Entrepreneurship Development: Meaning, Factors That Makes The Entrepreneur And Forms Of Enterprises

Table Of Contents

  • Introduction
  • Definition Of Entrepreneurship
  • Definition Of Enterprise (Business)
  • Factors That Make The Entrepreneur
  • Forms Of Enterprises
  • Features Of The Types Of Enterprises

Introduction

Recently government became more interested in diversifying the base of functional education in Nigeria to a more realistic platform with the effect that in 2006 government directed that entrepreneurship education be incorporated in all programmes offered in tertiary institutions in Nigeria as a mandatory course.

Entrepreneurship Development as a practical result of reaction to the aforesaid government thought, is traditionally by design, a sequel to introduction to Entrepreneurship Education and Practice Of Entrepreneurship which you have been exposed to respectively in year one and two, in that order. The goal primarily is to address the problem of graduate unemployment in the country by engendering the production of a crop of graduate entrepreneurs with appropriate attitude and skills which will spur them on the path to creativity, innovation and enterprise thereby enable them to be job creators instead of job seekers.

Meaning Of Entrepreneurship

Ani in 1992, defines entrepreneurship as a creative and innovative response to the environment. She argues that such response could be in any field of social endeavor including business, industry, agriculture, education, social work, technology, medicine, engineering, religion, printing and publishing etc.

Entrepreneurship has also be defined as doing new thing or doing thats that are already being done in a new way. Entrepreneurship is an action, while the person that initiates and takes the action is an entrepreneur. Entrepreneur is generally accepted as a synonym to businessman, as entrepreneurship is synonymous with business and enterprise.

Meaning Of Enterprise/Business

The National Board for Technical Education (NBTE) defines an enterprise any identified idea that is translated into a planned and satisfactory implemented activity. It has also been defined as any activity undertaken to solve problem for the society. Otherwise, it refers to a business venture or simply an undertaking. Practically all projects and undertakings can be referred to as enterprise if the following steps are followed:

  • Idea Identification
  • Planning
  • Implementation
  • Successful Completion Of An Activity, And
  • Accepting The Reward.

A typical entrepreneur is a risk taker, a businessman who braves uncertainty, strikes out on his own and through native intelligence, devotion to duty and singleness of purpose, some how creates a business and industrial activity where non existed before.

Entrepreneurs are widely recognized as the prime movers of economic development: the people who translate ideas into action.

Generally, Entrepreneurship is first and foremost a mindset. Entrepreneur is a person who habitually creates and innovates to build something of recognized value around perceived opportunities.

Factors That Make The Entrepreneur

The following factors make up what the entrepreneur is:

1. Ratio of genetically and environmental influences is 50-50.

2. He is independent, has competitive spirit, can face challenges.

3. Behavioral Characteristics: He can persevere, has determination, orientation to clear goals, opportunity orientation, creativity, persistent problem-solving skills, risk taking, integrity, honesty, internal locus on control.

4. Environmental Factors:

i. Entrepreneurial heritage runs in the family.

ii. Begin entrepreneurial activity early: needs not to be over educated.

iii. Most entrepreneurs first gain some work experience in the line of business before starting up.

5. Other Factors:

i. Initiates change

ii. He is able to see creative ideas through to the end, and then start climbing another mountain

iii. He is able to see or craft opportunities that other people miss

iv. He is an expert at exploiting contacts and sources

v. He resolves problems under pressure and can turn problems into opportunities

vi. Putting customers first

Forms Of Enterprises

People in a community have many interests and different needs and wants. It is the role of enterprising men and women to identify these interests, needs and wants and establish specific enterprises through which these interests needs and wants can be satisfied. All enterprises provide satisfying rewards for those who successfully establish them.

Terms used to classify enterprise include private, public, formal, informal, individual, community, local, foreign, small, large, business, social, manufacturing, and service, consumer or industrial. Enterprises that succeed, irrespective of their nature, come up with irresistible and valued approached that contributes to providing solutions to problems, as well as satisfying the desired needs and wants. The key difference between all types of enterprises lies in the reward they provide. Business venture provide profits as rewards which could be either physical or psychological. Enterprising men and women will therefore engage in enterprises depending on what kind of rewards they expect from them.

Business may be organized as a sole proprietorship, partnership, joint stock company (private limited company and public limited company), cooperative societies and corporations. Whatever the type of classification that applies, specific enterprise in a community have the potential to benefit from the existence of all the others.

Features Of The Types Of Enterprises

Characteristically, business enterprises and non business enterprises may be presented as follows:

Business Enterprises

1. Profits are a primary motive

2. Products/services must be demanded

3. Products/services are sold in a market

4. Products/services must be paid in full.

Non-Business Types Of Enterprise

1. Various types of human needs are catered for.

2. People may want products/services

3. Market situation need not to be present

4. Products/services may not necessarily be paid in full.

The NBTE further classifies enterprises as follows:

1. Sectoral: Enterprises are classified along the type of products produced. There is an international code that helps you with this classification. It is called the ISIC (International Standard Industries Code). Below is an example of what you may see in your neighbour:

A. Retail:

i. Newspaper stand
ii. Clothing store
ii. Fashion boutique
iii. Bicycle shop
iv. Antique shop
v. Camera shop
vi. Art and Craft gallery
vii. Drugstore
viii. Liquor store
ix. Florist
x. Pet shop
xi. Auto dealership

B. Food And Recreation:

i. Grocery store
ii. Restaurant
iii. Convenience store
iv. Bar/cocktail lounge
v. Motel
vi. Fashion

C. Manufacturing:

i. Machine shop
ii. Manufacturers
iii. Representative
iv. Medical equipment
v. Food processing/home products
vi. Industrial equipment/components
vii. Cosmetics and beauty products.

D. Services:

i. Computer services
ii. Print shop
iii. Landscaping
iv. Rental services
v. Interior decorating
vii. Warehousing and storage
viii. Auto repair shop
ix. Accounting and tax service
x. Business franchise services
xi. Car wash
xii. Banking/Forex/Bureaux Security.

2. Size: The size of the enterprise may also be used for it’s classification. Worldwide, this type of classification depends on either/both of the capital employed or the number of staff engaged by the enterprise. Below are the definitions adopted by the Federal Republic of Nigeria:

i. Micro/Cottage industries: are defined as those whose total investment cost does not exceed one million and five hundred thousand naira (N1,500,000.00) including working capital but exclusive of land. The workforce is not more than 10.

ii. Small Scale industries: are defined as those with total investment of between fifty million (N50,000,000.00) and two hundred million (N200,000,000.00) naira excluding land, but including working capital; and/or labour force of between 101 and 300 workers.

iii. Large Scale industries: are defined as those with a total investment of over two hundred million naira (N200,000,000.00) excluding land but including working capital; and/or labour force of over 300 workers.

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