Could you be an Entrepreneur Essay Example | Topics and Well Written Essays - 2000 words

Could you be an Entrepreneur - Essay Example These people are still alive in history, in their inventions and in the hearts and minds of the people, and they continue to inspire many people. However, the dark side of entrepreneurship is that not all people make it to level where they earn a place in the history. In fact, statistics reveal that more than half of the small businesses fail in their first year of business. Furthermore, the bankruptcy fillings have been increasing over the past few years (Keister, pp. 19-23, 2005). This paper is an attempt to explore the reasons of the same. The paper would present the reasons why majority of the entrepreneurs fail to manage their growth phase and what allows entrepreneurs to do the same with effectiveness. Discussion Following are some of the reasons why entrepreneurs fail to manage their growth. Growth Strategy One of the biggest issues entrepreneurs face once they have overcome the inertia of business is the absence of a clear strategy. Most small businesses are opened based on i ntuitions, advices of colleagues, peers, family and friends, raw data, assumptions and others. Furthermore, since most entrepreneurs want to make it simple, they do not plan things extensively, and just allow things to â€Å"let happen.† Entrepreneurs prefer their business to be a rollercoaster ride rather than planning and strategizing like other businesses do (Kuratko, pp. 287, 2008). However, once they get going and enter into their growth phase, they fail to understand that the reactive approach, unplanned approach, uncalculated, intuition based strategy is less likely to work. When a firm grows, it is exposed to the market competition and other competitive forces like that of buyer power, supplier power, threat of new entrants, and threat of substitute products. When a firm grows, it catches the attention of many competitors and rivals, which had previously avoided the entrepreneur as posing no threat (Audretsch, pp. 23-43, 2002). Therefore, the point is that while growi ng, an entrepreneur has to choose a clear and well-defined growth strategy (Bygrave & Zacharakis, pp. 78-79, 2010). Now successful entrepreneurs are able to understand that there are only three types of four distinct types of growth strategies available for the firm. These are ‘penetration strategy, product development strategy, market development strategy, diversification strategy’ (Crane & Meyer, pp. 112-115, 2010). Penetration strategy calls for operating in the existing market with the existing product. The idea here is to increase the usage of customers by encouraging them to buy more of the same product. The same can be done with the help of marketing, promotional offers, little modifications in the product and others. Important here to note is that the entrepreneur would not look to target any other customers, segment or try to take away share from other competitors (Crane & Meyer, pp. 112-115, 2010). By pursuing a market development strategy, the entrepreneur tr ies to reach out new geographic, demographic, psychographic, and other markets and segments for its existing product. Moreover, it is also possible to pursue a market development strategy by communicating a new use of the product thus increasing the customer base. Successful entrepreneurs may also go for product developme