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Advice from Theophilus

Submitted by Theophilus in November 2012

 

Authors from the AfDB, the OECD Development Centre and two United Nations organisations wrote in a foreword to the recently-launched African Economic Outlook 2012 as follows: “Creating productive employment for Africa’s rapidly-growing young population is an immense challenge, but also the key to future prosperity.”  For instance, Pretoria — South Africa’s unemployment rate had increased from 24.9% to 25.5% in the third quarter of 2012, said Statistics South Africa (Stats SA) on Thursday. Releasing the third Quarter Labour Force Survey (QLFS) on Thursday, Stats SA said the number of unemployed persons, at 4.6 million in the third quarter of 2012, was the highest level since the QLFS commenced in 2008.

Professor Ernest Aryeetey, an eminent Economist and Vice Chancellor of the University of Ghana, at the launch of ISSER’s 2011 report on the state of the economy argues that chronic joblessness is the biggest weakness facing Ghana’s fast-growing economy. The issue of graduate unemployment is a huge national challenge that needs priority attention. Ghana’s population has a youthful structure constituting about one out of every four of the population. He goes on to state that one gets an inkling of the pervasiveness of the problem from the huge numbers of youth that line the streets “selling things nobody will buy.” The report of the recently-launched African Economic Outlook 2012, estimates the unemployment rate among youth aged 15 to 24 in Ghana at 25.6%; twice that of the 25-44 age group and three times that of the 45-64 age group. It said the youth account for 60% of the unemployed in Africa.

Europe’s financial and sovereign debt troubles are extremely serious but tackling its unemployment problems must remain a top priority for all of its policymakers, not just those in hard-hit ‘peripheral’ states. The data of the latest info graphic drawn from Eurostat, the official statistics body of the European Union, which publishes unemployment figures on a regular basis, explores the differing rates of unemployment across member states, gender and age. It also takes a broader view, looking at changes in job participation rates and long-term unemployment over time. On the 30th Nov 2011, Eurostat published its latest ‘Euro indicator’ on unemployment, showing further increases in the EU27 joblessness rate from 9.7% to 9.8% and in the euro area rate from 10.2% to 10.3%.

The increasing rate of unemployment in the world has led to developments such as hunger and poverty. FAO FAQs on Hunger, 2010 report reveals that, 925 million people do not have enough to eat totaling more than the populations of USA, Canada and the European Union combined.98% of the world’s undernourished people live in developing countries.Two-thirds of the world’s hungry live in just 7 countries: Bangladesh, China, the Democratic Republic of the Congo, Ethiopia, India, Indonesia and Pakistan. FAO News Release, 2010 shows that 1.4 billion people in developing countries live on $1.25 a day or less and 22,000 children die each day due to conditions of poverty.

It is evident from the above assertion that the single most important advice to give any business minded person or student is to have the mind of an entrepreneur. To alleviate poverty in the world especially Africa, there need to be a deliberate effort to create wealth. To create wealth, we must put our people to work. To put our people to work, we need entrepreneurs. Entrepreneurs are vital to the world’s prosperity. The multiplicity of successful entrepreneurs across the African continent is fundamentally necessary for lifting it out of its poverty.

One of the most outstanding works ever done into why and how nations become wealthy is Adam Smith’s ‘An Enquiry into the Nature and Causes of the Wealth of Nations’, a title usually shortened to ‘The Wealth of Nations’. In it he argued ingeniously that the true wealth of a nation was to be found in the produce of the labour of its people. The increase of this produce is what is referred to as economic growth. Robert Reich in his introduction to the book summed up Adam’s Smith’s view thus: “To him, the ‘wealth’ of a nation wasn’t determined by the size of its monarch’s treasure or the amount of gold and silver in its vaults … A nation’s wealth was to be judged by the total value of all the goods its people produced for all its people to consume.”

Entrepreneurs are at the core of economic growth. This is because they are the ones who organize production in a society. They put together the society’s resources of land, capital and labour to produce goods and services. The more entrepreneurs therefore, the more goods and services are produced. The more goods and services are produced, the more a society becomes materially prosperous.

 

A special report on Entrepreneurship in the Economist (March 14, 2009) carried this definition of an entrepreneur: someone “who offers an innovative solution to a (frequently) unrecognised) problem. The defining characteristic of entrepreneurship, then, is not the size of the company but the act of innovation.” Through the acts of innovation more value is created and by implication more prosperity. Paul Romer, a Stanford University economist put it beautifully: “Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable… [It] springs from better recipes, not just more cooking.”

Any individual, who possesses a business, firm, or venture, is known as an entrepreneur. He or she is accountable for its development, the inherent risks and returns associated with it. Entrepreneurship is defined as the practice of beginning a new trade or reviving an existing business, for capitalizing on fresh opportunities. Normally, entrepreneurship is a difficult proposition as many new businesses fail to survive in their initial periods and never take off. The entrepreneurial activities for a particular kind of business depends upon various factors and is quite specific on the kind of business or firm being run. Whatever may be the course of action, entrepreneurship has a lot of benefits both for the entrepreneurs and the society in which these businesses are carried out. Some of these benefits include:

  • Opportunity to get control.

Owning a firm or a business endows the entrepreneurs with the independence and opportunity to control their own business. They can aim to achieve targets that are important to them. Entrepreneurship provides entrepreneurs a chance to take decisions according to their own wishes.

  • Offers a chance to make a difference

Some people begin and put a lot of effort just to make a difference in society. This has given rise to the concept of social entrepreneurship, which is a recent phenomenon. Such people search for opportunities to serve a cause that is significant to them and try to find pioneering solutions to some of the most pressing and challenging problems of society.

 

 

  • To reap high Profits

Reaping high profits by being an entrepreneur is one of the most important factors that motivate people to become one and take up all the challenges associated with it. The profits their companies and businesses make play a vital role in any decision made by entrepreneurs. Owning a business or a firm is the best way towards accumulation of wealth.

  • Helps people work to their full potential

Many entrepreneurs find their work to be extremely enjoyable. They consider their business as an instrument of self-actualization and self-expression. Owning a firm or a business acts as a test for the creativity skills, abilities, and determination of an entrepreneur and is taken up as a challenge towards success.

  • Offers a chance to pursue their interests.

Most entrepreneurs don’t believe their work to be actual work. Most of them establish businesses closely associated with their interests. As such, there is no particular age for retirement of entrepreneurs.

With all these benefits people now consider the alternative of running their own small businesses rather than doing jobs for others.

                                       HIGH-RISK, HIGH-REWARD VENTURE

Entrepreneur is a high-risk but high-reward position. There’s no scripted way to become an entrepreneur, but there are certainly things you can do to make your journey easier. In order to become a successful entrepreneur, the following advice can be helpful.

Firstly one has to think of a great idea. Most businesses start with one compelling idea — whether it’s a service people need, a product that would make life easier or something that combines both.

    • If a great idea comes to you, evaluate if it is realistic. Think of cost, manufacturing time, and popularity.
    • Always be open to different ideas. Ask and record if people would actually buy the product.
    • If you don’t have an idea yet, it is a good start to think of your target market first. Then brainstorm a list of things like places they shop, things they like, and things you like. Narrow the list down to about three items, keeping cost, manufacturing time, and popularity in mind. Find the easiest, most realistic product you can offer.

 Secondly one has to write a business plan. A business plan has to perfect before moving on; this will make the business run a lot more smoothly. Include details and descriptions, and plan everything out realistically. A business plan is essential for anyone who is trying to start any type of business!  They’re not just for obtaining financing and shouldn’t be put onto a shelf once they are complete.  It’s a tool that a business owner can use to help guide them in the right direction for their business .Take your time and evaluate your product at each section. The sections of a good business plan include:

    • Product description: develop your product. What will it look like? What materials will you need? Make your product eye-catching.
    • Market Analysis: Who is your market? Where do they shop? Where are they located?
    • Competition: Who is your competition? What are their strengths? How will you beat them?
    • Marketing: How will you market your product? What kind of image do you want to display? Where will you advertise? What is your tagline? What is your packaging like?
    • Sales: Where will you sell? How will you get your customers to buy? When will you sell? What is your estimated sales forecast?
    • Manufacturing: How do you make your product? Explain this in detailed steps. What materials do you need to make your product? When and where will you manufacture? What is your COGS (cost of goods sold)?
    • Finance: how much money do you need to start your business? What is your gross profit?

Thirdly one has to get   investors. Pitch your idea to any potential investor to get money to start your company. If you have a good idea, they will love to invest their money in your company.

    • Make a PowerPoint presentation explaining why your product is the best, including each part of your business plan in the presentation.
    • Tell them how much your estimated gross profit is and how much percentage of that they will earn in interest. Many VCs (venture capitalists are not set up to make you successful. A wonderful success for you might be to earn $80,000 a year doing work you love.
    • Starting small and pleasing a small number of customers at first is a high-probability way to get there. A VC will not allow such a success to happen, because a VC’s strategy is to become a billionaire by rolling the dice on many low-probability but potentially gigantic-returning businesses. The price you pay for taking on a VC is control: control of your dream. If you can get the business started without spending a lot of money,  that might be your best route.

Fourthly   , Sell and distribute your product. If you’re getting revenue, then you’re in business. You’re testing your theories about the market, you’re finding out what really works and what doesn’t, and you’re getting fuel for more ideas and improvements. If you’re not getting revenue, then it’s all in your head.

In addition to the above, Network is very important. By meeting entrepreneurs socially, you gain contacts and hear about opportunities.

    • More importantly, you learn how entrepreneurs think. You pick up their attitudes, their nose for opportunity, their willingness to explore every idea and its opposite (they know that often both work), the great diversity in their styles.

 

SUCCESS STORIES OF SOME YOUNG ENTREPRENEURS

Over the years some young entrepreneurs have had remarkable stories.

Tiny Literary Giant – Adora Svitak

Adora  Svitak   is a 12-year-old who has published two books and transformed her writing success into speaking and teaching success. She has spoken at over 400 schools and presented at the annual TED conference. She has been featured on Good Morning America and on CNN.

Youngest Magazine Publisher- Savannah Britt

Savannah Britt started her own publication – a magazine called Girlpez – making her the youngest magazine publisher in the world. The magazine features coverage of events, like concerts and fashion shows, along with interviews from the likes of Shwayze, Kevin Rudolf, and Dawn from Dannity Kane.

 Young Inventor of the Year-   Philip Hartman   

Philip Hartman   is a home-schooled high school senior at the ripe age of 15. He won the 2008 Young Inventor of the Year award for inventing a new system for fusing optical fibers. His latest invention emits steam onto a windshield and is capable of defrosting a frost-covered windshield in about 15 seconds.

World’s Top Young Blogger- Alex Fraiser  

Alex Fraiser  and his business partner, 24-year-old Seth Waite, launched their first product – a web theme modeled after Blogussion’s unique style – to immediate success. With an Alexa ranking under 20,000, Blogussion is now the highest ranking blog by a 16-year-old on the Internet.

 

 Top Young Indian Entrepreneur- Farrhad Acidwalla

Farrhad Acidwalla has launched Rockstah Media, a cutting-edge company devoted to web development, marketing, advertisement, and branding. It is just over a year old but it has clients and a full fledged team of developers, designers and market strategists spread across the globe.

11 Companies, 3 Foundations-   Mark Bao

Mark Bao   is a 17-year-old high school senior and he has already launched 11 web-based companies (and sold three of them) along with three non-profit foundations. Some of his projects include TickrTalk, the Ramamia Foundation, Classleaf, and Avecora – a technology network launching sometime in 2013.

Young Architect Outsourcer- Marshall Haas  

Marshall Haas   recruited a team of 20 artists in the Philippines to create architectural images from floor plans and he began attracting as many as eight clients a month. He is also developing a mobile web application called Podums, which will use game mechanics to encourage people to be productive.

Most Likely Millionaire- Michael Dunlop

Michael Dunlop dropped out of school and began to develop websites, including RetireAt21.com. Today, Michael is 21 years old and, though he isn’t retired, he is netting six figures a year with his websites. His latest, IncomeDiary.com, has attracted well over 10,000 subscribers.

CONCLUSION

It is an incontrovertible fact that most of the developed countries like the US and other countries where built by entrepreneurs. Business opportunities are like buses, there’s always another one coming. It is often said that an entrepreneur tends to bite off a little more than he can chew hoping he’ll quickly learn how to chew it. I believe the best advice in the 21st century to any business mind where governments need the private sector to augment its efforts is to consider going into entrepreneurship.

Find a great mentor – or two, or three! People who have started companies successfully are invaluable when you start out; they have the knowledge and experience to help you get started on the right track and not make the same mistakes they did! The more people you can surround yourself with in different fields and with different expertise, the greater the collective knowledge you have to draw on to make your business a success.

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