Issues Affecting Small Business, Essay Example

This assignment evaluates on issues which are affecting small businesses. With the growing demands in the face of globalization, individuals are seeking self employment as a means of relieving themselves of the pressures of the corporate world while starting up small businesses which has lead to their increase in the market. Research has identified entrepreneurial activities as a substantial catalyst and central element in the economic growth of a country (Pennings, 2007). These findings are based on the argument that formation of new businesses is critical in job creation and creating economic development. Creation of enterprises is “…a process of becoming rather than a state of being”. The reason is because business start up is a process rather than being an event whereby the rewards of start up may not be instant but after duration of time. There are several motivations factors which lead entrepreneurs to start their own businesses and they are characterized by: the entrepreneur’s personal traits, their cultural back ground, political and economic influence and social context in the market (Gibb & Ritchie, 2004). Establishment of small businesses is encouraged by a stimulus market and entrepreneurs who are courageous to take risks and quit formal employments sectors and invest in businesses of their interest.

The corporate world of today is characterized by intense pressures that present a whole lot of frustrations to employees. When such pressures are accompanied with financial dependence, people under such situation s are prompted to seek for alternatives that provide them more freedom and money (Pennings, 2007). Pressures demand one to work for extra hours so as to maintain the organizations they work for ahead of competition. Such pressures deny people both the opportunity to be with their families and the chance to enjoy social life. Self employment is known to provide the best opportunity for social life as one is able to manage and allocate their time effectively creating space for a social life and at the same time increasing their financial independence (Brockhaus & Horwitz, 2006). According to Schurenberg (2008), people of the modern times seek more out of work and life than just the pay and the little free time available in the corporate world. Such is the example of Robert Thomas who through his desire to have more time with his family and thus enjoy the pleasure of social life while still making more than what he earned in the corporate world, resolved to invest in Gator Ramp (Schurenberg, 2008). In this new life, he could at last work from home in an environment that would allow him to challenge his objectives and still be flexible. Robert notes that a home business is the foundation for both a home life and a profitable enterprise. Business opportunities driven by market demand trigger innovativeness that through passion and risk propensity motivates an entrepreneur to invest in that line of business and a small business is born (Gibb & Ritchie 2004).

Many people in the corporate world rarely have challenges that exploit their full potential specifically their high levels of skill and qualifications. Such people feel that there is room to do more and since their current employment dos not offer the opportunity to exploit this potential; such people are prompted to move into personal businesses where they can invest in all their potentials to achieve a quality of work life and satisfaction (Pennings, 2007).

Dissatisfaction with current employment is one major catalyst prompting people to set up own businesses. Gator Ramps was born as result of Roberts’s dissatisfaction with his serving in the corporate world where his full potential was underutilized. There is also the need for control over ones life. Many people hate the idea of being directed by another person and this is another basis for business start ups so that people become their own bosses.  Entrepreneurial behavior is related to a number of traits and among them risk-taking propensity is perhaps the most important of them (Morrison Et al. 2000). Entrepreneurs are risk takers and it is this quality that is responsible for the high competiveness in the modern world as more and more investors take risk to achieve their objectives. Knowing the risks involved in leaving a salaried job to venture into a new business, Robert went ahead and took this risk and this became the birth of his ever successful company.

Passion also is an essential tool for business star ups and their long term success. Drive is a common ingredient to success and thus is paramount in the development of new natures and their growth. Entrepreneurs are passionate people who take the necessary risks to protect their passion and achieve the goals of their life (Storey, 2003). This feature encourages high level of business optimism. According to Schurenberg (2008) the passion that Robert had following his first sales initiated strong business optimism in him and this has made his Gator Ramps-home business to be one of the best. This optimism is prompting him to develop expansion plans for his business.

Optimism and creativity generates innovations which are crucial for entrepreneur’s exploitation of the market niche and this is vital in the expansion of the economy (Brockhaus & Horwitz, 2006). Innovativeness plays the founding role in small business start ups as most businesses are founded basing on an urge to do things differently or better (Morrison Et al. 2000). According to Storey (2003) innovativeness prompting people to do things better refers to adaptive innovative traits while doing things differently implies creative innovative behavior. It is indisputable that innovativeness offers entrepreneurs an opportunity to penetrate the market and secure quite a large niche of the market hence making the enterprises to grow even more.

Despite all the qualities posed by entrepreneurs, there are some risk factors which if not handled properly can affect the establishment and the eventual success of small enterprises. Such include the societal attitude towards entrepreneurship and capital (Gibb & Ritchie, 2004). Based on a positive society attitude, Gator Ramps has become a successful home business venture. Since small enterprises operate in free markets, competition comes in as another factor that can challenge the growth of small business due to reduced market share (Brockhaus $ Horwitz, 2006). Such factors define the environment that the firms operate in and which dictate the level of innovativeness necessary to successfully penetrate the market and remain profitable. However, starting up a business is risky and needs the investor to have the skills and experience required to startup the business. According to Schurenberg, (2008) most small business do not remain in operation for more than four years these has been attributed to poor selection of business, failure to strategize and formulate long term objectives which will ensure the business change to conform with changing market and operational needs. Lack of required skills to run the business successfully are also a factor to be blamed for none performance of small businesses as well.

Works Cited

Brockhaus, H & Horwitz, S. (2006). The Psychology of Entrepreneur. The Art and Science of Entrepreneurship. Cambridge: Ballinger

Gibb, A. & Ritchie, J. (2004). Understanding the Process of Starting Small Businesses. European Small Business Journal, 1(1): 26-46

Morrison, A., Carter, S. & Jones-Evans, D. (2000). Enterprise and Small Business: Principles, Practice and Policy. London: Prentice-Hall

Pennings, J. (2007). The Urban Quality Of Life and Entrepreneurship. Academy of Management Journal, 5(1): 45-71

Schurenberg, E. (2008). The Off-Ramp to Riches. Money, 36(7): 23-46

Storey, D. (2003). Entrepreneurship and the Small Firm. London: Croom Hel