There has been a strong interest following entrepreneurship in the world. This is a courtesy of the challenges facing the nations that opened the opportunity for involvement in entrepreneurship. These challenges that face many nations include; economic struggles, histories of political crises, and social challenges.
Involvement in the area is expected to boost on their economies and mobilize on their masses. A lot of encouragement is seen coming from business leaders, who are initializing initiatives that purpose to motivate the youth in improving on their ideas. An entrepreneur is an individual who possesses a new venture, idea, or enterprise, and takes accountability for the outcomes and inherent risks (Diochon 2003).
In spite of the promised results in the field, there has been a good deal of disappointment for those who have gotten involved in the past. Entrepreneurship does not only bring fruitful results, but also negative outcomes for those in this area of business. This paper seeks to bring out the downsides of entrepreneurship as a business venture. Academic secondary materials were used in the determination of which problems are related to the venture.
The Downside of Entrepreneurship. Inexperienced entrepreneurs have a minute acumen in business, despite their extensive business ideas. These cause them to plunge their ideas into the market without applying the proper tools and skills of management and leadership. They may succeed in putting their ideas in the market, but this does not promise the desired results, due to lack of the needed workmanship.
For those who acquire leadership roles, lack of the required stewardship may make them poor and non-effective in leading others (Diochon 2003). For instance, a newly appointed manager to an organization may not effectively administer the proper leadership qualities for the success of the organization. This is then blamed on the little or no experience in the field, despite the qualifications for the position.
Entrepreneurship faces the challenge of individuals sidestepping the critical steps in development; hence, this is a hindrance in other cases. This is an analogy to the idea of skipping crucial stages like walking to begin with running. This shows that many of the successful entrepreneurs originate from organizations that are strong in their foundations. Their experience and qualification is significant to the business venture, thus, their success. Studies conducted to understand these issues have shown that many young individuals think that involvement in the corporate sector does not require spending time in achieving the desired skills.
They consider college education to be sufficient for one to participate in this sector. Learning more about the corporate world is essential in business competence for the involved parties (Galbraith 2006). This can be likened to a child skipping two grades because they are considered to be smart; this process, in the long run, affects the children’s social skills, as they lack a vital skill that they skipped at school. This social problem they develop is due to the intentional skipping of grades at school.
In entrepreneurship, there is the mentality of lottery tickets. This mentality revolves around the role of luck and chance. It is said that for one entrepreneur who is successful, there are (a thousand) many parties who do not attain this achievement. The interests that are launched by business leaders and the business community lure young and interested entrepreneurs into entrepreneurship, but at times, expectations end up being unrealistic (Hitt 2002).
Considering an example of candidates for a draft competition, the candidates are not all chosen for the organization drafting them. A relevant scenario is the draft process while choosing for players in the National Basketball Association; different clubs only take a few potential parties to play for them. This shows that, despite their individual efforts and interests, only a small number of them qualifies through the draft process.
There is the threat of these entrepreneurs facing business leaders who are shady and end up taking advantage of the ideas of the new entrepreneur. Although it has been recorded in small occurrences, it is a shortcoming for this sector. The act of taking advantage of these ideas is for their own interests, or because they regard themselves as powerful, hence, can easily influence these minds.
This act of stealing ideas from young entrepreneurs makes them feel used, disappointed, thereby lack the drive to perform for the firm. It is considered fraud and crime in most cases. Influencing these individuals in working or performing in accordance with their shady leader’s interests does not build the organization, thus, non-profitable (Hitt 2002). It might be influential in money making, but the long-term result is never pleasant for the firm.
There is the issue of risks in investments due to uncertainty. Successful entrepreneurs claim that, despite their admired results, there is the problem of risks. While investing in a particular area, the risks of achieving or losing are never determined. Identifying a suitable area to indulge is easy, but the difficult part is running the risk of investments.
This means that when one puts, for example, one thousand dollars into an area, he or she cannot be sure of the results. Risks arise when after one loss, the individual continues to put more cash without gaining anything. This is referred to as the gambler’s approach, where they continue to put money, while betting with hope for gains (Kent 1990).
Entrepreneurs face the problem of short terms of work. This is evident when one works for a company for some time, and is laid off after the projects are completed. Such people have to look for other jobs to work on, which do not necessarily come easy. It is prevalent for entrepreneurs in construction sectors; they leave the organizations after finishing their projects.
In search of other available jobs, a huge amount of time is lost, that could be put into good use. Research that was done by Kent showed that the average time of their employment is two years; until they build a personal firm. There has been a monumental turnover in the area of telecommunication and other technical sectors, like information technology.
It is quite difficult to work for full hours and invest in the developments around simultaneously. Leaders in the corporate sector expect that these entrepreneurs perform their duties, and also invest in developments. A recent survey on a Chief Executive Officer has suggested that the lack of competent resources is among their vast worries. They call for investments from managers and leaders, in spite of being an entrepreneur. It is, therefore, very valuable for participative involvement in investing, so as to maintain these corporate resources.
There is a risk for entrepreneurs of being affected by the Founder’s Syndrome. This is a condition that mostly affects the start-up entrepreneurs who create new entrepreneurial firms. It is characterized by high initial expectations followed by a failed result. The developer sets objectives for the firm and follows them to realization, but later on, they fail due to other unexpected factors. This leaves the creator in a condition of utter confusion combined with exceptional loss in investments (Kent 1990). The stages of changes in the individual do not seem critical, as they are regarded as adapting to the new conditions, but it causes health conditions in the eventuality.
While working in entrepreneurial firms, blame cannot be put to the leaders of business. In all proceedings of an enterprise, the loss or miscalculated events that cause negative impacts to the organizations are attributed to the entrepreneurs involved. They suffer for the loss of the firm without any pardon or probations, making the job’s inhumane. Considering that a firm fails in a new venture, the costs of its loss are directed towards the propagators of the venture. Such crude policies render this sector inconsiderate of the normal business results.
In entrepreneurship, the involved individuals must like sales and marketing. It is more of a compelling factor that all parties ought to develop this liking, regardless of their area of specialization. For an entrepreneur, whether in a managerial or leadership role, it must be conversant with the art of sales and marketing in the organization. For the firm, it creates a work force which considers selling the ideas of the firm adequately.
Another disadvantage of this corporate sector is that there has to be an establishment of a budget that should be followed strictly. This budget ensures that the organizational processes run successfully. Creating this budget is not as difficult as following its stipulations without deviations. In every firm or business activity, there come situations that need flexibility in the allocation of funds, so with the budget, this urgent matters go unattended. In spite of its purpose being positive, other areas might fail or become difficult to manage, hence, prompting termination. Flexibility, especially in expenditure issues, is crucial in an organization’s prosperity (United States 2004).
Working in entrepreneurial organizations leads one to forgetting to make goals. In these firms, goals are pivotal in establishing the success of the firms. Failure to this leaves the company without a defined route that the employees and its administration can follow in their daily activities. Working without knowing what should be achieved for the firm or individuals subjects the organization to unnecessary prioritizing that might only work momentarily for its needs. Failing to make goals is caused by the huge number of daily activities for the entrepreneurs that take up most of their time for planning.
Delayed payment by the entrepreneurs is a problem in their success. In order to run an organization that achieves its planned profits, the entrepreneurs should pay themselves in time. There is a tendency of delaying their own payment period, which translates into their poor performance in the field. The expenditure that is set to cater for salaries is later used in addressing other issues leaving them without payments. It, thereby, becomes difficult for one to claim the money in the future, thus, these funds vanish altogether (Kent 1990). Most of these individuals are unsuccessful because of this issue.
Dedication to this corporate area makes entrepreneurs ignore listening to their intuition and instincts. Intuition entails the feeling that something is true or beneficial to the organization. One cannot address areas that might bring benefits to the objectives of the firm when they focus on what is already established for them. This mostly is a result of ignoring the art of brainstorming to get new ideas that might attract consumers, hence, profitability.
Entrepreneurship allows people to work during their flexible hours. It is vital for entrepreneurs to relax for some time after working for long hours. An adjustable working schedule in this case is considered to be misleading because these hours that are taken off end up being more than the worked hours. The number of hours worked should always be more than those taken to relax and cool off.
A good number of entrepreneurs have the fear factor. They fear of failing in their business ventures, but the fact is that most of these ventures will fail rather than succeed. It is, thereby, a way of life to venture into the job area and launch projects with the hope of succeeding because without venturing there will be no gains. This is common in most developing nations that are not versatile in the field, like African nations show early failures in entrepreneurship. Creating a contingency plan is the proper approach towards solving fear within these individuals.
Entrepreneurs are affected by short-term thinking in business. This kind of thinking is common in many business cultures, where the concerned parties are interested in making fast money at that moment. For example, offering poor services to customers is a good proof of this. Customer’s satisfaction should be the main aim, so as to maintain and increase the transactions with them; poor services put them off, thus, affecting the business. All businesses are supposed to be taken as long-term projects.
In entrepreneurship competition is stiff. Many of these individuals are not ready to cope with competition. They choose to venture into monopoly because here they only deal with a particular business, hence, avoiding competition. Moguls in these businesses use their power to eliminate other organizations that prove to be a threat out of the sector (Hitt 2002). Competition is inevitable in the world of business, therefore, this demands for aggression in every endeavour. In surviving competition, firms and organizations need to venture in fields that are not common to many. For instance, in Africa, many business enterprises have failed due to competition.
Many entrepreneurial organizations focus on small markets. Hitt (2002) claims that small markets are risky in nature and do not have the potential to grow. For instance, organic food stuffs have a small market in most developing nations. Investing in areas of larger markets creates a stronger foundation before venturing into small market areas, considering that the African market does well with bar soaps than powder.
A number of entrepreneurial businesses lack integrity. While in business, it is vital for those involved to uphold trust and integrity. It is extremely difficult for any firm to be successful without having integrity. Many individuals in business break rules, in order to achieve their own goals. Dishonesty never appeals to anyone, so, working with this type of individuals proves risky. This results into a bad reputation for the entrepreneurs, hence, avoided by business houses. For instance, in most developing nations, there is a poor culture on credits, where paying off debts is extremely difficult.
Entrepreneurship lacks diversity in their ventures. Diversifying means that their business runs from trading, electronics, and pharmaceuticals. These models of activities are responsible for the success behind their organizations.
There is a need for these entrepreneurs to focus on addressing these downsides of entrepreneurship. They are to create a more appealing picture of this sector, so as to improve on the people getting involved. It is quite difficult to work for full hours and invest in the developments around simultaneously. Leaders in the corporate sector expect that these entrepreneurs perform their duties, and also invest in developments. Competition is inevitable in the world of business, therefore, this demands for aggression in every endeavour.
Investing in areas of larger markets creates a stronger foundation before venturing into small market areas. Dishonesty never appeals to anyone, so, working with this type of individuals proves risky. This results into a bad reputation for the entrepreneurs, hence, avoided by business houses. Creating a contingency plan is the proper approach towards solving fear within these individuals.