What Does Entrepreneurship Mean?
Entrepreneurship in layman’s language or explanation is where an individual forms or establishes something such as a business, by coming together or bringing people together into a structured group, manages and endures, deals with, accepts, or puts up with the risks that come with operating a business, especially when it is unpleasant or unavoidable.
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It does not just end there but entrepreneurship has a wide thought and aspect to it as it has developed rapidly becoming greater in size over the years. Today numerous explanations to what entrepreneurship is termed to be are being offered in books journals entrepreneurial magazines and so forth.
Today’s modern world is characterized by economically driven ideas that are a result of entrepreneurship taking a central role in the business world, leading to entrepreneurship and innovations are inseparable. It has become a realization to governments worldwide that sustainable progression in a country’s development economy has to be hinged on the enlightenment of its citizenry to become constant innovative thinkers in coming up with new ideas and innovations in product and service delivery.
A country’s rate or speed at which economy develops is speeded up by entrepreneurial motivation which is a very important aspect. Entrepreneurship is more or less closely associated to individuals as the prospering of this is dependent on an individual’s innovativeness, imagination, vision and ability to take on business risks.
Entrepreneurship is usually a risky venture for anyone to delve into, and one has to be ready for the end results be it a realization of profits or in other cases losses. Entrepreneurship is a pulsating affirmation of the fact that individuals can be developed, and their attitudes and ideas be altered and their ideas transformed into action through a well thought-out and methodical program for entrepreneurs.
The world over entrepreneurship is recognized as the most fundamental aspect in political, social, and economic agendas. The late 90s saw a rash of Internet start-ups and an increase in venture capital investment and stock market values. A very strong interrelationship exists between economic growth and entrepreneurship and has led to policy makers focus more on the development and implementation of strong and effective strategies that cultivate and uphold entrepreneurial activity the world over.
Findings all over the world argue that entrepreneurship at its early stages tends to be much more appreciated and higher in countries that have a lower per-capita GDP. A pattern can be observed worldwide as developing countries register high initial stage entrepreneurial activities, in middle income countries this activity reduces but rises up again in developed countries with high incomes.
Data contained in the General Entrepreneurship Monitor (GEM) Report Of 2007 based on an adult population survey done between 2001-2006 adduces that; global cities worldwide have the same kind of pattern mentioned above.
Additional key aspects establish by this report point out that Asian and Latin American middle income countries exhibit high rates of initial-stage entrepreneurial activity. The repot further states that Eastern Europe and Central Asia countries have traditionally lower early-stage entrepreneurial activity rates.
The business environment in the world today is characterized by challenges that may develop blocks against corporations and entrepreneurs from attaining their main business objectives centered on higher profit returns. One of the most fundamental purposes entrepreneurship development and increasing them in the society has aimed at making it possible for the society to produce industrious human resource, marshal and maintain the same in successive progressions of development.
The impulsiveness and stability of such a progression would hinge on the type of people that can be driven and groomed in the entrepreneurial career. GEM’s sole aim and purpose is to create a framework where studies on entrepreneurship and its relationship to economic growth can be carried out and provide more information to budding entrepreneurs and business people especially women. (Brush 2006)
Women in Entrepreneurship and Micro/Small Business
It is said that women are worse at micro and small business entrepreneurship than men
Women in business and entrepreneurship are rarely driven by money as a motivator for engaging in any kind of business instead a key motivating factor is the passion that they posses for their ideas and desire to realize this ideas and be able to enjoy a better and more exclusive lifestyle as a product of their ideas. A huge roadblock to entrepreneurship among women is the attitude formed towards them by the world which is usually dismissive and hinders them in exploring the business world thus leaving it world for the man.
This attitude usually is detrimental to women when they are sourcing or raising capital and resources to enable them develop their ideas from just mere ideas to tangible and viable businesses. An “unconscious bias” directed to women entrepreneurs, comes about when people compare them to men despite the challenges they face and paint a picture of them as weak even though men may not be doing that well from them in business (Brush 2006).
Women entrepreneurs decide on whether to take up business ventures depending on support, assistance and facilitation accorded to them. Without any motivation there are not able to take any risk and put their passionate ideas into practice. A big barrier is the accessing of resources which is a result of lack of proper and sufficient information being offered to women the world over on how to engage in entrepreneurial activities.
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A need to persuade more women to take on education in so as to be able to address matters that impact them and inspire them towards entrepreneurship projects in terms of business growth, technology, revenue models, and securing correct types of finance is necessary (Welter, Smallbone , & Isakova 2006).
Categorizing business ventures either owned or belonging to women as different from the normal and therefore warrant preferential treatment is not probable and worthy, nevertheless it is widely known that there are some challenges women face when it comes to getting involved in business and most end up not realizing their full potentials in an environment designed for the male entrepreneur.
Internationally businesses owned by women are accorded less than 5 percent of business enterprise start-up capital. Women involved in entrepreneurial activities are usually not that enthusiastic in applying for bank loans and overdraft facilities. Not considering country of origin of operation, women tend to come out as more prudent – they are able to achieve more with the little resources they have.
Whether this is a satisfying positive aspect or it is an inexperienced failing that is responsible for women’s downgrading to micro enterprises is yet to be known. A case where women business owners, will be able to establish and nurture their ideas and passions into profitable businesses as compared to the male dominated entrepreneurial world, economies worldwide would experience an increase in wealth and job creation and the governments would realize a generation of further considerable amount of tax revenues (Carter 2007).
The bias against women entrepreneurs
Women entrepreneurs come out as extra cautious as compared to not being more caring about other people’s feelings or about the seriousness of a situation in consideration of their growth potential in business unlike their male counterparts.
This trait paints a picture of them being realistic when it comes to taking business risks but it is sometimes detrimental to them when it comes to negotiations for capital and resources sourcing. Most women in business term themselves as managers of risk and not people who take risks but one has to understand that they are focused despite all this.
In the U.K women are still not represented fully in the business sector. In today’s world, most women seek business sustenance and guidance for putting up new business enterprises and also try to create a balanced framework between their work and personal life. The last decade has seen a large increase in women entrepreneurs who are able to triumph over societal prejudice and biasness as a result of their gender by becoming successful entrepreneurs(Buttner & Rosen1989).
The biasness against women in business stems out of the fact that there is little information on the difficulties, challenges and performance they experience in this male dominated entrepreneurial/business world, despite studies being carried out on the sector.
The current raging debate on poverty going on worldwide saw a common ground being formed where it is necessary to find out and identify the scope to which women entrepreneurship plays a part in the fight to reduce high female unemployment and consequently eradication of poverty.
This is inline with measures decided on by the Fourth World Conference on Women, and the Copenhagen Program adopted during the World Summit for Social Development, to promote self-employment, developing entrepreneurship potential and small businesses for women in rural and urban areas.
Women entrepreneurs face many barriers in today’s world especially those that are venturing into business and entrepreneurship for the very first time. Some of these may include issue like (MacMillan, Siegel & Narasimha 1985):
- Sourcing for start-up capital and raising resources has been and continues to be a very major barrier since time immemorial. Limited access to information. This can overcome having focused training structures put in place.
- Low self-esteem and perception
- Women entrepreneurs rely mostly on their families, personal savings, credit cards and home equity loans to provide them with the startup capital they require to set up businesses. There is no support network set up to provide women entrepreneurs with necessary skills and information.
- Business setups by women have to fight back alongside male-dominated enterprises.
- There are also cultural and structural obstacles women entrepreneurs encounter:
- Women able to make huge amounts of cash are termed immoral.
- The traditional perception of women and their roles in the society.
- The society does not feel well in the boldness and aspirations among women.
- Financial independence among women is not tolerated.
- Lack of marketing skills and lack of time that can be allocated to business are strong difficulties to overcome
- They are deemed or perceived a weak by their male counterparts.
Current trends reveal more and more women leaving their positions in large multinational corporations to dive into the murky world of business though success is not easily realized in an environment dominated by their male counterparts.
Obtaining startup capital has emerged as the foremost obstacle against women and research show that women face much more difficulties in convincing people to invest and support them. Review conclusions as brought forward imply that loan officers are influenced by an entrepreneur’s gender, thus are more likely to favor males over females, when appraising loan applications (Hisrich and O’Brien 1982, p.57).
There still exists a “glass ceiling” denying women an equal opportunity an equal platform in engaging in entrepreneurial activities alongside their male counterparts despite an increase in women entrepreneurs in the U.K. the city of London prides itself with the highest number of women entrepreneurs starting their own ventures with the government taking into account and making the first move to support women entrepreneurship in UK. This strategy has resulted to some becoming successful and renowned entrepreneurs in the UK. They include women such as:
- J K Rowling: renowned British author for her Harry Potter series that have sold close to 460 million copies and has a net worth of about £1 billion.
- Dame Anita Roddick: ‘The Body Shop’ founder, a passionate activist of human rights and environmental issues. She created an ethical thinking in her consumers.
- Samata Angel: an award winning women entrepreneur, Ghanaian but born in the U.K and has ventured in fashion and media. Her clothing line enjoys clients such as Jennifer Lopez and Angelique Richard.
- Hermione Way: 24 years of age but founded the Newspepper and Techfluff.
All this above examples are evidence that women can actually make it in entrepreneurship. They are a true inspiration aspect to other hopeful women entrepreneurs in the UK (Butler 2003).
Provision of Funding and Support for Women Entrepreneurs
There is need for a comprehensive framework for provision of funding. The following pointers can be used when sourcing for funding and providing the same for women entrepreneurs:
One should be able to come up with an all-inclusive and meticulous business plan and can reflect on the following finance alternatives for start up capital sourcing:
- Source for loans from families and friends.
- Approach Community Development Finance Initiatives (CDFIs) which offer loans to women entrepreneurs with viable business ventures.
- Big business ideas will warrant a visit to venture capitalists who offer funding in return for a stake in the business.
- Form networks as women are a major provider of guidance, resources and support services to themselves. Women are able to offer provide funding and skills through schemes and networks after proper evaluation and endorsement of business ventures.
- Governments worldwide have begun offering grants and support schemes through providing funds to entrepreneurial activities that do not discriminate against gender, but are viable as assessed from the business plans submitted. To be eligible for these grants, budding entrepreneurs should be sure of what they propose to do in terms of product, location and size of business. This includes funding such as: (Cassell 1997)
- Grant for Business Investment (GBI)
- Research and growth funding
- Making available of information and knowledge to all stakeholders in the industry.
- Instructional Skills
- Business Solution Grants
- Loan appraisal officers should be offered training and information that would enable them identify deserving applicants irrespective of gender and sex.
- Organizations and networks should be setup to provide information and education to budding entrepreneurs in coming up with business plans as these are what financial institutions put much importance on when determining where to invest in or offer support in terms of loans.
- Sensitize budding entrepreneurs in the importance of registering assets in both names especially in cases where men register assets in their names only despite the fact the woman may have had a contribution in obtaining the said assets.
- Offer business advice and make it more readily and easily available. This can be done through a network where services are decentralized and a constant visit to the business within the network done on a frequent basis.
- New entrepreneurs should be well advised when setting up their business on the ideal location to do so.
- Many entrepreneurs have a limited idea of existing support organizations, their objectives and activities and workshops alone are not enough to provide the much needed information thus need for follow-up, to encourage women entrepreneurs, to support them and build their self-esteem is necessary.
- Design a mentor framework for young women to associate with and be able to get started.
- Assist young women when setting up instead of waiting till they are already started then providing assistance. To add onto this, mentor programs should be developed where young women are taken through programs and trainings that equip them with the relevant skills to take on the male dominated world of entrepreneurship. Use of women who are successful entrepreneurs is also another way to spur young women into self employment, these women act as role models to the budding young business women.
- Organizations that are in the lending business or financial support provision should become more and more aware of the current rising number of young women and women with disabilities taking on entrepreneurship.
- New business ventures should embrace marketing with vigor as it is a very crucial aspect of business especially micro-businesses. A very small percentage of entrepreneurs embrace or appreciate the impact of marketing on their businesses and few of them can actually acknowledged organizations that provide this support framework, therefore this leads to a necessity of encouraging marketing activities in the entrepreneurial world.
- Established business ventures should think of employing women in advisory roles or positions regarding business issues since they are bound to be well conversant with issues that affect business outside its context (external factors) such as: family issues and balance with the work place. Women feel free in sharing with their fellow women issues such as this that may be affecting the output of their business activities.
- Importance has also to be accorded to women with disabilities who wish to go in to self employment. It is important to note that entrepreneurship to women with disabilities is not a supposed cure for all diseases or problems however, they can be accorded all the support that they require to undertake and start off their business ventures. Organizations that cater for the interest of the disabled should form specific and special programs and strategies that focus their energies and strengths to address issues affecting the disabled in relation to aspects such as training, business advice and funding. These programs should also be able to sensitize people on the difficulties that the disabled go through and make sure that they are respected and accorded equal treatment as everyone else.
- Governments should set aside a certain percentage of contracts to be awarded specifically to women in entrepreneurship and also provide assistance and support in coming up with viable and tangible proposals. This can be done by encouraging them to form cooperatives to be able to come up good and strong marketing strategies to facilitate easier effective and efficient tendering.
- Training institutions should provide easier access to their courses in areas such as bookkeeping and cash management to women entrepreneurs as this is a necessity for all business people to have this skills. This will help provide the skills for good business management in terms of income, resources, expenditure and how to take on business risks. Follow up sessions are also necessary to keep track of the business growth.
- Entrepreneurs should acknowledge the importance of being faithful to existing business laws, rules, regulations, practices and associations that are there to put checks and balances on activities in the business world. This turns out to benefit all parties involved especially the entrepreneurs as the association provide frameworks and training workshops where they can be further equipped with necessary skills. The associations further offer joint marketing entrepreneurs, information technology advancement and access is also increased, promotion of networks and sub-networks, international forums is always a plus advantage, provide a chance to be included in the development of new initiatives.
An entrepreneur has been defined and made to look as innovative, well networked, intelligent, confident, all this describe the male and results to a discrimination and biasness against women due to their gender. Worldwide, a trend among the private sector and all stakeholders concerned are now more relentless than ever in looking for ways to dispel the above myth and in turn give self-assurance to women to take up entrepreneurship.
Women in rural parts tend to be more active towards entrepreneurship which contributes economically to their families and the country as well. This scenario dictates that governments and all stakeholders involved should not only focus their energies in women found in urban towns but also in the rural set ups.
Also focus should be directed towards young women by offering training, information and financial support. Strategies and frameworks should be developed to come up with networks that connect entrepreneurs to each other as a result will increase productivity and development in entrepreneurial activities and business world as a whole. Understanding the dynamics that affect the business world also play a key role in equipping and empowering women to undertake entrepreneurship.
Brush, C., 2006. Growth-oriented women entrepreneurs and their businesses: a global research perspective. Cheltenham, UK: Edward Elgar Publishing,
Butler, J., 2003. New perspectives on women entrepreneurs. Arlington, VA: IAP
Buttner, E., & Rosen, B,1989. “Funding New Business Ventures: Are Decision Makers Biased Against Women?”, Journal of Business Venturing, vol. 4,pp. 249-261.
Carter, N., 2007. Female entrepreneurship: implications for education, training and policy. Philadelphia, PA: Taylor & Francis.
Cassell, C., 1997. “The Business Case for Equal Opportunities: Implication for Women in Management”, Women in Management Review, vol.12, no.1, pp. 11-16.
Hisrich, R., & O’Brien, M., 1982., “The woman entrepreneur as a reflection of the type of business”, Frontiers of Entrepreneurship Research. Wellesley, pp. 54-67.
MacMillan, I. Siegel, R. & Narasimha, P., 1985. “Criteria used by venture capitalists to evaluate new venture proposals”, Journal of Business Venturing, vol.1 no.1,pp.:119-128.
Welter, F, Smallbone , D & Isakova N., 2006. Enterprising women in transition economies. Burlington, VT: Ashgate Publishing, Ltd,.