A
variety of factors influence entrepreneurial success or failure. Mare (1996)
identified both external and internal factors that play a role in business
success. The external factors include the economic climate, the social and
socio-economic environment, politico-legal aspects as well as the international
climate. Internal factors are those aspects within the immediate environment of
the enterprise,
which concern entrepreneurs and include experience, managerial
skills, business philosophy and planning ability. Prospective entrepreneurs
will constantly have to take note of both the external and internal factors to
plan and maintain entrepreneurial success.
The entrepreneur generally has no
control over external factors and can in most cases only take limited
precautions to restrict negative influences. It is however very important to
take cognizance of these factors to establish whether the climate is conducive
for entrepreneurial activity. Entrepreneurs find the limited control they have
over external factors frustrating because it is in direct opposition to their
need to be in control. In terms of the economic climate, a free market system
is generally considered as a prerequisite for a favourable climate but however
does not guarantee either economic growth or successful entrepreneurship.
Furthermore, an economic recession, high inflation rates and a strict long term
monetary policy can be detrimental to the advancement of entrepreneurship. In
addition the influence of high standards, legal restrictions and bureaucracy
can also hamper economic development and suppress entrepreneurial initiative.
The demographic environment, in which
the entrepreneur resides, has a great influence on the nature of the enterprise
that can be considered. The available consumable income of the community also
plays an important role in determining the viability of an enterprise.
Furthermore, cultural and ethnic differences should also be taken into account
when planning entrepreneurial activity. It can thus be concluded that it is
important to evaluate the socio-economic standards and needs of the community
to establish the feasibility of a proposed business enterprise. Furthermore,
prompt action and the ability to adapt to the changing needs and circumstances
of the community are important in ensuring entrepreneurial success.
It is also important for entrepreneurs
to be accustomed with legislation and they should be at least be conversant on
the basic understanding of the laws that affect the business. This would ensure
that entrepreneurs do not engage in illegal activities.
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