Although the discovery of an opportunity is a necessary condition for entrepreneurship, there is more to it than that. After having identified and assessed an opportunity, potential entrepreneurs must decide whether they want to exploit it. Why, when and how do some people and not others exploit the opportunities they discover? The answer again appears to depend on the joint characteristics of the individual and the nature of the opportunity.''
Individual differences matter too. Firstly, individuals have different opportunity costs. The opportunity cost principle states the cost of one good in terms of the next best alternative. For example, suppose a public servant decides to launch a business venture. The opportunity cost of the entrepreneurial profit is the alternative income that he or she might receive by remaining a government employee.
Since people have different incomes and wages, they are likely to make different decisions about whether or not to exploit any given opportunity. Secondly, the decision to exploit entrepreneurial opportunities is also influenced by individual differences in risk perception, optimism, tolerance for ambiguity and need for achievement.
So far, little research has focused on would-be entrepreneurs and the factors likely to influence their decision to launch a new venture. However, certain triggers and barriers often appear to play a role in the decision to exploit an opportunity. For example, the following triggers have been identified:
• Material rewards. Many entrepreneurs launch their own business venture because they want to be rewarded according to their effort, and because of the anticipated financial gains. For example, 40 per cent of the Fast 100 owners —BRW's list of Australia's fastest growing companies - draw a salary in the first year in business and, for the majority of them, this salary is over A$100 000 per year." Launching or buying a business can also represents an interesting investment option for those who have savings.
• Creativity. When asked about the variables that motivate the launch of a new venture, many entrepreneurs mention: 'to take advantage of my own talents', 'to create something new' and 'to realise my dreams'. Altogether, these variables translate the desire and the ability to bring something new into existence.
• Desire for autonomy. Entrepreneurs want to be independent, and they express the desire to work at a location of their choice, set their own hours of work and be their own boss. The launch of a new business venture can be a long and difficult process, and entrepreneurs can face all sorts of hurdles while trying to realise their dreams. If these barriers are too high, entrepreneurs may eventually abandon the opportunity. The following barriers appear to play an important role in the start-up process:
• Lack of resources. Would-be entrepreneurs often think that they do not possess the necessary marketing and management skills. These personal deficiencies are often worsened by a lack of information on start-ups and the difficulty of finding sufficient finance.
• Compliance costs. High taxes and the cost of complying with government legislation are perceived as a major hurdle. Such compliance costs are often referred to as 'red tape'.
• Hard reality. Setting up a business venture is often harder and riskier than initially expected. The future is perceived as very uncertain and, as a result, a certain fear of failure emerges while the would-be entrepreneur gathers resources and processes information to launch the venture.
Some precipitating events, such as dismissal, job frustration, graduation or an inheritance, may also trigger the launch of the business venture. However, when the importance of each trigger is examined, it is often the desire to create something new— sustained ultimately by the passion and motivation of the individual — that pushes the entrepreneur to 'take the plunge'.