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Empowering “Necessity Entrepreneurs”

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The term ‘Necessity Entrepreneurs” refers to those individuals who start a small business out of necessity. This could be anyone setting up as a street trader, a confectionery shop or even a fast food franchise outlet.

A necessity entrepreneur is someone who, rather than starting a new business as the result of methodical strategic planning, does so in reaction to a career jolt (like unexpectedly being laid off from their job, for instance).

Necessity is the mother of invention - Plato

“I decided that if nobody was going to offer me a job, then I’d got out and create one for myself, which is exactly what I did,” says Lian Danby, a budding entrepreneur who recently set up his own coffee shop.

The good news

In today’s high-tech world the good news for necessity entrepreneurs is that the cost of starting a small business, and especially a small business based at home, is lower than ever before. Technology has become inexpensive and in many cases even free.

However, I do believe that necessity entrepreneurs need to be educated in the foundations of entrepreneurship and that the Government should market the concept to those individuals and support them so that they can become players in the advancement of the UK’s economic development.

A structured approach would help budding entrepreneurs

A structured approach should focus on building sustainable small businesses based on effective management practices, upgrading entrepreneurs’ knowledge and building the nation-wide capacity.

Although as a business person I could be categorised as an “Opportunity Entrepreneur”, not a “Necessity Entrepreneur”, I’ve worked and partnered with many of the latter types. For necessity entrepreneurs, learning is more of a dynamic process, not a structured process. They learn as they go based on the current phase their businesses are in. Such a dynamic learning process can be a successful approach in many cases, but it sometimes fails. Without a clear path and defined milestones, one cannot create a sustainable business and here comes the role of the Government.

How can Government help?

Government’s programs and initiatives targeting necessity entrepreneurs usually are geared towards upgrading one or two types of the knowledge base; technical or commercial, while neglecting other forms of training such as team management and leadership. These areas are also crucial to success. We must include these important areas in any mentoring or course programmes to build the skills of the individual and the collective capabilities of the business.

Good for the nation

Just as an idea or opportunity-based entrepreneurship has a significant contribution to the wealth of a nation, so does necessity entrepreneurship. Necessity entrepreneurs have the desire to succeed, which is why they engage in what I refer to as a “dynamic learning process”. They would be part of the solution to lower the rising unemployment rates and providing opportunities for formal employment for themselves and their employees.


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