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Relationship between entrepreneurship and economic
Importance of entrepreneur
Importance of entrepreneur
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Recommended: Relationship between entrepreneurship and economic
For many years, economist viewed entrepreneurship as a small part of our economy. Whether they are students (typically college or high school) recent college graduates, unemployed, or newly retired from one career, today entrepreneurs have a central role in the economy. According to the research I have conducted throughout the semester, an entrepreneur is defined as someone who identifies a business opportunity and assumes the risk of creating and running a business to take advantage of it. Two important characteristics of a businessperson are risk-taking and innovation. The most common reasons for starting a business according to the Small Business Administration are: to be your own boss, to accommodate a desired lifestyle, to achieve financial independence, to enjoy creative freedom, and finally to use knowledge or skills. Starting a business can be exhilarating and wildly fulfilling. However, it can be quite complicated, and may challenge you in ways you had not imagined. Knowing the challenges and problems you may encounter in your start-up can help you to prepare for the unexpected, and possibly help avoid common drawbacks. The SBA points out that many new entrepreneurs will have questions about where and how to begin because business owners trigger the production and sale of a new product or service. New entrepreneurs will need professional, expert help to start and run a small business effectively and successfully. The financial resources needed to start or grow a business can be extensive and an entrepreneur must identify when and how to ask and receive financial assistance.
Financing a small business is a very crucial process for the entrepreneur and it’s hard to get the financing need for your start-up. According to the ...
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...eurs play a central role. According to the research I have conducted throughout this semester, an entrepreneur is anyone who dreams working for themselves. Financing a small business is a very crucial process for the entrepreneur. Many business start-ups fail each year because of the lack of thorough research and planning, poor management practices and principles, and lack of financial resources. In other words without financial stability one cannot run a successful business. Overall, I have come to believe that doing some extensive research before starting your business, and taking additional training classes can help with success in funding and growing your business.
Works Cited
Cooper, Sharon. Personal interview. 17 Oct. 2013.
“Exploring Business” Flatworld Knowledge. Web. 27 Nov. 2013.
"Starting a Business” SBA.gov." Starting a Business. Web. 17 Nov. 2013.
Currently all the small business houses or the SMEs are praising the support of commercial finance companies all over the world. Mostly these financial organizations are established to provide loan or financial support to a variety of business needs to commercial customers. They have no provision for the general people as they only target business clients. Ranging from small retail stores to the manufacturing firms can obtain loans. Professionals like doctors, dentists, lawyers, etc can also apply for loans from these lenders to expand their in-house business.
In the article, "Strategies for Enhancing Small-Business Owners' Success" by Susan Turner and Al Endres, it is claimed that there is no specific reason as to why small businesses are failing in today's America. They believe, however that two factors can cause the demise of small businesses. These factors are small business financing and the marketing plans associated with those businesses. Small business owners are finding it increasingly hard to acquire funds to start up and help maintain a foothold in the business world. The authors state that this is due to the rising risks of propositions for investors and acknowledge that small businesses have to resort to using their own resources such as their own funds and bootstrap financing. Another
When trying to obtain a small business loan you are going to want to do your research first. The best place I feel that will be willing to work with you the easiest is the place you bank with. The next step would be to fill out the loan application for the lender to review the application for credit score and history. The lenders will most likely analyze the financial ratios of your business and check to see what collateral and equity you have. All this will be to determine whether you have the ability to repay the loan. After the review is complete the lender will make one of two decisions, approve it or turn it down.
Unlike the CEOs of major public company whose personal financial situation has little effect on their companies’ borrowing, if you are a small business owner, your personal credit is a major factor influencing your company’s access to capital. The power of personal credit scores to predict small business loan repayment, the legal structure of many small businesses, and small business owners’ use of personal guarantees and personal borrowing to finance business operations all link small business owners’ personal credit to their companies’ access to capital.
Adelman, P. J., & Marks, A. M. (2010). Entrepreneurial finance. (5 ed.). Bedford, Texas: Prentice Hall.
The biggest hurdle for most small businesses is accessing money to start or expand, and it can make the difference between success and failure. Of course, great personal credit will make funding your business easier, but there are business loans available from many different places; you just need to know where to look.
All business activities require finance to establish itself physically in a location and to fund daily activities of the business. This money can be acquired in two ...
Access to equity and formal debt financing has repeatedly been identified as a recurring constraint to SME growth and development. Commercial banks apply conservative policies in lending to SME. More, importantly the existing structure of financial sector was developed to serve medium to large enterprises which are organized as a formal business (Kon and Storey, 2003). Most banks prefer to hold risk free-income generating assets and lending to SME is unattractive due to a range of objective and subjective factors. These include high transaction costs, inability to do away with tangible collateral requirement, no linkage of financial products with sector needs and the inability to structure/ offer and manage risk-prone SME specific medium to long term financing options.
Innovation has a big part to play in the financing process, but this does not mean that it is the sole reason. Understanding some of the reasons why financiers contribute funds may help entrepreneurs consider their approach during their campaigns. According to Vachelard, et al. (2016), individuals engage in crowdfunding or campaigns ranges from gaining new products and services, supporting new entrepreneurs, some are usually excited about a new idea, to gain social networks and for social benefit. The authors however, note that ventures that are as a result of innovation suffer from lack of certainty or information imbalance and no one knows whether the innovation will be readily accepted or rejected in the market. Startups experience high cost of capital than established enterprises and for this reason, their most important concern is financing that provides not only fiscal resources but non-pecuniary assistance. Roebuck (2011) notes that scientific studies have focused on the impact of venture capitalist on innovative startup and concluded its predominance in affording fiscal resources over conventional lenders such as banks. Undoubtedly, crowdfunding has a positive effect on the increase of innovative ventures, especially capital ventures where the financier has an active role in the management of the business. Startup
The intention to create, knowledge of what is to be created and the confidence in creating and setting up a new venture, are the three basic requirements for successful venture creation. Creating ventures without relevant knowledge can be considered as reckless even when there exist a strong inclination and intention for venture creation. Thus, appropriate entrepreneurship education is a precondition for acquiring the right exposure, knowledge and intention about entrepreneurship (Shane & Venkataraman, 2000). The following attributes operationally define venture creation:
Access to capital and credit at various stages in the business life cycle is identified as the major hurdle by the entrepreneurs. For many small firms and most start-ups, the personal funds of the business owners and entrepreneur and those of relatives and acquaintances constitute as the major source of capital. For many small businesses, especially during the early years of their operation, credit is simply not available. For many others, the limited available credit is not through bank loans. Due to this many of them rely on multiple credit card balances and home equity loans as major sources of credit for start-up firm. Because banks are bound by laws and regulations to prudent lending standards that require them a risk management assessment for each loan made. These regulations were made more vigor during the late 1980'' and early 1990 . Banks always found that lending to manufacturing firm with hard asset such as property, equipment, and inventory has always been easier than lending to today's expanding service sector firms. Because the service sector firms own few hard asses, therefor lending judgment have to be based in terms of character, markets, and cashflow, which make it difficult to the bank to meet the regulations for the approval of the loan. Additional, the banking industry, as well as the entire financial sector of the
To be a successful entrepreneur, there are steps that one must follow when starting a new enterprise. These steps are termed as the process of entrepreneurial which is the systematic method of preparation of an enterprise that consists of four steps. The four steps are fundamental to the success of an entrepreneur venture. The four entrepreneurial processes includes discovering, assessing and opportunity, developing a business plan, establishing resource needs, and managing the resulting enterprise (Barringer & Ireland, 2010). Each individual step is vital for the start of an entrepreneur venture and for an entrepreneur to achieve their entrepreneurial goals. This paper will discuss the four steps of the entrepreneurial process,
"Entrepreneurs who start and build new businesses are more celebrated than studied. They embody, in the popular imagination and in the eyes of some scholars, the virtues of "boldness, ingenuity, leadership, persistence and determination." Policymakers see them as a crucial source of employment and productivity growth. Yet our systematic knowledge of how entrepreneurs start and grow their businesses is limited. The activity does not occupy a prominent place in the study of business and economics.
Many people dream of becoming entrepreneurs someday. But it made me realize that there other factors that needs to be taken into consideration. We need to ask ourselves are we ready to take the challenge to the outside world. Not everyone have the vision, innovation and creativity to become an entrepreneur. The individual must have a positive attitude and accept the responsibility, have discipline to meet their goals, and take action when the opportunity presents itself. Many prefer a job security and rely on a weekly paycheck, while entrepreneurs will take risks and doesn 't have that luxury to know the amount of their income.
Entrepreneurship is an important aspect of social, economic and community life. It can be viewed as a critical factor to economic growth as well as a way of addressing unemployment (Nolan, 2003).Entrepreneurs are people who are persistently focused on identifying opportunities, they seek to create something worthwhile while taking into account foreseeable risk and rewards associated with the efforts (Nolan, 2003). Furthermore, entrepreneurs are frequently understood to be individuals who discover market needs and establish new business to meet those identified opportunities. The following assignment will firstly discuss the types of entrepreneurship, secondly it will discuss the reasons people become entrepreneurs, and thirdly it will discuss the importance of entrepreneurship.