Entrepreneurship Universe Essay
Entrepreneurship can be described as the ability and willingness to establish, organize and operate a business setup with an aim to make a profit regardless of the risks associated with the business venture. The most common entrepreneurship examples are new business startups. Economically, the combinations of the factors of production, such as land, labor, capital and natural assets with entrepreneurship have the ability to derive profit. The entrepreneurial spirit has core features of innovation and risk-taking. These features are crucial components of a country’s capacity to achieve success in the increasingly competitive and dynamic worldwide market. The comprehension of the stages, which an entrepreneur undergoes to create successful venture, is essential. The basic stages include concept formation, which is characterized with idea generation, the identification of innovation and opportunity, and then the venture starts to shape up. The resource collection stage is whereby the resources are gathered to launch the venture, and the final stage is an organization which is usually created (Anderson, Harbi & Brahem, 2013).
In the entrepreneurship world, there are different types of business startups, roles and contexts. The types of startups include micro2, micro, small and growth ventures. The business contexts can be social, corporate, technological or international. Finally, the roles include small business banker, community based advisor, venture capitalist and agent/consultant and professional services. This paper goal is to evaluate all above mentioned aspects in order to provide an argument of possible fitness in each one of them with an aim of making an informed decision.
Entrepreneurial Types of Startups
In entrepreneurship, starting new business ventures is common. The four kinds of startups will be addressed in this section. An extensive discussion will be provided on how I would fit in any of the types.
I. Micro2 Type of Start-up
These are the businesses that are considered extremely small-scale and the sole aim for their establishment is either for domestic or personal gain. Examples of these kinds of ventures include carpentry, travelling agencies, online commerce and many more. Usually, these businesses are managed by the owners. A family member or local worker may be recruited to carry out given tasks and duties. In the social environment, the goal of this venture is to provide needs for a family or derive a small amount of profit (Cassar, 2014).
In own perspective, this kind of venture is rarely profitable and have less gains attached to the society. There are few developmental oriented goals and market target. Bearing in mind that these ventures have less market and profit goals, they are, therefore, unable to attract business capitals. They end up depending on contributions from small business loans, friends or relatives. However, the micro2 type of startups play a key role in small business ventures and development plans.
II. Micro Type of Entrepreneurship
These types of ventures are launched with the goal of slight future growth. It demands more start-up capital compared to micro2. These are envisioned impacting the local society slightly. However, they are launched and operated by the owners. These ventures have the capacity of attracting financial advisors and local investors. Banks and other corporate organizations may be willing to collaborate with the ventures for the aim of expansion because they have plans for growth and expansion. Their launch demands little capital and some operation requirements permitted by the local government. Moreover, some ventures under this category require technological infrastructure. Examples of ventures in this category include boutiques, cafes, and general retail stores among others.
On personal perception, operation of these ventures is relatively easy and most businesses launched daily belong to this class. They do not require professional consultancy when starting them. However, with growth and expansion, it may attract the services of venture capitalist and professional consultants to promote growth and development. However, poor management and other influences affect these ventures since the staff hired are less skilled particularly the management. Additionally, the entrepreneurs have inadequate access to operating capital because they are small scale.
III. Small Entrepreneurship
The small business ventures are also small in scale and demand minimum startup capital and other operational needs. Most ventures under this category are registered companies whose operations are limited in development. These ventures require sustainable innovation and generally provide diverse products which are associated with the major business trading products. The key influences are the alterations of the client’s requirements and tastes, which may reinforce adoption of new technology and even legislation. The ventures in this class are competitive, therefore, they are prone to competition from their business rivals. Stiff competition may force the ventures to either introduce new products or modify the already available one. There is a need for business plans which are well stipulated. The businesses may attract professional and consultancy services. The businesses have the advantage of obtaining management staff that is well-skilled and better technological assets. Finally, these ventures have the potential of expanding to become internal organizations characterized by extensive technological improvements (Peplow, 2005).
From personal perception, this category is very rewarding profit-wise. Moreover, via corporate social responsibility initiatives, the venture can be involved in socially responsible initiatives. However, there are characteristics which are undesirable; the decision-making process is slow because of consultation and the startup capital is relatively high. Moreover, they possess extensive organization culture, which may hinder disruptive innovation, thereby rendering it highly unmanageable for execution. Notwithstanding, the ventures are open to loans and capital for expansion, which is essential for the general growth of the business. Numerous companies in this class are tailored to be scalable and possess extensive expansion potential.
IV. Growth Venture Entrepreneurship
Growth ventures are mainly targeted for faster expansion after establishment. Many ventures in this class match with the corporate world business context. Mostly, the major goals of the business are to generate services and products essential for incorporation in social problems solving and demands. The central goal of the ventures is to develop a positive impact socially and not wealth creation or market share demand. Commonly, growth ventures are established as big organization since the launch of their operations. These ventures are mostly set for large-scale organizations for non-profit or aimed for a gain but have a social mission. These ventures utilize advanced technology in their operations and hire employees who are well skilled (Yitshaki, 2012).
Based on personal evaluation, these ventures have the advantages of potential attraction of international advisors, venture capitalists and top-level professional consultancy services. These services offered by the above players are majorly targeted at providing guidelines and provision of professional research services that is significant in the operations of the growth ventures.
In entrepreneurship, context is very crucial, particularly when dealing with startup advice. The entrepreneur should effectively comprehend his or her business environment. There are four different entrepreneurial contexts which will be evaluated in this discussion.
I. Social Context
Social entrepreneurship generally involves the pursuing of innovative products and services in order to provide solutions to social problems. Particularly, the social entrepreneurs employ missions for the generation and sustenance of social value. This context can be utilized in business ventures and the non-profit environment. They operate in a wide array of organizations. The organizations can be small-scale or large, new establishment or already existing, profit-oriented, non-profit and hybrid (Sheth, 2010). Unlike other business entrepreneurs who evaluate performance in terms of profit and return, this class of entrepreneurs measure their performance in terms of the positive impact on society.
Based on individual perception, social entrepreneurship seems to be limited to the already established organizations with less interest in profits. These ventures entirely further wide social, cultural and environmental objectives and generally, it is related to the voluntary and non-profit institutions. However, sometimes profits may be factored in for some companies or other social ventures.
II. Corporate Entrepreneurship
This context refers to the generation of new ideas and opportunities in large-scale or already established ventures. The objective of this is to promote the company’s profitability, strategically renew an already existing business and improve the competitive position. In this context, innovation is central. Moreover, corporate entrepreneurship may crucially modify the competition balance within an organization or generate new industries via internal innovation (Raufflet, 2008).
Basing on individual perspective, corporate context of entrepreneurship is mainly significant for large-scale companies, aiding these institutions that are normally reluctant to innovative risk taking. It drives people towards an elevated degree of corporate enterprising. Additionally, this view offers the organizational advantage of setting the ground for leadership continuity. This context can be considered a little irrelevant to the micro and small scaled business ventures.
III. Technological Entrepreneurship
This context of entrepreneurship invests in programs that assemble and utilize specialized people and multiple resources that are associated with the advancement of scientific and technological information with the aim of generating and capturing venture value. This is done via collaborative experimentation and examination. This context is perceived to be essential for growth, distinctiveness and competitive advantage for business ventures (Roy & Sikdar, 2003).
Basing on personal perspective, technological entrepreneurship attracts majorly the leaders and top managerial individuals of both small and large scale businesses who utilize technology to generate, create and harness value for the sector players. However, the micro2 and micro business ventures sometimes may lack the capacity to utilize the technological infrastructures due to limited startup capital.
IV. International Entrepreneurship Context
International entrepreneurship is the establishment of new business ventures so that from their launch they are involved in international business. Their operational domains are considered international from the early stages of business activities. It encompasses numerous activities such as exportation, and licensing. It is highly lucrative for individuals who seek to conduct businesses beyond national boundaries (Gamboa & Brouthers, 2008).
In own perspective, the international entrepreneurship is advantageous if low sales are experienced in the local market. Products can be sold in the global market depending on the presence of customer demand for the product in the other countries’ market. The entrepreneurs can sell their wares in foreign markets if they have stroked maturity stage in local markets and earn desirable returns from the sales. However, these contexts may appear to be irrelevant to entrepreneurs whose base capital is limited.
Roles in Entrepreneurship
In entrepreneurship, different players have significant roles in ensuring that the ventures are successful. The entrepreneurs derive services from different role players such as small business bankers, community based advisors, venture capitalist and agent/consultant and professional services. These roles will be discussed and evaluated individually.
I. Small Business Banker
Most of the micro and small business ventures are faced with a similar challenge. It is an inadequate access to startup capital or expansion finances in order to receive more profits from the ventures. Most commercial banks do not consider most of these entrepreneurs to be bankable or creditworthy. Of importance, is the creation of an enabling business environment for both the entrepreneurs and the micro2, the micro and the small business ventures to have access to the finances. It is worth noting that a number of institutions have been generated to tackle this challenge, but still there is a lot to be improved on (Vera & Onji, 2008).
The small business bankers come in handy in these situations. These bankers play a crucial role in the micro and small venture startups. They are the channels through which the small and micro types of startups can access loans for startup capital which highly promotes the business operations. However, this role is irrelevant to large scale ventures.
II. Community Based Advisor (Urban/International)
The community based advisors provide consulting services to entrepreneurs from both the small scale and large-scale. They offer a special opportunity for the entrepreneurs who seek to achieve a strategic vision. These advisors support the establishment of community based entrepreneurs and generate open dialogue between different communities with the aim of promoting both (Chaston, 2013).
These advisors play an important role in providing advice to the growth ventures and small-scale startups. This is achieved via urban or international planning. These advisors are able to cut across all the scales of businesses.
III. Venture Capitalist
Venture capitalists offer capital fund to the start-up companies possessing a huge potential for growth and expansion at the initial stages. The business financial capital earns money through equity ownership in the companies invested in. These companies usually possess a novel technology or venture model in the high technology fields, for example, biotechnology and information technology. It is considered as a type of private equity (Davila, Foster, & Gupta, 2003).
The venture capitalists only support the startups with high growth and expansion potential. They provide a desirable option to entrepreneurs with brilliant ideas and business models. However, for the micro2, micro and some small scale types of entrepreneurship, they do not provide the much needed financial assistance. Nevertheless, their contribution to entrepreneurship cannot be underestimated.
IV. Agent/ Consultant and Professional Services
These services are offered in a bid to achieve business growth via the creation of leads and nurturing them. The professional offering these services are usually trained in different areas of expertise ranging from marketing, branding and all other sectors of business operations. They offer appropriate advice and strategies to ensure that the business ventures achieve their objectives. Small types of entrepreneurship and growth ventures seeking to attain high growth can utilize these services (Chaston, 2013).
The consultancy and professional services provided are targeted at providing guidelines and carrying out expertise research services, which are advantageous to the growth venture. However, other business ventures that are the micro2 and micro types of entrepreneurship do not attract these services.
Basing on the above arguments provided in the discussion, the type of business venture that is personally suitable is a small type of startup. The small kinds of businesses are more flexible and have a higher potential for growth and expansion. Additionally, the venture can participate in socially responsible programs via corporate social responsibility initiatives. These business ventures are open to loans and fund capital essential for expansion. The small business entrepreneurs can obtain the services of the small business banker, community based advisor (urban/international), consultancy and professional services and the venture capitalist if the business idea as a high potential for growth. Other forms of startups that are the micro2 and micro ventures do not have a potential of attaining desirable profits.
From the discussion above, it is evident that the entrepreneurship universe is extensive. The paper highlights the different types of business startups, such as micro2, micro, small and growth ventures. The entrepreneurial contexts related to society, corporate, technology and international have been discussed. The different roles of the small business bankers, advisors, venture capitalist and consultancy and professional services have been focused.