UNIT 2 FACTORS INFLUENCING ENTREPRENEURSHIP

1. UNIT 2 FACTORS INFLUENCING ENTREPRENEURSHIP

2. 5 Simple Ways to Become a Better Leader Connect and communicate Focus on the positives Show, don't tell Ask for feedback What's your motivation?

3. Some of the world's most famous and profitable businesses were started by students. Microsoft began in Bill Gates' Harvard dorm room, Google got its start on the Stanford campus as the computer science project of doctoral students Sergey Brin and Larry Page and thousands of other student companies thrive in every industry. Even if you're not aiming to be another Bill Gates - you'll have to navigate some unique challenges as a young entrepreneur testing the business waters. Here are 10 success tips for young entrepreneurs.

4. 10 Success tips for Young Entrepreneurs. 1. Do what you love. All successful teen businesses have one factor in common: Their owners love what they do - so choose a small business idea that aligns with your interests, no matter what they are.

5. 10 Success tips for Young Entrepreneurs. 2. Know what you want. Are you willing to leave school if your business takes off? Or do you envision your business as a side project? Being able to answer questions like these will help you organize your time and priorities.

6. 10 Success tips for Young Entrepreneurs. 3. Be radical... In your late teens and early 20s, your thinking is fresh, original and full of energy. Don't be afraid to try something no one's ever done, create an off-the-wall product or shake up an existing market by changing factors (such as a service or delivery model) that established companies take for granted.

7. 10 Success tips for Young Entrepreneurs. 4. ... but follow the rules. Being a young entrepreneur doesn't exempt you from registering your business, keeping records and paying taxes. Following these simple rules now will save you from legal and administrative headaches later.

8. 10 Success tips for Young Entrepreneurs. 5. Manage your time. Running a business is stressful and difficult. Understand what is required of you in your separate roles, and employ planning and organizational tools - for example, a well-maintained appointment book, Microsoft Outlook or an online time/project management system - to make the most of your time.

9. 10 Success tips for Young Entrepreneurs. 6. Use school resources. Being a student isn't a handicap in business; on the contrary, it can be an advantage. Your campus offers free computers and Internet connectivity, a host of potential employees and/or volunteers and the expertise of professors who would be happy to share their knowledge and experience with you. You're literally surrounded by people and resources, so make the most of your situation.

10. 10 Success tips for Young Entrepreneurs. 7. Find a mentor. Buddy up with a local entrepreneur or business leader with a record of achievement to be your small business mentor. Your mentor will help you understand the risks and challenges of business, provide a sounding board for your ideas and help you find investors for your company.

11. 10 Success tips for Young Entrepreneurs. 8. Exploit online resources. Your computer can connect you to hundreds of online resources for young entrepreneurs. Immerse yourself in these resources; they'll help to inspire, direct and motivate you

12. 10 Success tips for Young Entrepreneurs. 9. Be good to yourself. Regardless of how organized and enthusiastic you are, some days will overwhelm you. Don't be afraid to step back from work and do whatever relaxes you. Whether it's the endorphin rush of exercise, the lively company of good friends or a quiet day of meditation on the beach, take advantage of opportunities to invigorate yourself and balance your responsibilities with relaxation.

13. 10 Success tips for Young Entrepreneurs. 10. Check your mentality. One of the problems that can afflict young entrepreneurs is a mental block against, as Nike might say, just doing it. We've all been raised on stories of Internet billionaires, wealthy young actors and other tales of spectacular overnight success. Knowing how well other people have done in business and how quickly they've scaled the mountain is demotivating. It can make some young entrepreneurs lose confidence and feel as if they don't want to get started on a business unless it's going to be the next YouTube.

14. 10 Success tips for Young Entrepreneurs. This is a self-defeating mentality. Combat it by reminding yourself that you're not competing against anyone but yourself. Do whatever it is that you can do today, whether that means tutoring, designing T-shirts or building online communities. The important thing is to get your feet wet - not to take over the business world. The bottom line is that your student days are ripe with entrepreneurship opportunities. You may never again have the energy, resources or motivation to start your business, so get to work.

15. How Cultural Factors Influence Entrepreneurship • Culture refers to the customary practices and beliefs that have a significant impact on the basic values, perceptions, preferences, and behaviours of people. • Culture and entrepreneurship intervene in many ways. • People traditionally engaged in businesses have a pro business attitude and disdain working as employees. • Many people fall outside the establishment and remain unsuited for the traditional job market due to a strong culture of independence or other reasons. • Business school students come under the missionary zeal of teachers who exhort them to become entrepreneurs even if the opportunity cost is very high.

16. How Cultural Factors Influence Entrepreneurship • The culture of consumerism where people desire material goods encourages entrepreneurship within the area as returns from a business become more than returns from a job. • People engaged in jobs and other services pressure their children to find secure jobs and crush their entrepreneurship spirit at a very early age. • A culture of thrift where people spend less and save for a rainy day discourages entrepreneurship within the local community as the returns from a business become less attractive compared to returns from a job. • Cultures where people are risk averse and do not attach much importance to hard work and persistence are not conducive to entrepreneurship.

17. How Political Environments Support or Suppress Entrepreneurship • The following are some of the ways in which the political environment influences entrepreneurship: • Unstable political conditions where government policies change frequently discourage business, as investors fear for the safety of their investments. • Government support to economic development through infrastructure development, facilitation, industrial parks, and the like all encourage entrepreneurship.

18. How Political Environments Support or Suppress Entrepreneurship • High taxes that cut into the returns usually discourage entrepreneurs. On the other hand, tax holidays to encourage business attract start-ups. • The availability of infrastructure and utilities such as good roads, power, communication facilities, and lack of corruption and bureaucratic delays in obtaining such utilities encourage entrepreneurship. • Economic freedom in the form of favorable legislation and few hurdles to start and operate businesses encourage entrepreneurship. • While most businesses accept laws related to the safeguard of labor rights and the environment, some countries have retrograde laws that make compliance very difficult and time consuming. Such legal hurdles create a barrier to entrepreneurship.

19. How Economic Factors Influence Entrepreneurship • The nature of the economy is a major factor that influences entrepreneurship. • The general purchasing power of the people, manifested by income levels and economic prosperity of the region, plays a major role in the success of entrepreneurial ventures. • During times of economic slowdown or recession, the purchasing power declines and people remain reluctant to invest, affecting entrepreneurship adversely. • In a subsistence economy, most of the people are engaged in agriculture, consuming most of their output and bartering the rest for simple goods and services. Entrepreneurial opportunities are few in such scenarios.

20. Availability of Resources as a Major Factor that Affects Entrepreneurship Critical factors that influence entrepreneurship include the availability of resources such as capital, human assets, raw materials, infrastructure, and utilities. Capital remains indispensable to start an enterprise. The availability of capital allows the entrepreneur to bring together other factors and use them to produce goods or services. The importance of human assets or employees can never be underestimated. No enterprise succeeds without a skilled and committed workforce. The very existence of the business depends on the availability of raw materials to process. Physical infrastructure and utilities such as good roads, parking, communication facilities, and power all play a crucial factor in the seamless functioning of a business.

21. How Entrepreneurial Skill Sets and Psychological Orientation Affects Entrepreneurship All other factors notwithstanding, the success of an entrepreneurial venture depends on the entrepreneur. The entrepreneur is the leader and driver of the venture, and requires the following skill-set and orientation for success: Hard work and persistence Ability to manage and minimize risk

22. How Entrepreneurial Skill Sets and Psychological Orientation Affects Entrepreneurship Ability to draw up a comprehensive business plan, and having a contingency plan ready A strong need-orientation that provides the inclination to achieve things With the collapsing trade barriers bringing in greater opportunities, and job security passé, the conditions for entrepreneurship are better than ever before.

23. Perceptions of Desirability and Feasibility According to Krueger and Brazeal’s model of entrepreneurial potential, this education should improve the perceived feasibility for entrepreneurship by increasing the knowledge of students, building confidence, and promoting self-efficacy. It should also improve the perceived desirability for entrepreneurship by showing students that this activity is highly regarded and socially accepted by the community and that it can be personally rewarding work. These perceptions are critical to develop among black youth because they have fewer entrepreneurial role models or opportunities to prepare themselves for starting a business (Development Associates, 1993; Green & Pryde, 1990).