Entrepreneurs play a vital role in today’s economy. This is not withstanding the hurdles mentioned in the previous section. Most of them get through the tough times and their businesses become success stories. The success or failure of a growing business depends largely on the entrepreneur himself. However, there are factors that may be beyond his control, but if he can get around these, one way or the other, he only has himself to convince that the business can actually develop.
The economy can support the entrepreneur’s venture depending on the various cycles, and the stage of growth the business happens to be in any one of these cycles. It would be the entrepreneur’s hope that the period of boom finds his business just picking up so that he can be taken by the wave of growth and prosperity that will be represented by most commercial activities during these times.
As the economy grows, the business grows with it. If the economy shrinks, this will have an impact as well on the business. It is suffice to say that the growth of the business depends to a large extent on the state of the economy. In both situations, whether the business is growing or not, the entrepreneur will need to identify ways the business can contribute to the economy which supports him. This may not be his main objective, since he is in the business to make a profit. Any other requirements that do not lead to this may not be in his priority list. However, the entrepreneur’s business will find itself dealing with people and other institutions. The basic role of entrepreneurs in an economy is described below;
Offering employment opportunities
The entrepreneur becomes a job creator if his business is growing and at the same time hiring personnel to assist in the management and running of the firm. The entrepreneur will eventually discover that he cannot run the business on his own. He will need to get assistance from other people. He will create posts that become relevant as the business grows. Other posts may not be relevant during the early stages of the business’ growth. The entrepreneur needs to be careful not to overstaff his firm as he may get into difficulties when it comes to paying their salaries and wages.
The entrepreneur’s firm whether registered as a company or not still has a legal requirement to pay its taxes and to furnish the tax authority with the relevant paper work. The entrepreneur running a sole business will need to submit all his income in a given fiscal year and the business income from his firm forms part of this. An entrepreneur running a public limited company has the responsibility of ensuring corporate taxes are paid each year and in compliance with the Companies Act and any other legislation. Other taxes that the entrepreneur should furnish the tax authorities are taxes on the sales of good to the final consumer, personal taxes on his employees and any other penalties associated with theses taxes. The various forms of taxes are a source of revenue for the government
The entrepreneur should realize that his business will go a long way in getting public approval if it is seen to be doing something positive for the local community. Regular contributions to community projects will put the business in the good books of the community. This should be clearly highlighted in the company’s policy. The good will of the business stands to improve and this ensures support not only from regular customers but also the local authorities.
Formation of cartels
Cartels are formed by firms with the same business objectives. Theirs is to establish favorable trade terms with suppliers so that when the goods reach the final consumer, sufficient margins have been made. This helps the many small individual firms that perhaps could not have had the same bargaining power as they do when in a cartel. In a way it fortifies the relationships between the various businesses and contributes towards healthy competition. The smaller firms eventually grow and play important roles in the economy as well.