Entrepreneurship is defined as the willingness or capacity that an individual or group of people have in developing, organizing and managing business ventures regardless of the risks that are involved (Kumar, 2008). Entrepreneurs are essentially individuals with excellent skills in presentation, generation of creative ideas that are likely to lead to the creation of multiple business ventures, as well as negotiating, functional and other entrepreneurial skills. According to Getz and Petersen (2004), all entrepreneurs share certain common traits including confidence, good communication and motivation skills, passion for the business venture, risk taking, self-drive, ability to work in volatile markets and visionary leadership skills. The current business environment is characterized by high competition levels between companies as they struggle to increase their market shares (Foss et al., 2013). However, entrepreneurs often see opportunities and apply their innovation and creative skills to succeed in such markets. According to Hayton et al. (2002), whereas entrepreneurs have significant interest in personal development, they also have strong interests in creating business ventures that have high potentials of succeeding. The subject of entrepreneurship has been debated by scholars and compared, as well as critically analyzed in comparison with other types of entrepreneurs in various sectors (Zhang & Dodgson, 2007). Entrepreneurs can also be classified as serial, novice and portfolio entrepreneurs (Sergey et al., 2005). This paper intends to provide an in-depth discussion of entrepreneurship. Some of the concepts to be presented include a discussion of characteristics of entrepreneurs, the importance of entrepreneurship in the current business environment and challenges that are faced by entrepreneurs. It also highlights some theories and models about entrepreneurship and their applicability in event management and will also highlight several examples from the event management industry.
Characteristics of Entrepreneurs
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One of the characteristics that define most of the entrepreneurs is their willingness to take risks. This does not necessarily mean dangerous risks but rather calculated risks by minimizing inherent risks in the undertaken venture, as well as managing the venture and focusing on the discovered opportunity (Henry & Bruin, 2011). It is crucial that entrepreneurs should be prepared to take risks owing to the fact that in some cases, new ventures are unexplored; therefore, risk taking becomes a pre-requisite (Peters et al., 2009). Based on the Carol Moore’s interpretation, risk taking is among the personal elements that influence the entrepreneurial process and leads to innovation. According to Bygrave and Zacharakis (2004), entrepreneurial traits and personal traits are interrelated as indicated in the model, which leads to a triggering event that ultimately leads to the establishment of a new venture. Serial entrepreneurship is somewhat widespread. Entrepreneurs also have the urge to exploit an opportunity that presents itself and this provides and environment for achievement (Allen, 2003). The need for achievement has also been outlined as a trait of serial entrepreneurs by Timmons and Spinelli (2007). Serial entrepreneurs have a desire to engage in challenging subsequent ventures because they apply tactics learnt from previous ventures like minimizing financial risk. Their urge to achieve leads them to overcome challenges and other risks involved with new ventures. This is unlike average businessmen who might cower from engaging in new ventures if they have an existing venture that is successful (Timmons & Spinelli, 2007). The need to achieve more is what drives them to engage in more ventures. For instance, while most small business owners are content with the status quo and are reluctant to expand their businesses, entrepreneurs are always looking for innovative ideas on how to expand their businesses.
Given that many entrepreneurs often engage in business ventures that are somewhat ambiguous, they ought to be ambitious and should not succumb to discouragement or challenges that they may face (Kumar, 2008). This requires that they have a vision of what they desire to achieve in the business, their long term and short term goals and objectives, as well as what outcomes they expect from the new venture (Bygrave & Zacharakis, 2004). The element of having a vision is also highlighted in the Carol Moore’s entrepreneurial model as a personal aspect that directly contributes to the implementation and growth of the entrepreneurship. Although multiple factors influence the success of an entrepreneurship, a significant part directly depends on the lead entrepreneur who determines the success of the new venture (Burns, 2007). The extent to which any entrepreneur is ambitious about his vision determines the outcome. For serial entrepreneurs who have implemented several enterprise before, their previous experiences form other ventures provide the individual with enough knowledge, skills and experience to avert any threats and negative impacts as much as possible (Sergey et al., 2005). For successful serial entrepreneurship, it is of essence that an entrepreneur has a vision on future growth of the business venture, as well as, profit maximization (Garcia et al., 2007).
Challenges faced by Entrepreneurs
Even though the end-results of entrepreneurial ventures may be successful, individuals with the capability of venturing into entrepreneurship are faced with several challenges. (Kumar, 2008) argues that these challenges are more pronounced in the earlier entrepreneurship stages, which are characterized by several instabilities. One of the challenges that are faced by most entrepreneurs is that there is an uncertainty of income. Given that entrepreneurs have to ensure that all the aspects of their ventures have to be in place before they can allocate funds to themselves, occasions may arise where they are left with no income for themselves (Burns, 2007). However, this challenge is likely to be overcome when the enterprise of business venture matures and gets to the intended level of returns. Another challenge that is faced by entrepreneurs is derived from the risks that are involved. If an entrepreneurship project is started without carrying out the necessary market research and cost-benefit analysis, entrepreneurs face the risk of incurring losses and in worst cases, may lose their entire investments (Zhang & Dodgson, 2007). For this reason, it is vital for entrepreneurs to reduce their exposure to risk by ensuring that they carry out an exhaustive analysis and study of their intended ventures before implementing them. Early stages of entrepreneurship may also increase the stress levels of entrepreneurs as they struggle to make it successful (Foss et al., 2013). Within the last few decades, there has been an increase in the number of people who are interested in entrepreneurship. As a result, there has been an increase growth and complexity in the field of innovation. Whilst entrepreneurs are assumed to possess innovative skills, there is also an increasing competition in the innovative world (Timmons & Spinelli, 2007). This is because an invention or innovative idea that is implemented by an entrepreneur may be overtaken by more innovative ideas in a short time. To overcome such a challenge, entrepreneurs are advised to be consistent innovators and should carry out exhaustive market research to establish the on-going trends and expectations (Henry & Bruin, 2011).
Budgeting is also among the challenges that entrepreneurs face as they implement and run their ventures (Allen, 2002). Whilst some entrepreneurs are known to prepare an exhaustive budget prior to the event taking place, there are also entrepreneurs that fail to do so. There are also cases where budgetary allocations are made very early before the actual enterprise in started. There are situations where such estimates usually end up being much less than the actual costs that are needed in starting the business because of price increases that might have taken place in the market, thus leading to cost overrides (Holl & Bohm, 2005). Other cases usually involve preparation of budgets without incorporating all major components that will be needed when starting the business, which may lead to under-allocation of funds. To avoid inconveniences that are caused by estimation of overall costs that are lower than the actual prices in the market, entrepreneurs should ensure that they frequently update themselves on market prices of the require business inputs so as to fill the gap of price differences that might exist (Dickson & Arcodia, 2010). To avoid situations where some of the major budget components of the event are omitted from the budget, a comprehensive budgetary plan must be prepared and reviewed severally to correct such issues.
Factors Affecting Entrepreneurship
There are also challenges or opportunities that are posed to entrepreneurs by virtue of their macroeconomic conditions in their regions of operation. Among the key challenges in the external business environments are political factors (Kumar, 2008). Whereas the last few years have seen a relative increase in political stability in many countries, there still exist economies whose political structures and institutions are not supportive of entrepreneurship (Henry & Bruin, 2011). Political factors mainly comprise of regulations that are formulated for businesses operating in certain countries by the government or any other authoritative political leadership body. Some of the aspects that are controlled by governments include tax policies, environmental laws, labour laws and business tariffs and restrictions (CIMA, 2007). Apart from the intervention of governments in the business environment, political factors can also relate to the political stability of a country. Whereas stable economies are reliable for business, unstable or volatile political situations may adversely affect entrepreneurship. Identifying political factors of a country can be used by entrepreneurs to formulate market entry or exit strategies (Henry, 2012).
Economic factors also directly affect entrepreneurship. Success of a entrepreneur or enterprise in any country greatly depends on the economic conditions that characterize it. These comprise of GDP and GDP growth rates, price stability (inflation), foreign exchange and interest rates, among others (Murray-Webster, 2010). Likewise, business strategies are formulated from economic conditions that prevail in an economy. For instance, if the interest rates on loans have a direct effect on an organization’s cost of capital (Williamson et al., 2013). Therefore, it affects the entrepreneur’s decisions on accessing credit facilities and expanding. Foreign exchange rates have a direct impact on companies in the import or export businesses or multinationals operating in economies that are not their home countries.
In the external business environment, social factors include aspects like culture, the size and growth rate of the population, religion and demographic aspects like age and gender distributions (Morschett et al., 2005). Social factors have an impact on demand patterns of products and services. Because companies cannot adjust the social compositions and trend in the market, the strategy that can be used is the adjustment of goods, services or management styles to match the tastes and preferences dictated by the social patterns (Lussier, 2011). For instance, if an economy’s population is highly diversified, companies should ensure that they hire an inclusive workforce (Hongjun & Yajia, 2012).
Technological factors can also facilitate or challenge entrepreneurship. These include research and development capabilities, automation of operations, communication and distribution technologies (Cadle et al., 2010). The technological aspect of the external business environment has an impact on several areas of operation in the organization and therefore is among the key areas of reference in the formulation of success strategies. Murray-Webster (2010) argues that they determine market entry barriers, innovation capabilities and also labour costs.
It has been argued by some researchers that legal factors or the external business analysis are closely related to political factors because laws and regulations are formulated by political leadership (Murray-Webster, 2010). Legal factors include laws that regulate employment, health and safety, discrimination and consumer protection. The level of maturation or of an economy’s legal systems also affects the operation of companies (Grant, 2013). For instance, legal systems that are not mature may have loopholes that allow vices like corruption and bribery, which lead to an imbalanced competitive environment for entrepreneurs, which may adversely affect their success.
Opportunities for Entrepreneurs
Even with the current status competition in the UK business environment, there are still opportunities for innovative entrepreneurs in the business to expand and strengthen their brand positions (CABI, 2009). One characteristic of entrepreneurship is that it is applicable across all industries not only in the UK, but all over the globe. However, entrepreneurs must note that to succeed in this competitive industry, they need to market themselves through implementing innovative ideas that are relevant and competitive enough in whichever industry they are targeting. In addition to this, they must also market themselves through many available avenues so as to attract a wide range of customers (Shone & Parry, 2010). The increased globalization that is taking root in the global market also provides opportunities for entrepreneurs to reach a wider global audience with their ideas. Increased competition levels across industries have cause companies to intensify their promotional activities through events to increase public awareness.
With a focus on the events’ industry, many entrepreneurial opportunities are presented. For instance, there is an increase in levels of diversity in the UK (CABI, 2009). For this reason, there are different religious, ceremonial, and cultural art events being held by member of different cultural backgrounds across the UK. These events seek services of event managers to run successfully. By either specializing in offering services for a certain cultural group of offering services across the board, event managers have a big opportunity for growth (Bratton & Gold, 2012). There is also an increase in the number of weddings, anniversary and birthday celebrations. Event companies that provide excellent services and effectively market themselves through the traditional and modern mediums have an opportunity of capturing a large market share in the UK. One of the successful companies in the UK is Theeventscompoany (Theeventscompany, 2013), which is based in the midlands and provides event services in the United Kingdom and European countries. Success of this company has been attained by providing a wide range of corporate event management services that include corporate entertainment events, company fun days, conference management, themed events and gala dinners and other promotional events. Another successful company in the UK events industry is the Absolute Perfection Wedding Consultancy, which has focused on provision of wedding event management (Absolute Perfecttion, 2013). Even with the relatively high number of event companies across the UK that increase the bargaining power of buyers, the increasing market demand provides an opportunity for new companies to enter the UK market. However, successful entry and development of a competitive edge against the current market players requires heavy investment in equipment, marketing and hiring of qualified staff members in the organization.
Creativity and Innovation in Entrepreneurship
The current business environment is characterized by several dynamics that have made organizations change their approaches to business issues. To thrive in the present day corporate environment, entrepreneurs are increasingly recognizing the need of incorporating creativity in their day-to-day activities (Cooke et al., 2012). Creativity is the process through which new ideas or alternatives for solving different issues are generated. Implementation of these ideas is referred to as innovation. According to Andriopoulos and Lowe (2000), business entities are categorized as being creative if they get their main income by generating novel ideas that are appropriate in tackling the needs of their target clients. There are several entrepreneurs whose businesses or companies have prospered by embracing creativity and creating a work environment that nurtures innovation. These companies include Google, Facebook, apple and Microsoft. Among ways in which companies are transforming towards being more creative is the elimination of hierarchical barriers that slow down the communication process and response to change. Eardley and Uden (2011) posit that hierarchical management structures are based on the notion that the management is supposed to create control, certainty and predictability. Even though bureaucracy has its advantages, the current business environment requires organizations to be flexible and ready to face unpredictable situations. This can only be achieved by encouraging creativity. As opposed to earlier times when competition between companies that offer the same service or product to clients was mostly based on price, creativity has also become an important aspect of competition. Creativity has been incorporated in advertising and other promotional techniques, product design, pricing strategies and distribution which are the key components of marketing (Slater et al., 2010). Even though creativity and innovation is essential for survival in the current business environment, there are several setbacks that are associated with it. For instance, creativity involves taking risks with no certainty of a positive outcome. This is one of the reasons that make certain organizations to stick to hierarchical structures (Andriopoulos & Dawson, 2009).
Theories in Entrepreneurship and their applicability in Event Management
Event management is the utilization of a wide range of management skills in creation, organization and development of different types of events. Events can be categorized into four major classifications. These are leisure events, personal events, cultural events and organizational events (Bratton & Gold, 2012). In order to ensure that events are successful, event managers have to consider several aspects before, during and after events. Just like other industries in the wider business environment, success in the event management business also depends on the entrepreneurial skills of the owners.
With the gradually increasing interest of researchers in the subject of entrepreneurship, several theoretical models that can be used to obtain a deeper understanding have been suggested. One of these theories is the path dependence theory (Zumbansen & Calliess, 2011). The path dependence theory states that decisions that are to be made about the choice of a product or service depend on previous experiences with it. This remains the case even when newer and improved versions of services or products are availed in the market. Path dependence results from the fact that it is easier and cost effective to continue with the use of certain products and services (an already-set path) that to create another path that is entirely new and unknown (Magnusson & Ottosson, 2009). With reference to this, entrepreneurs in the event management business need to ensure that they provide customers with satisfactory services that will make them return in case subsequent event needs. By carrying out post-event analysis, this theory is also applicable in selection of suppliers for the event company. Even though this theory holds true to a certain level, it is also true that when companies that offer better event management services enter the market, customers can shift from their original event management service suppliers. It is also argued by scholar that the historical determinisms in the path-dependence theory are prone to disruptions from that occur as a result of the dynamism in the present-day economic environment and industrial evolution (Dobusch & Kapeller, 2013).
There also the cultural dimensions’ theory that can be used in relation to entrepreneurship. According to Hofstede (2001), the institutional and cultural background of the entrepreneur determines various attributes including the ability to take risks and avid uncertainty. For instance, Hofstede’s model (1980, 2005) some cultures nurture individuals to have high uncertainty avoidance index as compared to others. This influences the willingness to take risks among managers, entrepreneurs and employees. For instance, his studies find the Chinese as being largely influenced by the Confucianism culture, which has the philosophy that what is bound to happen is inevitable; this culture is what the Chinese use to handle uncertainties. The Chinese are, therefore, not used to many rules and regulations, managers are more willing to engage in risks. In other studies Hofstede (2005) established a higher uncertainty avoidance index among the German people as compare to the British. According to Perks and Ricarda (2005), the factors of uncertainty avoidance and risk taking which are influenced by culture, affect entrepreneurship and, especially serial entrepreneurship which determines the ability to acquire new ventures and come up with new innovative business ideas.
Another theory that is relevant to entrepreneurs in the event management business is the narrative theory, which is about how effectively organizations market themselves to their target markets (Goodson, 2012). For companies to successfully appeal to their target audience, they have to say something unique about themselves in their promotions, mission statements and vision statements. For event companies, this can be achieved by mentioning their points of strength or areas of specialization (Makkonen et al., 2012). Critics of the universal theory argue that its applicability is limited to communication styles that fit classic narrative patterns (Herman et al., 2012).
The current state of dynamism that characterises the present-day business environment has increased the need of entrepreneurship. As earlier defined in the paper, an entrepreneur is an individual who has the courage and will to venture into uncertain business ventures, regardless of the risks that are presented. Based on this, there are different challenges and opportunities that entrepreneurs are faced with. This paper has discussed these challenges and opportunities, and also provided recommendations on how entrepreneurs can avoid the challenges that they are exposed to. Macroeconomic factors that affect entrepreneurship have also been discussed in this paper. This report has also provided an overview of the events management industry that has discussed and the applicability of entrepreneurial theories on the industry. Opportunities include expansion to the global markets and different avenues in which event management services are needed. Theories that can be applicable to the events industry have also been discussed in this paper. In addition to explaining their relevance to the event management industry, criticisms of these theories have also been presented. Whilst several points have been presented in this paper, future research could be beneficial to practice by establishing the gaps that exist between entrepreneurship theory and practice.
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