Effective Business Management and Enterpreneurship
Abstract
Entrepreneurship and business management of small business entails the designing, planning, launching, and management of business. Business management is a concept in entrepreneurship which is the process that exists in an entity to obtain optimum results by making the best use of material, human, and financial resource. The effective ways of business management entail analyzing the risks associated with a business. Part of the discussion are the positive and negative effects associated with a risk. The factors of consideration in locating a business are important to be analyzed. The discourse has discussed overseas business and the barriers to doing international business. The success of a small business entity is achieved through making good decisions at the right time.
Keywords: Entrepreneurship, Risk, Barriers, Distribution, Location
Effective Ways of Business Management
Entrepreneurship focuses on the launching and running of businesses. Economists have defined an entrepreneur as the person who is willing to bear the risk of a new venture if there is a significant chance of making a profits (Scarborough, 2014). The discipline of entrepreneurship has often been associated with the designing, planning, launching and managing a business. The concept of business management comes from entrepreneurship. According to Timss (2011), business management is the process that exists in an entity to get the optimum results by making the best use of the human, financial, and material resource available to the entity by the manager. The aim of this paper is to discuss concepts of business management which are the factors to consider in risks, choosing of business location, product distribution, business expansion, and the success of a business venture.
Risk Analysis for a Business or Business Idea
Risk analysis is a process in risk management. Enterprise risk management (ERM) refers to the process of identifying, analyzing, evaluating, and ultimately making a response to risk mitigation (ERM, 2012). A risk in business is the uncertain event that its occurrence results to either positive or negative effect on the entities goals. Risk analysis is the process of understanding the nature of a risk and forms the basis of decision making and formulation of a response (Jolly, 2003). The steps to follow in analyzing risk are discussed as follows:
The first step is to identify and categorize the risk. According to ERM (2012), risk categorization is in seven categories which are financial, legal liability, hazard or safety, operational, strategic, human capital, and compliance as shown and described in Table 1: Risk Categories. Secondly, consider the potential impact of each of the risks identified from the first step. This step involves the determination of the consequence of each risk affecting the business entity goals either positively or negatively. The category of risk in consideration is then analyzed and described as shown in Table 2: Risk Impact Scale. The third step is to determining the probability of a specific risk occurring. A risk may have a low, medium, or high chance or occurring if its return probability is <2%, 2%<25% or >25% respectively (ERM, …
