Business founders often form a small business from a new idea to serve a niche in the market. Small businesses play a major role identifying gaps in the market and take advantage of them (Soros, 1998). In the new global world marketplace this role is especially important to serve social needs not addressed by massive multinational companies. No one is closer to the consumer than small business. The consumer may have needs unmet social and product needs.
The entrepreneur should have a deep-seated interest in solving these needs that go unmet because supply-side economic principles used by multinational corporations often fail to deal with them. Multinational corporations simply raise prices because oligopolistic or monopolistic conditions exist. Small businesses rely more on supply and demand equilibrium to bring products and services to market.
Small businesses are more nimble and can respond to gaps in the market. Entrepreneurs founding new ventures put together flatter business concerns more aligned with rising consumer needs. Small business founders deal with unclear business conditions trying ideas to solve these budding needs. Multinational corporations are more adept at dealing with managing existing risk through risk management tactics designed to preserve wealth. Entrepreneurs drive wealth creation by understanding consumer needs and dealing with unknown conditions.
Hormozi (2004) reported that according to the Small Business Administration (SBA), new business drive economic growth and provide most of the new jobs. The SBA defines small businesses as having fewer than 500 employees and less than $50 million in revenue excluding farm businesses.
Certain characteristics fuel entrepreneurs to lead small business. A need to achieve propels entrepreneurs to triumph over unknown conditions and solve unmet needs. Hard work is a ritual to the dedicated entrepreneur, and an orientation to quality motivates the entrepreneur to nurture a new venture to success. The business founder accepts total responsibility for the success or failure the business achieves. Entrepreneurs recognize accomplishments with rewards. Business founders view opportunities in a positive light and believe anything is possible. Entrepreneurs take pride in finding excellence in achieving their goals. These people take responsibility for bringing together the right group of people aiding the company to achieve its goals. Profit motivates the business founder to a lesser extent, but serves as a benchmark toward achieving success (Hormozi, 2004).
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Hormozi, A. M. (2004). Becoming an entrepreneur: How to start a small business. International Journal of Management, 21(3), 278-285. doi: 784446471; 14557301; 11864; MJI; INODMJI0001483700
Soros, G. (1998). Toward a global open society. The Atlantic Online, 281(1), 20-32. Retrieved from http://www.theatlantic.com/past/docs/issues/98jan/opensoc.htm