Starting and Developing a New Venture. Nature of Entrepreneurship - Essay Example

? STARTING AND DEVELOPING A NEW VENTURE By Starting and Developing a New Venture Introduction Starting a new yet viable enterprise in these times of business dynamism proves quite a big challenge. With all areas of potential businesses having been exploited, new entrepreneurs find themselves faced with the challenge of choosing the most appropriate idea that will create great ventures and stand the test of time. Improving further the existing ideas using creativity and innovation seems to be the most appropriate way of coming up with such ventures. In spite of this, some entrepreneurs still find opportunities around them, which they develop as new ideas. A new venture does not necessarily have to mean a new business altogether. It could be a new idea in a big company’s department, or a new product developed by an existing company. Improving on an existing product still encompasses entrepreneurial skills and innovation. However, starting a small business entity requires patience and strong entrepreneurial skills. The development of an idea to a big venture requires patience and courage. Big and established businesses in the same industry will try to push the new entrepreneur out of the business through packaging and price battles. Additionally, the giants will try to prove of experience in the industry which they already have their customers. To win customer confidence, the entrepreneur should ensure quality in their products and competitive pricing. Waging such a tough war requires commitment and dedication by the entrepreneurs. In exploring this topic of starting and developing a new venture, this paper will look at the entrepreneurial skills and careers of two of the worlds’ most successful entrepreneurs, Stelios Haji-Ioannou of Easyjet and Richard Branson of Virgin. Many scholars have written about entrepreneurship. According to oxford English dictionary an entrepreneur is a person who attempts to make profit by taking risk through an initiative. Richard Cantillon is credited to be the originator of the word “entrepreneur” in the year 1755 in his book “Essai sur la nature du commerce en general.” Stokes & Wilson (2010, p. 1) believes that entrepreneurship is more than just the business of making money. According to Sjovoll & Skogen (2010, p. 8), the creativity and innovation exhibited by the members of a society and at family level are forms of entrepreneurship. Hardly do these talents get noticed however, until an idea is put into action. A visible entrepreneurial idea is called a venture. The different skills and attributes portrayed by a person makes them entrepreneurs, while the ability of a person to see an opportunity where other people cannot see one defines the person’s entrepreneurial skills (Sarasvathy 2004, p. 521). There exists a distinction between entrepreneurship and Intrapreneurship, which is a rather new term in the corporate world. While entrepreneurship defines both the act and the art of undertaking innovations that include introducing new things especially in the business acumen, Intrapreneurship is the act and art of entrepreneurship in large organizations. Employees who undertake to develop their organizations through creative ideas such as product development are referred to as intrapreneurs. Nature of Entrepreneurship A lot of arguments have been raised regarding the nature of entrepreneurship. While some experts believe that great entrepreneurs are born, others believe that the best entrepreneurs are trained (Pittaway & Cope 2007, p. 212). However, the argument of whether entrepreneurial skills are an inborn talent or are a learned and acquired through the process of experience and education, different accounts of the careers of successful entrepreneurs provides answers to this. According to scholars though, the best entrepreneurs are trained. Greene & Mole (2007, p. 14-20) strongly believes supports this. According to them, entrepreneurship as a process does not end in a person’s life. If anything, it remains alive until the death of a person. To them, for a person to become a good entrepreneur, a lot of learning has to take place. The continuity of the process makes it perpetual to the point of a person’s death. The ability of a person to adapt to the changing situations in life and the endless search of opportunities in life makes one an entrepreneur of some sort. All in all, somebody with the ability to see an opportunity in the society, and has the skills of transforming that opportunity into a business venture determines the entrepreneurial qualities of the person (Politis 2005, p. 401). The various reasons which prompt a person to become an entrepreneur are referred to as push and pull factors. The pull factor is defined as a positive factor that attracts people to entrepreneurship. People under this factor find numerous opportunities, especially if they are potential entrepreneurs. The options provided to the person are attractive to the entrepreneurs who are generally defined as independence, achievement, recognition, social status gain, personal development and wealth. These categories of entrepreneurs are pulled by the desire to start their own ventures, perhaps as a way of becoming independent and own bosses. They are likely to be more persistent in their businesses and mostly the opportunity is grabbed by women entrepreneurs. Inventors also fall under this class of entrepreneurs. On the other side, the push factor is characterized by a negative attraction which is contrary to the pull factor. Situations apparent in their careers or lives are responsible for their involvement in entrepreneurship. The various factors that could lead to this effect include unemployment, job insecurity, insufficient income from the current job, job dissatisfaction from the current job status, or even career advancement limitations. In this factor, a person is prompted to engage in entrepreneurship. Examples of prompting factors include divorce, retirement or retrenchment. Groups of people who are likely to follow this trait include managers or employers, displaced employees, young professionals and the excluded people in the job market. Entrepreneurial Traits Two of the worlds’ most successful entrepreneurs in the aviation business, Stelios Haji-Ioannou of Easyjet and Richard Branson of Virgin exhibit the traits of entrepreneurship. Throughout their careers, the two entrepreneurs have portrayed great entrepreneurial traits which significantly contributed to the success of their careers. To them, entrepreneurship was a calling, having been pulled into the world of entrepreneurship by passion and desire to be successful. To succeed in business, a person needs to be disciplined. Hard work and dedication are quite as important, butt for any business to succeed, an entrepreneur needs to exhibit high discipline and commitment in work. Sarasvathy, et al., (2010, p. 56) observes that discipline does not only mean being dedication to the work or office, neither does it mean financial discipline by itself. Discipline encompasses the ability of a person to be organized, both psychologically and physically. Time keeping is one of the best ways of measuring personal discipline. If a person is a good time keeper, the likelihood of success is high. However, poor time keepers make poor business people. A person will need to keep time in order to attend a meeting with a client or reporting to work. Lateness is a turn off, as it is often associated with lack of interest and seriousness. An entrepreneur needs to have a strong locus of control which is the belief that you it is possible to make things happen. People with low locus of control leave things to fate, giving up quite easily. Richard Branson knew this too well. Investing in a field that is thronged by big airlines, some even owned by governments was quite a challenge for him. His strong belief that he could make it made him climb to the top of the world’s most successful business people. Locus of control theory suggests that people with a high locus of control, are more proactive, but poorly delegate duties and activities. The danger of this is lack of trust towards the employees. People who trust themselves to hold all the work by themselves find no time for rest. While simple mistakes are imminent, the entrepreneur is likely to suffer from stress related problems. It is impossible for a person to have the ability to carry out all duties a lone. Thus, such people are taught the importance of delegating to other people. Experts argue that a business venture is likely to perform well even without the owners’ presence than when monitoring every act by the employees. Too much involvement is important at the beginning of the enterprise, however, after it picks up, the owner needs to delegate most of the duties and remain as an overall manager. Some are even advised to retire altogether (Stokes & Wilson, 2010, p. 186). Good entrepreneurs have high propensity of taking risk. Entrepreneurial research suggests that the most effective entrepreneurs take risks moderately. Most in fact will prefer to take calculated risks and are neither gamblers nor risk averse. For both Branson and Haji-Ioannou,, despite having been referred to as risk takers, they could not invest in places that they were bound to fail, or where chances of losing are very high. Arguably, the biggest driving force for entrepreneurs is the need for achievement. Typically, they have a strong need for achievement. The desire of achieving is the biggest driving force for entrepreneurs (Alvarez & Barney, 2007, p. 146). Achievement enhances their self-esteem and this encourages them to seek other demanding assignments. For Haji-Ioannou, working in his fathers’ shipping company was not enough for him. Having been born and raised in an entrepreneurial environment, he felt encouraged to achieve more. Thus, his quest for success made him, think of starting up a business of his own. With money provided by his father, he set up his business that later came to be the successful Easyjet. An entrepreneur exhibits superb self-confidence in their ideas and abilities. As assignments are successfully completed, the more self-confidence is attained and subsequently, the more an entrepreneur feels more motivated. Dedicated entrepreneurs do not regard failure, as they consider it to be a learning experience. In case an idea or venture fails, it does not kick them out of the business. An entrepreneur will consider such an incidence to be a learning process and arms them with greater knowledge to help them out in future projects. Giving up according to them is a sign of failure, which they do not believe in. Richard Branson, when setting up Virgin Trains, many people discouraged him on his likelihood of failure. It was considered as one of his most risky ventures. Although he is characterized as a big risk taker, Branson had gone quite far with the train idea as people described it. However, his sense of courage and self-confidence made the venture succeed, winning franchises for the Former Intercity West Coast and Cross Country, both sectors of the British Rail. Entrepreneurs are good leaders, a characteristic they exhibit by their ability to easily build teams that help in pushing the product to the market. To become efficient leaders, entrepreneurs require building trust and confidence among employees and building an effective communication within them. Trust between leaders and the employees ensure a good working environment in the organization. I n cohesion of the entrepreneurial process, effective leadership is a prime factor (Dew, 2011, p. 245). Tenacity of entrepreneurs requires them to show a strong degree of persistence that is required for an entrepreneur to succeed. Major barriers that they meet along the way are regarded as obstacles to their success. Continuously, the entrepreneur overcomes such barriers and ensure that they project succeeds to its final stage of implementation. To them, barriers make them stronger, encouraging them to be more vigilant and proactive. Autonomy in entrepreneurship refers to the independency of an individual from other people, and having the ability to be in control of one’s own destiny. This frequently accompanies the locus of control, which requires a person to be in control of events beyond the individual. For both entrepreneurs, their individualism of their businesses with other people is evident from the manner in which they chose to run their businesses. People are the biggest discouragers. They make great ideas stall, as they discourage people from exploiting them. For Branson and Haji-Ioannou, although they lived with other people, they set their careers away from their social lives and family. They did not allow other people to meddle in their businesses. Although the trait theory seems to give the best and most important qualities that describe an entrepreneur, it has a number of critics. Experts argue that it is too simplistic, yet human beings are too complex to be categorized. Moreover, there is evidence of many entrepreneurs who lack the said characteristics and are successful while others have all of the said traits but are still unsuccessful. Naturally, the essence of self-belief and determination determines the level of success. This is a defining factor and strength for any entrepreneur. According to (Verstraete & Jouison-Laffitte 2011, p. 14) hard work is just an integral in the whole equation of success. To him, success is like a journey that needs focus and planning. There is need to plan ahead and strategize to come up with a solid implementation plan for the enterprise. However, transforming opportunities into a successful business idea is probably what defines successful entrepreneurs. Forget the talent, this is acquired, attributes picked in the life of a person, those which make them more competitive than others (Harmeling et al., 2008, p. 352). According to Stokes & Wilson (2010, p.51) points out that there building blocks that make successful entrepreneurs. Personal attributes such as innovation, determination, team leading and strategic focus are important in making a successful entrepreneur. Entrepreneurs are managers and exhibit management competencies of marketing, finance and human relations. Technical skills of entrepreneurs include knowledge of the product service and understanding of the product market industry. Not only does entrepreneurship create employment for the entrepreneurs alone, it also creates job opportunities for the employees of the ventures. Different traits describe entrepreneurs, just like scholars have suggested. For successful entrepreneurs like Stelios Haji-Ioannou of Easyjet and Richard Branson of Virgin, these traits are responsible for their success. While some scholars hold that entrepreneurship is a natural talent that people are born with, others are of a different opinion that entrepreneurship is a process that can be learned and skills can be acquired by interested parties. However, whet is important is the success of new ventures, which require skills and knowledge. How entrepreneurs acquire them is not the issue. Works Cited Top of Form Alvarez, S & Barney, J 2007, Discovery and Creation: Alternative Theories of Entrepreneurial Action, Fisher College of Business-Columbus, Ohio. Dew, N, Read, S, Sarasvathy, S & Wiltbank, R 2011, On The Entrepreneurial Genesis Of New Markets: Effectual Transformations Versus Causal Search And Selection, J Evol Econ (2011) 21:231–253. Greene, F., & Mole, K 2007, Three Decades of Enterprise Culture? Palgrave Macmillan. http://www.myilibrary.com?id=318129. Harmeling, S, Sarasvathy, D, S, & Freeman, R, S 2008, Related Debates in Ethics and Entrepreneurship: Values, Opportunities, and Contingency, Journal of Business Ethics 84:341–365. Pittaway, L & Cope, J 2007, Simulating Entrepreneurial Learning Integrating Experiential and Collaborative Approaches to Learning, Management Learning, Sage. Politis, D 2005, The Process of Entrepreneurial Learning: A Conceptual Framework, Baylor University. Sarasvathy, S & Venkataraman, S 2010, Entrepreneurship as Method: Open Questions for an Entrepreneurial Future, Baylor University. Sarasvathy, S., Dew, N., Wiltbank, R., & Ohlsson, A.-V 2010, Effectual Entrepreneurship. Taylor & Francis. Sjovoll, J & Skogen, K 2010, Creativity and innovation: preconditions for entrepreneurial education, Trondheim, Tapir. Stokes, D., & Wilson, N 2010, Entrepreneurship. Hampshire, UK, South-Western/Cengage Learning EMEA. Verstraete, T., & Jouison-Laffitte, E 2011, A Business Model for Entrepreneurship. Cheltenham, Edward Elgar Pub. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=807392. Read More