What Key Factors Influence Entrepreneurship And Business Growth? Ideas For Researchers

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By: Site Engineer, Staff

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Many researchers have been engaged in the quest to explore more on what makes some entrepreneurs create a successful new business. The focus has been placed seriously on the characteristics of the entrepreneur, the life-path circumstances of individuals that might influence them in becoming entrepreneurs.

Also, they equally examined certain environmental factors that might encourage entrepreneurship and the perceptions of the desirability and feasibility of becoming an entrepreneur, which also seems to affect the decision to engage in entrepreneurship activities.

We are going to look into these factors one by one.

Personal Characteristics

Research on the background characteristics of entrepreneurs focused mainly on the childhood family environment, which considers issues like birth occupations of the parents. Another focus of inquiry has been the level of entrepreneurs’ education, which in most cases, entrepreneurs tend to be better educated than the general population.

However, in developing countries, there is a wide variation in educational attainments, with some entrepreneurs lacking in higher school education while others having university degrees.

Also, age has been another variable of interest in explaining’ entrepreneurial activity, though individuals are more likely to become entrepreneurs between the ages of 22 and 35, some do so across a wider span-more like individuals can become entrepreneurs before the age of 20 but such endeavors are less likely because these individuals do not have the education, experience, and financial resources needed to create new ventures.

By mid-50s, reduced energy and physical problems can impede some though certainly not all would be entrepreneurs.

There is evidence that work history and related experience are important factors in starting up a new enterprise. Several studies indicate that ventures, at least one of the company founders had previously worked in the same industry as the new ventures seem to become easier after the first one, giving rise to the corridor principle.

The corridor principle states that the process of beginning a new venture helps entrepreneurs visualize other opportunities that they could not envision or take advantage of until they started the initial venture.

Life-Path Circumstance

There are some life-path, or individual, circumstances that seem to increase the probability of one becoming an entrepreneur.

The four major types of circumstances are:

  • Negative displacement
  • Unsatisfactory work environment
  • Presence of positive pull influences
  • Career transition point

Negative displacement, or disruption, occurs when circumstances in a person’s life situation cause the person to make major changes in lifestyle. Factors in this category include being fired, getting a divorce, becoming widowed, reaching middle age, or emigrating from another country, etc.

The unsatisfactory work environment is a job situation characterized by circumstances like work dissatisfaction, employer’s refusal to recognize the value of initiative ideas, which may impel the worker to think about leaving and forming or starting a new venture.

Career transition points are circumstances in which an individual is moving between one type of career-related activity and another. Such points are completing studies being discharged from military service, finishing a major project, or having children leave home.

Positive pull influences are individuals, such as mentors, investor, customers, or potential partners, who urge an individual to start a business.

Favorable Environmental Conditions

A lot of environmental conditions appear to influence entrepreneurs. Normally, they deal with the basic prerequisites of running a business, such as a technically skilled labor force, adequate financing, accessibility of suppliers, accessibility of customers or new markets, availability of land or facilities, availability of supporting services and accessibility of transportation. Other, more indirect conditions provide support as well, such as the presence of experienced entrepreneurs and incubator organizations, government influences, the proximity of universities, attitude of the areas, population, and living conditions.

An incubator is an organization whose purpose is to nurture new ventures in their very early stages by providing space (usually at a site housing other new venture as well), stimulation, support, and a variety of basic service, often at reduced fees. The idea is to help the new ventures during their first 2 or 3 years or so until they have grown enough up to maturity stage and join the normal business world.

Perception of Desirability and Feasibility

Energizing when personal characteristic, life-path circumstances, and/or environmental conditions are either pushing or pulling individual toward entrepreneurship, such individuals are still unlikely to take action unless another element is present, and they must perceive entrepreneurship as both desirable and feasible.

Some factors that influence desirability are related to the personal characteristics mentioned earlier, such as family members who have owned their own business and/or who encourage independence.

Even with perceived desirability, would be entrepreneurs must also make an assessment of the feasibility of creating a new enterprise, while personal characteristics and life-path, environmental conditions are an important aspect of feasibility assessment.

Conclusively, the factors influencing entrepreneurship which we explained in this article are not exhaustive but varied.

 

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