Global Entrepreneurship

By M. Isi Eromosele

Entrepreneurship is a necessary ingredient for stimulating economic growth and employment opportunities in all societies. In the developing world, successful small businesses are the primary engines of job creation, income growth, and poverty reduction. As such, government support for entrepreneurship is a crucial strategy for economic development.

The culture of a community also may influence how much entrepreneurship there is within it. Different levels of entrepreneurship may stem from cultural differences that make entrepreneurship more or less rewarding personally. 

A community that accords the highest status to those at the top of hierarchical organizations or those with professional expertise may discourage entrepreneurship. A culture or policy that accords high status to the “self-made” individual is more likely to encourage entrepreneurship.

Successful entrepreneurs come in various ages, income levels, gender, and race. They differ in education and experience. But research indicates that most successful entrepreneurs share certain personal attributes, including: creativity, dedication, determination, flexibility, leadership, passion and self-confidence.

Determination is the extremely strong desire to achieve success. It includes persistence and the ability to bounce back after rough times. It persuades the entrepreneur to make the 10th phone call, after nine have yielded nothing. For the true entrepreneur, money is not the motivation. Success is the motivator; money is the reward. 

Flexibility is the ability to move quickly in response to changing market needs. It is being true to a dream while also being mindful of market realities. A story is told about an entrepreneur who started a fancy shop selling only French pastries. But customers wanted to buy muffins as well. Rather than risking the loss of these customers, the entrepreneur modified her vision to accommodate these needs.

Passion is what gets entrepreneurs started and keeps them there. It gives entrepreneurs the ability to convince others to believe in their vision. It can’t substitute for planning, but it will help them to stay focused and to get others to look at their plans.

Self-confidence comes from thorough planning, which reduces uncertainty and the level of risk. It also comes from expertise. Self-confidence gives the entrepreneur the ability to listen without being easily swayed or intimidated.

The entrepreneur’s challenge is to balance decisiveness with caution, to be a person of action who does not procrastinate before seizing an opportunity and at the same time, to be ready for an opportunity by having done all the preparatory work possible to reduce the risks of the new endeavor.

Through careful analysis of entrepreneurs’ successes and failures, economists have identified key factors for up-and-coming business owners to consider closely. Taking them into account can reduce risk. In contrast, paying them no attention can precipitate the downfall of a new enterprise.

Motivation

What is the incentive for starting a business? Is it money alone? True, many entrepreneurs achieve great wealth. However, money is almost always tight in the startup and early phases of a new business. Many entrepreneurs do not even take a salary until they can do so and still leave the firm with a positive cash flow.

Strategy

What is the strategy for distinguishing the product or service? Is the plan to compete

solely on the basis of selling price? Price is important, but most economists agree that it is extremely risky to compete on price alone. Large firms that produce huge quantities have the advantage in lowering costs.

Realistic Vision

Is there a realistic vision of the enterprise’s potential? Insufficient operating funds are the cause of many failed businesses. Entrepreneurs often underestimate start-up costs and overestimate sales revenues in their business plans.

Some analysts advise adding 50 percent to final cost estimates and reducing sales projections. Only then can the entrepreneur examine cash flow projections and decide if he or she is ready to launch a new business.

A prospective entrepreneur needs to come up with a good idea.  This will serve as the foundation of the new venture. There are many ways to look for ideas.  Read a lot, talk to people, and consider such questions as:  What limitations exist in current products and services?  What would you like that is not available?  Are there other uses for new technology?

Is society changing?  What groups have unfulfilled needs?  What about people’s perceptions?  Growing demand for healthy snacks created many business opportunities in the United States, for example. 

To be successful, entrepreneurs should distinguish their ventures through differentiation, niche specification and innovation.

Differentiation is an attempt to separate the new company’s product or service from that of its competitors.  When differentiation is successful, the new product or service is relatively less sensitive to price fluctuations because customers value the quality that makes the product unique.

Niche specification is an attempt to provide a product or service that fulfills the needs of   a specific subset of consumers.  By focusing on a fairly narrow market sector, a new  venture may satisfy customer needs better than larger competitors can. 

Changes in population characteristics may create opportunities to serve niche markets. One growing market segment in developed countries comprises people over 65 years old.  Other niches include groups defined by interests or lifestyle, such as fitness enthusiasts, adventure-travel buffs, and working parents.

Innovation is perhaps the defining characteristic of entrepreneurship. Innovation is change that creates a new dimension of performance  There are two main types of product innovation.  Pioneering or radical innovation embodies a technological breakthrough or new-to-the-world product.  Incremental innovations are modifications of existing products.

Innovation, differentiation, and/or market specification are effective strategies to help a new venture to attract customers and start making sales.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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