Entrepreneurship has become a solution to the problem of unemployment faced at a global level in the world today. It gives individuals the sense of freedom and independence that they can make their mark in the world. With the field of entrepreneurship as an opportunity, individuals do not have to toil hard day by day in a job they have zero interest in. Instead, they can invest their time and effort into a product or service that they are passionate about. In turn, such entrepreneurs create job opportunities for the youth of the community. They become a blessing to consumers who can have more varieties of products at effective prices. It decreases the chances of a monopolistic market. An entrepreneur can go a long way in having an impact on the economy of a country. By creating job opportunities and market demand as well as exporting quality products, they can help strengthen the economy. If you have set out your foot in the world of entrepreneurship you will understand that there are many factors affecting the growth of entrepreneurship. Here are some of the economic and non-economic factors which have an impact on entrepreneurship:
These factors are important in influencing the economic stability and growth of a country. They are the factors that are crucial in ensuring your company sees its expected progress and attains its objectives.
To start your entrepreneurial journey, you would need capital for many reasons. First off, you would need land, a place where you can start your company. You would need raw materials to create the product or service. You would also need machines to process those raw materials. If you have funds readily available to use as capital that would be a bonus for you. But if you have to seek funds so you can start your company you can start pitching to investors. Present your business idea to investors and find out if they would be interested in investing in your business. In some countries, entrepreneurs are given the financial capital they need in their initial stages by the government. Events are organised where entrepreneurs can pitch their ideas and judges select the company based on the criteria.
The infrastructure available in your city, village or town will go a long way in having an impact on the growth of your entrepreneurial venture. A location with quick and easy access to communication tools and the latest technology will help boost your business or company. For example, if your product would require shipping to different parts of the country or other countries, it is ideal that you are located in a place with access to quick and secure shipping facilities.
For a business to see growth and success, you will require skilled labour. The quality of labour should be given importance over the quantity of labour. However, the availability of quality labour at an efficient cost would be a bonus. Choose a location that will be able to provide the labour population you require. If transportation and accommodation become an issue, these factors could add to your expenses and result in losses. If your company is going to require manual labour, choose a location that is close to the communities where the manual labourers live. Otherwise, make arrangements for the labourers to be able to reside next to the place of business to save transportation costs. If you are planning to start a software or IT company, it would be ideal to invest in a place that is the IT hub of the city or the country. There would be more chances for this city to have the personnel with the required skills and expertise for the company.
- Raw Material
Just as important as labour is raw material procurement. When choosing the location for your business make sure it is near the raw material source. While it is possible to transport the raw material through a supply chain, such requirements would increase expenses. To gain maximum profit at a low cost, a location close to the raw material source is the ideal choice. For example, an entrepreneur may be interested in starting a furniture business, but if the required wood types are not available nearby, the cost of transporting the raw material would double the expenses. As such it would be ideal to start the furniture company in a location where different wood types would be accessible. Or else, the company can focus on one particular type of wood for all its products as its specialisation.
The market plays an important role in ensuring the growth of your business. The size of the market, as well as the marketing techniques used, are both important. A market is a place where entrepreneurs and consumers interact. It is a place where buying and selling take place. With the advanced technology available today, the world has become one big market. You can market your product to any part of the world using the internet and shipping facilities. This improves your chances of increasing profit and sales. It expands your market beyond the immediate location of your company. The availability of various E-commerce platforms also increases your market size. You could sell your product through such platforms saving the cost of shop rent and labor charges. Make sure to study what is dominating in the market where you are planning to introduce your product. Consistently work towards expanding your market in the offline or online space.
Various non-economic factors come into play in affecting the growth of entrepreneurship. Some of these are:
- Social Mobility
Social mobility is an important factor in the growth of a business. The society where you are starting your entrepreneurship journey should be an accepting one. Certain societies are not easily adaptable to change. Such communities would hinder the growth of the company. Assess the social environment where you plan to start your business and make sure it is a place that is adaptable to change and growth.
Education has an important role to play in defining your entrepreneurial journey. This may be formal or informal education. While one should acquire the degrees required to start a business, this opportunity may not be accessible to all. However, every person can get educated through experience and consultation. Work for different entrepreneurs and learn how they get their businesses to grow. Learn from their mistakes and errors. Consult experts and professionals. The whole journey of entrepreneurship is a never-ending learning process.
- Entrepreneurship Legitimacy
All societies in the world come with their terms, norms, and regulations. The entrepreneur must learn to adapt himself and his business to society. There are cultures and traditions passed down through generations that cannot be ignored in totality. The entrepreneur must keep these norms and regulations in mind while also growing his or her business. For example, the fast-food corporation McDonald’s makes alterations in their menu as per the country’s religious norms and regulations.
- Attitude of the Society
The attitude of society is another factor that should be considered for the growth of entrepreneurship. For entrepreneurs to flourish, society should learn to accept changes. They should learn to encourage growth when it is directed towards the progress of the community as a whole. There might be instances where it is necessary to have slight changes in cultural traditions and norms for growth and development. The society has a role to play in showing a positive attitude toward entrepreneurial advancements.
- Cultural Value
The cultural values of a country also impact the growth of entrepreneurship. If the culture has a leaning toward the growth of the economy and money-making business, there are higher chances of entrepreneurs flourishing in the country. There are certain countries whose cultures encourage a strong work ethic. These kinds of countries are the ideal place to start a business or company for an entrepreneur.
There are many factors affecting entrepreneurial growth and some of these factors can be classified into economic and non-economic factors. Both factors play important roles in ensuring the growth of a business or company. The economic factors are such as capital, infrastructure, raw material, labour, and market. Without these economic factors a business can’t grow and earn profit. The non-economic factors are largely influenced by the society and country where the entrepreneur resides. These factors are such as social mobility, education, entrepreneurship legitimacy, the attitude of society, and cultural values. A society must be willing to adapt to changes for entrepreneurs to flourish. They should be able to see how such businesses create employment opportunities for the youth of their society. And how the rise of entrepreneurs can impact the overall growth of the economy.
(For those in later years of the graduate program/ PG students/ working professionals/ pre-incubatees having a validated idea to launch a venture)