Table of contents
- Introduction
- 5 entrepreneurial resources
- Conclusion
Introduction
When an entrepreneur identifies business opportunity, he mobilizes resources to tap the opportunity. The ability to mobilize the resources needed is what determines if he will venture and succeed in the business. It is not enough to identify business opportunity, you need to have the capability to harness the opportunity.
5 Entrepreneurial Resources
There are five major resources an entrepreneur must have at his disposal to be able to venture into entrepreneurial business opportunities. These resources are factors of production. The resources are called 5Ms — Man, Machine, Material, Method and Money.
Man
It means availability of skilled labor. Every business requires manpower to run it. Adequate manpower is a very important resource for business operation. The entrepreneur must be able to mobilize/ recruit people who have the required skills to do the job. Or at least he should have the skills to do the job and can then train others.
Sometimes the available labor prices are very high. This results to the entrepreneurs or small business owners opting for cheap labor who are usually semi-skilled or unskilled labor.
Machine
Machines/ devices or equipment are needed to run a business, therefore, the entrepreneur must be able to acquire the right tools needed for the business. The challenges entrepreneurs face in getting working tools are unavailability, inaccessibility of tools at affordable prices. An entrepreneur may identify business opportunity in an environment but have difficulty in finding the needed tools for the business in the environment.
Material
Material here is talking about raw materials, inputs and land. Raw materials are needed in business operation especially in manufacturing and agricultural sectors. An entrepreneur should be able to know where he can access raw materials needed for the business and have the capacity to acquire them before venturing into the business.
Method
The entrepreneur should have the skills to run such business. He must be knowledgeable about the business. If the business is on Tech manufacturing, services, the entrepreneur should posses the knowledge about Tech industry. If you see opportunity in biscuit production you should as well know the processes of producing biscuits before venturing into biscuits production. You must know how to plan, organize and control the combination of these other resources to produce needed results.
Money
Capital plays a vital role in every business, the faster you are able to get your hands on funds, the faster you kick-start your business. The success of the business does not depend on the business idea alone; without capital, an entrepreneur will not be able to tap the business opportunities. Ideas are as good as nothing without capital to bring them into fusion. So capital is as important as the business idea. Funds are needed to acquire aforementioned resources needed to kick-start any business. You need money to hire men (labor), purchase materials to execute business project. Simply put, you need fund to get startup kits. Getting the funds for business can be an uphill battle. The major constraint most start-ups face is difficulty in raising business capital.
An entrepreneur can raise business capital through personal savings, contributions and soft loans from friends and family, bank loan, government business support grants, partners and investors.
Unfortunately, banks don’t easily give loan facility to start-ups except the start-ups that have collateral to secure the loans. In fact, banks and other financial institutions do not fund business ideas but businesses that have been in operation. They need to look into your books before granting you loan facility. Outside personal savings, the surest way to raise fund is through investors, but some entrepreneurs are usually skeptical about accepting funds from investors. They think the business will no longer be theirs once investors contribute in setting up the business. Investors are readily willing to provide funds for business, if the business opportunity appears viable. Sometimes, investors are also skeptical to contribute their financial resource, they would rather prefer contributing their material resources to a business opportunity.
Conclusion
As an entrepreneur who have identified entrepreneurial business opportunity, you need to garner these 5 important resources at your disposal before delving into the business. Lack of access to some of these resources is one of the reasons small businesses fail within their first five years of operation.
Also read:
Business Opportunities During And After Coronavirus (Covid-19) Pandemic
Things A Small Business Owner Must Expect
Things To Consider When Choosing A Location For Your Business
Can One Person Register Limited Liability Company In Nigeria?
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