Entrepreneurship is a complex whole consisting of various elements, internal and external. In its essence, entrepreneurship is the process of giving birth to a new business. But the question is: What key components work together to conceive of and give birth to new businesses?
Why Do Entrepreneurial Ventures Need Nurturing?
All components of the entrepreneurship model are looking for definite returns, such as these.
Economic growth
A healthy economy grows at a good, steady pace without causing high levels of inflation. New businesses create wealth that is eventually distributed to all members.
Standard of living
All the stakeholders in a country’s economy want economic growth coupled with an improved standard of living that includes clean air and water, safety, and security, peaceful relations, equal opportunity, and quality products and services at reasonable prices.
Job creation
Clearly, new businesses create jobs and a significant return to all members of society.
Profits
The key stakeholders in the whole process are entrepreneurs, venture capitalists, and other investors. They all expect and deserve a substantial profit from their new businesses.
Tax base
Clearly, all governments need ways to expand their tax base to support various programs. Some would argue that the lax base is already too broad and deep. The point here is that new businesses become taxpayers, thus returning revenue to governments and indirectly to other groups such as universities.
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Research centers and universities are interested in enhancing their stature in order to attract topflight researchers and professors. They also want to secure funds to support a variety of research educational programs.
Technological development
Global competition dictates that great strides be made in technological development. To do so, requires massive amounts of capital and long lead times, which, in turn, call for public-private partnerships.
Investment opportunities
The success of one new business produces many additional entrepreneurial and investment opportunities. Or the creation of technology, such as transistors, fiber optics, computers, lasers, television, cellular phones, and so forth, propagates thousands of investment opportunities and new businesses.
5 Methods To Foster Entrepreneurial Ventures For Success
Foundation
The foundation provides the environment and general support that help foster entrepreneurship. The major elements are these.
Venture capital
Venture capital that is readily accessible provides the catalyst for starting risky ventures.
Financial base
In addition to venture capital, a variety of financing sources, both debt and equity, should be made available at a reasonable cost. The cost of capital is often too high for aspiring entrepreneurs and small-business people.
These people simply cannot generate enough cash flow to service capital costs. Therefore, they are doomed before they can get started. Banks and governments must become more involved in financing new business ventures at reasonable rates.
Education and training
These programs should be available to all people in the lime to provide the knowledge and expertise to achieve their personal goals and learn new skills.
Infrastructures
Adequate public and private infrastructures should be in place to provide efficient telecommunications systems, transportation, distribution networks, and general services that make the flow of commerce smoother.
Laws and regulations
Deregulation, such as that which occurred in the telephone and transportation industries, provides a significant stimulus for new business development. Moreover, outdated antitrust laws should be modified or deleted.
Tax
The tax system should be overhauled for simplification and equity. In addition, taxes should be generally reduced, especially for new businesses and older businesses that invest in research and plant modernization.
Trade
Strong trade regulations, quotas, and tariffs are normally counterproductive Elimination of trade barriers causes domestic businesses to become more competitive and eventually stronger.
Corporative support
Large corporations’ sponsorship of new business development to support their product lines through technology licensing nurtures a steady stream of new products.
Also, many corporations have products they are not manufacturing, marketing, or both. The transfer of this technology to entrepreneurs establishes a flexible and varied manufacturing-marketing base. Furthermore, corporate cultures should be conditioned to accept and support in-house entrepreneurs- entrepreneurs.
Research
For moving ahead and improving free investigations and experiments must be made to discover new and better ways of doing things. One of the chief goals of entrepreneurship is to develop product-service ideas that will fill a new need or want in the marketplace.
Enterprise zones
The major goal of setting up enterprise zones is to create jobs. The enterprises should be new businesses. However, not XYZ Company moved from a non-enterprise zone. Such a movement is a zero-sum game.
Public-private partnership
Both the public and private sectors should work together to resolve conflicts and problems. Furthermore, strategies should be hammered out to meet international competition.
Society
Trend leaders of society, such as writers, reporters and commentators, teachers, politicians, clergy, parents, and so forth, should extol hard work, discipline, and risk reward.
They should encourage and nurture a creative, positive spirit in today’s world; some of this seems a bit old-fashioned, even trite. But the fact remains that entrepreneurship dies without the attitudes that these virtues create and without positive stimuli from society.
Aspiring Entrepreneurs
The raw energy and talent for venturing come from aspiring entrepreneurs who are dedicated, hardworking, and knowledgeable people.
Entrepreneurs come from universities, corporations, research labs, and the general community. They differ in age, sex, race, and treed. They all have an equal opportunity to become entrepreneurs.
Some aspiring entrepreneurs are tinkerers and inventors. Some are good at putting things together and making the result work: they are good organizers and take-charge people. Still, others are opportunity-sensitive and can readily spot viable business opportunities. They all have a yen to venture.
These people, supported and connected to the other components of the entrepreneurship framework, create a synergism for an explosion in new business birth and growth.
Collaborative Affiliation
To a great extent, entrepreneurship is an intellectual endeavor. The collaborative affiliation component comprises research centers, parks, consortia; universities; governments; corporations; and private groups, and cooperates with entrepreneurs and venture incubators to give general guidance, expertise, and research support.
This collaborative affiliation represents a tightly connected partnership. The goals of this support group are to generate economic growth and diversification, improve the standard of living for all members of the society, create jobs, broaden the tax base, improve image and stature, produce new technologies, and generate additional investment opportunities. Specifically, the elements of this component are the following.
Research facilities
These research facilities include research centers, technology and science parks, and research consortia. The establishment- of these facilities represents a new wave of commitment and intensity to achieve a position of preeminence in new technologies.
In some instances, these facilities are built through a linkage between universities, governments, and the private sector, where funding and effort are balanced.
Examples are; Microelectronics and Computer Technology Corporation (MCC) in Texas, the Science and Technology Foundation in New York, the Ben Franklin Partnership Fund in Pennsylvania, the High Technology Council in Iowa, and the Technology Park Corporation in Massachusetts, USA..
Universities
Many universities also play a major role in research. Moreover, many universities provide general business, accounting, and marketing education. Management and entrepreneurship to educate people who are not only entrepreneurially motivated but who also have the knowledge required to start and manage a business.
Furthermore, traditionally disparate groups, such as law, engineering, medicine, computer science, and business, work together to provide entrepreneurs guidance, expertise, and products and services that have commercial potential through licensing.
Governments
Central and local governments are taking a proactive, noninterventionist role to seek out 3rd fund technological efforts from conception to full commercialization. Also, more efforts are being made to transfer technology from the laboratories and shelves of agencies to entrepreneurs and, thereby, to consumers.
Corporations
Some of the vast financial resources of corporations can be marshaled to provide equity or debt capital for investment or for the development of new products and services that would support these corporations’ operations.
For example, a large manufacturer may choose to back an inventor of a robot by providing engineering, lab, and production facilities for product development and funding the venture to full commercialization. The large manufacturer could license the robots, eventually buy the company, or become a major customer of the new robotics firm Exxon, GE, and Citicorp of USA are examples of large corporations that have set up venture capital funds.
Private groups
Several private groups, such as accountants, attorneys, and banks, can develop close ties with venture incubators to provide the professional expertise necessary to start a new business.
Venture Incubator
The venture incubator provides an ideal place to “hatch” new businesses. Entrepreneurs, with foundation stimulation and support and affiliation with various helpful groups, bring their abilities and product-service ideas to the incubator unit.
However, bringing these product-service ideas to full commercialization requires various skills and support, such as capital, professional expertise, labor, and so on.
In addition to providing linkage to the foundation and collaborative affiliation components, the venture incubator specifically provides the following.
Building anti-lab facilities
Incubators provide floor space with necessary storage, office, and workspace, plus lab facilities and equipment as required.
Shared services
Shared services include secretaries, word processors, office supplies, telephone, shipping and receiving, and fabrication shops.
Library and computer facilities
These facilities are made available for entrepreneurs who need to perform research and store and process large volumes of data.
Skillet/Consultants
Incubators can tap a wide variety of experts for consultation. These experts include accountants, attorneys, marketers, engineers, computer scientists, government officials, physicians, biotechnologists, metallurgists, and geologists.
Inexpensive Workforce
If the incubator is located close to a university, most students are willing to work part-time for relatively low wages and experience. Such an agreement is beneficial for both the students and entrepreneurs.
Financing sources
Once a product-service concept is ascertained to have market potential, capital is provided to launch a business structure that supports it.
Networks
Entrepreneurs learn from and are motivated by. each other. Close association with fellow entrepreneurs in the incubator can lead to a lot of cross-fertilization and creative dynamics.
While in the venture incubator, entrepreneurs can also establish several business connections with future suppliers, bankers, accountants, attorneys, and even potential customers.
New Business
All the components are brought together to hatch the new business. A board of directors is selected, a management team is formed, legal and accounting work is started, an accounting information system is implemented, construction of a building is completed, or one is leased, employees are hired, equipment is installed, inventory is bought, a marketing program is implemented, and customers are contacted. The “chick” has been hatched and is ready to start “scratching for business.”
