to this specific market segment, they address a need and build a loyal customer base.

Examples of Business Ideas/Opportunities

− Setting up a grocery
− Setting up a school, hospital, medical center, clinic.
− Selling sweet bananas
− Starting a poultry farm
− Starting a fumigation service business
− Opening up a saloon
− Starting a restaurant
− Starting up a textile workshop

Sources of Business Ideas/Opportunities:

Entrepreneurs generate business ideas from various sources, and out of the many ideas, they select the most promising business opportunity to pursue. Here are some common sources of business ideas:

Emerging New Technology and Scientific Knowledge: The development of artificial intelligence (AI) has led to new business ideas in fields such as autonomous vehicles, facial recognition software, and AI-powered customer service chatbots.
Changes in Consumption Patterns: The growing demand for healthy and organic food products has created opportunities for businesses specializing in these products.
Trade Fairs, Journals, Press, Magazines: Attending trade fairs and reading industry publications can expose entrepreneurs to new products, trends, and business ideas.
Social and Economic Trends: The aging population has led to increased demand for products and services tailored to seniors, such as assisted living facilities and home healthcare services.
Observing the Market Critically: Identifying gaps in the market or unmet customer needs can lead to innovative business ideas. For instance, a lack of convenient and affordable childcare options could inspire an entrepreneur to start a daycare center.
Market Surveys and Discussions with Entrepreneurs: Conducting market research and engaging in discussions with fellow entrepreneurs can provide insights into customer preferences, industry challenges, and potential business opportunities.
Creative Mind and Innovative Skills: Entrepreneurs with creative thinking and innovative abilities can come up with unique product or service concepts that appeal to customers.
Identifying Businesses That Do Not Meet Customer Expectations: Recognizing businesses that fail to satisfy customer needs or provide poor service can inspire entrepreneurs to develop improved offerings in the same market.
Newspapers, Magazines: Reading business and industry publications can keep entrepreneurs informed about new trends, emerging technologies, and potential business opportunities.
Hobbies: Turning a hobby or passion into a business can be a rewarding and profitable venture. For instance, a person who enjoys baking could start a home-based bakery.
Brainstorming: Conducting brainstorming sessions with a team of creative individuals can generate a multitude of business ideas that can be further refined and evaluated.

Reasons for starting a business

Earning Potential: Business owners have the chance to earn more money compared to traditional jobs, based on their drive, luck, commitment, and ideas.
Autonomy: Entrepreneurs have the freedom to make their own decisions, set their own schedule, and choose who they work with.
Team Building: Business owners can select like-minded individuals to complement their skills and contribute to the success of the venture.
Achievement: Creating a successful business can bring a sense of accomplishment and fulfillment, especially when an idea comes to fruition.
Innovation: Entrepreneurs have the opportunity to implement their ideas, make changes, and profit from those changes if successful.
Learning Experience: Starting a business can lead to valuable knowledge and experience, even if it fails initially. Failures provide opportunities for growth and improvement in future endeavors.

Protecting Your Idea

1. Intellectual Property: Business ideas, inventions, logos, and unique product names can be considered intellectual property if recorded in written, audio, or video format.

2. Legal Forms of Protection:

Patents: Exclusive rights granted for a fixed period to inventors of new and useful products or processes.
Trademarks: Names or symbols used in trade that are subject to government regulation.
Copyright: Exclusive rights regulating the use of original creations, including text, video, audio, and multimedia formats.

3. Importance of Secrecy: Be cautious about disclosing your idea to others, especially those you don’t trust.

4. Written Documentation: Place your idea in writing, including a detailed description and sketches if applicable.

5. Registering Patents and Trademarks:

Patents: File a patent application with the appropriate government agency.
Trademarks: Register your trademark in the relevant country or region.

6. Applying Copyright: Copyright protection is automatic in most countries and does not require registration. However, adding the copyright symbol (©) to your work is recommended.

7. Notarization: Consider having your written description of your idea notarized for added legal protection. Notarization is the official act of verifying the authenticity of a signature on a document and confirming the identity of the signer.

BUSINESS OPPORTUNITY

A business plan is essential to translate an idea into a viable opportunity.

A business opportunity refers to a favorable set of circumstances or conditions that exist in the market or industry, which can be leveraged to create value and generate a profit.

A business opportunity is an attractive investment idea or proposition that provides the possibility of a monetary return to the person taking the risk.

Indicators of a Good Business Opportunity:

Availability of Real demand/market: A good business opportunity should have a market willing and able to buy its goods or services.
Reasonable Return on Investment: The business should offer profits that justify the risk and effort invested by the entrepreneur.
Availability of Required Resources: Necessary resources like capital, raw materials, and labor should be accessible for establishing and operating the business.
Availability of Required Technical Skills: Adequate skills and equipment are needed for production or service delivery, ensuring smooth operations.
Acceptability in the Community: The business should align with societal norms and preferences to gain acceptance and support.
Favorable Government Policy: Conducive policies, such as low taxes, can enhance the feasibility and success of the business.
Availability of Good Infrastructure: Support services like transportation, communication, and banking facilities should be in place to facilitate business operations.

Qualities of Attractive Business Opportunities:

a) Competitive: The business should offer products or services that meet or exceed customer expectations.

b) Good Income Potential: It should have the capability to provide a steady income to support a reasonable lifestyle.

c) Reasonable Ease of Entry: Entry into the market should not be overly challenging, allowing entrepreneurs to leverage their existing skills and resources.

d) Low or Modest Startup Costs: The business should require minimal initial investment.

e) Good Growth Potential: The opportunity should have the potential for long-term survival and income generation.

f) Alignment with Skills and Experience: Entrepreneurs should possess the necessary skills and experience to succeed in the chosen business.

g) Timeliness: The opportunity should address current, unmet customer needs or trends.

h) Sizeable Market Gap: There should be a significant number of potential customers seeking the business’s offerings.

i) Goal Alignment: The opportunity should align with the entrepreneur’s objectives and aspirations.

Types of Business Opportunities:

Retail and Wholesale: Retail businesses sell directly to consumers, while wholesalers buy goods in bulk and sell them to retailers.
Franchise and Independent: Franchises involve selling a manufacturer’s goods or services under a special agreement, while independent businesses are created and managed independently.
Product and Service: Businesses can offer either products, services, or a combination of both.
Storefront and Non-Storefront: Businesses may operate from physical locations (storefronts) or rely on virtual storefronts (e-commerce websites).
Industry-Based: Entrepreneurs should choose industries they are interested in and have expertise or experience in to avoid costly mistakes.

Identification Process for a Good Business Opportunity:

Entrepreneurs should conduct a pre-feasibility study to assess the viability of a business opportunity, considering factors like market demand, resources, and competition. This analysis helps determine the potential success of the opportunity and serves as a basis for seeking financial assistance.

EVALUATING BUSINESS OPPORTUNITY

The process of evaluating a business opportunity is what is referred to as feasibility study analysis.

Feasibility study analysis is therefore referred to as a process aimed at assessing the profitability and feasibility of the business opportunity.

Profitability of the business refers to the ability of the business to generate reasonable returns of investment.

Feasibility of the business refers to the ability, applicability and possibility of carrying out the business idea as intended and planned.

Steps in Evaluating Business Opportunities

There are several steps or stages to be considered while evaluating the business opportunity and these include the following;

Objective analysis: This requires the entrepreneur to find out reasons as to why someone chose that business line. This helps in identifying the benefit ability of the business to the operator or the other stakeholders.
Market feasibility: This deals with how the products are being priced, branded or packed, how promotion is being handled, the customer’s perception about products. Ask questions on future market prospects, distribution channels among others.
Technical feasibility: This deals with the production or operations department. Ask questions relating to skills and experience required to perform duty, tools and machinery required, the plant layout, technology, raw materials, storage among others.
Financial feasibility: This deals with finance analysis and questions expected are; how did you finance this business, how much revenue do you get from sales, how much did you spend on fixed sales, how much working capital is required etc.
Personnel feasibility: Deals with human resource related issues, for example ask question relating to how many workers do you have, how do you motivate them, how much do you pay them, how did you train them etc

Steps in Starting a Business

Identify potential business opportunities: Sarah loves baking and notices a growing demand for natural baked goods in her neighborhood.
Select business opportunities suitable to your background and feasible to the market: Sarah considers her passion for baking and the market demand, deciding to pursue the bakery idea.
Assess the selected business opportunity: Sarah researches the market further, analyzing the competition, potential customers, and financial feasibility of her bakery idea.
Prepare a business plan: Sarah creates a detailed business plan outlining her bakery’s concept, target market, products, pricing, and marketing strategies.
Mobilize the necessary resources: Sarah identifies the resources needed for her bakery, including ingredients, equipment, and skilled staff.
Complete all legal formalities: Sarah registers her bakery as a legal entity, obtains necessary permits, and ensures compliance with health and safety regulations.
Acquire land or buildings, equipment, raw materials, skilled and unskilled labor: Sarah leases a commercial kitchen space, purchases baking equipment, and hires staff to assist with baking and customer service.
Prepare your marketing plan: Sarah develops a marketing plan to promote her bakery through social media, local advertisements, and collaborations with nearby businesses.
Launch your enterprise: With everything in place, Sarah officially opens her bakery, showcasing her delicious treats to the community.
Manage all the functions for your enterprise: Sarah oversees all aspects of her bakery, including production, sales, customer service, and finances, to ensure its smooth operation and success.

TYPES/NATURE/ FORMS OF BUSINESS ENTERPRISES

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MANAGING BUSINESS RISKS

Risk refers to the probability that an event will occur.

It can also be understood as an uncertain event or set of events that, should it occur, may affect the achievement of the business.

Risk Management refers to the systematic application of procedures to the tasks of identifying, assessing, and controlling risks through the implementation of planned risk responses.

Business Risk Management is a subset of risk management that focuses on the risks of businesses’ operations, systems, and processes.

It consists of a combination of:

The probability of a perceived threat or opportunity occurring
The magnitude of its impact on the objectives of the business

Threat refers to an uncertain event that could have a negative impact on the objectives of the business.

Opportunity refers to an uncertain event that could have a positive impact on the objectives of the business.

Types of Risks:

a) Systematic Risks:

Also known as external risks, these influence a number of assets and are often called market risks.
They affect nearly every business, including interest rates, inflation, and environmental regulations.
They are not under the direct control of management.

b) Unsystematic Risks:

These affect a small number of assets and are sometimes called unique or specific risks.
Examples include staff strikes, location factors, unavailability of raw materials, poor service delivery, and poor controls.
They are within the direct control of management.

c) Low Risks:

These are minimal risks that do not yield significant benefits or cause substantial damage.
Such risks tend to discourage entrepreneurs from investing resources due to their low return on investment.

d) Moderate (Calculated) Risks:

These risks can be forecasted, calculated, and managed by entrepreneurs.
They are not always desirable but offer a potentially higher benefit with a manageable loss propensity.
Examples include fire, theft, and burglary.

e) High Risks:

These risks have a high chance of occurrence, and if they occur, one has little or no control over them.
Examples include smuggling and dodging government taxes.

Forms of Risks

Financial Risks:

These risks may result in financial loss or gain.
Most businesses take risks with their financial assets regularly.
Choosing the wrong supplier or distributor can lead to problems if supplies don’t arrive on time or the distributor goes out of business.
Relationships with customers can also be risky, especially if a company relies on customers carelessly.

Employee Risk

While these may include physical risks, business risk management should consider preventing theft, fraud, and other crimes by employees.
Another risk caused by employees is human error, where even a tiny mistake in data entry or the manufacturing process can have significant consequences.
Risk management should include a quality control process for data input and production to minimize the impact of employee error.

Risk Management

Risk management refers to the identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks.

An organization may use risk assumptions, risk avoidance, risk retention, risk transfer, or any other strategy or combination of strategies to manage future events effectively.

Techniques or Methods of Managing Risks in Business:

Risk Transfer/Sharing: An entrepreneur shifts the risk to another party to suffer the loss if it happens. For example, insurance companies suffer losses whenever they occur.
Risk Avoidance: An entrepreneur takes measures to prevent the risk from occurring. For example, establishing quality assurance measures to avoid producing poor-quality products, paying taxes promptly, etc.
Risk Reduction/Mitigation: The entrepreneur accepts that a risk or loss may happen but devises means to minimize its impact. For example, installing strong steel bars across a taxi or vehicle to reduce the impact of an accident.
Risk Retention: Involves accepting the risk and budgeting for it when it occurs. This method is appropriate for small possible losses, especially when the cost of insuring the asset is greater than the possible loss.
Risk Exploitation: This works for risks that have benefits for the business. The entrepreneur is encouraged to use the chance to make more profits, sales, among others.

The Risk Management Process

Risk managers follow a five-step approach;

Identify the risks: This involves identifying all potential risks that could impact the business, considering all aspects of the organization.
Assess the risks: This step involves evaluating the likelihood of each risk occurring and the potential impact it could have on the business.
Develop risk responses: Once the risks have been assessed, the risk manager develops strategies to address each risk. These strategies may include risk avoidance, risk reduction, risk transfer, or risk acceptance.
Implement the risk responses: The risk manager then puts the chosen risk responses into action, ensuring that appropriate measures are taken to manage each risk effectively.
Monitor the risks: Finally, the risk manager continuously monitors the risks and the effectiveness of the risk responses. This involves tracking key risk indicators and making adjustments to the risk management plan as needed.

Importance of Business Risk Management:

1. Business sustainability: Risk management helps businesses prepare for and respond to emergencies, ensuring that they can continue operating even in the face of unexpected events.

2. Confidence among entrepreneurs: Effective risk management instills confidence among entrepreneurs, particularly in areas such as goods in transit, transportation, freight, and shipping.

3. Cultivates faithfulness: Risk management fosters trust and loyalty among traders, as they are united by a common goal of managing risks effectively.

4. Employment opportunities: Risk management creates employment opportunities for professionals such as accountants, lawyers, underwriters, and others.

5. Proper planning and documentation: Risk management encourages proper planning and documentation of assets and their associated risks.

6. Facilitates trade: Risk management, particularly in the context of international trade, plays a crucial role in ensuring that goods are insured before transit.

7. Promotes professionalism: Effective risk management cultivates professionalism in business, as entrepreneurs adopt proactive approaches to managing risks.

8. Protects against risks: Risk management safeguards businesses against potential losses by implementing appropriate risk responses.

9. Enhances business continuity: By transferring risks to third parties through insurance, risk management helps ensure business continuity.

10. Prioritization and decision-making: Risk management aids in setting priorities by guiding the allocation of scarce resources and capital. This helps in effective decision-making and planning.

Reasons for Poor Risk Management by Ugandan Entrepreneurs:

Ignorance: Many entrepreneurs lack awareness of the importance of risk management and its benefits.
Limited finances: Some organizations may have limited financial resources to invest in comprehensive risk management strategies.
Inadequate government policies: The government’s policies regarding insurance enforcement may not be robust enough to encourage effective risk management practices.
Negligence: Many business practitioners may neglect risk management due to a lack of understanding or prioritization.
Traditional beliefs: Traditional norms, values, and cultures may influence entrepreneurs to rely on traditional risk management methods rather than modern approaches.
Limited insurance firms: The number of insurance firms operating in Uganda may be limited, reducing the accessibility and affordability of insurance products.
Excessive compensation procedures: Complex and time-consuming compensation procedures may discourage entrepreneurs from insuring their assets.
Negative perception: The general public may have negative perceptions about risk management procedures, hindering its adoption.

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BUSINESS ETHICS

Business ethics are moral principles which are recognized in respect to a particular class of human actions or a particular group.

Ethics refers to the study of right and wrong and the morality of choices individuals make.

Codes of Ethics

Codes of ethics are written guidelines that stipulate the acceptable behaviors in an organization.

Principles of Good Business Ethics

Honesty: One should not present false or misleading information to others. One should openly and freely share information that is appropriate to the relationship with others.
Keeping promises: One should not make promises that cannot be kept. One should not make promises on behalf of the company unless authorized to do so.
Respect for others: It is important to honor the contributions and abilities of others.
Fairness and honesty: Businesspeople must obey all laws and regulations and refrain from knowingly deceiving, misrepresenting, or intimidating others.
Organizational relationships: These include relationships with employees and customers. Customers’ and employees’ confidential information is expected to be kept secret, and all obligations must be honored.
Conflict of interest: This is where a businessperson takes advantage of a situation for his/her own personal interest rather than the employer’s interest.
Compassion: One should maintain an awareness of the needs of others and act to meet those needs whenever possible.
Integrity: One will always live up to ethical principles, even when confronted by personal, professional, and social risks, as well as economic pressure.

Examples of Business Unethical Issues

Corruption
Theft
Industrial espionage (e.g., stealing copyrights or technology using sophisticated cameras, listening devices, etc.)
Misleading advertisements
Sexual relations for favors

Benefits/Importance of Business Ethics

Avoids expensive and embarrassing court lawsuits: Businesses that operate ethically are less likely to be involved in legal disputes, which can save them time, money, and reputation.
Better public image: Businesses that are seen as ethical are more likely to have a positive reputation among consumers, investors, and other stakeholders. This can lead to increased sales and customer loyalty.
Increases sales: Customers are more likely to do business with companies that they trust and perceive to be ethical.
Brings about customer loyalty: Customers who have a positive experience with a business are more likely to become repeat customers and recommend the business to others.
Reduces labor turnover: Employees are more likely to stay with a company that they believe is ethical and treats its employees well. This can save the company money on recruiting and training new employees.
Increases employee morale to perform work: Employees who feel good about the company they work for are more likely to be motivated and productive.
Increases productivity: A more ethical workplace can lead to increased productivity, as employees are more likely to be engaged and motivated.
Increases the ability of an organization to attract and retain quality human resources: Top talent is more likely to be attracted to companies that are seen as ethical and have a good reputation.

Limitations of Business Ethics

Absence of one agreed moral code (universal moral code). Morals differ in different communities: What is considered ethical in one culture may not be considered ethical in another. This can make it difficult for multinational companies to develop and implement a global code of ethics.
Competing religious and social moral codes, especially for multinational companies operating in different parts of the world and employing people from different cultures and religions: This can make it difficult for companies to develop and implement a code of ethics that is acceptable to all employees.
Pursuit of profits as a major objective, may lead to production of poor quality products, misleading advertisements, etc. with the aim of maximizing profits: This can damage the company’s reputation and lead to legal problems.
Ambitions of managers and owners. For example, ambitions to own and belong to big organizations may lead to exploitation of workers and production of poor quality products with the aim of reducing production costs to make abnormal profits for fast growth: This can damage the company’s reputation and lead to legal problems.
Modern technology creates ethical dilemmas, which never existed until quite recently. These allow unethical practices, for example, medical products (such as abortion), gene alteration of unborn babies, and selling of human bodies: This can make it difficult for companies to develop and implement a code of ethics that addresses all potential ethical issues.
Limited resources, e.g., to pay workers well and produce environmentally friendly products: This can make it difficult for companies to operate in a completely ethical manner.

Negative Effects of Ethical Behavior

Increased costs as businesses try to do what is expected, e.g., not pay bottom wages or dump pollution cheaply at sea: This can reduce the company’s profitability.
Conflicts between profits and ethical standards: Sometimes, businesses may have to choose between doing what is profitable and doing what is ethical. This can lead to difficult decisions for managers.
Business practices and organizational culture will have to be changed, i.e., if the organization had a culture of unethical behavior, it may have to change it to behave ethically, and change in most times comes with associated costs: This can be disruptive and expensive.
Changes in relations with suppliers. This may mean passing the same standards down to the supply chain, and yet several suppliers may not be prepared to meet standards. Alternative suppliers may be more expensive: This can increase the company’s costs.
Ethics and business decisions: Making ethical decisions can be complex and time-consuming. This can slow down the decision-making process and make it more difficult to compete in a fast-paced business environment.

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INNOVATION

Innovation is the implementation of a new or significantly improved product, service or process that creates value for business, government or society.

This is therefore the way of transforming the resources of an enterprise through creativity of people into new resources and wealth.

The ultimate goal of innovation is positive change, to make someone or something better, innovation and the introduction of it that leads to productivity is a fundamental source of increasing wealth in an economy.

CHARACTERISTICS OF INNOVATORS

1. An innovator has a compelling vision: the ability to formulate and articulate a compelling vision for your department or organization is the key characteristic of

your impact as an innovator. e.g Steve Jobs had a compelling vision for Apple to create a personal computer that was easy to use and accessible to everyone.

2. An innovator is opportunity oriented: an innovator always seem to find an

opportunity in any situation, he/she is constantly thinking about new ways of doing

things and is not afraid to try something new. e.g Jeff Bezos saw an opportunity to create an online bookstore that would offer a wider selection of books than any physical bookstore.

3. Are self-disciplined: this means that he or she knows that it takes self discipline to achieve results. One has to do the hard work to make it happen. Innovators are able to prioritize their time so that they are doing the important work. e.g Elon Musk is known for his incredible work ethic and his ability to focus on his goals.

4. Innovators are passionate about he/she believe in: highly successful people have a great passion for what they do. They are usually passionate about one thing and go after it with all their hearts.

5. An innovator is inner–directed: nobody has to tell an innovator what to do. Because of self discipline and ability to focus, innovators get up in the morning and get going, they are goal oriented and do not need anyone else to motivate them.

6. Are extraordinarily persistent: an innovator just keeps going, he does not let obstacles get in the way. It is this commitment and persistence that makes even the hardest goals to be achieved. e.g Thomas Edison failed over 10,000 times before he finally invented the light bulb.

7. An innovator is a trend–spotter: an innovator is able to identify something new and its social responsibility, i.e. its impact to the society.

TYPES OF INNOVATION

Marketing innovation: Developing new markets, new marketing systems, or methods of improvement in terms of product design, packaging, pricing, and promotional activities. Example: Kakira Sugar Limited innovated their packaging by changing from 50kg bags to 25kg bags. Beverage companies like Coca-Cola and Pepsi Cola have also changed their packaging from glass bottles and metallic containers to plastic bottles.
Process innovation: Implementing a new and significantly improved production and delivery system. May include changing the production layout, the delivery routes, and manufacturing systems. Example: MTN Uganda introduced a new and significantly improved system for sending and receiving money using mobile phones. This innovation has revolutionized the way Ugandans conduct financial transactions, making it easier, faster, and more secure.
Organizational innovations: Creating or altering business structures, practices, and models. May include process, marketing, and business model innovations. Involves changing the way the organization does things to something better or different in almost all sectors of the organization. Example: Automating a production facility from a manual system, computerizing records registry at a university, or changing accounting systems.
Product/Service innovation: Introducing new products and services or improving on existing ones. Example: Phone manufacturers have changed phones from Arial phones to wireless, buttoned phones to screen phones, and so on. MTN Uganda introduced a new product of Mobile Money, which was nonexistent in the country before.
Supply chain innovations: Changing the sourcing of inputs from suppliers and the delivery of outputs to customers. May include changing to better distribution channels, getting more reliable and better suppliers of raw materials, or owning raw material deposits. Example: BIDCO Uganda Limited reduced importing inflammable oil for making cooking oil and changed to buying land and growing their own at Kalangala Island.

SOURCES OF INNOVATIONS

The sources of innovation can be grouped into two major categories: internal and external factors.

Internal Sources

Unexpected occurrences: These include mishaps like a failed product introduction. It is often through such unexpected failures or successes that new ideas are generated or born from new information brought to light. Unexpected occurrences can also take the form of accidents.
Innovation inspired by process needs: These are innovations created to support other products or processes. For instance, advertising was introduced to mass-produced newspapers to cover the printing expenses on the newly acquired machines.
Industry and market changes: This often results in the rise and decline of successful innovators. For example, the introduction of mobile money services by MTN on the Ugandan market and in the telecommunication industry has caused many innovations among all the players in the industry and even other sister industries like the insurance and banking industry.

External Forces

Demographic changes: These affect all aspects of business, for instance, factors like birth rates, death rates, and the proportion of the educated to the uneducated, among others.
Changes in perception: This leads to innovation. For example, healthcare in Uganda has continuously become better and more accessible. People have increasingly become concerned about their health, thus demanding better health services. This has caused a need for innovations in the medical sector, whereby doctors have been trained more and more, and more tests and drugs have been innovated for particular diagnoses and diseases.
New knowledge or technology: When new technology emerges, innovative companies earn profits by exploiting it in new applications and markets. For example, the introduction of the internet into business has generated thousands of new service innovations like online chatting, online registration, e-learning platforms, e-commerce, video-conferencing, and many others.

ADVANTAGES OF INNOVATION

1. Creativity: Innovative companies generally employ a large number of creative and competent individuals who not only introduce new products but also make sure they are accepted in the market. Such innovative individuals provide ideas on product design, product packaging, implementation, and marketing. This has made such companies stand out from the competition.

2. Market Leadership: Innovative companies are always market leaders. For instance, Riham Cola, which made innovations in the soft drinks industry, has made a greater impact on the market against Pepsi Cola and Coca-Cola companies. Riham introduced the plastic (disposable and non-returnable) packing bottles for soda against the glass bottles of Pepsi and Coca-Cola. This innovation outcompeted the former key players in the industry.

3. Experience: Innovative businesses are also advantaged with experience. They typically get the process of product development down to an exact science that can be repeated over and over again.

4. Name recognition, reputation, and good image: Such companies have always created a good reputation among the public. They are highly recognized in the country, and every good employee would wish to work for such organizations. For instance, MTN Uganda, Stanbic Bank, among others, have gained a reputation.

5. Expansion of market and sales maximization: Innovation in technology and marketing has seen smaller businesses compete on a global scale. Proprietors using internet marketing have acquired global markets even when they are smaller firms at home but provided they use website advertisements, registered with global marketing sites, among other avenues.

6. Cutting costs: Through innovations like mechanization, automation, and computerization of systems like banking systems and production processes, among others, companies have been able to cut costs relating to labor, late deliveries due to delays in production, and so on.

7. Improving the quality of products/services: Innovation can lead to improvements in the quality of products and services. This can be achieved through the development of new technologies, the use of new materials, or the adoption of new production methods. For example, the development of new medical technologies has led to the development of new drugs and treatments that have saved countless lives.

8. Attracting customers and retaining existing customers: Innovation can help businesses to attract new customers and retain existing customers. This can be achieved by offering new and improved products or services that meet the needs of customers. For example, the development of new smartphones with new features and capabilities has helped Apple to attract and retain customers

9. Giving the business a competitive advantage: Innovation can give businesses a competitive advantage over their competitors. This can be achieved by developing new products or services that are unique or superior to those offered by competitors. For example, the development of the iPod gave Apple a significant competitive advantage in the portable music player market.

DISADVANTAGES OF INNOVATION

Employee concerns and unemployment: While innovation is important, it may arouse employee concerns, especially where many workers are to be laid off due to the automation of production processes. This causes many problems for the affected parties.
Upfront costs: While innovation saves costs and expenses in the long run, in the short run, it is very costly to implement. For instance, the acquisition and installation of machinery, computers, and all necessary accessories to enable the automation of processes will be more demanding and may cause liquidity problems for the business.
Rivalry and witchcraft: Innovation can lead to increased competition and rivalry among businesses, as they strive to outdo each other with new and improved products or services. This can sometimes lead to unethical behavior, such as industrial espionage or even witchcraft, as companies try to gain an edge over their competitors.
Decline in craftsmanship: As businesses adopt new technologies and mass production techniques, there can be a decline in the quality of craftsmanship. This is because machines often cannot replicate the same level of detail and precision as human hands. As a result, traditional crafts and skills can be lost, as they are no longer economically viable.
Monopoly tendencies: Innovation can lead to the creation of monopolies, as companies that are first to market with a new product or service can gain a significant advantage over their competitors. This can make it difficult for new entrants to break into the market, and can lead to higher prices for consumers.
Over-exploitation and depletion of resources: Innovation can also lead to the over-exploitation and depletion of natural resources. For example, the development of new technologies for extracting oil and gas has led to increased drilling, which can have negative environmental impacts.
Cultural and moral degradation: Some innovations can have negative impacts on culture and morality. For example, the development of new technologies for communication and entertainment has led to concerns about the decline of traditional values and the rise of individualism and materialism.

Innovation in Small Businesses

Many people think innovation is a formal and complicated process, which only big organizations and businesses can undertake, and yet this is not the case. It is something that all businesses can afford to do since it requires only changing the way things are done normally to switch to something different.

Small businesses are, however, more chanced and more likely to be innovative than larger firms because of the following:

Most small business owners are willing to try new approaches to make their businesses more successful.
Small businesses understand customers’ needs, identify new opportunities, and can fix problems more quickly and efficiently.
Small businesses can quickly implement new business practices and adapt to changing market considerations.
When pursuing new opportunities, many small business entrepreneurs experiment and improvise. They accept failure as part of the path to success.
Small businesses traditionally rely on strong local social networks to share information needed for innovative thinking.
Small businesses are often more flexible than larger firms.
Small businesses have fewer bureaucratic issues to overcome.
Small businesses are often closer to their customers and can get feedback more quickly.
Small businesses are often more willing to take risks.

Ways to Foster Innovation in Small Businesses

Expect change. The rate, complexity, and unpredictability of change are increasing, creating a new hyper-competitive environment.
Implement new rules. Innovators who go beyond the existing parameters of competition will achieve competitive advantage and success.
Develop innovative strategies. Develop conscious strategies and mechanisms to promote consistent innovation, as entrepreneurs innovate all the time.
Avoid barriers. Dissolve internal barriers that separate people and departments. Boundaries between firms, suppliers, customers, and competitors are also under severe pressure.
Be fast. Implementation needs to be fast. It is better to be 80% right and quick than 10% right and late.
Think global. The fastest-growing markets may be at the international level. Companies can now shop in a single global supermarket for just about everything.
Think like an entrepreneur. Entrepreneurs make things happen and allow themselves to fail and improve because of it.
Always be a faster learner. This is a key to competitive advantage in entrepreneurship: the ability to learn faster and better than competitors and to turn learnings into new products, services, and technologies before competitors can imitate your latest innovation.
Measure performance indicators. Focus energy on what really drives the future success of the business.
Do well. By doing well for others, success is easier to attain.
Create a culture of innovation. Encourage employees to come up with new ideas and take risks.
Provide resources for innovation. This could include things like training, funding, and access to technology.
Celebrate successes. When employees come up with successful new ideas, make sure to recognize and reward them.
Be patient. Innovation takes time. Don’t expect to see results overnight.

MOTIVATION

Motivation refers to the process of stimulating someone to adopt a desired course of action usually directed towards achievement of specific goals.

WAYS OF MOTIVATING EMPLOYEES

Timely and adequate remuneration/payment: Employees are more likely to be motivated when they are paid fairly and on time.
Provision of on-job training and education sponsorship for higher education: Employees appreciate opportunities to learn and grow, and they are more likely to be motivated when they feel that their employer is investing in their future.
Pleasant or good working conditions: Employees are more likely to be motivated when they work in a safe, comfortable, and supportive environment.
Providing job security: Employees are more likely to be motivated when they feel that their jobs are secure.
Promotion prospects: Employees are more likely to be motivated when they have the opportunity to advance in their careers.
Appraising and appreciating contributions of workers: Employees are more likely to be motivated when they feel that their work is valued and appreciated.
Participation in decision making: Employees are more likely to be motivated when they feel that they have a say in how their work is done.
Transparent management: Employees are more likely to be motivated when they trust their managers and feel that they are being treated fairly.
Open communication: Employees are more likely to be motivated when they feel that they can communicate openly with their managers and coworkers.
Giving fringe benefits: Employees appreciate fringe benefits such as health insurance, paid time off, and retirement plans.
Management of discipline: Employees are more likely to be motivated when they feel that discipline is fair and consistent.

Importance of Motivation to a Business

Motivation stimulates workers to perform their duties and the given tasks effectively and efficiently.
It also improves workers’ productivity and profitability since workers work harder.
Motivation improves the image of the business or enterprise among the public.
It also prevents employees from seeking alternative employment opportunities elsewhere.
It also minimizes employee strikes and demonstrations.
It enhances teamwork.
It also improves on worker’s skills through providing training programs like on-job training.
Motivation in the form of financial or monetary reward improves the worker’s standard of living and increases commitment at work.

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ENTREPRENEURSHIP SKILLS

Entrepreneurial skills refer to a broad range of abilities that individuals use to start and manage their own businesses.

These skills can be broadly categorized into technical skills, leadership and business management skills, and creative thinking.

Examples of entrepreneurial skills include:

Creativity skills: Ability to generate new ideas and solutions to problems.
Innovation skills: Ability to think critically and analyze information to make informed decisions.
Risk management: Ability to identify and assess potential risks and develop strategies to mitigate them.
Business management skills: Ability to set goals, make decisions, and take calculated risks.
Communication and Listening Skills: Ability to communicate effectively both verbally and in writing. Effective communication and interpersonal skills, including the ability to negotiate, persuade, and build relationships.
Teamwork and leadership skills: Ability to work effectively with others to achieve common goals.
Customer service skills: Ability to build and maintain strong relationships with customers.
Financial skills: Understanding of financial management principles, including budgeting, forecasting, and tracking expenses. Ability to manage finances, including budgeting, forecasting, and tracking expenses.
Analytical and problem-solving skills: Ability to identify and analyze problems, and develop and implement effective solutions.
Critical thinking skills: Ability to think critically and analyze information to make informed decisions.
Strategic thinking and planning skills: Ability to develop and implement strategic plans to achieve business goals.
Technical skills: Proficiency in specific software, tools, or technologies related to the entrepreneur’s industry.
Time management and organizational skills: Ability to manage time effectively and prioritize tasks. Strong organizational skills, including the ability to keep track of multiple projects and deadlines.
Branding, marketing, and networking skills: Ability to develop and implement effective branding and marketing strategies.

CREATIVITY

Creativity is the process of bringing something new into existence.

Creativity is characterized by the ability to perceive the world in new ways, find hidden patterns to make connections between seemingly unrelated phenomena and to generate solutions. Creativity involves two processes i.e. thinking, and then producing.

While creativity is generating something new like a new idea, new product, new technology, new design of packaging, new fashion style, new technique e.t.c, Innovation is the process of implementing or applying the created new concepts.

However if after creativity, innovation does not take place, the process is called invention, invention therefore means coming up with some new (creativity) but you leave it there unimplemented.

CHARACTERISTICS OF CREATIVE PEOPLE

• Deep focus and concentration: Creative people are able to focus deeply on a particular subject or problem for extended periods of time. This allows them to develop a deep understanding of the topic and to come up with innovative solutions.

• Intelligence and problem-solving skills: Creative people are often highly intelligent and have strong problem-solving skills. They are able to think outside the box and come up with new and original ideas.

• Risk-taking and open-mindedness: Creative people are willing to take risks and try new things. They are open to new ideas and experiences, and they are not afraid to fail.

• Self-confidence and resilience: Creative people are confident in their abilities and are able to tolerate isolation and criticism. They are resilient and able to bounce back from setbacks.

• Overcoming challenges: Creative people often have a history of overcoming challenges in their childhood, such as financial constraints or hunger. These experiences can help them to develop resilience and creativity.

• Curiosity and experimentation: Creative people are curious and always looking for new things to learn. They are willing to experiment and try new things, even if they fail.

• Collaboration and sharing: Creative people are good at sharing their ideas with others and collaborating on projects. They are not selfish with their knowledge and are always willing to help others.

METHODS/TECHNIQUES OF DEVELOPING CREATIVE ABILITY

1. Think beyond the invisible frameworks that surround problems or situations.

Challenge the status quo and look for alternative perspectives.
Be open to new ideas and possibilities.
Don’t be afraid to question assumptions.
Recognize when assumptions are made and challenge them.

2. Assumptions can limit our creativity and prevent us from seeing new possibilities.

Be aware of your own assumptions and be willing to challenge them.
Ask yourself why you believe something to be true and be open to considering other possibilities.
Stop narrow-minded thinking and widen the field of vision.

3. Draw on the experiences of other individuals or businesses.

Look for inspiration in different fields and industries.
Be open to new ideas and perspectives, even if they seem unrelated to your own work.
Develop/adapt ideas from one field to another.

4. Cross-pollination of ideas can lead to innovative solutions.

Look for ways to apply ideas from one field to another.
Be willing to experiment and try new things.
Be prepared to use unpredictable events to your advantage.

5. Unpredictable events can be a source of inspiration and creativity.

Be open to new possibilities and be willing to adapt your plans.
Embrace change and see it as an opportunity for growth.
Use your unconscious mind, e.g. by sleeping on a problem to generate creative solutions to the problems.

6. The unconscious mind can be a powerful tool for creativity.

Allow yourself time to relax and let your mind wander.
Keep a notebook handy to jot down any ideas that come to you, even if they seem silly or unrelated.
Note down ideas that apparently drop into the mind unsolicited/uncalled for, so that they are not forgotten.

7. Creative ideas can come at any time, so it’s important to be prepared to capture them.

Keep a notebook or journal with you at all times.
Write down any ideas that come to you, no matter how small or insignificant they may seem.
Make connections with points that are apparently irrelevant, disguised or outside your own sphere or expertise.

8. Creative ideas can often be found by making connections between seemingly unrelated things.

Be open to new experiences and be willing to learn about different things.
Look for patterns and relationships that others may have missed.
Suspend judgment to encourage the creative process and avoid premature criticisms.

9. Premature criticism can stifle creativity.

Allow yourself to generate ideas without judgment.
Save your criticism for later, once you have a number of ideas to work with.
Know when to leave a problem (remaining aware but detached) until solutions emerge, patience is important here as in the suspension of judgment.

10. Sometimes the best way to solve a problem is to step away from it for a while.

Allow your subconscious mind to work on the problem.
Be patient and don’t force a solution.

STAGES OF CREATIVITY PROCESS

1. Preparation:

Gather information and analyze it.
Propose some possible solutions or alternatives.

2. Incubation:

Engage in mental work and self-storming of possible solutions.
Ask yourself many questions, but don’t expect to find answers yet.

3. Illumination:

Stop thinking about the questions and relax.
Engage in recreational activities that make you feel relaxed and at ease.
An idea to solve the problem may come to you during this free time.

4. Verification:

Test the idea or solution that you have developed.
If the idea or solution does not work, leave the problem for a while and then revisit it with a fresh perspective.
Consult with others and seek alternative solutions.

OBSTACLES TO CREATIVITY

Negativity: Not thinking positively about problems and seeing them as a threat rather than an opportunity.
Fear of failure: Being afraid to take risks and try new things for fear of making mistakes or failing.
Lack of quality thinking time: Being too busy or stressed to think objectively or think at all.
Over-conformance with rules and regulations: Being too rigid and inflexible in one’s thinking and unwilling to break away from established norms.
Making assumptions and conclusions: Assuming that something is not possible without exploring all the options.
Applying too much logic: Relying too heavily on logic and reason and not being open to more intuitive or creative approaches.
Thinking that you are not creative: Having a negative self-image and believing that you are not capable of being creative.
Lack of aspirations: Being uninspired and lacking the motivation to come up with new ideas, even when presented with new information or challenges.
Groupthink: The tendency to conform to the opinions of the group and not express creative ideas.
Lack of diversity: Having a homogeneous group of people working on a project, which can lead to a lack of different perspectives and ideas.
Unwillingness to take risks: Being afraid to step outside of one’s comfort zone and try new things.
Perfectionism: Striving for perfection and being unwilling to accept anything less, which can stifle creativity.

INNOVATION

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ENTREPRENEURSHIP SKILLS Read More »

The Entrepreneur as a Manager

An entrepreneur will also be required to play the normal management roles:

Planning, organization, financial management, human resource management, leadership and control.

The most common educational approach for entrepreneurship distinguishes six types of skills:

Operational management, personnel and organization, financial administration, marketing, financial management, and making a business plan.

The main difference between Entrepreneur and Manager is their role in the organization. An entrepreneur is the owner of the company whereas a Manager is the employee of the company.

Types of Entrepreneurs

Innovative Entrepreneurs: Assemble diverse information to experimentally produce new possibilities in terms, techniques, or products. Example: Steve Jobs, co-founder of Apple Inc., introduced innovative products like the iPhone, revolutionizing the technology market.
Imitative (Adoptive) Entrepreneurs: Copy and paste other people’s technology and techniques, using existing ideas in the market. Example: Generic pharmaceutical companies that replicate existing drugs with expired patents.
Push (Forced or Necessity) Entrepreneurs: Forced into business due to circumstances beyond their control, like job retirement or single parenthood. Example: An individual starting a small business after job loss due to company downsizing.
Pull (Motivated) Entrepreneurs: Lured by the attractiveness of a business idea and its personal implications. Example: Entrepreneurs motivated to start eco-friendly businesses due to a personal commitment to environmental sustainability.
Induced Entrepreneur: Induced by government policy measures, assistance, incentives, and concessions to start a venture. Example: A renewable energy entrepreneur encouraged by government subsidies and incentives.
Visionary Entrepreneurs: Concentrate on making one line of business the biggest, focusing on expansion. Example: Elon Musk, CEO of Tesla, who envisions a sustainable future and concentrates on electric vehicles and renewable energy.
Opportunistic Entrepreneurs: Constantly seek and exploit opportunities due to wide skills and knowledge. Example: Entrepreneurs in the tech industry who quickly adopt emerging technologies for business growth.
Portfolio Entrepreneurs: Run multiple businesses and have stakes in various other ventures. Example: Richard Branson, founder of the Virgin Group, involved in diverse industries like music, airlines, and telecommunications.
Professional Entrepreneurs: Interested in establishing a business but not in managing or operating it once established. Example: A doctor who establishes a healthcare clinic, then hires administrators to manage daily operations.
Lifestyle (Craftsman) Entrepreneurs: Restrict business to areas of skill and experience, with limited growth ambitions. Example: Artisans like carpenters or potters who operate small, skill-focused businesses.
Technical Entrepreneurs: Develop improved quality goods due to craftsmanship. Example: Craft breweries that focus on the technical aspects of brewing to produce unique and high-quality beer.
Non-technical Entrepreneurs: Focus on marketing and distribution strategies, not concerned with technical aspects. Example: Entrepreneurs in the fashion industry who emphasize marketing and branding rather than production techniques.
Pure Entrepreneur: Motivated by psychological and economic rewards, undertaking entrepreneurial activity for personal satisfaction. Example: An individual starting a social enterprise focused on community development, driven by a desire for social impact.
Habitual Entrepreneur: Individuals with ownership stakes in multiple businesses, having experience in establishing or purchasing them. Example: An entrepreneur who has owned shares in various businesses, involving both successes and failures.
Spontaneous Entrepreneur: Persons with initiative, boldness, and confidence, activating them to undertake entrepreneurial activities. Example: Someone inspired to start a small business after identifying a sudden market demand for a unique product.
Business Entrepreneurs: Conceive an idea for a new product or service and create a business to materialize the idea. Example: Entrepreneurs in the tech industry who develop innovative software solutions and establish startups to bring them to market.
Trading Entrepreneur: Undertakes trading activities without involvement in manufacturing work. Example: Import-export entrepreneurs involved in the trading of goods between different countries.
Industrial Entrepreneur: A manufacturer identifying customer needs and tailoring products or services to meet market demands. Example: Henry Ford, founder of Ford Motor Company, revolutionized industrial entrepreneurship with the assembly line.
Corporate Entrepreneur: Demonstrates innovative skills in organizing and managing a corporate undertaking. Example: Google’s development of new products and services within its corporate structure, fostering innovation and growth.
Agricultural Entrepreneur (Agripreneur): Undertakes agricultural activities, including raising and marketing crops, fertilizers, and other agricultural inputs. Example: A farmer who not only cultivates crops but also sells agricultural products directly to consumers.
Drone Entrepreneurs: Entrepreneurs resistant to change, who may close their business rather than adapt to new circumstances. Example: Traditional bookstores resistant to embracing e-commerce and digital platforms, leading to business closure.
Fabian Entrepreneurs: Reluctant to change, but circumstances may force them to adapt slowly. Example: Traditional brick-and-mortar retailers slowly transitioning to online sales due to changing consumer preferences.
Individual and Institutional Entrepreneurs: Start-ups often initiated by individual entrepreneurs but may evolve into more complex ventures led by a corporate body. Example: A tech startup founded by individuals that later receives institutional funding and evolves into a larger corporate structure.
Copreneurs: Entrepreneurial couples working together as co-owners of an enterprise. Example: A husband-and-wife team starting and managing a family-owned restaurant.
Part-time Entrepreneurs: Entrepreneurs engaging in business irregularly or on a part-time basis. Example: A professional consultant who runs a small online business during weekends.
Serial Entrepreneurs: Continuously generate new ideas and start multiple businesses. Example: Elon Musk, who founded multiple successful companies, including SpaceX, Tesla, and Neuralink.
Corporate Entrepreneurs: Develop new ideas and opportunities within large or established businesses, contributing to organizational profitability. Example: An employee within a large pharmaceutical company spearheading a successful internal startup division.
Women Entrepreneur: Women with entrepreneurship skills engaging in business activities. Example: Amina, owner of Kingston Hardware and Oasis Mall, showcasing women entrepreneurs’ diverse roles.
Social Entrepreneur: Engages in business to empower disadvantaged people, with a focus on social impact rather than profit. Example: Prudence, owner of Bella Wine Company, who supports social causes through the proceeds of her business.
Intrapreneurs: Individuals within an organization who take responsibility for creating products and generating ideas. Intrapreneurs apply entrepreneurial skills, vision, and forward-thinking to their roles within the company. Example: An employee at a technology company who proposes and leads a project to develop a new software solution, bringing innovation to the organization’s product offerings.

Differences between an Entrepreneur and an Intrapreneur

Differences	Entrepreneur	Intrapreneur
1. Definition	An individual who builds a new business with limited resources.	An employee who develops new products for the company they are working for.
2. Goals	Aims at creating something of social and economic importance.	Aims to create organizational competitiveness.
3. Motivation	Motivated by achievement, passion, independence, and financial rewards.	Motivated by freedom to innovate, company backing, and incentives.
4. Resources	Uses their own resources.	Uses company resources.
5. Risk	Vulnerable to many kinds of risk.	Very limited risk, if at all.
6. Decision Making	Independent.	Collaborative/consultative.
7. Time Frame	Not time-bound.	Stipulated by the organization.
8. Service Focus	Primarily serves the customer.	Primarily serves the organization and themselves.

Important Roles and Functions of an Entrepreneur in an Enterprise

An entrepreneur plays a crucial role in the success and sustainability of an enterprise. From the initial planning stages to the final marketing of products or services, entrepreneurs fulfill various functions that contribute to the overall efficiency and effectiveness of the business. Here are some of the key roles and functions of an entrepreneur:

Planning: Entrepreneurs initiate the process of establishing and organizing an enterprise. They formulate a comprehensive plan that outlines the methods of production, the size of output, the location of the industry, and the nature of the commodities to be produced. This plan serves as a roadmap for the successful operation of the business.
Starting of Production: Entrepreneurs make critical decisions regarding the commencement of production. They take necessary steps to ensure the smooth and uninterrupted functioning of the production process, addressing any challenges or obstacles that may arise.
Mobilization of Capital: Entrepreneurs play a vital role in securing the necessary capital to fund their business ventures. They explore various sources of financing, such as bank loans, investments from friends and family, issuing shares and debentures, or leveraging their own personal assets.
Innovation: Entrepreneurs are often driven by a spirit of innovation. They continuously seek new methods of production, explore new market areas, and initiate steps to improve the technology and efficiency of their industry.
Coordination: Entrepreneurs act as coordinators, bringing together and managing the various factors of production. They hire and allocate labor, procure raw materials and equipment, and ensure the smooth integration of all resources to achieve optimal productivity.
Organization of Labor Force: Entrepreneurs recruit and place the right people in the right positions within the enterprise. They introduce division of labor, assigning tasks based on merit, ability, and the specific needs of the business. They also supervise and motivate employees to maximize their performance.
Supply of Tools and Machines: Entrepreneurs provide the necessary tools, machinery, and equipment to enable employees to perform their tasks efficiently. They invest in up-to-date technology to enhance productivity and reduce costs.
Marketing Mechanism: Entrepreneurs develop and implement marketing strategies to promote their products or services and generate demand in the market. They utilize various channels, including advertising, public relations, and social media, to reach their target audience and influence consumer behavior.
Anticipation of Market Changes: Entrepreneurs closely monitor market trends, consumer preferences, and changing fashions. They adapt their products or services accordingly to meet the evolving needs and desires of their customers.
Division of Labor: Entrepreneurs introduce division of labor within the enterprise to increase efficiency and productivity. They assign specific tasks to employees based on their skills and expertise, leading to improved output quality and reduced costs.
Risk Taking: Entrepreneurs embrace risk as an inherent part of starting and running a business. They make calculated decisions, assess potential risks, and take proactive measures to mitigate uncertainties. They are willing to bear the financial and emotional risks associated with entrepreneurship.
Uncertainty Bearing: Entrepreneurs navigate the inherent uncertainties of production and marketing. They understand that profits can fluctuate and losses may occur. They possess the resilience and adaptability to withstand market fluctuations and unexpected challenges.
Distribution of Profits: Entrepreneurs allocate profits to various stakeholders, including employees, investors, and themselves. They determine the appropriate distribution of profits to ensure the sustainability and growth of the enterprise.
Creation of Value: Entrepreneurs play a crucial role in creating value for society. By establishing new businesses and industries, they generate employment opportunities, contribute to economic growth, and introduce innovative products or services that enhance consumer welfare.
Least-Cost of Production: Entrepreneurs strive to produce output at the lowest possible cost. They analyze the marginal productivity of different factors of production and make adjustments to optimize resource allocation. This focus on cost efficiency contributes to the profitability and competitiveness of the enterprise.

Differences between an Entrepreneur and a Manager

Differences	Entrepreneur	Manager
1. Role	Is the starter/owner of the business.	Is employed to run the business.
2. Risk	Bears all risks.	Does not shoulder any serious risk.
3. Reward	Rewarded with profit.	Rewarded with the salary he or she gets from the company.
4. Motivation	Key motivation is achievement.	Motivation comes from power and rewards that come with the position.
5. Approach	Can be casual/informal in approach.	Managers tend to be formal in behavior and approach.
6. Decision-Making	Decides independently and may take quick decisions.	Often involves a more structured decision-making process and follows company protocols.
7. Long-Term Focus	Focuses on the long-term success and growth of the business.	Typically concerned with meeting short-term goals and targets.
8. Innovation	Innovates and introduces new ideas to drive the business.	Implements and executes existing strategies and policies.
9. Job Security	Faces the uncertainty of business outcomes, leading to less job security.	Enjoys relatively more job security.
10. Work Hours	Often works irregular hours and may have a flexible schedule.	Usually follows a fixed work schedule with regular working hours.

STAGES OF ENTREPRENEURIAL PROCESS

There is a myth about entrepreneurship by most people. They think that it is a get rich quick scheme. However, the truth is that entrepreneurship is a lengthy process that requires patience and hard work. It goes through a series of steps and each step in the process has its own demands. Some of the key steps include;

Self entrepreneurial identification: The entrepreneurial process begins by identifying yourself if you can start any business activity. This stage is the starting one because if someone cannot identify himself or herself as a potential entrepreneur, then one can never be one.
Generation of ideas: When one decides to become an entrepreneur, the next step is to generate ideas and start to search for business opportunities.
Evaluating the idea/ Idea Assessment: After generating several ideas and or identifying many opportunities, one starts to evaluate each of them in order to choose the best of the ideas. This is because it is difficult to implement all the ideas since the resources and expertise are limited.
Business Planning: After you have well assessed the different ideas or opportunities, you should have concluded on one of them which looks to be more feasible and profitable. Then this step requires you to plan on how you will be marketing the business, how you will satisfy the customer’s needs, what new tactics you will use to be very competitive than your competitors. You have to plan on the production processes, staffing, financing options and when to start the business among other things.
Resource mobilization and allocation: At this stage, after planning everything how it will be handled, you begin mobilizing all resources like finances, recruiting employees and search for marketing agents and suppliers. This stage also requires you to go for registration of business and launch of business.
Managing the enterprise: This stage requires the entrepreneur to fully establish the business functions and ensure full scale operation of the business. At this point, the business has started to brand its name into the market. This requires skilled management and at times the entrepreneurs will become a director to supervise business management.
Business growth, expansion and exit or closure: Some businesses are seasonal and so may reach its maturity stage where it will require closure of the enterprise. However many businesses are ongoing concerns and are not affected by seasonality and so after business has grown to full scale, the possible options are opening up sister businesses, branches and outlets in different countries. This is a stage that may require entrepreneurs to go global and make groups of companies. It is at this stage that we see the Madhvani group, Mukwano Group and many other groups of companies.

Success and Failure of Businesses in Uganda

Building Success in a Business in Uganda

Possession of entrepreneurial skills: These include creativity, risk-taking, endurance, and flexibility, among others.
Command of business and technical skills: These skills, such as marketing, finance, and management, help entrepreneurs effectively exploit the full potential of their businesses.
Mobility and exposure: This allows entrepreneurs to develop new ideas that shape creativity and save entrepreneurship.
Presence of role models in the community: Successful entrepreneurs in the community can inspire and motivate aspiring entrepreneurs.
Presence of resources: Access to raw materials, labor, and other necessary resources is crucial for business success.
Government support: Favorable government policies and support can create a conducive environment for businesses to thrive.
Availability of transport networks: Good transport infrastructure enables businesses to transport their goods and services to markets and customers.
Political stability and presence of security: A stable political environment and adequate security measures create a favorable climate for businesses to operate.
Availability of customers and consumers: A strong customer base is essential for business success.
Presence of markets: Access to markets where businesses can sell their products and services is crucial.
Rewarding of entrepreneurial effort: Recognition and rewards for successful entrepreneurs promote the enterprising spirit.

How Businesses Fail in Uganda

Seasonality of markets: Some products have a seasonal demand, which can lead to fluctuations in sales and revenue.
Absence of copyright laws: The lack of copyright protection allows for the duplication of products and ideas, which can harm original creators.
Political instability and insecurity: Political instability and insecurity in certain areas can disrupt business operations and discourage investment.
Natural disasters: Natural disasters such as fire, drought, and earthquakes can cause significant damage to businesses and lead to financial losses.
Limited funds for expansion: Access to financing for business expansion can be limited, especially for small businesses that lack collateral.
High-interest rates on loans: High-interest rates on loans can increase the cost of borrowing and reduce profitability.
Intense competition: Intense competition in the Ugandan market can lead to price wars and reduced profit margins.
Poor government policies: Inadequate government policies to liberalize the economy can leave infant businesses vulnerable to competition from stronger foreign businesses.
Unreliable and expensive electricity: The unreliability and high cost of electricity in Uganda can hinder business operations and increase production costs.
Poor transport infrastructure: The underdeveloped state of Uganda’s rail and air transport systems, as well as poor roads in rural areas, can limit market access and increase transportation costs.
Heavy taxation: High tax rates can burden businesses and reduce their profitability.

How to Prevent Businesses from Failing

Strategic management: Aligning business objectives with considerations of the internal and external environment can help businesses adapt to changing conditions.
Customer retention and acquisition: Maintaining existing customers and attracting new ones is crucial for business growth and sustainability.
High-quality products and services: Offering high-quality products and services can help businesses build a strong customer base and reputation.
Skilled workforce: Employing a skilled and motivated workforce can improve productivity and efficiency.
Training and development: Providing training and development opportunities for employees can enhance their skills and knowledge, leading to improved performance.
Corporate social responsibility (CSR): Engaging in CSR activities can enhance a business’s reputation and foster goodwill among customers and the community.
Advertising and promotion: Effective advertising and promotion can increase brand awareness and attract new customers.
Compliance with legal requirements: Ensuring compliance with legal authorities and government regulations can avoid legal penalties and reputational damage.
Supplier relationships: Maintaining healthy relationships with suppliers can ensure a steady supply of raw materials and other essential resources.
Succession planning: Proper succession planning can ensure a smooth transition of ownership and management, preventing disruptions to the business.
Separation of business and family: Maintaining a clear separation between business and family can prevent conflicts of interest and ensure professional decision-making.

The Entrepreneur as a Manager Read More »

INTRODUCTION TO ENTREPRENEURSHIP

The word entrepreneurship was first introduced by a French economist Richard Cantillon during the early 18th century. Entrepreneur is a French word ‘‘entreprendre’’ which literally means ‘‘under take’. An entrepreneur is also referred to as ‘‘a risk taker’’ who buys commodities at certain prices and sells at a relatively higher price.

Definitions of an Entrepreneur

There is not a universally acceptable definition for an entrepreneur, different scholars have defined entrepreneurs according to what they seem to be attributing to the qualities of them (entrepreneurs).

1. The Middleman – Richard Cantillon (1751): He defines an entrepreneur as someone who bridges between a supplier and the market and takes a profit by facilitating the exchange process

2. The merchant – J. B. Say (1800) He defined an entrepreneur as one who shifts economic resources from an area of lower yield to an area of higher economic yield.

3. The Risk Taker – Knight, (1921) He defined Entrepreneurs as the organizers of uncertainty who recognize and seize opportunities that result from uncertainties.

4. The Innovator – Joseph Schumpeter (1934) Schumpeter defines an entrepreneur as one who destroys the existing economic order by introducing new products and services, by creating new forms of organization, or by exploiting new raw materials.

In summary,

An entrepreneur is one who sees a need and brings together resources to meet that need.

An entrepreneur is an individual who generates or identifies innovative business ideas and mobilizes the resources needed to turn the idea into a successful business.

Definitions of Entrepreneurship

• Stoner defines Entrepreneurship as the ability to make factors of production like land, labour and capital into new goods and services.

• Schumpeter (1994), Entrepreneurship is a process of creative destruction that involves restructuring a previously stable market in order to create new and better systems.

• Ronstadt (1984), who argues that: “Entrepreneurship is the dynamic process of creating incremental wealth.”

In summary;

Entrepreneurship is the process of exploring the opportunities in the market place and arranging resources required to exploit these opportunities for long term gain.

Business refers to any activity that deals with buying and selling of goods or providing a service with an aim of making a profit.

Why We Study Entrepreneurship

Introduces learners to marketing skills with the aim of making profits. This includes marketing of laboratory services, supplies, and consumables.
Teaches learners skills in starting up and managing small-scale and medium businesses/enterprises. For example, starting up a basic laboratory, distributing laboratory supplies, a basic clinic, or a basic drug shop.
Enables the youth to develop a positive attitude and culture towards work, business, self-employment, entrepreneurship, creativity, and other careers in the business area.
Helps individuals to learn how to make use of available resources in the economy. This includes human potential, knowledge and skills, and natural resources such as forests, lakes, and land, appropriately and effectively.
Helps to acquire knowledge for scanning the environment, identifying relevant business opportunities, selecting a product or project, and manufacturing the product. For example, identifying gaps in laboratory services and establishing a lab that meets the set standards.
Teaches entrepreneurs how to mobilize resources to start up small businesses.
Helps learners to learn skills that are useful in enabling business growth and expansion.
For academic purposes.

Terminologies Used in the Study of Entrepreneurship

1. Resource: Refers to an endowment that may exist in an area/locality.

A resource is something that can be used for making profits or benefits, whether that be a source, supply, or support.

There are five types of resources entrepreneurs have to mobilize and manage:

Financial resources (money)
Human resources (manpower)
Physical resources
Time resource (moments)
Informational resources (messages)

2. Business Opportunity: Refers to situations in the marketplace in which new goods or services can be introduced and sold at a price greater than their cost of production, i.e., at a profit.

3. Need: Refers to a basic that an individual must have in order to survive as a human being. Examples of needs include physiological needs and self-actualization needs, i.e., shelter, food, water, etc.

4. Good: Refers to an item that is tangible or physical and visible and has monetary value. Examples include a car, furniture, buildings, books, foodstuffs, etc.

5. Assets: These are resources owned by the business. They include money, stock of goods, land, buildings, goods and services paid for in advance, etc.

There are two types of assets:

Current assets
Fixed assets

Current Assets: These are resources owned by the business for a short period of time, i.e., for less than one year. Examples include stock, cash at hand, cash at bank, debtors, etc.

Fixed Assets: These are resources owned by the business for a long period of time, i.e They are used for running the business and are not intended for resale. They are kept within the business to create wealth. Examples include machinery, land, vehicles, equipment, computers, etc.

6. Liabilities: Refers to the financial obligations of the business. There are claims by outsiders against the business. Examples include creditors, bank loans, bank overdrafts, services that other people paid for in advance, outstanding expenses, etc.

There are two types of liabilities:

Current liabilities
Long-term liabilities

Current Liabilities: These are debts that must be paid quickly, within one year. For example, creditors, bank overdrafts, services, electricity bills, outstanding rent, etc.

Long-Term Liabilities: These are debts that must be paid after a long period of time. They can take more than one trading period, i.e., long-term loans for 3 years, 7 years, etc.

7. Debit Note: Refers to the document sent by the seller to the buyer to correct an undercharge in the original invoice.

8. Invoice: This is a demand note. It shows the items taken and the amount one is supposed to pay.

9. Dividends: Refers to payments to shareholders.

10. Salary: Refers to a fixed periodical payment to a non-manual employee, usually expressed in annual terms. It is usually paid on a monthly basis.

11. Wage: Refers to payment made to manual workers. It is usually expressed as a rate per hour.

12. Capital: Refers to the money invested in the business by the owner.

Fixed Capital: Refers to capital tied in the form of fixed assets that are maintained in the business for a long period of time. Examples include machinery, land, vehicles, equipment, computers, etc.
Working Capital: Refers to the difference between the current liabilities and the current assets.
Borrowed Capital: Refers to money borrowed for investment purposes.
Liquid Capital: Refers to current assets in liquid or cash form.
Circulating Capital: Refers to the value necessary to keep the business running and necessary to keep the day-to-day activities going.

13. Depreciation: Refers to the gradual reduction in the value of fixed assets through usage in the production process and during business operations.

14. Profits: This is income normally earned by business persons. It is earned when the selling of goods and services exceeds cost and expense.

15. Contract: Refers to a legally binding agreement between two or more parties that creates, modifies, or terminates a legal relationship.

16. Transaction: Business activities involving receipt or payment of money through buying and selling.

17. Drawings: Refers to the money or assets that an owner withdraws from a business for personal use.

18. Income Statement: Refers to a financial statement that shows the revenues, expenses, and profits of a business over a period of time.

19. Taxes: Refers to the mandatory payments that individuals and businesses make to the government to fund public services.

20. Supply Chain Management: Refers to the process of managing the flow of goods and services from suppliers to customers.

21. Corporate Social Responsibility (CSR): Refers to the obligation of a business to consider the interests of society as a whole in its decision-making.

Importances or Roles of Entrepreneurship

To the country:

Employment opportunities: Entrepreneurs create new businesses, which in turn create new jobs. For example, a young entrepreneur who starts a tech startup may hire software engineers, marketers, and customer service representatives.
Training & mentorship platform: Entrepreneurs often provide training and mentorship to their employees, helping them to develop new skills and advance in their careers. For example, a successful entrepreneur who owns a chain of restaurants may mentor young people who are interested in starting their own food businesses.
Improves research: Entrepreneurs often invest in research and development to create new products and services. For example, a pharmaceutical entrepreneur may invest in research to develop new drugs and treatments for diseases.
GDP in terms of exports: Entrepreneurs who export their products and services contribute to the country’s GDP. For example, a fashion entrepreneur who exports clothing to other countries is contributing to the country’s GDP.
Revenue in terms of taxation: Entrepreneurs pay taxes on their businesses’ profits, which generates revenue for the government. For example, a manufacturing entrepreneur who makes a profit of 1 million may pay 200,000 in taxes to the government.
Tool to regulate inflation: Entrepreneurship can help to regulate inflation by increasing competition and driving down prices. For example, if a new entrepreneur opens a grocery store in a town, it may force existing grocery stores to lower their prices in order to compete.
Leads to industrialization: Entrepreneurship can lead to industrialization by creating new industries and businesses. For example, an entrepreneur who invents a new type of engine may start a company to manufacture and sell the engine, which could lead to the creation of a new industry.
Infrastructure development: Entrepreneurs often invest in infrastructure development, such as building new roads, bridges, and schools. For example, a real estate entrepreneur may build a new shopping mall in a developing area, which could lead to the construction of new roads and other infrastructure.
Diversification of the economy: Entrepreneurship can help to diversify the economy by creating new businesses in different sectors. For example, a tech entrepreneur may start a new software company, which could help to diversify the economy away from traditional industries such as manufacturing and agriculture.

To an individual:

Provides one’s destiny: Entrepreneurship allows individuals to take control of their own lives and create their own destiny. They are not beholden to a boss or a company, and they can choose to work on projects that they are passionate about.
Self-employment and reliance: Entrepreneurs are self-employed, which means that they are not dependent on a paycheck from someone else. They are responsible for their own success or failure.
Enjoys lots of money: Entrepreneurs have the potential to earn a lot of money, especially if their businesses are successful. However, it is important to note that entrepreneurship is not a get-rich-quick scheme, and it takes hard work and dedication to succeed.
An opportunity to make a difference: Entrepreneurs can make a difference in the world by creating new products and services that solve problems and improve people’s lives. For example, a social entrepreneur may start a company that provides affordable housing to low-income families.
Helps one to reach his/her potential: Entrepreneurship can help individuals to reach their full potential by allowing them to pursue their passions and dreams. It can also help them to develop new skills and learn from their mistakes.
Enjoyment of one’s work: Entrepreneurs often enjoy their work because they are passionate about what they do. They are not working for someone else, and they are free to make their own decisions.
Contribute to the society and be recognized for it: Entrepreneurs can contribute to society by creating new jobs, paying taxes, and investing in their communities. They can also be recognized for their achievements and contributions.

To the organization:

Competitive advantage: Entrepreneurship can give organizations a competitive advantage by allowing them to be more innovative and responsive to market changes. For example, a small business may be able to adapt to new trends more quickly than a large corporation.
Expansion of the company: Entrepreneurship can help organizations to expand by creating new products and services, entering new markets, and increasing sales. For example, a manufacturing company may start a new division to produce a new product line.
Increased revenue: Entrepreneurship can help organizations to increase revenue by generating new sales and profits. For example, a retail store may increase its sales by opening a new location.
Good image: Entrepreneurship can help organizations to improve their image by creating new products and services that are seen as innovative and customer-focused. For example, a company that develops a new environmentally friendly product may improve its image among consumers.
Leads to innovation: Entrepreneurship is often associated with innovation, as entrepreneurs are constantly looking for new ways to improve their products and services. For example, a tech company may develop a new software product that is more user-friendly and efficient than existing products.
Creates an environment that sustains businesses: Entrepreneurship can help to create an environment that sustains businesses by providing access to capital, mentorship, and other resources. For example, a government may create a small business incubator that provides office space, training, and networking opportunities to new entrepreneurs.
Improved productivity: Entrepreneurship can help to improve productivity by encouraging organizations to be more efficient and effective. For example, a manufacturing company may invest in new machinery that can produce more products with fewer workers.

To the industry:

Competitiveness: Entrepreneurship can increase competitiveness in an industry by introducing new products and services, and by driving down prices. For example, a new entrant to the telecommunications industry may offer lower prices for phone calls, which could force existing companies to lower their prices in order to compete.
Innovation/creativity: Entrepreneurship is often associated with innovation and creativity, as entrepreneurs are constantly looking for new ways to improve their products and services. For example, a fashion designer may create a new line of clothing that is more stylish and affordable than existing lines.
Cost reduction: Entrepreneurship can help to reduce costs in an industry by introducing new technologies and processes. For example, a manufacturing company may develop a new process that allows it to produce products more efficiently and at a lower cost.
New processes are created: Entrepreneurship can lead to the creation of new processes and technologies, which can benefit the entire industry. For example, a tech entrepreneur may develop a new software platform that can be used by other companies in the industry.
Knowledge creation: Entrepreneurship can lead to the creation of new knowledge, as entrepreneurs often conduct research and development to create new products and services. For example, a pharmaceutical entrepreneur may conduct research to develop a new drug that can treat a disease.

To the community:

Employment: Entrepreneurship creates employment opportunities for people in the community. For example, a new restaurant may hire cooks, waiters, and dishwashers.
Improved image: Entrepreneurship can improve the image of a community by creating new businesses and jobs, and by investing in the community. For example, a new coffee shop may attract customers from outside the community, which can help to improve the community’s image.
Increased standards of living: Entrepreneurship can help to increase the standard of living in a community by creating new jobs, paying taxes, and investing in the community. For example, a new factory may create jobs that pay higher wages than existing jobs in the community.
Creation of role models: Entrepreneurs can be role models for young people in the community, showing them that it is possible to start their own businesses and be successful. For example, a young entrepreneur who starts a successful tech company may inspire other young people to start their own businesses.
Infrastructure development: Entrepreneurs often invest in infrastructure development, such as building new roads, bridges, and schools. For example, a real estate developer may build a new shopping mall in a community, which could lead to the construction of new roads and other infrastructure.

CHARACTERISTICS/QUALITIES OF ENTREPRENEURS

Qualities or Personal Entrepreneurial Characteristics (PEC) of successful entrepreneurs refers to the desired traits which enable an entrepreneur to do what is expected of him or her and succeed in business.

Personal Entrepreneurial Characteristics (PECs) are the desired traits that enable an entrepreneur to succeed in business.

The word “quality” can be used interchangeably with “Personal entrepreneurial characteristics” also popularly known as PECs. These are;

Opportunity seeking: Entrepreneurs are able to identify and seize opportunities that others may overlook. For example, they may see a need for a new product or service, or they may find a way to improve an existing product or service.
Commitment to the work: Entrepreneurs are passionate about their work and are willing to put in long hours and hard work to achieve their goals. They are also committed to satisfying their customers and providing them with the best possible products or services.
Persistence: Entrepreneurs are persistent and never give up, even when faced with challenges or setbacks. They are determined to succeed and will work tirelessly to overcome any obstacles that stand in their way.
Risk taking: Entrepreneurs are willing to take calculated risks in order to achieve their goals. They are not afraid to try new things or to invest in new ventures. However, they are also careful not to take unnecessary risks that could jeopardize their business.
Demand for efficiency and equality: Entrepreneurs are always looking for ways to improve their efficiency and productivity. They are also committed to providing their customers with the best possible value for their money.
Goal setting: Entrepreneurs set clear and specific goals for themselves and their businesses. They are also able to break down their goals into smaller, more manageable steps. This helps them to stay on track and to achieve their goals more easily.
Information seeking: Entrepreneurs are constantly seeking out new information that can help them to improve their businesses. They read books, attend conferences, and network with other entrepreneurs. They are also willing to learn from their mistakes and to make changes to their businesses as needed.
Systematic planning and monitoring: Entrepreneurs are organized and efficient. They develop detailed plans for their businesses and they track their progress regularly. This helps them to stay on track and to make adjustments as needed.
Persuasion and networking: Entrepreneurs are able to persuade others to support their businesses. They are also good at networking and building relationships with other entrepreneurs, investors, and customers.
Self-confidence: Entrepreneurs have a strong belief in themselves and their abilities. They are confident that they can succeed, even when faced with challenges or setbacks.
Perseverance: Entrepreneurs are able to overcome challenges and setbacks. They are persistent and never give up on their dreams.
Intelligence: Entrepreneurs are able to use their knowledge and skills to start and grow successful businesses. They are also able to learn from their mistakes and to make changes as needed.
Use of resources: Entrepreneurs are able to make the most of the resources they have available. They are not afraid to take risks and to invest in their businesses.
Leadership skills: Entrepreneurs are able to lead and motivate others. They are also able to create a positive work environment and to inspire their employees to achieve their goals.
Highly competitive: Entrepreneurs are always looking for ways to improve their businesses and to stay ahead of the competition. They are also willing to take risks in order to achieve their goals.
Interpersonal relationship: Entrepreneurs are able to build strong relationships with their customers, employees, and other stakeholders. They are also able to communicate effectively and to resolve conflicts.
Emotional stability: Entrepreneurs are able to handle stress and pressure. They are also able to stay calm and focused, even when things are difficult.
Unique skills: Entrepreneurs often have unique skills that set them apart from others. They may include unique customer care skills, business planning skills, unique record keeping skills and the unique stock keeping skills.
Tolerance: Entrepreneurs despite the difficulties and challenges they face, they keep running their businesses and finding better methods of running their business.
Other traits include

Problem-solving ability
Communication skills
Flexibility
Optimism

Barriers to Entrepreneurship

Barriers to entrepreneurship are factors that hinder development of entrepreneurship.

Poor Entrepreneurial Skills: Many entrepreneurs lack essential skills such as creativity, innovation, endurance, and flexibility. This hinders the overall success and sustainability of entrepreneurial ventures. Example: An entrepreneur who lacks creativity and innovation may struggle to develop new products or services that meet the needs of customers.
Lack of Business and Technical Skills: Entrepreneurs require skills in marketing, accounting, management, and other technical areas to effectively manage their ventures. Example: An entrepreneur who lacks marketing skills may struggle to promote their business and attract customers.
Lack of Role Models: Uganda faces a scarcity of entrepreneurial role models, limiting the number of aspiring entrepreneurs. Successful entrepreneurs are often admired but not emulated.This lowers the inspiration and willingness to pursue careers in entrepreneurship. Example: In a community where there are few successful entrepreneurs, people may be less likely to aspire to start their own businesses.
Lack of Business Ethics: Unethical behaviors, such as unpaid loans, exploited employees, substandard goods, and tax evasion, contribute to the failure of many businesses. Example: An entrepreneur who engages in unethical behavior, such as selling counterfeit goods or evading taxes, may damage their reputation and lose customers.
Lack of Continuity: Few Ugandan firms survive the death of their founders, limiting the passing on of enterprises to the new generation. Example: A family business may struggle to survive if the founder dies and there is no one to take over the business.
Political Instability: Decades of political instability in various regions of Uganda have resulted in the loss of entrepreneurs, savings, and business assets. This forces business closures and creates an unfavorable environment for entrepreneurship. Example: An entrepreneur who operates in a country with a history of political instability may be at risk of losing their business due to violence or economic disruption.
Business Administrative Procedures: Complex regulations, favoritism, corruption, and weak enforcement mechanisms dominate the business environment, pushing businesses into the informal economy. Example: An entrepreneur who has to deal with complex and burdensome regulations may be discouraged from starting or growing their business.

Other Causes of Early Failure of Entrepreneur Ventures:

Lack of access to financing/Lack of sufficient capital
Poor or total lack of business planning
Death of the entrepreneur
Poor managerial skills
Heavy taxes
Competition from existing companies
Uncertainties like weather, wars, etc.
Inadequate market
Poor financial management
Poor business location
Poor infrastructure

Possible Solutions to the Above Challenges

Poor entrepreneurial skills: Provide training and education programs to help entrepreneurs develop the skills they need to succeed.
Lack of business and technical skills: Offer business and technical assistance programs to help entrepreneurs learn the skills they need to manage their businesses effectively.
Lack of role models: Promote successful entrepreneurship stories and provide opportunities for aspiring entrepreneurs to network with successful entrepreneurs.
Lack of business ethics: Promote ethical business practices and enforce laws and regulations against unethical behavior.
Lack of continuity: Encourage entrepreneurs to develop succession plans to ensure that their businesses can continue to operate after their death.
Political instability: Promote political stability and security to create a favorable environment for entrepreneurship.
Business administrative procedures: Simplify and streamline business regulations and procedures to make it easier for entrepreneurs to start and grow their businesses.
Excessive, complex taxation: Reduce taxes and simplify the tax code to make it easier for entrepreneurs to comply with tax laws.
Lack of access to finance: Provide access to financing options, such as loans and grants, to help entrepreneurs start and grow their businesses.
Low purchasing power: Promote economic development and job creation to increase the purchasing power of consumers.
Poor or total lack of business planning: Encourage entrepreneurs to develop comprehensive business plans before starting their businesses.
Death of the entrepreneur: Encourage entrepreneurs to develop succession plans to ensure that their businesses can continue to operate after their death.
Lack of sufficient capital: Provide access to financing options, such as loans and grants, to help entrepreneurs get the capital they need to start and grow their businesses.
Poor managerial skills: Provide training and education programs to help entrepreneurs develop the managerial skills they need to succeed.
Heavy taxes: Advocate for tax policies that are favorable to entrepreneurs and small businesses.
Competition from existing companies: Encourage entrepreneurs to differentiate their products or services from those of their competitors.
Uncertainties like weather, wars, etc.: Encourage entrepreneurs to develop contingency plans to deal with uncertainties.
Inadequate market: Conduct market research to identify opportunities and assess the demand for products or services.
Poor financial management: Provide training and education programs to help entrepreneurs develop the financial management skills they need to succeed.
Poor business location: Choose a business location that is accessible to customers and has the necessary infrastructure.
Poor infrastructure: Advocate for improved infrastructure to create a more favorable environment for entrepreneurship.

Factors that encourage growth of entrepreneurship

Availability of funds: Access to capital, including loans, grants, and investments, is essential for entrepreneurs to start and grow their businesses.
Availability of technology: Technological advancements, such as the internet, e-commerce platforms, and mobile devices, have made it easier for entrepreneurs to reach customers, manage their businesses, and innovate.
Good infrastructure: Reliable transportation, communication, and energy networks are crucial for entrepreneurs to operate their businesses efficiently.
Appropriate knowledge and skills: Entrepreneurs need the necessary knowledge and skills to identify opportunities, develop business plans, manage finances, and market their products or services.
Favorable government policies: Government policies that support entrepreneurship, such as tax incentives, regulations, and access to government contracts, can create a conducive environment for businesses to thrive.
Individual strengths and talents: Entrepreneurs often possess unique strengths and talents, such as creativity, innovation, and risk-taking ability, which are essential for entrepreneurial success.
Availability of markets: Access to domestic and international markets is crucial for entrepreneurs to sell their products or services and generate revenue.
Availability of resources: Natural resources, such as minerals, forests, and agricultural land, can provide opportunities for entrepreneurs to develop businesses based on these resources.
Culture: A culture that values entrepreneurship, innovation, and risk-taking can encourage individuals to start their own businesses.
Natural factors: Favorable natural factors, such as climate and soil conditions, can support the development of agriculture-based businesses.
Political stability: A stable political environment is essential for entrepreneurs to operate their businesses without fear of disruption or uncertainty.
Fair competition: Fair competition promotes innovation and efficiency, allowing entrepreneurs to compete on a level playing field.
Social security: Social security systems, such as healthcare and unemployment benefits, can provide a safety net for entrepreneurs, reducing the risks associated with starting a business.

The Entrepreneur as a Manager

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