Entrepreneurship Development and New Business Start-Ups: Challenges and Prospects for Ghanaian Entrepreneurs’
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Lack of planning, Management/Technical Training, Organizational abilities, Gaining other Entrepreneurship and Risk Management Skill Sets Apart from financial constraints, doing business planning analysis before setting up the business is key to successful entrepreneurial venture since the true value of business planning is to identify potential strengths and weaknesses, as well as opportunities and threats that could impede the success of the business, and plan around them before they happen, rather than getting blindsided by them when the business has already been set in motion. Viewing the business in a holistic manner will help the entrepreneur in aligning his/her vision for the product or service that delights the identified target market. The Business and Financial Times (2011) reported that “SMEs which form the backbone of Ghana’s economy face many constraints and only a few of them are competitive in today’s globalized business environment.” Managerial and technical skills are some of the key factors that affect the growth of SMEs and entrepreneurs in both Ghana’s formal and informal economies. Business mismanagement constitutes one of the main characteristics and failures of SMEs in Ghana and a typical constraint to their growth, which is often attributed to cultural factors. Since the entrepreneurial characteristics required to launch a business successfully are often not the same as those required for business growth and even more frequently not those required to manage it once it grows bigger, the role of entrepreneurs needs to change with the business as it develops and grows, but all too often many entrepreneurs are not able to make the transition successfully. New entrepreneurs and existing businesses have the potential to fail if their owners do not have the prerequisite management skills to establish well-defined goals and objectives as well as undertake feasibility studies by focusing on finance, production and marketing of the new product/service, and periodically measure the progress of his/her plans to determine whether objectives are being met, and goalstargets are on schedule. The importance of human capital can also not be underestimated, and no business will be successful without a skilled and committed workforce. Transferring your passion and vision to align with your overall business’ goals is a major task that one needs to achieve successfully. As a new entrepreneur, it is necessary to ensure that your staff recognizes the vision you wish to create, believe in your possibilities and be passionate about making that possibility a reality to help you transform the firm into a competitive and profitable one. Effective management is a critical challenge for new businesses. Since new
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entrepreneurs are self-managed, they are required to be their own bosses, have self-discipline, set their own schedules, make all the right decisions and work long hours to keep the business going, while maintaining a professional attitude at all times. While the study identified the necessity of some level of basic or higher education as a prerequisite for successful business management, most programmes on technical skills and entrepreneurship development in Ghanaian institutions focus more on the theoretical aspect and certification rather than the practical side of learning such as shaping attitudes and skills. It also became apparent that educated entrepreneurs or those who receive frequent training, have the potential to understand business planning and are able to outsource partnerships from larger businesses globally than their contemporaries with no education. Apparently, entrepreneurs who are highly skilled are motivated towards competition, growth, innovation and business success, and are more likely to establish businesses in more competitive environments than those who have less motivation to seek growth and competitiveness. Among other conditioning variables, the study also found that most of the successful entrepreneurs in Ghana in contemporary times are strongly related to their experience and education or their international exposure. Despite these findings, most entrepreneurs of SMEs in developing nations may lack basic business management skills and entrepreneurial culture such as growth orientation, risk-taking, savings and investment, with no business innovation and limited access or exposure to modern technology. They may have little or no idea about business planning and strategic management with limited or no training in basic accounting and book-keeping skills to enable them manage their enterprises successfully. Many entrepreneurs admitted that access to finance alone is not enough to transform Ghana’s SMEs into powerful, sustainable and competitive enterprises, but they also need business training to bolster their management skills (Director, Ghana Freight Forwarders Association, 2016). Additionally, there is the challenge of skilled labour availability and effective utilization. Some local entrepreneurs are unable to recruit competent managers or skilled professionals who possess the necessary knowledge, abilities, skills and other characteristics ideal for operating and managing their businesses successfully. Many entrepreneurs find it difficult getting skilled personnel for their businesses, but it is prudent for entrepreneurs to ensure harnessing competency, capital and market for competitive advantage. Hiring the right people who are strategically-business-minded and proactive in nature could help a new entrepreneur build a competitive team that can brainstorm on ways to come up with new and innovative ideas to support your vision. In developing a new business, this is a major challenge that hinder many new businesses, but if successfully overcome, could propel the business into accelerated growth. The human resource problem could be addressed more appropriately if entrepreneurs identify and recruit the right caliber of personnel to work in their businesses and by focusing on both competency and values. Corruption and poor accountability have also led to distrust of employees, which is one of the overriding concerns of many entrepreneurs in handing over the management of their businesses to hired managers. Business owners also fail to outsource some processes to other small businesses that are specialized in particular areas to reduce their cost of production. Another identified challenge as lack of technological knowhow in Ghana’s private sector, in both the formal and informal economies. The Director of the National Information Technology Agency (2015) noted that besides formal education, most Ghanaian entrepreneurs lack technological knowhow, innovation, as well as research and development. SMEs in Ghana are not technology-oriented industries since most rely on old technologies or manual
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labour, which affect their businesses’ output and performance. Other entrepreneurs also stated that the NBSSI training support is limited and covers a small geographical area in the country, mainly Accra (Members of the Beauticians and Designers Association, 2015). Without availability of adequate raw materials, businesses cannot be competitive and their very existence will be threatened. Physical infrastructure and utilities such as good roads, electricity, communication facilities etc. also play key roles in the seamless functioning of a firm. New entrepreneurs also perform a plethora of duties and roles by being virtually in charge of every aspect of starting and opening a business, which include planning, budgeting, getting a location, production, marketing, purchasing of equipment and raw materials, hiring and training of new staff. The sheer volume of tasks a new entrepreneur performs can be overwhelming for those who may not have the prerequisite knowledge, skills and abilities to undertake these duties or not fully dedicated towards achieving their dream of making the business a success. The study argues that acknowledging these challenges and addressing them could help new entrepreneurs deal with them more appropriately and in so doing, find strategic means of managing their businesses more successfully. Another major challenge is the different kinds of risks entrepreneurs and SMEs face. Generally, SMEs experience problems very different from those of larger corporations. Factors such as operational risk, market accessibility, customer loyalty, skilled labour availability, and lack of opportunity for growth and expansion etc. could mean taking great business risks. The level of risk is largely due to the differences inherent in the volume and quality of resources available to each, and the ability to deal with them. For these reasons, new entrepreneurs require risk management training. All other factors notwithstanding, the success of any business start-up largely depends on the entrepreneur’s skill sets and psychological orientation for setting up a new business. Since he/she is the main driving force behind the success or failure of the business, entrepreneurs need to be hardworking, persistence or persevere, ability to take, manage and minimize risk, ability to draw up a comprehensive business plan, with a ready contingency plan to address any unplanned occurrence, and a strong need-orientation that provides the inclination to achieve the firms goals. It is necessary for a new entrepreneur to be involved in every aspect of the business in the initial stages of the business to avoid flaws in delegation and to manage the different risks the new business may be exposed to more effectively. Poor delegation of duties, especially giving responsibility of critical duties to others that require care and crucial attention can adversely affect a new business. Time management is also key to the success of a business, and having an effective time management plan could be very helpful. Dedicating enough time for the business is important in ensuring that all aspects of the business receive a deserving attention in order to grow the business successfully. Overcoming the diverse risks associated with business start-ups is a major challenge for new entrepreneurs, which can be addressed through effective management strategies. As a new business, how the entrepreneur manages the business efficiently and effectively will determine its profitability, competitiveness, and sustainability.
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