Running Head: Entrepreneurship sample essay
Entrepreneurship refers to the process or practice of starting and creating a new business venture or rather an economic opportunity in response to identified needs and problems with the aim of offering new solutions. This can be done either by one individual or by many individuals coming together to form a partnership (Parker 2004). we are going to study small businesses and small restaurants in Southern Florida specifically.
Our case study is the Guanabana Restaurant as an example of a mid size business and Tommy’s Italian Restaurant as a small business enterprise. These are successful small businesses that grew out of entrepreneurship of the owners. The businesses provide cuisines, main dishes, fast food and take away services. They also offer lodgings to travellers. They also have special provisions for couples. To start these businesses, there are several factors that motivated the owners.
These businesses are located close to the beaches and Miami. Miami is a location that receives many tourists both local and international. The entrepreneurs assessed the market and identified the need of a place that would offer meal services to the locals and visitors of Miami. They also saw the need for lodging places for the tourists who came from far away places. The fact that there was possibility of a ready market motivated these owners to start up the businesses.
The state of Florida has structures that encourage entrepreneurship. It has established systems that fund small businesses. These motivated the owners as it provided a source of capital that was needed to start the business (Long 1983). They took loans as they needed a substantial amount of money to set up the restaurants. This is in terms of obtaining the necessary documents, employ people and buy equipment, pay rent and generally start the operation of the restaurants.
To be able to start these businesses, the entrepreneurs developed a passion for business. Knowing what they wanted was a driving force for these entrepreneurs. This passion did not allow them to give up hence they were able to face challenges that came their way positively and are now able to achieve their set goals. They see the big picture of their task and focus on achieving it. To start the business and remain in business, the owners of these businesses had the intrinsic motivation.
They have the strong desire to continue doing what they do because it is satisfying, challenging and exciting. This intrinsic motivation enabled them to take the risk to invest in these businesses. The desire to make money and be self employed and self reliant was the biggest a motivator to these entrepreneurs (Parker 2004). These entrepreneurs wanted to make money for themselves and be rich. They looked at other entrepreneurs who had made it in the business and wanted to be like them. Having these role models was also a contributing factor for them to start the businesses.
The Guanabana Restaurant has about fifty employees while Tommy’s Italian Restaurant employees up to about twenty employees. In both cases the employees work on shifts so that the services can be provided to the customers any time of the night. The owners have insured the restaurants against burglary and fires so that they will be safe in the event that an accident happens.
Their main competitors are Nino’s Pestaurant Pizzeria, Romeo’s Cafe and portobelio Restaurant. They also face competition from the bigger restaurants such as Nine One Five and Cafe prima Posta. The entrepreneurs train their employees lean operation methods so that the business can bring in more revenues. They aim at reducing the cost of operation while at the same time not compromising on the quality of the services offered to their customers (Guanabana Restaurant).
The entrepreneurs take several steps to remain successful in their businesses. The entrepreneurs do planning and management of the businesses operations and any projects associated with the business. They take the responsibility of managing the businesses. They come up with strategies that will enable them to use the available resources in a way that will reduce wasting cost of operation so as to maximise on the profits while at the same time not compromising on the quality of the services.
The entrepreneurs also face risks that arise in the operation of their businesses. They prepare for uncertainties and future risks by insuring the businesses. The entrepreneurs have also taken the Limited Liability Company policy so that debts caused by other businesses and any damages that arise from law suits are covered by the policy provider. This relieves them of any personal liabilities that are not from within the business. Insurance and taking the LLC enables them to be safe in case of uncertainties such as of burglaries and fires. They also lay down strategies that would help them deal with the risks that cannot be insured such as competition or economic uncertainties.
These entrepreneurs also give rewards to their employees for work well done. They do this through promotions and salary increases all in accordance with the businesses vision and goals so as to increase the employee’s commitment and efficiency in their chores. To increase the sales of their services and products, the entrepreneurs take the responsibility of marketing and advertising the restaurants so that people can be aware of their existence.
The entrepreneurs have also been successful by delegating lesser tasks that do not require their presence to their juniors. They have trained their employees in such a way that they can handle some of the issues and problems that could arise in the absence of the owners or in the event that the owners are occupied and busy. This has enabled them to create time for other activities that would expand the businesses and enable them to make more profits.
The entrepreneurs have had to be creative and innovative so as to face the challenges that arise in their businesses and be successful. They also encourage their employees to do the same by having regular meetings with them and responding to their suggestions of solutions to problems or ideas on how to improve the services they offer. Involving the employees motivates and gives them a sense of ownership. Innovation involves utilizing the existing inventions and discoveries to come up with new products and ideas that have economic benefits. Innovation keeps the businesses competitive as they are able to solve most of their challenges (Townroe & Mallalieu 1993).
The businesses however face some challenges. Some of the problems faced by the entrepreneurs during the early stages before the business picked up and stabilised are many. Lack of mentors who would give them advice and guidance on the business venture they wanted to invest in was a major problem.
The lack of access to first hand information on how to run the business ventures made it hard for the businesses to pick up ( Larsson et al., 2003). Lack of adequate capital also is a problem to these small businesses. Sometimes they need to buy equipment that is crucial to the business especially one that uses new technology. Most of the time they are not able to do so because as they lack enough funds. Usually they need loans which are hard to acquire as the small businesses do not have the adequate security that is needed by the lenders (Hindle & Rushworth 2002).
Running a restaurant business requires qualified and experienced employees. The challenge faced by the owners is that they are not able to find this kind of employees and when they find, it is not easy to keep them. This is because most employees seek to be provided with benefits and be paid just like the large scale organizations do. The small businesses are not in a position to pay as much as the large scale businesses do hence lose their employees within a very short time. This high turnover is not good for the businesses as they usually have to spend a lot of resources to recruit and train new employees every now and then the aspect of competition also is a problem to these small businesses (Casson 2005).
This becomes a major problem especially when the competition is from a big business. This becomes a major threat to the small businesses because the big businesses have the advantage of having more resources in terms of money can easily take control of the market. They can manipulate the market and win over the customers by employing new technologies, employing experienced workers, producing a variety of products which the small businesses can not afford to do due to lack of adequate finances.
There are regulations set up by the state and federal governments which they have to comply to. All public utility service providers and eating places need health and safety inspections in addition to permits and licenses to operate. Obtaining these documents is very expensive for small businesses. The entrepreneurs have to take time off work to attend to this issues which are mandatory for their operation. This is seen as wasted time which would have been used to perform some task that would increase the businesses’ productivity.
Research has also shown that small businesses have higher annual regulatory burden per employee as compared to large scale businesses that have large numbers of employees. The small businesses owners in Miami and any where else have no control over economic conditions. Fluctuations such as those in the dollar rate, wars or general insecurity such as the one caused by terrorists which affected the number of tourists coming to Miami adversely affected these businesses. The sales are low during such times and they even are threatened to close down. These economic uncertainties usually have great impact on these small businesses.
These small businesses have problems with staying to date with technology. There always are developments in technology keeping pace requires a lot of financial resources which these small businesses do not have. They hence lag behind and the chances of them remaining competitive in offering services to the market reduce. New technology is also associated with increasing the quality of the products. Lack of up dated technology has therefore reduced the quality of the services offered by these businesses hence reduction in sales.
Casson, M. (2005). Entrepreneurship and the Theory of the Firm. Journal of Economic Behavior & Organization, 58 (2), pp. 327-348
Hindle, K. and S. Rushworth. (2002). Entrepreneurship: A Policy Primer, Queensland
Larsson, E., L. Hedelin, et al. (2003). “Influence of Expert Advice on Expansion Goals of Small Businesses in Rural Sweden. ”Journal of Small Business Management 41(2): 205-212
Long, W. (1983). The meaning of entrepreneurship. American Journal of Small Business, 8(2), 47-59. (c971086)
Parker C. Simon. (2004). The Economics of Self-employment and Entrepreneurship. University Press. Pg. 5
Townroe, P. and K. Mallalieu (1993). Founding a New Business in the Countryside: Small Firms in Urban and Rural Locations. J. Curran and D. Storey. London, Routledge.
Guanabana Restaurant. Retrieved 26 March 2009.
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