By Dosumu Adeola Christiana, LASU
Business Enterprise: Contributing to the National Development.
Entrepreneurship is about the identification of opportunities in the business environment and using the available resources at hand. It is the creation or extraction of value, creating something new from the old to satisfy a need. Innovation cum creativity is the hallmark of entrepreneurs.
The study of entrepreneurship dates as far back as 1776 through the Adam Smith Capitalist theory. Hence, entrepreneurship can only survive in a capitalist or mixed economy where private individuals can own and operate businesses.
An entrepreneur is long time oriented and creates value. A business man, however, is short time oriented and is all about profit.
The purpose of entrepreneurship in the society is to promote the expansion of the economy through a free enterprise system. In a free enterprise, businesses are organised, owned and operated by private individuals who have the right to a profit or must suffer the loss accrued from the business operations.
The most common reason why individuals create businesses is to profit and create wealth, the desire to make a profit as a reward for taking the risks of running a business form the major reason why individuals get engaged in small businesses. Profit is the money received minus the cost price of operating the business.
Entrepreneurship generally plays a key role in employment generation, increased productivity through innovation, adaptation of technology as well as the dynamic generation and utilization of resources. Entrepreneurs such as Mark Zuckerberg and Jeff Bezos contributed largely to the society at large through their innovation.
Facebook has made long distance communication so much easier and through Amazon, it is possible to shop online without much stress. In Nigeria, the likes of Mike Adenuga of Gloworld and Aliko Dangote have contributed largely to economy landscape. The taxes obtained from these enterprises contribute a lot to the infrastructural development of the country.
The major problems enterprises are faced with is capitalization. Capital does not include raw materials, land or labour employed by an enterprise. Capital is money committed into a business on short term or long-term basis depending on the gestation period of the business.
An enterprise has access to three classes of capital; short term capital, medium term capital and long-term capital. A business enterprise must neither be over capitalized nor undercapitalized.
Over capitalization occurs when the capital of an enterprise exceeds both fixed and currents assets. In essence, there is an over flow of capital. It is caused by idle funds, inadequate provision not depreciation. And it can be remedied by reducing capital.
Under capitalization is referred to a situation where an enterprise does not have adequate funds or solely depends on borrowed funds to survive. It is caused by low property ratio and can be remedied by increasing capital.
There are various opportunities available in the Nigerian economy that entrepreneurs can invest in that will boost the economy.
Dosumu Adeola Christiana is a law student at the Lagos state university. She is the Campus Ambassador for LASU. Christiana is passionate about human rights activism and pro bono legal outfits. She loves writing and journalism.