The aspirations of various people are to be successful in their engagements and be self-employed, especially after completing their studies. This paper analyses the various challenges and rewards that entrepreneurs face in their business ventures. It provides measures and methods that any entrepreneur, who wishes to be successful, must undertake. The business world is riddled with various risks and competitive forces, which to a large extent determine the capability of a business to succeed. How one identifies and mitigates these risks determine the realization of set goals and objectives in an entrepreneurship. It also helps in establishing the competitiveness of an enterprise over the others. This paper focuses on these realities using information got from a successful grocer. The paper explores various challenges that entrepreneurs face, especially when they are in the formative stages of setting and developing their business.
The establishment and growth of La Canasta grocery
Nurturing the idea
When one intends to come up with an entrepreneurship business, he must have an idea in the mind, which he intends to transform into reality. This is due to the desire to be self-employed and be in charge of one’s business as opposed to being in formal employment, where one is guaranteed a particular amount of income every month. There are situations, where one may not feel compensated for the effort he is putting at the workplace, but for an entrepreneur reward is imminent based on the amount of effort that one puts in. This flexibility allows an entrepreneur to gather market information, such as commodity prices and customer tastes and preferences. This information helps in the establishment of a successful venture taking into account established competitors who have large business networks and customer bases. La Canasta grocery started with a single line of products, but over time the proprietor was able to accumulate resources and expand the business resulting to more income. Personal desire to succeed and ability to turn challenges to opportunities is vital for any entrepreneur. It is this ingenuity and business acumen that makes one identify his market niche, which he exploits.
An entrepreneur makes all the decisions concerning his business without any interference. They enjoy great independence in formulating and implementing business decisions. This allows any entrepreneur to explore opportunities that exist in the business field without limitations. It offers one the opportunity to realize gains in a short time compared to a person who is in employment, since there is no time wasted seeking approvals of any business plan or idea. The formulation and adoption of these personal business decisions comes with various risks and pitfalls, which can either make the business prosper or fail. One must have an ability to read the changes in customers’ moods, attitudes and perceptions towards particular products. These changes are even more sophisticated in the current era of information technology, where information on any consumer product is readily available at minimum costs.
Risk identity and avoidance
The business venture chosen by an entrepreneur must pose fewer risks and should be less susceptible to competitive behavior from rival enterprises (Smith, 2010). Lower risks enable the business attract financing from financial entities like banks at a much lower cost. These institutions normally look at the viability of a business and its potential to repay the advanced amounts together with accrued interest. La Canasta grocery was able to attract financing, which enabled its expansion and investment in more product and equipment that enhanced product quality. Mr. Garcia, the owner, was able to buy coolers, which preserved his products and ensured that quality was maintained.
It is also imperative for any entrepreneur to identify and establish his supply chain network. He must establish other players in the industry, whom he can collaborate with, in order to reduce the costs of doing business. Small businesses normally suffer increased operational costs that are passed on to them by members of their supply chains such as distributors. They pass their costs of distribution to these small businesses that in turn are forced to increase their commodity prices in order to realize profits. Entrepreneurs should seek to integrate both forward and backward in order to reduce these costs and increase their profitability. They can consider entering agreements with producers of goods and services. This eliminates the prevalence of middlemen who normally charge highly for their services, thereby raising product costs and increasing the costs of doing business. Mr. Garcia cites the increase in supplier costs as a major hindrance to the growth of business (Garcia, personal communication, 2012). This is because high product prices always limit the sales volumes and profitability. It is even worse when you are trading in perishable goods like Mr. Garcia.
An entrepreneur who identifies his market niche properly is assured of continuous growth due to developed customer loyalty. Many customers will always like identifying with the business. Loyal customers always refer others to the business, and in this way a business expands greatly. This is enhanced by the entrepreneurial ability coupled with proper managerial effectiveness of the owner. Such operators of businesses always ensure that there is enough stock within their premises to cater for various customer needs. Availability of stock is one sure way of enhancing customer retention, which in the long run leads to loyalty.
An impeccable benefit of venturing into entrepreneurship is that it accords one an opportunity to realize his vision in a more proactive way, than when one is in employment. One utilizes his thoughts and is able to follow his passion more systematically. However, the main challenge is that entrepreneurship tests the patience of a businessman in a great way. One normally goes through rough patches as he familiarizes himself with the market dynamics of his area of specialization. This can take longer than anticipated and if one is not strong in his will, there is high possibility of pulling out. Once the business picks up, the operator has an opportunity to realize anticipated goals more competitively.
The main aim why anyone should venture into entrepreneurship is to experience freedom and exercise personal decisions without interference. This can be challenging to any starter, especially when the venture that one is entering to is not new. Existing operators will seek to protect their market from new rivals. They mainly engage in activities that seek to protect their respective market share. One must be prepared psychologically and also financially in order to cope with these competitive pressures, which are most intense at the formative stages of business. An entrepreneur must carry out a market survey in order to identify potential risks and opportunities that exist in the area of interest. Identification of these risks helps in evaluating the cost effectiveness of a business venture hence making strategic choices. One has an informed view of the customer segment he serves and, therefore, well positioned to identify their tastes and preferences. Customer attributes, such as the levels of income, age structure, beliefs and attitudes are crucial characteristics of any market. Knowledge of these characteristics enables an entrepreneur to make optimal choices of products and services that he is going to provide to these consumers. This contributes greatly to growth of a business due to its ability to adapt to its market.