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Entrepreneurship defines the process of managing all the resources required for the successful implementation of a new business idea. Therefore, an entrepreneur has the task of initiating a profit based business, ensuring that it does not collapse and influencing its growth and expansion with time. The main characteristics of entrepreneurship have been defined as initiative taking, collection of resources, independent thinking and the ability to take a risk (Baldwin, 1994). It is worth noting that all big businesses start as small enterprises, therefore, they can be defined as the results of properly managed small businesses. However, it has been noted that only few of all new business ventures achieve the initial prospected growth or even become profitable. Their decline may be attributed to several factors including the common lack of basic entrepreneurial skills among the business owners (Sethi, 2008).

There are several factors that may contribute to an entrepreneur’s success such as their personality traits, the environments they have been exposed to as well as their previous work experience (Mind Tools Ltd, 2010). The most important quality that defines the success of any entrepreneurial activity is the entrepreneur’s commitment to their initiative. They should also be able to come up with unique answers to the challenges they encounter such as inadequate capital, obtaining market for their products and creating a team that will steer the business to success.  Poor management of any available resources could easily lead to the collapse of the start-up. Usually, the first few years of business are very unpredictable for new ventures and, therefore, present a lot of unforeseen challenges. Therefore, entrepreneurs should be able to develop solutions for the challenges created by this unpredictability. Furthermore, successful entrepreneurs should be people who are always prepared to take risks owing to the fact that their ventures are completely new in the market and the uncertainty that characterizes many new businesses in their maiden years. Thus, the entrepreneur’s abilities to take risks and handle uncertainty have a great effect on the running of a business (Mind Tools Ltd, 2010).

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Businesses operate in given environments which pose different challenges and opportunities for the enterprise (Njanja & Pellisier, 2011). This paper aims at determining how the entrepreneur’s abilities to take risks and handle uncertainty affect the operating environment of small business enterprises.

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Entrepreneurs should be able to respond and adapt to changes in their external and internal environments that would benefit their organizations and influence their growth (Njanja & Pellisier, 2011). Among the opportunities created by environment include global markets which have been made possible through important technological advancements in transport and communication. The challenges involve adapting to the different cultures and political ideologies in different environments. Entrepreneurs must prepare for the uncertainties in new environments by creating competent teams that understand the organization’s goals clearly (Njanja & Pelissier, 2010). Some environmental factors affecting businesses include technology, politics, legal systems, economic, social, and cultural practices.

Technology can enhance the speed at which services are offered or goods are produced, influence the quality of goods and increase an organization’s efficiency. It has helped solve numerous problems and overcome barriers in business. Realization of world markets for several businesses has been made possible through technology. Technology has enabled exhaustive use of raw materials in industries while reducing the destruction on the environment (Njanja & Pellisier, 2011). Technology also increases an organization’s competitiveness especially in highly aggressive business environments. Small enterprises are always geared toward achieving the same aim, thus, indicating the need for entrepreneurs to invest in technologies which lead to a decrease in operation costs. Technological advancement has also made record keeping and track of inventory easier. This has enabled businesses identify their shortcomings and correct them so that processes or transactions happen faster (Berger, 2005). Despite the numerous advantages for small businesses upon adoption of various technologies, many entrepreneurs continue to shy away. The reasons for this include the fact that most small enterprises serve smaller communities which are very loyal; their local setting overrules the need for connectivity while some entrepreneurs are wary of insecurity or an invasion of their privacy. It is obvious that technological advancements have created opportunities for growth of small enterprises but it is also associated with certain risk as well as uncertainties. Thus, if an organization should enjoy the advantages associated with adoption of relevant technology, the entrepreneur must be prepared to deal with any challenges that may arise from technology.

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Regulation is another environmental factor that affects businesses and defines any processes of social control whether by the government or otherwise (Baldwin, 1994). Through regulation, the government may legalize or prohibit certain actions and an attempt to go against the regulation may lead to legal action being taken against the enterprise (Hampton, 2005). Some state regulations essential for entrepreneurs concern property rights, taxation, financial reporting, employment, health and safety among others. Some regulations are relevant to specific businesses. These regulatory actions affect businesses by their effect on available resources and the number of decisions that entrepreneurs can take. In their study of the effects of external environments on the management of SMEs, Njanja & Pellisier (2011) argue that most often, state regulations lead to increased business costs depending on the earlier business practices, thus, impacting negatively business ventures. They discourage growth and expansion of businesses despite the existence of opportunities. Entrepreneurs may be forced to spend a lot of money settling disputes for not complying with the set out regulations and sometimes their businesses may be closed down (Njanja & Pellisier, 2011). This is a case of uncertainty for businesses for it is impossible to tell when any regulations could be implemented. This could prevent many people from implementing their start-ups but an entrepreneur’s ability to cope with uncertainty enables them to take the risk and grow their businesses and they can deal with the challenges when they come.

Poor infrastructure may also be a major setback for the expansion of small businesses or their actual start-up despite the already identified opportunities. Inaccessibility to roads and essentials such as power, water, telecommunication and sewage prevents the development of businesses (Njanja, & Pelissier, 2010). Most entrepreneurs will wait until these conditions become favorable so as to set up their businesses. Entrepreneurs who can cope with the uncertainty and are able to take risks will go ahead and establish their business with the hope that their presence will influence the development of infrastructure faster. This has been the case for the industrial sector in Kenya enabling them to take advantage of the existing opportunities while influencing development by their presence and thereby improving their operating environments (Njanja & Pellisier, 2011).

Some internal factors that may affect the operating environment of businesses include the level of expertise among staff. Business practices continue to evolve and improve owing to technological advancements and research. This creates a need for training among employees so that they can steer the business in the desired direction. The lack of training on improved and current business practices may cause a business to lag behind leading to reduced profits. Some entrepreneurs have invested in sponsoring training for their employees, thus, ensuring that the teams remain competent and relevant in the market. Although additional cost is incurred while training employees, the gains for the business are greater than the risk involved. It also enhances employee loyalty since additional training enhances opportunities for career growth and they know that the organization values them. Some entrepreneurs also go ahead to acquire and improve their business skills, thus, improving their capabilities to manage their businesses better. The entrepreneur’s readiness to improve their team’s competence improves the business’ internal environment as employees are able to deal better with challenges and, hence, the business continues to grow and thrive.

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It is evident that entrepreneurs must possess certain personality traits that influence their success in business. They should also have sound interpersonal skills if they will succeed in developing good relationships with employees, suppliers, customers, investors and other stakeholders. Their critical and creative thinking skills will enable them to deal efficiently with arising challenges as well as enhancing their utilization of opportunities. In addition, management skills are extremely important so that they can successfully guide the organization to realize profits and grow as envisioned (Brockhaus, 1982).

The success of small enterprises depends heavily on the existing internal and external operating environments. Small businesses should integrate technological advancements in their operations so as to enjoy the opportunities it creates. They should prepare for the risks involved such as breach of security and privacy by obtaining information on their mitigation. Countries should endeavor to improve infrastructure so as to encourage entrepreneurial activities. Entrepreneurs should also realize their ability to influence infrastructure development since they contribute highly to growth of national economies. Policy makers should ensure that their regulations do not discourage entrepreneurial activities since this has a negative impact on the economy. Entrepreneurs should realize opportunities created by some government incentives and cease them to enhance their growth and increase profit margins. Entrepreneurs should seek to create internal environments conducive for business development. This includes sound management and allocation of resources, ensuring clear understanding of responsibilities among employees, ensuring that they remain competent and feel valued in addition to maintaining good working relationship with and among the employees (Njanja & Pellisier, 2011). An entrepreneur should always be willing to take risks and be ready to deal with uncertainties in their operating environments for their organizations to grow and expand (Sethi, 2008).

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