Before we can discuss managing your small business, let us define what we mean by management, small business and entrepreneurship. Furthermore, we shall look at who starts a small business and how. We shall further discuss the benefits of entrepreneurship.
What is management and small business?
Management is coordinating the business's limited resources in order to achieve specific goals (e.g. the owner buys a new machine that makes coffee faster and saves on labor).
A small business is an independently owned and operated company that is limited in size and in revenue depending on the industry according to Your dictionary, (2016:1). A small business employs less than 500 employees.
Who starts a small business and how?
According to Scarborough, (2012:4) an entrepreneur is one who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on those opportunities.
Holt, (1992:7) defines entrepreneurship as the dynamic process of creating incremental wealth. Individuals create this wealth by assuming the major risks in terms of equity, time, and or career commitment of providing value for some product or service. So the product or service may either be a new one or not new. However, somehow there must be added value by the entrepreneur as he secures and allocates the required resources and skills.
Entrepreneurship is the process of creating something different, with value, by devoting necessary time and effort, by assuming the accompanying financial, psychological, and social risks, and receiving the resulting rewards of monetary and personal satisfaction according to Bowen and Hisrich, (1986).
So we can see that entrepreneurs start small businesses. That does not mean that there is no entrepreneurship in big businesses. Introducing innovative products in big businesses requires an entrepreneurship spirit. So entrepreneurship is not limited to starting new small businesses. Businesses are started by entrepreneurs as they pursue their dreams. They use their skills of creativity and innovation to take advantage of opportunities and overcome threats presented by the business environment.
What are the benefits of entrepreneurship?
According to Zimmerer and Scarborough (2005:6) the benefits of entrepreneurship are as follows:
1) Opportunity to create your own destiny
As an entrepreneur, you attain independence as well as the opportunity to achieve what is important to you. It must be stated however, that this requires effort.
2) You have an opportunity to make a difference
You combine your concerns for social issues with the desire to earn a good living. Impacting your communities in a great way is possible as you meet the needs of your society.
3) Opportunity to reach your full potential
As an entrepreneur, you can use the business as an instrument to self-expression and self-actualization. You can do what you enjoy doing. Your dreams are unlimited. You are the only one who can limit reaching your business potential.
4) You can reap impressive profits
The motivation of an entrepreneur is the potential of earning profits. As long as you are able to add value and reduce costs as much as possible in your business, you can earn good profits.
5) Contribution to society and recognition for your effort
Anyone who desires to own a small business can do so. Success will be possible if you want to provide added value to people. Adding that value in business is termed as entrepreneurship. There are many advantages to it. This requires effort on your part and the love for what you do.