Characteristics of an Entrepreneur - Research Paper Example

?Insights into Entrepreneurship Table of Contents Table of Contents 2 1. Definitions 3 1 Entrepreneurship/Entrepreneur 3 1.2 Start-up 4 2 Characteristics of an Entrepreneur 4 Ability to Deal with Risk 5 Result Oriented 5 Energy 5 Growth Potential 6 Team Player 6 Multitasking Ability 6 1.3 Reasons for Success and Failure of Start-Up Companies 7 1.4 Approaches in Founding a Company 8 References 9 1.1. Definitions 1.1.1 Entrepreneurship/Entrepreneur “The entrepreneurship is essentially a creative activity or it is an innovative function” is the definition given by A. Schumpeter (Baruah, n.d.). It has been observed that the generation of a country’s wealth along with dynamism greatly depends upon the competitiveness of the farms within that particular country. The main essence of the modern organizations greatly lies within the specialization of diversified functions. Entrepreneurship is generally understood as the starting up of one’s own business. In accordance with the views presented by economist Joseph Schumpeter, entrepreneurship is essentially the entrepreneur’s initiative and drive for the improvement that results in the change and growth of the farm (Cuervo & et. al., n.d.). Entrepreneur is "a person with leadership, which take risks to exploit certain opportunities, are based more on their forces, develop its strategy based almost entirely by personal interests” (Burdus, 2010). In normal viewpoint, an entrepreneur is a person who creates a business and is ready to endure risk at any point and under any circumstances. They usually are initiative takers and innovative in their approach with an objective to earn profits. Furthermore, it has been ascertained that they are capable of allocating the resources in a useful manner. Definitions of both entrepreneurship and entrepreneur show their comparisons. Entrepreneurship brings about the origination of primarily a farm or an organization that is created or established by an entrepreneur to continue with trade. Entrepreneurship represents the innovative function. Consequently, entrepreneur is the body that incorporates leadership skills and is capable of taking risks (Gutterman, n.d.). 1.1.2 Start-up Start-up founders are primarily the people who either register a business or simply establish something that might develop into a business. It has been observed that start-up founders are generally the entrepreneurs. The main difference lies between the start-up founders and entrepreneurs is the objective or goal. An entrepreneur commences a start-up business unit with the aim of generating value to stakeholders and shareholders. In order to derive utmost value, ethical and tactical approach of an entrepreneur is of high importance. In case of an entrepreneur of a start-up unit, the motive is constant i.e. financial growth. It has been further observed that failure of any start-up business and the entrepreneur’s fate are very closely related (Tenner, 2013). 1.2 Characteristics of an Entrepreneur Fast growing entrepreneurial organizations are in verge of absorbing candidates who continuously demonstrate the entrepreneur characteristics. It can be well observed that these entrepreneurial characteristics set the base of any organization. The various important characteristics of an entrepreneur have been explained in a detailed manner hereunder (Hadzima, 2005). Ability to Deal with Risk It is considered that an entrepreneur must be compatible enough to operate in an effective manner within the environment that is filled with risk. The entrepreneur becomes liable for building up strategies in order to deal with the any kind of risk and uncertainty. Moreover, an entrepreneur also endures the ability to formulate decisions that assist the employees in accomplishing the desired goals (Hadzima, 2005). Result Oriented It has been noted that the entrepreneur takes initiative in order to implement certain strategies for getting the work done by the employees. Furthermore, it has also been analyzed that an entrepreneur implements such decisions that motivate and direct the employees towards desired goals and objectives (Hadzima, 2005). Energy Entrepreneurs must endure the capability to provide high level of energy along with enthusiasm amidst the employees. Moreover, he/she must be committed towards the organization for its overall development and growth. An entrepreneur must be capable enough to point out the errors within the organizations and to mitigate it with efficiency (Hadzima, 2005). Growth Potential It is the responsibility of the entrepreneur to recruit effective workforce in order to foster accelerated amount of productivity. Moreover, today’s quality workforce within the organization will be the future’s managers and supervisors. This ensures accelerated productivity and growth of the business (Hadzima, 2005). Team Player One of the vital characteristics of an entrepreneur is team player. He/she must be capable enough to coordinate the team effectively. An entrepreneur must be able to direct and motivate the team towards business objectives. Managing and executing the team effectively is one of the most important characteristics of an entrepreneur (Hadzima, 2005). Multitasking Ability This ability of an entrepreneur is to control and monitor any situation efficiently. He/she must be capable enough to handle critical situations without any external help. An entrepreneur must be acquainted with all the activities of an organization to have an effective control over the others. This will ensure growth and development of an organization (Hadzima, 2005). 1.3 Reasons for Success and Failure of Start-Up Companies The success or failure of the farms greatly depends upon its birth. It has been noted that few of the start-up businesses fail. In this regard, such entrepreneurs are called nascent entrepreneur and the founding effort is known as the nascent entrepreneurship. The vital details for the failure of such farms include a lack of the representative sample. There are numerous factors that are responsible for the failure of the stat-up business. Inadequate planning that involves the commitment of the entrepreneur or the founder is also a key determinant. Planning to start-up a business incorporates numerous strategies, market knowledge and competitive analysis. Another vital factor represents the availability of inadequate capital for the start-up business. The wrong estimation of the market analysis also leads to the failure of the idea of starting a business. Furthermore, appropriate usage of professional advisors also plays an important role in the start-up of the business. As per the observations, another vital factor reflects to have a proper understanding of the capital requirements for a start-up business (Gelderen, 2005). In the midst of failures, there exist certain vital factors that assist in the success of a start-up. The founder must focus on leadership skills and qualities of the leaders. It is their responsibility to make the leaders accountable for the operations and the planning that they are involved in. Moreover, applying proper measurement tools related to performance can ensure success rate of the start-up business. Another vital factor pertaining to success rate is satisfying the customers by mitigating their wants and desires. It is important for the start-up founder to sell services and make the organization competent to deliver a service culture. These factors assist the founder to establish its start-up business (Salesforce, 2013). 1.4 Approaches in Founding a Company It has been viewed that in starting up a business, there always remains a hit-or-miss proposition. Nevertheless, in recent scenario, a new methodology that is ‘lean-start-up’ has been introduced. This mechanism significantly supports the experimentation extensively over the elaborate planning. Lean thinking has greatly assisted in dealing with the complications effectively while starting up a business. There exist five basic principles on which lean strategy works upon. Value, value stream, flow, pull and protection are the five principles (Hines, 2010). Schumpeter the economist has provided differentiated views in response to entrepreneur. According to him, gender-based perspective plays a vital role in the establishment of a new business. His views further reveal that a male entrepreneur remains more successful as compared to female entrepreneur. In accordance with his approach, men usually follow the long-term strategies as the management style, however, women entrepreneurs endure ‘limited-vision’ (Kwasnicki, 2003). According to the approaches of Cantillon and Say, an entrepreneur has been considered to be an important constituent in the overall economic development. He recognizes the entrepreneur as a person who is eligible to take risks and is innovative. They have been greatly motivated by the risk taking ability. In the gender-based approach related to risk taking, it has been assumed that female entrepreneurs endure ‘lower-risk propensity’ as compared to the males (Rothbard, 2010). In accordance with the trait approaches, it essentially reflects the characteristics that an entrepreneur must endure. It deals with the inherent qualities and weaknesses of the entrepreneur to handle the risks and challenges exceptionally with effectuality (Fleenor, 2011). References Baruah, A., No Date. Entrepreneurship: Concept and Definition. Indian Institute of Entrepreneurship, pp. 1-5. Burdus, E., 2010. Fundamentals of Entrepreneurship. Review of International Comparative Management, Vol. 11. Iss. 1, pp. 33-42. Cuervo, A. & et. al., No Date. Entrepreneurship: Concepts, Theory and Perspective. Introduction. Universidad Complutense de Madrid, pp. 1-21. Fleenor, J. W., 2011. Trait Approach to Leadership. Sage Publication. Gelderen, M. V., 2005. Success and Risk Factors in the Pre-Startup Phase. Small Business Economics, Vol. 24, pp. 365-380. Gutterman , A. S., No Date. Definitions of Entrepreneurship. Abstract, pp. 1-4. Hadzima, J., 2005. Seven Characteristics of Highly Effective Entrepreneurial Employees. Practical Advice for Entrepreneurs, pp. 1-3. Hines, P., 2010. The Principles of the Lean Business System. Sapartners, pp. 1-23. Kwasnicki, W., 2003. Schumpeterian Modelling. Institute of Economic Sciences, pp. 1-17. Rothbard, M. N., 2010. Richard Cantillon: The Founding Father of Modern Economics. Mises Daily. Salesforce, 2013. The 7 Secrets of SaaS Startup Success. Whitepaper, pp. 4-15. Tenner, D., 2013. Start-up Founders Vs Entrepreneurs. Swombat. [Online] Available at: http://swombat.com/2013/6/4/startup-founders-vs-entrepreneurs [Accessed 2 December, 2013]. Read More