Characteristics of an Entrepreneur and What is Entrepreneurship - Essay Example

? CHARACTERISTICS OF AN ENTREPRENEUR Present a critical review of the characteristics of an entrepreneur with reference to at least three different categories of entrepreneurship. (You might wish to choose between the “intrapreneur” “lifestyle entrepreneur” “social entrepreneur” “family entrepreneur” “webpreneur” “rural entrepreneur” “serial/portfolio entrepreneur”). Characteristics of an Entrepreneur Entrepreneurship is a series of skills, but more so an anthology of developed principles that have their origins in humankind’s earliest evolution. Entrepreneurship itself is the genesis of business activity. More importantly it forms the basis of an economy and by some standard is the economy of a nation (Anderson, 1999, p. 130). In order to successfully develop a new venture, and to keep an existing one going on, there is a requirement to identify viable opportunities. For finding such opportunities a person has to go out of the way in his search and completely focus on a particular market to understand its needs and then meet them. This process of searching for something in the market has to be persistent and consistent. The market needs change continuously and yesterday’s opportunities can be lost. Competition is everywhere; businesses develop to meet the needs of the market and provide new and/or better products which are more in terns with the demand of the market. We cannot prevent this change; it is inevitable and it threatens the existing businesses. If the businesses are not active and are unable to continuously keep up with the new and emerging needs of the market will always fail at one point or the other and this is not the sign of a successful business. This is what the difference is between an entrepreneurship and a business – an entrepreneurship does not fail and keeps coming up with novel ideas to keep up with competition. An entrepreneur is the mastermind behind such a successful business. It is the efforts of an entrepreneur, his creative thinking and his ability to capture every opportunity and make it a success that makes a business an entrepreneurship. Although the market needs keep changing continuously some businesses consider this a pain in the neck and it is difficult for them to keep up with the demand changes. Some others take this as an opportunity and thinking creatively, grab the situation and profit out of it. That is an entrepreneur. The difference between a businessman and an entrepreneur is that the latter finds out the opportunities available and cashes them out. The process of entrepreneurship involves recognising opportunities, gathering the resources and considering the risks while going after profits. In an entrepreneurship opportunities are perceived in places where others would find risks and threats; change is sought and found where everything still seems the same; an under-served market is identified where their needs are not being met completely, while others find only satisfied customers. In order to seize such opportunities a businessman needs to have a deep insight into the market matters. He needs to be able to think creatively and make decisions taking into consideration the pros and cons of the opportunities. He needs to be able to take risks in order to delve into any opportunity. He needs to understand that risks are inevitable and either one can sit in his own bubble and avoid every opportunity wherein he does not see profits, or he can step forward, take risks and make a name. It can be said that successful entrepreneurs have certain traits that do not exist in other common businessmen. These traits are what set them apart from others. The most important being the ability and willingness to take risks, as without that a business cannot expand. They have to have this courage. However, it is difficult to enumerate all such characteristics as it is not necessary that one successful entrepreneur has everything in common with another. Besides, the traits may also vary between the different types of entrepreneurs, since there are a number of types of entrepreneurs and their works are all different. Three of these include intrapreneur, social entrepreneur and lifestyle entrepreneur. An intrapreneur is one who works within a large organization behaving like an entrepreneur. That is, he does not own the company but he does bring about innovations there. He comes up with an idea which he can take forward and turn it into a profitable product. It can be said that intrapreneurs are following the goal of the organisation and during that only they come up with new ideas which could improve the company. A study was conducted in partnership with American Express and from the survey it was concluded that about 58% of the managers have a strong or a very strong will to support those employees who wish to capitalize a new business opportunity that they can find in their own company, while 40% of the millennial employees have such an interest (Schawbel, 2013). There are some managers who provide a lot of support to their employees while some others constrain them and limit their entrepreneurial spirit. The support that they provide allows them to believe that they are also making an impact on the company no matter what their age is. In fact, this is extremely necessary because a lot of millennials leave their companies within the first two years of employment because they do not find any such career opportunities there. Intrapreneurship programs are one way to solve this issue. Intrapreneurs are more valuable to a company than several other employees put together. This is because of the organisational result that intrapreneurs give. A normal employee may be just working for money and to be able to earn a living, or in some cases they might be working because they like it there and they feel there is no problem. Although they fulfil their jobs and do all the work required of them, they do not bring about any changes. The case of an intrapreneur is different. He looks at the bigger picture and contemplates on what the next step should be to take the company further. He surveys the market and researches into the demands of the customers, what threats pose to the company and how they can be avoided. He looks at the competition and thinks about how they can leave them behind and give a better service than them. He continuously looks for ways to expand and improve the company. Such a person creates value as he reduces cost while increasing revenue. A social entrepreneur sees the world differently. He finds an opportunity in a situation which a normal person may find challenging. He looks at it and sees potential, and then works on it to extract the potential and put it to good use. A social entrepreneur is one who uses his expertise in thinking up solutions for social problems around him. There is no other difference between a usual entrepreneur and a social entrepreneur. Social entrepreneurs have the responsibility of taking care of the big world problems. They do not have to worry about things such as market share and stock. Rather, they look over how to help the financially unstable and what can be done to help them establish a business or get them a job. They work on how the costs of small scale home businesses can be reduced in order that there is greater profit. They think up ideas for what can be done to promote their businesses. More often than not these small businesses have been started by poor people or those who have a passion but not enough resources to come up with something big. Social entrepreneurs can help them. They attempt to create social value. Like normal business entrepreneurs social entrepreneurs, too, learn and adapt as they go. They may work in any kind of an organisation and think over both the profit and non-profit aspects. For business entrepreneurs their end result depends upon how successful they have been in expanding their company and how much of a return they got. In case of social entrepreneurs the end result depends on how much good were they able to do for the society and what positive came out of it. Amassing personal wealth does not interest a social entrepreneur; he more wants to see how much change he can bring about in the society that can be helpful to others. They have a strong passion to do something for society whether that be helping poor, correcting a social injustice, or any other positive thing that can better the world even if in a small way and get him satisfaction. Then there are lifestyle entrepreneurs. Such persons consider lifestyle benefits to be more important than financial profits. They organise their work such that their lifestyle goals are achieved. These goals could vary from person to person. Someone may want flexible working hours, while another would prefer to get the work that he actually wants to do, for still others the goal is to be able to work as well as continue with their hobbies and spend adequate time with family and friends in the society. Life style entrepreneurs need money, of course, this cannot be refuted. They need it to survive and keep up with the increasing expenses and they need it to live in style. However, they do not overwork for any extra cash. They do not pursue wealth. Rather, they prefer that the work they do balances their time between work and play or, even better, they can earn while performing their favourite hobbies and activities. For them passion is more important than profit. While most of the businessmen delve into a business for profit and work hard to get shareholders, a lifestyle entrepreneur prefers personal freedom and family time over money, and also prefers to work on projects which they want to or which inspire them (Muljadi). The goal of a lifestyle entrepreneur is to do the work that gives him just enough money as well as the freedom they love. Also, this “work” has to be something that they like doing, something that is their passion. In this category lie professions such as photography, crafting, jewellery making, and so on; something that they can control and something that they can set their working hours for and work as much as they want to or need to, not more than that. Now let us talk about what makes an entrepreneur successful. The three types of entrepreneurs that have been discussed above have similar characteristics – the characteristics of an entrepreneur – of being able to take risk, of having the ability to bring about innovations, having leadership quality and ability to make people work and motivate them in order to reach the goal they have set. They influence people and help them improve their ideas. He makes them think his way and thus gets his work done. In short, an entrepreneur is a person who combines risk, innovation, leadership artistry, skill and craftsmanship into a foundation upon which to build and motivate a team (Anderson, 1999, p. 131). An entrepreneur can perform any of these functions. He may introduce a new product, he may introduce a new way of producing goods, he may open up a new market, he may conquer a new source of raw materials, and/or he may create a new kind of industrial organisation (Kalantaridis, 2004). The common idea among these functions is that he is setting up or coming up with something new – he is bringing about an innovation. He has to have a vision to do something different and couple it with the belief that he can do it and make it a reality. The ideas literally pour out of an entrepreneur; he is full of innovations and novel plans that he just needs to lay out and implement. Of course, not everything can be done right away and it takes time, energy and resources to set up a business or even just expand and improve an existing one. But he has to be crazy enough to believe in his talents and abilities and then work hard to achieve his set goals. Entrepreneurs are action oriented. They have a lot of motivation built up inside them and that is what makes them able to take risks in order to reach the goals they have set. It is very important to take risks; of course that does not mean that the entrepreneur just goes wild and gambles over his capital that he wants to invest. Rather, he looks into the situation, weighs out all pros and cons and understands and manages the risk posed. It is only then that he takes a step forward if he finds the situation feasible. He also counts his instincts when taking a decision. Taking risks definitely does not mean jumping into every opportunity available whether there is any future to it or not. It is to be noted, though, that today the world is changing at such a fast pace that businesses have to rapidly adapt to the market needs if they have to survive and even well established and big organisations are always at a risk of failing. It is the thinking and decision making and keeping up with the market that helps an entrepreneur and an organisation survive this cut throat competition. Such persons also have a lot of ambition and determination. They are fully committed to their work and want results. They want to achieve their goals in business and this motive makes them work; it strengthens them against any obstacles and hindrances they face and the anxieties they feel if something in the middle goes wrong. It helps them to repair misfortunes and want expedients for running a successful business. They have the quality of perseverance. Their want to accomplish a goal successfully is their driving force and what makes them work hard; harder than others. The risks, problems, and any difficulties that come in their way do nothing to demotivate them. All they see is the goal that they have to achieve and will go to any extent to work for it. In case an uncertainty does arise in the process, entrepreneurs will tackle with it intelligently. They will not get deterred; rather they would think over the problem and find the most feasible solution to it even if they do not have the guidelines. Entrepreneurs’ brains are thinking all the time and coming up with unique and creative ideas that they could implement in order to make an organisation better. They survey the market regularly and keep up with news. They consider the prevailing situations and their decisions are based on that. If something changes and their decision is not working out, they will definitely revise it to achieve their goals, rather than being frigid and persisting to work the wrong way. They have really open minds. Their open-mindedness allowed them to even take suggestions and opinios from others and look at how they perceive the situation. Also, when making decisions they think over it several times to make sure that they are on the right path. Of course, decision making is a very stressful task but they keep cool and look over everything calmly before deciding what is to be done. They are always looking for opportunities and once they find any they, right away, seize that opportunity and work on it to reach the goals they have set. Entrepreneurs are opportunity explorers. Entrepreneurs are people who act, people who get things done, often without paying much attention to “the rules.” In the economic realm, they can spot a business opportunity – an unmet need – and act on it, putting together the resources required and building an organisation (Anderson, 1999, p. 132). Such people are not really working for money. Of course they need a salary too to survive and uphold their societal status. But their main aim is achieving what they dream. They want personal rewards and want to be recognised. They are personal achievers (Miner, 1996). For this purpose they have to do something different and succeed at it. And since not everyone think different is good they have to take up the responsibility of their plans – this is more applicable to an intrapreneur because he works for an organisation and if something goes wrong it will be his fault. A self-employed entrepreneur, however, has the freedom to make his choices as he deems best. It must be said, though, that an entrepreneur likes to have the freedom and power to make decisions and they take responsibility for that. They want to be able to do as they like. They are job givers, not seekers. The reason that entrepreneurs are able to take up responsibilities is that they have self-confidence, they give full dedication to their company and they work hard to achieve the goals they have determined for themselves. They come up with an innovative idea, they think over it, they plan it and then they do it. That is to say entrepreneurs are thinkers, doers, planners and workers. They do not just give an idea and sit back; they overlook its implementation, seeing if everything goes alright and as planned. They plan everything and set out realistic business plans and then make sure that those plans are followed in order that the goal is achieved within the decided time. They have to rely on themselves for their capability, judgement and resources. They are confident about decision making and ready and willing to take responsibility for the end result. Entrepreneurs are also, more often than not, far sighted. They look at the market through the views of different people responsible for fulfilling their needs; a salesman who needs to persuade people to buy their products; a financial talent who needs to see that the available funds are being capitalised and used properly without any wastage; an auditor who looks over the precision. Entrepreneurs also tend to have good communicational skills. They need to be able to maintain relations with others – customers, employees, etc. This is particularly necessary because they have to be able to communicate their plans properly and fully in order for them to succeed. He has to make them understand what he needs them to do so that the business can be run effectively without any setbacks. He has to guide the ones under him for which he needs to talk to them in their language – a language that they understand better. One problem that potential entrepreneurs may face is the lack of capital (Blanchflower & Oswald, 1998). A person comes up with a novel idea that seems to be great to start a business upon. There are no flaws in the business plan and all it needs is for someone to implement it. Every business requires investment – some need a lot of it while others just need a nominal amount. In such cases investment is a very great problem. The plan is all laid out but it cannot be implemented due to the lack of resources. In such a case the person has a couple of options to consider. First of all, he can take a loan from the bank. However, that depends on the person’s background, his current financial status and the property he owns. Banks do not just give out loans to anyone who asks for it. They have to have collateral too, in the form of property, vehicle, or other valuable things. The person has to be eligible for getting a loan by fulfilling the requirements of the bank. If he cannot do that, he will not get the loan no matter how good his plan might be and no matter how much possibility there is of it being successful and profitable. The bank cannot take a risk. If this is the case the person can turn to his family and friends for help. Again, that depends on how well off they are and whether they can help him. Another thing to consider here is the degree to which they can trust the person regarding returning the money within the specified time. They would also ask the person several questions regarding his business plan. They would want to know how much of a possibility he has of succeeding and making his business profitable. Since it is their money that is being invested in the business, they will understandably be worried and curious about the details. It is the responsibility of the person to make them believe in him. He has set out the plan and he is confident that it would work; maybe because he believes in his talent, or maybe because he sees the opportunity correctly and knows how to work through it. However, the investor may not be able to see through it. He may not have the eyes of an entrepreneur and therefore would not be able to see how the investment would prove to be fruitful. Therefore, he has to make him understand everything and lay out his plans fully and completely. An entrepreneur believes that nothing is impossible. He has to portray this attitude to the investor as well. Once the capital has been arranged the person just has to proceed with the business plan and work hard to achieve his set goals. One thing to note is that an entrepreneur is not made. Of course, a person starting a business may improve his talents and skills over time and with experience. He may see how famous and reputable entrepreneurs tackle problems, what their decision making process is and how they come up with ideas, this quality cannot be instilled into a person. More often than not a person is born with entrepreneurial skills, just like some are born leaders and artists. Training and education can definitely improve a person’s mind-set and knowledge; he may get to know things he did not before. But a born entrepreneur would still be more successful than such people. He would have ideas oozing out of his brain while a learned businessman would have to think over how to improve his business and what new products and innovations can be brought about. Entrepreneurs always take the initiative; they do not back out and do not hesitate. Not everyone can do that. People tend to plan things and not implement them because they feel that it would not succeed and they might end up losing capital. An entrepreneur does not think that way. He takes the initiative, commits himself to it and drives himself to work hard, he has the determination and self-direction required and is confident enough to pursue toward his set goal. Once they succeed and achieve their goal they do not stop; they continue working to keep control of their business and to keep expanding and improving it and their profits. References Anderson, R. B. (1999). Economic Development Among the Aboriginal Peoples of Canada: The Hope for the Future. Captus Press. Blanchflower, D. G., & Oswald, A. J. (1998). What makes an entrepreneur? Journal of Labor Economics, 16(1), 26-60. Dyson, C. (2001). What makes a great entrepreneur? European Business Review, 13(5). Kalantaridis, C. (2004). Understanding the Entrepreneur: An Institutionalist Perspective. Ashgate Publishing. Miner, J. B. (1996). The 4 Routes to Entrepreneurial Success. Berrett-Koehler Publishers. Muljadi, P. (Ed.). (n.d.). Entrepreneurship. Schawbel, D. (2013, September 09). Why Companies Want You To Become An Intrapreneur. Retrieved December 10, 2013, from Forbes: http://www.forbes.com/sites/danschawbel/2013/09/09/why-companies-want-you-to-become-an-intrapreneur/ Read More