Importance of Entrepreneurship to America - Essay Example

Entrepreneurship Introduction It is worth noting that various businesses and organizations are ideas of particular people put into practice. Every business opportunity took a thoughtful person or group of persons to dream, think and put their dreams and thoughts to reality. Starting a business organization requires gathering and combination of ideas later converted into real business opportunities. Most business ideas targeted for specific environment rely on the determination of an existing gap or need for particular products in a given a region and the nature of supply as well as technology involved in the production of the products. The entire process of investigating demand and supply patterns of given product in a given business environment, and establishment of businesses to address the potential and existing demand entails the process of entrepreneurship. Entrepreneurship refers to the act of collecting and incorporating business ideas aimed at achieving purposeful and unique innovation in the production of a given product or service (Carsrud and Malin 7). Innovation in the context of entrepreneurship may result in various advantages such as introducing new or improved product in the market, new production techniques, and identification of newer markets for a product or service as well as identifying new source of supply of raw materials. It is imperative to understand that entrepreneurship is not only about starting of new business organization, but can also involve ideas to improve the state and performance of an existing organization. Importance of Entrepreneurship to America Entrepreneurship is a powerful tool for economic growth in any country. It is because of entrepreneurship and presence of globally acclaimed entrepreneurs that the American nation tops the list of world’s best performing economies. To start with, entrepreneurship has seen the expansion of production activities that have in turn led to creation of new job opportunities (Bordogna 10). Individuals resign from their initial jobs to invest in the newly identified opportunities where they employ themselves and create thousands of jobs to the initially jobless population through expanded production processes. Since entrepreneurship involves creation and introduction of new ideas, it has helped the development of research and innovation in the American economy. About two out of three innovations in America are as result of entrepreneurship. These innovations have eased production processes while improving the quality of products, accomplishments that have collectively spurred the growth rate of the American economy (Bordogna 13). Since entrepreneurship entails creation of new opportunities, it has empowered and facilitated the development and growth of national wealth (Miller). Income earned by entrepreneurs and their employees has expanded public expenditure as people purchase raw materials and finished products of entrepreneurship, encouraging national production. Bordogna adds that entrepreneurship has helped in providing self sufficiency to the American populace as people can afford and easily find what they need for their consumption (13). Self –sufficiency in the American economy also relates to increased local production of goods and services that ensure cheap and affordable prices for goods and services. Characteristics of Successful Entrepreneurs Entrepreneurs are individuals with the brains bearing or capacity to exhibit entrepreneurial skills. Entrepreneurs identify business opportunities, gather and collect ideas that they use to establish businesses or improve state of particular firm. For entrepreneurs to emerge successful in implementing their ideas, they have to exhibit or posses particular characteristics. Unique ambition is one of the defining characteristics required of an entrepreneur. Ambition helps entrepreneurs to face the potential competition in the given industry with aims on achieving the desired goals (Gitman and Carl 14). Entrepreneurs are also independent personalities who stand on their own and use their ideas to start and run businesses without being led by anyone, but followed by others. Good leadership ability is a prerequisite for entrepreneurship as the entrepreneurs rely on others to implement their ideas. Entrepreneurs must also posses high level of self-confidence, believing in their ideas and abilities even when everybody else seems to be in doubt. Entrepreneurs need to understand the potential risks and challenges likely to occur in the process of starting any form of business and develop sufficient skills to minimize or mitigate such risks. Self-confidence empowers entrepreneurs to depend on their ideology motivating them in starting of the business to solve any potential problems that may threaten their operations and success. According to Gitman and Carl, entrepreneurs also need to be risk takers who do not run away from potentially risky ventures but avail themselves to arrive at the right solutions (14). Being risk takers, entrepreneurs are able to identify loopholes in the market and use such findings to create new opportunities vital for their own growth. The aspect of risk taking also enables entrepreneurs to venture and invest in otherwise risky business activities but which returns are high in the event of success. Being visionary is another characteristic that defines successful entrepreneurs. Visionary entrepreneurs are able to spot at new opportunities and think of expanding their businesses. Carsrud and Malin reiterate that entrepreneurs need to work beyond being business owners or managers and be able to identify impending risks as well as future anticipated opportunities in the particular industry (10). This aspect of entrepreneurship is fundamental in elevating one to become a market leader in the given industry. Entrepreneurs also need to be energetic in order start and maintain a successful business. Running newly started business requires one to work for longer ours, which requires extra efforts. Some entrepreneurs also start their businesses while employed elsewhere and requires abundant energy to be able to turn to their businesses after finishing daily employment routines (Gitman and Carl 15). Passion and commitment to success are additional characteristics required of a successful entrepreneur. Entrepreneurs have to love their work and continually appreciate their ideas as a way of self motivation. Carsrud and Milan connote that commitment can see entrepreneurs making personal sacrifices and focus on addressing consumers’ needs to help in the achievement of the set goals (10). Moreover, entrepreneurs also need to be tolerant and able to accommodate any divergent ideas from among the fellow staff. This attribute helps in the gathering and harmonization of views that may foster innovation in the production or marketing of a given product. Favored Form of Business Organization for Personal Business Sole proprietorship is the easiest form of business organization to start when opting to engage in self employment. The reason for choosing sole proprietorship is in its ease of formation as it only requires small capital that helps raise sustainable profits in the future (Perez). Starting a sole proprietorship does not necessarily require an individual to borrow big loans from banks or other financial institutions. Financing this form of business organization only requires personal savings or perhaps borrowings from the family members and friends. Another reason explaining the choice for sole proprietorship is few legal requirements and governmental regulations to meet before its establishment. Unlike corporate or partnership forms of business organization, decision making in sole proprietorship is easy considering that it involves one person who exercises unlimited authority over the business. Furthermore, sole proprietorship can become a critical stepping stone in developing partnership or corporate business as the initial furnishes entrepreneurs with basic managerial and leadership skills. Factors to Consider Before Choosing a Form of Business Organization Selection of business organization to start and run depends on various issues that need determination before making final decisions. As outlined by McBride, one of the questions or factors to determine includes the formal requirements needed to start and operate the business. Starting sole proprietorship is easier compared to corporate forms of business considering the few or sometimes no requirement for documentation to authorize operation. Another factor to consider is the ability to raise capital. Normally, it becomes easier to raise capital for corporate form of business as individual shareholders can lease or sell their assets and equities to raise the starting capital and sustaining capital. Taxation is another factor that needs consideration before deciding on the form of business organization. Corporations depending on their sizes pay more taxes than sole proprietorship and partnership forms of businesses. Virtual vs. Real Space Businesses It is easier to start a business in the virtual space than it is in a real space. This is because businesses started in the virtual spaces involve less capital and low cost of investment. This claim attributes to the fact that virtual businesses only require individual to have computers connected to the internet where they can advertise their products and receive orders as well as payments for the goods before they can supply them (Swaminathan). Unlike in a real space business, virtual space business requires less physical space and can be run from home. Works cited Bordogna, Joseph. Importance of Entrepreneurs to the U.S. Economy. 2004. Web. . Carsrud, Alan L, and Malin E. Bra?nnback. Entrepreneurship. Westport, Conn. [u.a.: Greenwood Press, 2007. Print. Gitman, Lawrence J, and Carl D. McDaniel. The Future of Business: The Essentials. Mason, OH: South-Western Cengage Learning, 2009. Print. McBride, Carter. Principal Factors to Consider in Choosing a Form of Business Organization. 2012. Web. . Miller, Margret. Importance of entrepreneurship. 2008. Web. . Perez, William. Types of Business Organizations. 2012. Web. . Swaminathan, Kishore. Virtual Worlds, Real Business? 2007. Web. . Read More