In the United States of America which is the largest economy in the world, entrepreneurship is responsible for the creation of over 60% of the jobs in the market. The US government recognizes the entrepreneurial ventures as a critical success factor in the country in the strength and the recovery of the economy that leads to a sustainable future. The government also believes that the small business ventures improve the country’s competitiveness on a global scale. This lead the US government to develop incentives such as tax cuts, subsidies and ease of acquiring financial resources aimed at this sector in order to improve its services.
In comparison to other countries that have developed in the past years such as china, the rapid development of this country has been largely spiraled due to the removal of bureaucracy, financial limits and ownership limits on entrepreneurial ventures initiated by the Chinese. These small and medium enterprises in the various sectors such as IT, financial sector and the retail sector are also responsible for the rapid growth of some countries such as Brazil and India.
The efficient management of entrepreneurial ventures has a lot of benefits to the economy. This management may be guided by the skills, resources, vision and resources available to the entrepreneur. The benefits associated with entrepreneurship are job opportunities creation, diversification of the economy, equitable distribution of the resources and income, rural development, mobilization of domestic savings for investment, adoption of new technology, development of new skills and the development of the economy towards sustainable development.
Nigeria is a country that is endowed with a diverse number of natural resources such as minerals and a highly skilled work force. Despite this, the country is faced with a number of challenges. The unemployment rate is pegged at 6% and still growing day after day and many of the skilled workforces are underemployed. Currently in Nigeria, the oil industry is the major economic driver; the oil industry generates over 80% of the foreign exchange earnings and contributes about a half of the country’s GDP. The workforce of Nigeria is also growing at a rate of 2.5% and is estimated to be at 47 million and growing. The overdependence of the economy on oil leaves the country vulnerable in the long run due to price fluctuations in the international market. Such economic realties necessitate the need to diversify the economy from the oil sector, commercial sectors and the industrial sectors into others. This will create more employment opportunities that will absorb more of the workforce leading to a decrease in the unemployment levels in the country.
Why Many Nigerian Entrepreneurs Diversify
There are various reasons that have been put forward by countless experienced business coaches and specialists as to why individuals venture into the world of entrepreneurship in the Nigeria. The majority of the entrepreneurs desire to succeed and get out of poverty or unemployment. They end up taking up entrepreneurial activities with a lot of zeal in order to achieve financial success and power. The key consideration that will lead to the success of the business is giving 100% undivided attention to the business. Majority of the successful entrepreneurs have succeeded through this. The over dependence on the oil sector and the conflict that is experienced in the Nigerian oil delta puts doubt on the sustainability of the industry in the economic and political stability of the country.
Aspects that guide Entrepreneurs to failure
Regardless of many grievances about the tribulations faced by entrepreneurs in Nigeria in establishing and running of business enterprises, some entrepreneurships convert into dreadful reputes. Consequently, it is very imperative to find out information regarding the causes of failure among entrepreneurs. They include:
* A number of entrepreneurs consume the business investment capital instead of the profits; this makes the business have less capital base which affects the venture and may end up in closure. This is attributed to the fact that the entrepreneurs are so quick in changing their lifestyle status as soon as the business starts making some profit.
* The need to enrich them faster is the primary reason as to why many Nigerian entrepreneurs seek to venture into entrepreneurship. This makes them unnecessary risks that may lead into failure since it distorts the reality of the business.
* Many Nigerian entrepreneurial ventures are also affected by the personal failures of the entrepreneurs. This is experienced mainly in the management of the workforce. Other factors such as the mismanagement of funds, poor business management skills have been identified to be the main reasons why most businesses fail in Nigeria. This was found to cause about 30-35% of many business failures.
* The disparity between the access to funds and the knowledge of running is one of the reasons that lead to failure. This is due to the fact that many owners who have the capital to initiate the businesses do not have the necessary expertise to run the business efficiently and most of the time the business ends up in failure due to interruptions from the owner who insists of becoming the manager. The government of Nigeria should take this into consideration and tackle these issues for the success of the entrepreneurs in the country.
* Many of the Nigerian entrepreneurs want to prove that they are successful in entrepreneurship and outshine others. This aspiration to impress others is potentially suicidal to the entrepreneur as well as the business venture. Entrepreneurship is mainly a self-gratification project and the entrepreneur should be pleased with their achievement and neglect the applause other accord the enterprise.
* Nigerian businessmen want the business enterprises to be significant lasting through various seasons and hope that the demand for their products is constant. This may cause them to over commit in multiple events in order to maintain this. This can be detrimental to the venture. An entrepreneur should identify one opportunity that will offer the required returns and devote to that opportunity.