Factors affecting Entrepreneurial Growth

Economic Factors

• Capital
• Raw Material
• Market
• Infrastructure
• Labour

Capital

Capital is one of the most important an prerequisite to establish enterprise. Availability of capital facilitates for the entrepreneur to bring together the land of one, machine of another and raw material of yet another to combine them to produce goods. Capital is therefore, regarded as lubricant to the process of production.

Labour

The quality rather quantity of labour is another factor which influences the emergence of entrepreneurship. The availability of cheep labour positively affects entrepreneurship. But entrepreneurship is encouraged if there is a mobile and flexible labour force. And, the potential advantages of low-cost labour are regulated by the deleterious effects of labour immobility.

Raw Material

Entrepreneurship is encouraged only if there is an adequate supply of materials and know-how. Quality of product depends on the quality of raw materials used. Easy availability of material attract more more individuals towards entrepreneurship. To a modern enterprise requires technical know how for innovation.

Market

The fact remains that the potential of the market constitutes the major determinant of probable rewards from entrepreneurial function. The size and composition of market both influence entrepreneurship in their own ways. Practically, monopoly in a particular product in a market becomes more influential for entrepreneurship than a competitive market.

Infrastructure

Entrepreneurship development requires certain basic infrastructure like power, transportation, technical communication and information. Land and factory sheds at affordable rate, adequate supply of power, water, coal, and other sources of energy, transport facilities, and other facilities should be provided.