HSMU 215_MODULE I.docx

**HSMU 215: HEALTHCARE ENTREPRENEURSHIP** LESSON ONE ========== INTRODUCTION TO ENTREPRENEURIAL THEORY ====================================== 1.1 Entrepreneurship -------------------- Entrepreneurship is **[both the study of how new businesses are created]** as well as the **[actual process of s...

**HSMU 215: HEALTHCARE ENTREPRENEURSHIP** LESSON ONE ========== INTRODUCTION TO ENTREPRENEURIAL THEORY ====================================== 1.1 Entrepreneurship -------------------- Entrepreneurship is **[both the study of how new businesses are created]** as well as the **[actual process of starting a new business]**. The people who create these **businesses are called [entrepreneurs]** **A Sole proprietorship Entrepreneurship.** A sole proprietorship is one type of entrepreneurship. Entrepreneur is a broader term meaning someone who begins and **[owns one or more business ventures.]** [**A sole proprietor is an entrepreneur.**] A sole proprietor takes on major risks in an effort to generate a business profit on his own. **However, an entrepreneur is not always classified as a sole proprietor.** In some cases, entrepreneurs choose to organize themselves into partnerships, limited liability company, or LLC, members or corporate entities. An entrepreneur might also invest in companies that he does not personally own or participate in, whereas a sole proprietor is actively involved in the company. Entrepreneurs also often have more ambitious goals compared to sole proprietors ### 1.2 Advantages of Entrepreneurship **1. It gives a great amount of freedom.** If you are working for a boss and a company, you need to meet all their requirements and only have very little freedom on the job. On the other hand, if you start your own business, you will be able to make your own demands and set your own schedule. You dictate everything you do, giving you a level of freedom that you will not see when you are employed. **2. It can be exciting.** Entrepreneurship can be very exciting, with many entrepreneurs considering their ventures highly enjoyable. Every day will be filled with new opportunities to challenge your determination, skills and abilities. **3. It allows you to set your own earnings.** Of course, you will be the one setting your own wage and making investments when you own the business. The work that you do would be for something you own, which can be a huge advantage compared to when you are working as an employee for a certain company. **4. It offers flexibility.** As an entrepreneur, you can **schedule your work hours** around other commitments, including quality time you would spend with your family. ### 1.3 Disadvantages of Entrepreneurship **1. It requires you to dedicate a huge amount of time.** One big challenge in starting your own business is the amount of time you have to dedicate to it. Remember that entrepreneurship is not easy, and for it to be successful, you have to take a level of time commitment that many people are just not willing to make. And even if you are able to enjoy flexibility in your work schedule when your venture does become successful, you will still have to dedicate a substantial amount of time to growing the business. **2. It can be difficult to compete with other businesses.** It is very important for an entrepreneur to stay competitive. This means that you have to **differentiate your business** from others in your niche in order to build a solid customer base and, finally, become profitable. **3. It does not guarantee 100% success.** Entrepreneurship would make your dreams come true, which does not often happen with traditional employment, but you need to make some sacrifices to make it happen. You should know that this type of venture does not guarantee 100% success. **4. It comes with unpredictable work schedules.** One major drawback of being an entrepreneur is that **more work and longer hours** will be required from you than being an employee. While you want to become your own boss, you must first know the amount of effort, time and investment to make your venture successful. Even though there is a lot of a reward coming from it, it also has certain downsides. 1.4 Entrepreneur ---------------- Entrepreneur is a person who is **able to identify business opportunities** and **obtain the necessary resources to initiate a successful business activity.** [1.5 Qualities of an entrepreneur] ---------------------------------------------- **1. Disciplined** These individuals are focused on making their businesses work, and eliminate any hindrances or distractions to their goals. They have overarching strategies and outline the tactics to accomplish them. Successful entrepreneurs are **disciplined enough to take steps every day toward the achievement of their objectives.** **2. Confidence** The entrepreneur does not **ask questions about whether they can succeed** or whether they are worthy of success. They are confident with the knowledge that they will make their businesses succeed. They exude that confidence in everything they do. **3. Open Minded** Entrepreneurs realize that **[every event] and [situation] is a business opportunity**. Ideas are constantly being generated about workflows and efficiency, people skills and potential new businesses. They have the ability to look at everything around them and focus it toward their goals. **4. Self Starter** Entrepreneurs know that if something needs to be done, they **[should start it themselves]**. They set the [parameters and make sure that projects follow that path.] They are proactive, not waiting for someone to give them permission. **5. Competitive (read to compete)** Many companies are formed because an entrepreneur knows that they can do a job better than another. They need to win at the sports they play and need to win at the businesses that they create. An entrepreneur will highlight their own company's track record of success. **6. Creativity (innovative) great thinker** One facet of creativity is being able to make connections between seemingly unrelated events or situations. Entrepreneurs often come up with solutions which are the synthesis of other items. They will repurpose products to market them to new industries. **7. Determination** Entrepreneurs are not thwarted by their defeats. They look at defeat as an opportunity for success. They are **determined to make all of their endeavors succeed**, so will try and try again until it does. Successful entrepreneurs do not believe that something cannot be done. **8. Strong communication skills** The entrepreneur has strong communication skills to sell the product and motivate employees. Most successful entrepreneurs know how to motivate their employees so the business grows overall. They are very good at highlighting the benefits of any situation and coaching others to their success. **9. Strong work ethic** The successful entrepreneur will often be the **first person to arrive at the office** and the **last one to leave.** They will come in on their days off to make sure that an outcome meets their expectations. Their mind is constantly on their work, whether they are in or out of the workplace. **10. Passion (love their work)** Passion is the most important trait of the successful entrepreneur. They genuinely love their work. They are willing to put in those extra hours to make the business succeed because there is a joy their business gives which goes beyond the money. The successful entrepreneur will always be reading and researching ways to make the business better. [1.6 Characteristics of Successful Entrepreneur] ------------------------------------------------------------ **i) Desire to achieve** An entrepreneur would always want to excel to successes in completion with others as well as to accomplish something **ii) Action oriented** This is exhibited by their **motivation to take action** when and where necessary. **iii) Problem solver** They have the ability to **solve problems** and make decisions which involves striving with determination. They have high drive and ability to constantly struggle to accomplish solutions for business success. **iv) Risk taker** They take moderately calculated risks, they enjoy the excitement of challenges, they do not gamble. **v) Initiative** They have the ability to generate new ideas and implement them ahead of others to be able to create competitive edge. The power or opportunity to act or take charge before others does. Proactive rather than reactive **vi) Independence** They like doing things **their own way**. Their own business fulfils their need for independence. They lile being their own boss. **vii) Positiveness** The entrepreneur approaches tasks and issues with the hope of success and not fear of failure. They are optimistic persons. **viii) Self-confidence** An entrepreneur is **confident of achieving realistic and challenging goals**, coupled with a sense of effectiveness, will ultimately contribute to the success of the venture. 1.7 Classifications of entrepreneurs ------------------------------------ Entrepreneurs are classified into different types based on different classifications as mentioned below: ### A) Classification based on the Type of Business: #### 1. Trading Entrepreneur: (intermediaries) As the name itself suggests, the trading entrepreneur **[undertake the trading activities.]** They procure the **finished products from the manufacturers and sell these to the customers directly or through a retailer.** These serve as the middlemen as wholesalers, dealers, and retailers between the manufacturers and customers. #### 2. Manufacturing Entrepreneur: The manufacturing entrepreneurs manufacture products. They identify the needs of the customers and, then, explore the resources and technology to be used to manufacture the products to satisfy the customers' needs. In other words, the manufacturing entrepreneurs convert raw materials into finished products. #### 3. Agricultural Entrepreneur: The entrepreneurs who undertake agricultural pursuits are called agricultural entrepreneurs. They cover a wide spectrum of agricultural activities like cultivation, marketing of agricultural produce, irrigation, mechanization, and technology. ### B) Classification based on the use of Technology: #### 1. Technical Entrepreneur: The entrepreneurs who establish and run **[science and technology-based industries]** are called 'technical entrepreneurs.' Speaking alternatively, **[these are the entrepreneurs who make use of science and technology in their enterprises.]** Expectedly, they use new and innovative methods of production in their enterprises. #### 2. Non-Technical Entrepreneur: Based on the use of technology, the entrepreneurs who are not technical entrepreneurs are non-technical entrepreneurs. The forte of their enterprises is not science and technology. They are concerned with the **use of alternative and imitative methods of marketing and distribution strategies to make their business survive and thrive in the competitive market.** ### C) Classification based on ownership: **1. Private Entrepreneur:** A private entrepreneur is one who as an individual sets up a business enterprise. He / she it's the sole owner of the enterprise and bears the entire risk involved in it. **2. State Entrepreneur:** When the trading or industrial venture is undertaken by the **State or the Government**, it is called 'state entrepreneur.' **3. Joint Entrepreneurs:** When **a private entrepreneur and the Government jointly** run a business enterprise, it is called 'joint entrepreneurs.' ### D) Classification based on Gender: #### 1. Men Entrepreneurs: When business enterprises are owned, managed, and controlled by men, these are called 'men entrepreneurs.' #### 2. Women Entrepreneurs: Women entrepreneurs are defined as the enterprises owned and controlled by a woman or women having a minimum financial interest of 51 per cent of the capital and giving at least 51 per cent of employment generated in the enterprises to women. ### E) Classification based on the Size of Enterprise: #### 1. Small-Scale Entrepreneur: An entrepreneur who has made investment in plant and machinery up to 20 members #### 2. Medium-Scale Entrepreneur: The entrepreneur who has made investment in plant and machinery above 50 members #### 3. Large-Scale entrepreneur: The entrepreneur who has made investment in plant and machinery more than 100 members ### F) Classification based on Clarence Danhof **Clarence Danhof (1949),** on the basis of his study of the American Agriculturist, classified entrepreneurs in the manner that at the **[initial stage of economic development]**, entrepreneurs have less initiative and drive and as economic development proceeds, they become more innovating and enthusiastic. #### 1. Innovating Entrepreneurs: Innovating entrepreneurs are one **who introduce new goods**, **inaugurate new method of production,** discover new market and reorganise the enterprise. It is important to note that such entrepreneurs can work only when a certain level of development is already achieved, and people look forward to change and improvement. #### 2. Imitative Entrepreneurs: These are characterized by readiness to adopt successful innovations inaugurated by innovating entrepreneurs. Imitative entrepreneurs **do not innovate the changes themselves**, they only imitate techniques and technology innovated by others. Such types of entrepreneurs are particularly suitable for the underdeveloped regions for bringing a mushroom drive of imitation of new combinations of factors of production already available in developed regions. #### 3. Fabian Entrepreneurs: (skeptical) Fabian entrepreneurs **[are characterized by very great caution and skepticism]** in experimenting any change in their enterprises. They imitate only when it becomes perfectly clear that failure to do so would result in a loss of the relative position in the enterprise. #### 4. Drone Entrepreneurs: (refusal) These are **[characterized by a refusal to adopt opportunities]** to make changes in production formulae even at the cost of severely reduced returns relative to other like producers. Such entrepreneurs may **even suffer from losses** but they are not ready to make changes in their existing production methods. **G) Classification based on behavioral scientists:** **1. Solo Operators:** These are the entrepreneurs **who essentially work alone** and, if needed at all, employ a few employees. In the beginning, most of the entrepreneurs start their enterprises like them. **2. Active Partners:** Active partners are those **[entrepreneurs who start/ carry on an enterprise as a joint venture]**. It is important that all of them actively participate in the operations of the business. Entrepreneurs who only **contribute funds to the enterprise** but do not actively participate in business activity are called simply 'partners'. **3. Inventors:** Such entrepreneurs with their **[competence and inventiveness invent new products]**. Their basic interest lies in research and innovative activities. **4. Challengers:** These are the **entrepreneurs who plunge into industry because of the challenges it presents**. When one challenge seems to be met, they begin to look for new challenges. **5. Buyers:** These are those entrepreneurs who do not like to **bear much risk**. Hence, in order to reduce risk involved in setting up a new enterprise, **they like to buy the ongoing one.** **6. Life-Timers:** These entrepreneurs take business **[as an integral part to their life.]** Usually, **the family enterprise** and businesses which mainly **depend on exercise of personal skill** fall in this type/category of entrepreneurs. 1.8 The top 10 challenges faced by entrepreneurs today: solved ============================================================== 1.  Cash flow management ------------------------ **The challenge:** Cash flow is essential to small business survival, yet many entrepreneurs struggle to pay the bills (let alone themselves) while they're waiting for checks to arrive. Part of the problem stems from delayed invoicing, which is common in the entrepreneurial world. You perform a job, send an invoice, then get paid (hopefully) 30 days later. In the meantime, you have to pay everything from your employees or contractors to your mortgage to your grocery bill. Waiting to get paid can make it difficult to get by -- and when a customer doesn't pay, you can risk everything. **The solution:**  Proper budgeting and planning are critical to maintaining cash flow, but even these won't always save you from stressing over bills. One way to improve cash flow is to require a down payment for your products and services. Your down payment should cover all expenses associated with a given project or sale as well as some profit for you. By requiring a down payment, you can at least rest assured you won't be left paying others' bills; by padding the down payment with some profit, you can pay your own. Another strategy for improving cash flow is to require faster invoice payments. Invoice clients within 15 days, which is half the typical invoice period. This means if a customer is late on payment you have two weeks to address it and get paid before the next month's bills are due. In addition, more and more companies are requiring immediate payment upon project completion -- and in our digital age when customers can pay invoices right from their mobile phones, it's not a stretch to request immediate payment. 2.  Hiring employees -------------------- **The challenge:** Do you know who dreads job interviews the most? It's not prospective candidates -- it's entrepreneurs. The hiring process can take several days of your time: reviewing resumes, sitting through interviews, sifting through so many unqualified candidates to find the diamonds in the rough. Then, you only hope you can offer an attractive package to get the best people on board and retain them long-term. **The solution: ** Be exclusive. Far too many help wanted ads are incredibly vague in terms of what qualifications candidates must have, what the job duties are, what days and hours will be worked, and what wages and benefits will be paid. You can save yourself a ton of time by pre-qualifying candidates through exclusive help wanted ads that are ultra-specific in what it takes to be hired at your firm, as well as what the day-to-day work entails. Approach your employee hunt the same way you would approach a customer-centric marketing campaign: through excellent targeting. 3.  Time management ------------------- **The challenge:** Time management might be the biggest problem faced by entrepreneurs, who wear many (and all) hats. If you only had more time, you could accomplish so much more! **The solution:** Make time. Like money, it doesn't grow on trees, of course, so you have to be smart about how you're spending it. 4.  Delegating tasks -------------------- **The challenge:** You know you need to delegate or outsource tasks, but it seems every time you do something gets messed up and you have to redo it anyway. **The solution:**  Find good employees (see above) and good outsourced contract help, for starters. You might have to pay a little more for it, but the savings in time (and the resulting earning potential) more than make up for it. 5.  Choosing what to sell ------------------------- **The challenge:** You know you could make a mint if you just knew what products and services to sell. You're just unsure how to pick a niche. **The solution:** Admit that you're weak in identifying prosperous niches, and delegate the task to someone who is strong in this area. 6.  Marketing strategy ---------------------- **The challenge:**  You don't know the best way to market your products and services: print, online, mobile, advertising, etc. You want to maximize your return on investment with efficient, targeted marketing that gets results. **The solution:** Again, if you're not adept at [creating marketing plans](https://www.deluxe.com/sbrc/marketing/the-simple-way-to-a-successful-marketing-strategy) and placing ads, it's a good idea to outsource your marketing strategy to someone who is. At this point, all you need is a core marketing plan: what marketing activities will you undertake to motivate purchases? Give your planner a budget and tell them to craft a plan that efficiently uses that budget to produce profits. 7.  Capital ----------- **The challenge:** You want to start or grow your business, but you have little capital to do it with. **The solution:** There are many [ways to earn funding](https://www.deluxe.com/sbrc/financial/financing-finesse-consider-funding-small-business), from traditional bank loans to family and friends to Kickstarter campaigns. You can choose these routes, certainly, but I prefer the self-fueled growth model in which you fund your own business endeavors. 8.  Strapped budget ------------------- **The challenge:** Even though cash flow is fine, it seems you never have enough in your budget to market your company to its full potential. **The solution:** Unless you're one of the *Fortune* 500 (and even if you are), every entrepreneur struggles with their budget. The key is to prioritize your marketing efforts with efficiency in mind -- spend your money where it works -- and reserve the rest for operating expenses and experimenting with other marketing methods. 9.  Business growth ------------------- **The challenge:** We're assuming you are growing, not that you can't grow, and you've come to the point at which you can't take on any more work in your current structure. **The solution:** Create new processes that focus on task delegation. Many entrepreneurs, used to wearing all the hats, find themselves in this position once they've achieved a modicum of success. Because you're doing everything, your growth halters to as top when it hits a self-imposed ceiling. 10. Self-doubt -------------- **The challenge:** An entrepreneur's life is not enviable, at least in the beginning. It's extremely easy to get discouraged when something goes wrong or when you're not growing as fast as you'd like. Self-doubt creeps in, and you feel like giving up. **The solution:** Being able to overcome self-doubt is a necessary trait for entrepreneurs. Having a good support system will help: family and friends who know your goals and support your plight, as well as an advisory board of other entrepreneurs who can objectively opine as to the direction of your business. 1.9 Self-employment, family business and small business ------------------------------------------------------- [1. Self employment ] --------------------------------- **Factors to be considered in becoming self-employment include:** a. **Opportunity cost** b. **Types of business** c. **Market** d. **Government policies** e. **Location** f. **Resources** Advantages and disadvantages of self employment ----------------------------------------------- **Advantages of self employment.** a. **Personal satisfaction** This means doing what you want with your life. It enables one to spend each working day in a job you enjoy. E.g. if you like hair dressing and beauty care, you will start your own salon, hence, personal satisfaction when a customer s pleased by your service. b. **Independence.** Independence is freedom from control of others. You are able to use your knowledge, skills and abilities as you deem fit. You have freedom of action as you can make decisions without approval of someone else. c. **Profit** The profit left after the owner enjoys all the other expenses. It enables one to control his/her own income and increases the income which is not often the case when you work for someone else. d. **Job security** Job security enables assurance of continued employment and income. Self employment persons cannot be laid off, retrenched, fired or forced to retire at a certain age. e. **Status** Self-employed person receive attention and recognition through customer contact and public exposure hence enjoy status above others. They also enjoy pride in ownership; enjoy seeing their names on buildings, vehicles, stationery, and advertisement, e.g. kuguru food processors. Community service identifies and provides needs, desires and wants of the community. Family employment provides a place of employment. Disadvantages of Self-employment -------------------------------- a. **Loss of investment capital** There is high possibility of losing your investment capital i.e. money used in starting the enterprise, hence, the problem in repaying the banks, suppliers and other persons. b. **Uncertainty** There is high possibility of uncertainty or low income even in a well established business. c. **Long hours** Many self-employed persons work fourteen or more hours a day, six or seven days a week. The owner is often the first to arrive in the business in the morning and the last to leave at night. Customers dictate the hours but not the desire of the owner. d. **Routine chores** Running your own business may involve routine jobs you do not like to do. **[2. Paid Employment]** **Paid employment** jobs are those jobs where the incumbents hold explicit (written or oral) or implicit **employment** contracts which give them a basic remuneration which is not directly dependent upon the revenue of the unit for which they work. **Advantages of Paid Employment** a. Specific/fixed responsibilities b. Steady income c. Fringe benefits d. Fixed hours of work e. More certain future f. Set span of control g. Minimal risk i. **Disadvantages of Paid Employment** a. Strict following of orders b. Set income c. Limited responsibilities d. Difficulty in implementing ideas e. Dependency on employer [3. Small Business] ------------------------------- Small businesses are privately owned corporations, partnerships, or sole proprietorships that have fewer employees and/or less annual revenue than a regular-sized business or corporation. What constitutes a **small business** varies widely around the world. Small businesses are common in many countries, depending on the economic system in operation. Typical examples include:- **convenient stores**, other **small shops** a **bakery,** **hairdresser**, **tradesmen**, **lawyers**, accountants, restaurants, guest houses, photographers, doctors, clinics, small-scale manufacturers etc. Advantages of Small Business Ownership -------------------------------------- - **Independence.** As a business owner, you're your own boss. You can't get fired. More importantly, you have the freedom to make the decisions that are crucial to your own business success. - **Lifestyle.** Owning a small business gives you certain lifestyle advantages. Because you're in charge, you decide when and where you want to work. If you want to spend more time on nonwork activities or with your family, you don't have to ask for the time off. If it's important that you be with your family all day, you might decide to run your business from your home. Given today's technology, it's relatively easy to do. Moreover, it eliminates commuting time. - **Financial rewards.** In spite of high financial risk, running your own business gives you a chance to make more money than if you were employed by someone else. You benefit from your own hard work. - **Learning opportunities.** As a business owner, you'll be involved in all aspects of your business. This situation creates numerous opportunities to gain a thorough understanding of the various business functions. - **Creative freedom and personal satisfaction.** As a business owner, you'll be able to work in a field that you really enjoy. You'll be able to put your skills and knowledge to use, and you'll gain personal satisfaction from implementing your ideas, working directly with customers, and watching your business succeed. Disadvantages of Small Business Ownership ----------------------------------------- As the little boy said when he got off his first roller-coaster ride, "I like the ups but not the downs!" Here are some of the risks you run if you want to start a small business: - **Financial risk.** The financial resources needed to start and grow a business can be extensive. You may need to commit most of your savings or even go into debt to get started. If things don't go well, you may face substantial financial loss. In addition, there's no guaranteed income. There might be times, especially in the first few years, when the business isn't generating enough cash for you to live on. - **Stress.** As a business owner, you are the business. There's a bewildering array of things to worry about---competition, employees, bills, equipment breakdowns, customer problems. As the owner, you're also responsible for the well-being of your employees. - **Time commitment.** People often start businesses so that they'll have more time to spend with their families. Unfortunately, running a business is extremely time-consuming. In theory, you have the freedom to take time off, but in reality, you may not be able to get away. - **Undesirable duties.** When you start up, you'll undoubtedly be responsible for either doing or overseeing just about everything that needs to be done. You can get bogged down in detail work that you don't enjoy. As a business owner, you'll probably have to perform some unpleasant tasks, like firing people. [4. The Family Business] ------------------------------------ A family*-*owned business may be defined as any business in which two or more family members are involved and the majority of ownership or control lies within a family. Family*-*owned businesses may be the oldest form of business organization. ### Advantages of family businesses 1. **Common values** - you and your family are likely to share the same ethos and beliefs on how things should be done. This will give you an extra sense of purpose and pride - and a competitive edge for your business. 2. **Strong commitment** - building a lasting family enterprise means you\'re more likely to put in the extra hours and effort needed to make it a success. Your family is more likely to understand that you need to take a more flexible approach to your working hours. 3. **Loyalty** - strong personal bonds mean you and family members are likely to stick together in hard times and show the determination needed for business success. 4. **Stability** - knowing you\'re building for future generations encourages the long-term thinking needed for growth and success - though it can also produce a potentially damaging inability to react to change. 5. **Decreased costs** - family members may be more willing to make financial sacrifices for the sake of the business. For example, accepting lower pay than they would get elsewhere to help the business in the longer term, or deferring wages during a cashflow crisis. You may also find you don\'t need employers\' liability insurance if you only employ close family members.  **Disadvantages of family businesses** 1. **Lack of skills or experience** -- some family businesses will appoint family members into roles that they do not have the skills or training for. This can have a negative effect on the success of the business and lead to a stressful working environment. 2. **Family conflict** -- conflict can arise in any business, but it's important to consider that disputes within a family business can become personal as the staff are working with the people closest to them. Bad feelings and resentment could destabilise the business\' operations and put your family relations at risk. 3. **Favouritism** - can you be objective when promoting staff and only promote the best person for the job whether they are a relative or not? It is important to make business decisions for business reasons, rather than personal ones. This can sometimes be difficult if family members are involved. 4. **Succession planning** -- many family business owners may find it difficult to decide who will be in charge of the business if they were to step down. The leader must determine objectively who can best take the business forward and aim to reduce the potential for future conflict - this can be a daunting decision. Disadvantage of Family Business ------------------------------- a. Many times the members clash with one another and spread to the business. b. The business tends to interfere with family matters. c. Family business end with rivalry between siblings d. Parents assume that their children also join and continue with the same. e. Families (children) wreck the business since they get more priorities than others. f. It brings stress to members e.g. wife and some siblings. Reasons for Business Failure ---------------------------- a. **Neglect** **--** which may result from bad habits, poor health, marital difficulties, complacency or laziness b. **Fraud** **--** this may be a problem in which workers are involved or owner at least fails to guide against fraud. c. **Disaster --** Entrepreneur sometimes fails to insure against disaster by not having insurance or protection of some kind against fire or burglary. d. **Lack of experience --** This is whereby the owner of a small business lack technical knowledge in their particular business. This however, tend to be part of the problem. e. **Incompetence --** Some people do not have personal skills or technical knowledge necessary to run a business. These people could employ other people as managers. f. **Lack of customers --** Part of the entrepreneur's job is to find and keep customers. Customers avoid certain businesses for a variety of reasons; i.e. poor services, indifferent attitude of employees, failure of business to settle arguments and lower prices offered elsewhere. g. **Selling on credit --** Lack of clear-cut credit policy and method of collection. h. **Unreasonable expenses --** Expenses not kept to absolute minimum level. i. **Excessive fixed assets --** Too much money is kept or tied up in buildings, land and equipment. j. **Stock-trouble --** Overstocking or buying slow moving goods can be costly k. **Location --** Poorly located businesses away from customers are not accessible. l. **Personal characteristics --** example may be immaturity, unbalanced personality and unaggressive people may interfere with the effective performance of a going concern.