Discussion
Entrepreneurship is a field that is fast growing. Everyone is venturing into a new business every day. Others are extending the ventures to new markets every day; innovation is positively contributing to this growth in the entrepreneurship sector. Due to this, entrepreneurship has significantly contributed to the general growth of the Individual country economy as well as the world’s economy. The following are the importance of entrepreneurship and innovation.
According to (Seth , 2017) entrepreneurs play a major role in the economy. They are commonly referred to as national assets which have to be taken care of and motivated to the greatest extends possible. They greatly determine our living standards and working environments as well. With their innovative ideas, they successful change citizen’s living standards in each and every country by the creation of wealth from their business ventures. They are job creators as well, and this leads to better economic status. More importance’s are below,
Entrepreneurs are key sources of new businesses that deal with the production of new goods and services or improvement of existing ones. Due to this, entrepreneurs are linked with support for new business enterprises in which In the long run leads to economic growth. (Williams, 2003)
Entrepreneurship plays a major role in wealth generation. Innovation leads to evolution if new businesses that easily and quickly contribute to better returns compared to existing businesses which may remain confined to the scope of the preexisting markets and this may not be productive in terms of wealth and income generation. Wealth is created whereby innovative business ideas lead to the production of new and improved products and services. Technology helps in innovative business ventures that contribute to enabling new markets thus the creation of wealth. Wealthy economy, therefore, results from entrepreneurship. Moreover, entrepreneurship is a source of job opportunities to both the entrepreneur and other stakeholders that may be very necessary for that business venture to run and operate. Increased earnings due to job opportunities contribute to more national income due to the increased imposed taxes and revenues as well as very high government expenditure. This taxes and revenues collected are used by governments to help stabilize and build the struggling sectors and facilitation f human capital.
Entrepreneurship can be a key contributor to improvements In terms of quality of life, living standards and improved morale which help is achieving economic developments. This achieved through the unique ideas and innovation resulting in new goods and services. This helps entrepreneurs in breaking away from formalities and indirectly supports freedom by a reduction in terms of the levels of dependency on useful technologies and systems.
Importance of entrepreneurship and innovation to the economy and society
For instance, in the arid and semi-arid area, businessmen can be forced to suspend their business operations in order to look for water. This leads to less productivity and later reduced income. To cater for this, an innovative entrepreneur can come up with an innovative idea, say an automated , low cost and flow-based water pump that people can use to fill their tanks with water. This will help in saving the time that people used to spend while searching for water and alternatively use it for productive purposes. (Gerlach, 2014)
Entrepreneurship plays a major role in nature entrepreneurs who have an interest in the related business. Some of the innovative ideas that entrepreneurs tend to think of may lead to investment in communal projects. Entrepreneurs also play a role in economic growth through the provision of financial support to local charities. This is important in that it enables development beyond their business. For instance, famous entrepreneurs like Bill gates use their incomes and money to finance other business ideas, large income generating projects that benefit other people, education, and public health matters. (Julie, 2012)
Established and wealthy foreign countries are known to invest much in third world counties and developing countries. They, therefore, tend to dominate certain sectors of that economy in a given country. For instance, vehicle and motor assembling industry together with technology industry are sectors that foreign companies tend to venture in developing countries. With innovation and entrepreneurship concept, potential entrepreneurs can change the situation by posing competition to such business. They can come up with supplementing and complementing business which will end up reducing foreign dominance. This means that revenues and income generated will be circulating within that country economy compared to a state characterized by foreign dominance. (Julie, 2012)
One of the sole trader businesses that are profitable and thrives well in Australia is a supermarket business. Although it’s very costly to start and run a supermarket in Australia, In the long run, supermarket business has proved to be one of the most profitable businesses not only in Australia but in the entire world. The business idea is out of analysis on the growing population in urban town. The high population in urban areas is increasing demand for almost all commodities and therefore, when one invest in a supermarket, the can avail supply for the goods and services. Moreover, nowadays, people prefer to do their purchases and shopping just once in a while. This is an opportunity for one to start a supermarket and provide all sorts of goods and services within one building. Starting a supermarket is very costly and requires some financing. The following are some of the sources of finance that can be used to start and run the supermarket.
Entrepreneurs are sources of new businesses
To venture into a new business like supermarket entrepreneurs need initial capitals to run as well as funds to run their businesses. There are various sources that can be used to finance and cater to financial entrepreneurship requirements. Some of the capital sources include:
Bank credits are the most generally utilized wellspring of financing for little and medium-sized organizations. Consider the way that all banks offer distinctive differences, regardless of whether it’s customized benefit or tweaked reimbursement. It’s a smart thought to search around and discover the bank that meets your particular needs. Generally, as an entrepreneur, you should know a loaning institution is searching for organizations with a sound reputation, and that has superb credit. A good business idea isn’t sufficient; it must be supported up with a strong strategy for success. Start-up credits will likewise normally require an individual certification and guarantee from other the business people. This means in case you seek a loan from a bank or any other money lending institution; you must satisfy a requirement where other people can take up your obligation of paying that loan of your behalf in case you fail to pay for it.
Most large business and organizations like supermarket use the personal saving to venture into business. The clearest favorable position of utilizing individual investment funds to fire up or extend your business is that you give up no power over your business meaning no accruing debt in your operations and therefore if managed well the outcome as are profits. However, it is generally uncommon for an entrepreneur to have adequate individual investment funds to totally back his or her business. Individual reserve funds are regularly utilized in conjunction with different types of financing, i.e., bank credits. Brokers tend to see critical speculation of individual reserve funds as an essential sign of an entrepreneur’s promise to the business.
“Love money,” are gifts like sources from family or companions, thus is another ordinarily utilized source of business financing, especially in the start-up stage. This additionally empowers you to keep up control of your business. However, in the occasion, a business does not succeed, and advances from family and companions can’t be reimbursed, this can make critical strains on individual relationships
Government is a key source of finance that can be used to start entrepreneurship. There are several forms of government assistance that is available for potential entrepreneurs. They can be issued in the form of grants or loans at different levels of governance. In many cases, there are set criteria and processes that must be met and followed to access these funds. The government targets some industries like chain order stores and supermarkets to offer them with these grants and loans. Although they can be termed as a source of financing that can be used to start a business, anyone intending to benefit from them should be ready to invest a substantial time amount before the process is completed. Approval of grants and loans is a very slow process as a result of many review and procedures that are involved.
Entrepreneurs positively contribute towards the national income
Just like any other large business, starting a supermarket in Australia is likely to face the following challenges.
Political instability is a challenge that can negatively affect the progress and growth of the supermarket business. Political instability affects the business by creating tension among the customers. Majorly, supermarkets are mainly situated in urban areas. In future, if Australia happens to be a victim of political instability, customers will reduce their buying behavior and maybe shift to a rural area which is believed to be more secure as a way of avoiding attacks. Moreover, lack of political stability will contribute issues of supply chain and its management. Goods and services will not be easily moved to and from the supermarket. Political instability will tend to lead to the addition of administration costs, and this will result in increased prices for the goods and services which can scare away customers .this consequently leads to losses. Lastly, political stability will contribute to the exiting of the Australian nation from the trade unions. Trade unions greatly help the supermarket industry in Australia. There will be less importation and exportation of goods, and this will reduce the large pool market for goods and customers the supermarket will have been experiencing.
The social factor that may impose challenges on the supermarket business in Australia may be as a result of economic conditions that may change consumers buying behaviors or rather change the habits of consumers in terms of taste and preferences. One of the factors that may contribute negatively to reduced buying behaviors is culture change and traditions. The world today is becoming and appreciating diversity. Diversity Is a positive factor, but in some long run, it may end up affecting anyone who invests in the supermarket business. Tradition and culture tend to dictate where to make purchases and what to shop. For instance, some people may have found that, by the time they were born, their families were doing shopping at a certain shopping mall or certain supermarket company. Since it’s a tradition, they will definitely find it hard and will keep on going there for shopping. (Bloemer & Odekerken–Schröder, 2002)
In regard to this, for the case of starting a supermarket as at today, it may be challenging in future to have such customers with a loyalty tradition , whereby, you are quite sure even there coming generation still will be your customers. Moreover, social factors like social class and status may pose a challenge to the supermarket business. In this case for instance, if the supermarket is new, it tends to accommodate all levels of social classes and status as long as it’s providing quality goods and services and added advantages of differentiated products and services. After some time, things may change where you note that either that supermarket common customers are middle-level income earner or very wealthy people. This is a challenge resulting from social status, and it can even lead to the collapse of a supermarket business if not managed well.
Entrepreneurs create social change
In many cases, technological challenges that may affect the supermarket industry are as a result of innovation and creativity. To avoid such challenges, it very important that entrepreneurs in the supermarket industry keep up with these innovations as a way of providing the best level of customer satisfaction expected. We are living In a world of technology where everything is being improved on a daily basis. One of the technological innovations that may pose a challenge to stories supermarket business is the issue of Commerce and online business. Almost everything is being done online. The supermarket industry is experiencing stiff competition from online merchandises and platforms that have started offering sell of all manner of goods, payment, and delivery without unnecessary movement by the customer. This is posing a threat to the future of the supermarket industry where the owners have to be very innovative to come up with countermeasures that will help maintain their market existence. One of how this challenge can be solved is coming up with a company website where customers can view commodities being offered by that supermarket and prices as well as delivery services. (Metzger, 2014)
Similar to other industries and businesses, the supermarket is facing major disruption in the way the run and how customers shop and make purchases. The following are some of the potential risks of investing in the supermarket industry.
- The growth of stiff competition – supermarkets are being at risk of experiencing stiff market competition from trading mall markets, open-air markets, online merchandise and multinational supply chains.(Matsa, 2011)
- Increased rate of insecurity and attacks with the increasing rate of lack of job opportunities, the rate of insecurity is increasing. Robbery cases are also increasing, and therefore there is a need for an entrepreneur willing to venture into the supermarket industry to consider the security-related matter. Insecurity can lead to losses through robbery as well as a lack of confidence by the customers regarding their safety while having their shopping process.(Moore, 2001)
Conclusion
These risks associated with the supermarket Industry can be counter-attacked by conducting a comprehensive assessment of the risks that our supermarket is exposed to and coming up with strategies for risk management such as insurance programs. (Donlon, 2017).supermarket is a highly profitable business in Australia, it’s therefore important to plan well and strategies on how to overcome the challenges associated with this business as well as risks its exposed to before starting the venture.
Reference
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Donlon, R. L. (2017). risks supermarkets face as the industry changes. Property-casualty, 1(2), 2-11.
Ferreira, N. M. (2018). What is Entrepreneurship? Entrepreneur Definition and Meaning. Oberlin, 3(1), 12.
Gerlach, M. (2014). The Importance Of Entrepreneurship. Society , 4.
Julie, F. (2012). Importance of entrepreneurship to Kenya’s economy. Elvis, 1, 2-9.
Matsa, D. A. (2011). Competition and product quality in the supermarket industry. The Quarterly Journal of Economics, 126(3), 1539-1591.
Metzger, K. (2014). Business Analysis of Supermarket Industry. Southampton: Leakey publishing company.
Moore, D. (2001). Corporate social and financial performance: An investigation in the UK supermarket industry. Journal of Business ethics, 34(3-4), 299-315.
Rouse, M. (2017). Business innovation. TechTarget, 3.
Seth, S. (2017). Why Entrepreneurs Are Important for the Economy. Investopedia, 1-4.
Williams, E. E. (2003). Entrepreneurship, innovation and economic growth. Elsevier, 2(1), 3-15.
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