Entrepreneurship is a major revenue source for a country. Entrepreneurs create new businesses thereby leading to increased job opportunities. Take for instance, almost all discoveries in the 20th century are the result of entrepreneurship.Even better, it brings with it other advantages such as increased living standards and creation of social responsibility. With all these merits that are due to a country that promotes entrepreneurship, there are some factors which if not taken care of, may stand in the way of all these advantages as explained below.
Poor Marketing strategies
A marketing chart shows the direction of your business. A business without a marketing plan risks failing in the long run. Marketing plan enables entrepreneurs to have coordinated efforts in promotion and selling. Have you ever made something without knowing its use? Where did it end up? In most cases, products without use end up in the store after which they are disposed of. The same can be said about marketing. Making products without having target customers is very risky. There are so many platforms for marketing; if your target are streamers, buy Twitch viewers, it will be very impactful to the business.
Having a marketing plan enables budget estimation. With the budget, you are able to calculate the amount of money going into marketing and find out the effectiveness of the strategies as measured by the number of customers who turn out. Maximum returns can only be gotten with a well-developed marketing plan. As an entrepreneur, you don’t want to be forced out of the market due failure to develop a marketing plan.
Some of the inherent factors for profitable innovations to take place include transportation, communication and power supply. These factors reduce the cost of production thus increase profit. In most cases, developing countries do not have capital inventions let alone transport and communication facilities.
Guess who is left with the burden of shouldering the whole costs involved? How do they manage it all? This is why entrepreneurship in developed countries is on another level. The countries make capital goods thus their entrepreneurs can easily acquire them hence reducing the production cost. Without proper communication, risk is very high in developing countries as there are no channels for getting the right information. As an entrepreneur, before diving into business, it is good not only to enumerate your goals but also the accompanying challenges and how to deal with them.
Politics plays a huge role in the entrepreneurial activities within an area. Politicians, in most cases, decide the type of market they want in the area. Different countries have adopted different systems such as capitalists, communist or mixed economies. A capitalist system demands groundbreaking innovations while communism system requires interconnection between politicians and the entrepreneurs.
After years of observation, it has been concluded that more capitalist countries enable entrepreneurship while communism discourages it. Moreover, the government of the day can directly have an adverse impact on the entrepreneurs. Say you operate in the area and you don’t support the government. They will do everything to ensure that your business fails. Therefore even as you venture into business as an entrepreneur, take note of the influence of politics on your operations.
Lack of good legal factors
Law is a very salient future in entrepreneurship. The strength of the legal factors affects the attitude towards entrepreneurship. The business environment involves deals between individuals, deals between business entities and deals between the government and business. Failure to adhere to the agreement requires the courts to intervene. Failure of the courts to provide solutions to these turns the hearts of many away. Moreover, entrepreneurs require the courts to protect them when it comes to property rights. Moreover, failure of laws involving declaration of bankruptcy discourages many entrepreneurs from diving into it.
This is one of the sources of finance for the government. Even so, there should be a limit to the rate of taxation. Sometimes, the government goes against the grain of entrepreneurship; begging the rich and giving to the poor. One of the tenets of business is survival of the fittest. Therefore in any case the government does this, many potential entrepreneurs will shy away.
Before diving into entrepreneurship, have both the downfalls and the advantages listed. Then come up with a plan of how to draw a balance between the risks and the rewards associated with them.