Evolution of Entrepreneurship and Its Stages

Study Notes

Marco Polo, early period example, signed contract with venture capitalist to sell goods. Profits shared.
Middle Ages, entrepreneur managed large projects using provided resources. Clerics oversaw castles, cathedrals.
17th Century, entrepreneurs contracted with government to provide goods. Risk involved, small profits. Cantillon's theory, entrepreneur is risk-taker.
18th and 19th Centuries, industrialization led to differentiation between capitalists and entrepreneurs, (capitalist provided funding for inventions.)
20th Century, entrepreneurs viewed as organizers and operators for personal gain, taking calculated risks, with skills, plans, leading operations. Loss and gains are owned.

Identifying an Opportunity: Start with a business idea or from external sources like consumers, business associates, members of distribution systems, consultants. Customers are best source for new venture ideas about products.
Evaluation of Opportunity: Whichever capital is invested determines profit. Assess necessary time and effort to succeed. An overall opportunity assessment plan (for short-term opportunity) includes description of product, agreement of opportunity, entrepreneur and team assessment, resources, capital needed, and expected profit.
Preparing a Business Plan: Achieve opportunity via well-defined business plan. Plan should include title, table of contents, executive summary, business, industry, technology, financial, organizational, production, marketing, and distribution plans, and summary of plan.
Determining and Organizing the Plan: Starts with assessment of present resources. Care must be taken not to underestimate required resources. Risk with insufficient/incorrect resources to be calculated. Sources of supply, manufacturing process etc. must be planned.
Management of Enterprise: After resources are acquired, entrepreneur implement business plan. Growing enterprise's problems need to be addressed. This requires management with planning, organizing, staffing, directing, and controlling functions.

Raw Materials: Non-availability or competitive pricing of raw materials is an impediment to growth. Alternatives can worsen the issue.
Labor: Skilled labor is in short supply, leading to lack of competent employees. This impacts business growth.

Machinery: Current technology can render good machines obsolete quickly.
Investment: Necessary investment for machinery can be difficult to secure, often a challenge for small businesses.
Land and Building: Acquiring land/building is costly often forcing businesses to rent versus outright purchase.

Adequate Infrastructure: Businesses need reliable power, roads, water, and drainage. Such support often comes from development agencies with bureaucratic processes.

Capital/Funds: Capital is essential for business success. Numerous sources exist (savings, loans, investors).
Payment Delays: Payment delays from financiers can delay business start-up and operations.

Lack of Confidence: Many doubt their capabilities to start and run a business, dismissing the idea.
Lack of Dependability: Entrepreneurs might prefer trial and error over outside support or advice.
Lack of Motivation: Enthusiasm can wane in the face of business challenges and losses.
Lack of Patience: Desire for quick success can hinder progress, leading to disinterest in case of challenges.
Inability to Dream: Vision loss or complacency with existing achievements hinders future growth of business.
Sense of Pride/Embarrassment: Excessive pride or embarrassment can prevent seeking necessary support.

Societal Constraints: Societal perceptions and preferences for employment can hinder entrepreneurial pursuits. Conformity and security mindset also discourages entrepreneurship.