Are You A Necessity Entrepreneur?

Necessity Entrepreneur

Necessity Entrepreneur, do you know what this is or who this is? Have you heard a discussion that goes like this:

“Ah! You’re jobless? You can’t find a job? You need income? Why don’t you go into business?”

There are two types of Entrepreneurs:

  1. The Opportunity Entrepreneur – One who see opportunities and grabs them, and
  2. The Necessity Entrepreneur – If you are in business because it’s the only option left for you to earn a living, then you are a Necessity Entrepreneur! Necessity Entrepreneurs are those individuals who have no other viable option for licit (legal, lawful, legitimate) income than to start a small income generating activity.

Now the question: are you an opportunity entrepreneur or a necessity entrepreneur? You may be asking with a raised eyebrow: Why the discussion?

The Risks of Being A Necessity Entrepreneur

According to a recent study, there are approximately 1 billion necessity entrepreneurs in both developed and developing nations and many of them failed. They lost their businesses and lost the money they invested in their businesses.

The Reasons for the Failures and Losses

Most necessity entrepreneurs have little or no business training at all, that’s why many  are prone to make costly mistakes. Many of these necessity entrepreneurs, for example, do not have basic understanding of business finance. To expound a little, many do not understand that business money is not personal money which means business money should not be mixed with personal money and should not be spent on personal needs. In Accounting, this is contained in what is called the Business Entity Concept. It is a little technical for people with no accounting background or business training but if you want to know more, you can read more here.

What Will Help? 

One key to avoid making these mistakes is to get basic training on how to run a business. This includes basic understanding of the ‘business entity concept’ (which simply means the business is separate and district from the owner), establishing simple business systems and processes (like keeping good, accurate records of all income and expenses), and knowing when to hire and when not to hire, and who to hire.

Does this mean that an entrepreneur must get a business degree? No! Not necessarily! Know this – no amount of business education will ensure business success. There are other factors too! And guess what? The best thing about learning is that it is not limited to schools or formal educational institution. There are many books about business … one just has to know where to look, and what to look for!

But just like everything else in life, knowing something is not a guarantee for success. In its truest sense ‘knowing’ is not enough’. It is the ‘doing’ or application of the knowledge that makes a difference. So learn … study … find out … discover … and then APPLY!

There’s nothing wrong with being a necessity entrepreneur. You can succeed! The key, again, is to get the necessary tools so you can run your business ‘smartly’ and wisely. The future is yours to take!

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