How to Become an Entrepreneur - Essay Example

Reflective Journal on how to become an entrepreneur Name: Course: Lecturer: Date of Submission: How to Become an Entrepreneur Entrepreneurship is the act of discovering new business opportunities, evaluating them and successfully exploiting them (Kotter, 2008). This results in new products, new ways of doing things, new markets and sources of raw materials, and new organizational features (Holmes & Schmitz, 2001). Entrepreneurial opportunities have always had something to do with the entrepreneur’s environment and the individual himself in terms of skills, creativity, beliefs and knowledge (Cuervo, 2007). For an opportunity to be viable, it has to be; timely, attractive and matches the entrepreneur’s ability and interest (Shane, 2003). I totally agree with Shane (2003) that entrepreneurship as a concept can only result in to a real business when an opportunity exists to be exploited by an individual with the right skills, qualities, knowledge, and attributes. In light of this understanding, I will discuss extensively in this journal, the skills, qualities, knowledge and attributes required to be an entrepreneur. Attributes Risk taker The most common characteristic in all entrepreneurs is the willingness to take risks (Wang & Poutziouris, 2010). Once an entrepreneur believes an opportunity is viable, he or she commits resources, time and energy to a great extent to exploit it successfully (Cuervo, 2007). In most cases, business opportunities exist in situations of great uncertainty where the degree of success or failure cannot be easily determined. Ordinary people fear to commit to an opportunity that is yet to be proved viable. Entrepreneurs, on the other hand are willing to pursue the unknown course of a business concept or product idea (Wenhong & Liuying, 2010). According to Shane (2003), an entrepreneur is exposed to three basic risks when he/she starts a business. Firstly, the entrepreneur is not guaranteed of recouping his investment or generating a regular income from the business. The initial stages of a business are the most challenging since the core organizational systems are not yet well developed. Hayek & Harvey (2012) support Shane (2003) observation that entrepreneurs run the second risk of disrupting family relations. This is because entrepreneurs spend a lot of time running their business particularly at the initial stages (Lewis & Weber, 2011). In our second week lecture, I learned about opportunity obsession being a dominant theme in an entrepreneurial mind. I believe opportunity obsession and personal commitment isolate an entrepreneur from his immediate family. In case an entrepreneurial venture fails, an entrepreneur is likely to develop psychological issues such as depression (Hayek & Harvey, 2012). Despite all this risks, entrepreneurs are courageous enough to take risks and in most cases emerge successful. Creative It takes a great deal of creativity to spot an idea and convert it into a viable business. Creativity is a core attribute of entrepreneurs (Rae, 2004). Steve Jobs, a co-founder of Apple Inc. creatively blended technology and art to come up with the iPhone. According to Jobs, his aim was to introduce computer technology in cell phones in a more interactive and productive way (Adams, 2013). In my research I found similar creative attributes with Richard Branson, the founder of the Virgin group of companies. Branson admits that his creativity and anxiety was instrumental in establishing Virgin as a brand in more than 200 businesses ranging from tourism, transport, entertainment and telecommunication (Branson, 2011). I believe entrepreneurs’ creativity stems from their ability to break from conventional to out-of-the-box thinking. Entrepreneurs are nonconformists in nature and will always try to break generally accepted rules in solving problems (Wenhong & Liuying, 2010). Visionary Entrepreneurs have the ability to envision a business from an idea to a highly profitable empire (Wang & Poutziouris, 2010). This ability automatically qualifies entrepreneurs into leaders. Leaders are the bearers of a vision, and they guide followers through many hurdles and uncertain situations into a successful future (Kotter, 2008; Kelly, 2000). I believe the success of an enterprise is highly dependent on the leadership ability of the lead entrepreneur. Of course, leadership is to a large extent connected to the entrepreneur’s self-belief. Entrepreneurs have to be highly confident of their abilities and ideas. Without confidence, an entrepreneur’s ideas or concepts can be easily challenged by others (Stokes, Wilson, & Mador, 2010). I believe the above three attributes are very important for successful entrepreneurs. However, it is also true that entrepreneurs do have more attributes that make them exploit opportunities successfully than other people. For example, entrepreneurs have a high tolerance for failure and disappointments along the way to their success (Shane, 2003). Entrepreneurs take failure as a learning opportunity to improve on their practices and concepts to be successful this means an entrepreneur cannot be easily dissuaded from his vision and belief in a business or concept (Wenhong & Liuying, 2010). Skills Being a risk taker, having creativity and other entrepreneurial attributes are not enough to be successful in entrepreneurship. An entrepreneur needs a range of acquired skills to be successful in business. I was particularly curious about the ideas informing the school of thought which postulates that entrepreneurs are born, not made (Shane, 2003). While I agree with this concept, an entrepreneur with an inborn intuition for opportunity exploitation also needs skills vital for business. Communication In all start-ups, an entrepreneur is the originator or the owner of an idea. He also bears the vision of the business going into the future (Kotter, 2008). An entrepreneur needs investors and employees to understand his ideas and vision for his business. Clearly, an entrepreneur must be able to communicate effectively in order to persuade other to believe in him (Kelly, 2000). The entrepreneur must know how to use his body language and choice of words in a way that will be highly impactful to the recipient of a message. In organizations, entrepreneurs communicate their vision through core values, their own conduct and actions and informal channels (Ireland & Hitt, 2001). Managerial Successful entrepreneurs double as good managers of people and time (Cuervo, 2007). The success of business in most cases is defined by the productivity of people and profitability. According to Butler (2004) an entrepreneur must ensure that an opportunity is exploited during its lifetime. To achieve this, he must organize the right skills and work efficiently within a specific time constraint to be successful. Entrepreneurs must understand how to motivate their employees in order to reap maximum benefits from them. In most start-up businesses, core employees are likely to work beyond their job description (Ardichvilli, Cardozo, & Ray, 2003). In entrepreneurial businesses, employees also work overtime to ensure the success of the business as envisioned by the entrepreneur. The entrepreneur must, therefore, be able to motivate his team for example through incentives such as prizes or a share of the business. Management in businesses revolves around meeting people’s needs and expectations (Kelly, 2000). This means the entrepreneur must also be a team player. Planning and execution I agree with Rae (2004) that entrepreneurs are master planners. Without planning, it is not possible to achieve success in businesses. Growth and profitability are usually prepared for and anticipated in any business. Successful entrepreneurs must be able to plan how they are going to achieve objectives set out in their businesses. With a good plan, the entrepreneur must go the extra step of implementing it accordingly (Lewis & Weber, 2011). The business planning lecture introduced me to the concept of effective planning in entrepreneurship. I developed my entrepreneurial planning and execution ability from the business planning skills I acquired in week 6 lecture. Entrepreneurs must be able to research effectively in order to develop good plans and execute them successfully. This means entrepreneurs must have the ability to scan their environment and think critically to understand the dynamics that inform their ideas. I hold the opinion that an entrepreneur must be able to apply tools such as SWOT analysis, PESTLE analysis and Porters five forces Qualities Entrepreneurs in different fields have common qualities that define them. These qualities can be visible in other people such as sportsmen or scientists, but are vital in ensuring the success of entrepreneurs too. Perseverance Entrepreneurs are present at all the life stages of a business. This means that they bear all the hardships of starting and running the enterprise more than any other person (Rae, 2004). Young businesses go through a lot of challenges including financing, staffing and managerial. Investors and banks are not usually willing to finance a new business that does not have a clear growth path (Butler, 2004). This is usually a challenging situation to the entrepreneur as the business is at a stage where it is critically in need of finances. It is also difficult to source for talented employees as they require established structures and higher salaries (Ardichvilli et al, 2003). The entrepreneur successfully manages to go though situations where good employees are poached and opportunities are foregone due to limited financial capacity. The entrepreneur learns from failure and improves through such challenges to grow an enterprise. I believe without such perseverance, a business idea cannot grow into a thriving profitable enterprise. Workaholic Entrepreneurs work more than 60 hours a week to ensure the realization of their dreams and objectives in a business (Stokes et al, 2010). I realized from my discussion with fellow students that most people associate self-employment with freedom. However, I believe an entrepreneur commits more time and energy to sustain a business than anybody else. This means that an entrepreneur has to be self-motivated to work such long hours. This is what in my lecture studies is defined as opportunity obsession and commitment to a goal. More often than not, entrepreneurs have limited time for social engagement and family affairs due to long working hours. I believe entrepreneurs are highly disciplined individuals who do not need any supervision to work. Aggressive/competitive Entrepreneurs are very much committed to their goals such that they exhibit high levels of aggressiveness to succeed (Branson, 2011). The success of a business means more than profit to most entrepreneurs. Success in a venture is connected emotionally to the need for achievement in entrepreneurs. According to Wenhong & Liuying (2010), entrepreneurs are likely to slide into depression if they do not succeed in highly risky ventures. This is because entrepreneurs sacrifice time, energy and resources in an idea that they strongly believe in (Hayek & Harvey, 2012). entrepreneurs take failure as temporary defeat in order to avoid getting depressed. This allows the entrepreneur to start all over again as a way to compensate for failure and avoid stress. Knowledge An individual must have certain attributes, skills and qualities in order to be a successful entrepreneur. However, an entrepreneur must also be very knowledgeable about his environment in order to position the business competitively (Longenecker, Petty, & Palich, 2011). Knowledge is dynamic and is influenced by the environment and prevailing trends. An entrepreneur must scan his environment regularly to acquire knowledge (Casson & Wadeson, 2007). Industry knowledge Industries are constantly going through change due resource depletion or availability as well as technological advancement (Kotter, 2008). This change informs new knowledge that can only benefit entrepreneurs and organizations that position themselves for such changes. I agree with Kotter, (2008) that an entrepreneur must always be updated on changing trends in the industry. Technology industries such as mobile communication devices have exhibited disruptive changes in the 21st century. The introduction of smart phones by Apple Inc and Samsung significantly reduced Nokia’s market share. Nokia did not change rapidly to adopt new industry and market trends (Arthur, 2014). Knowledge makes entrepreneurs more concerned about the society to be more socially responsible (Hawkins, 2006). Businesses process knowledge An entrepreneur must research greatly to understand his product offering and how businesses processes in the firm are organized to deliver it (Ardichvilli et al, 2003). This means that the entrepreneur must have a good understanding of consumer preferences and needs and how the product meets the needs. The entrepreneur needs such knowledge to plan the organizational processes and mobilize the right people to sustain the processes. Becoming an entrepreneur is not a single-phase process. I believe entrepreneurs must have attributes such as creativity, ability to dream and take risks to achieve goals. Entrepreneurs are hardworking and self-motivated individuals who endure hardships to achieve their dreams. Apart from this, I agree with the reviewed body of research and arguments in this paper that entrepreneurs need skills in management and communication to be successful. Finally, entrepreneurs must continuously acquire knowledge to position their entities competitively in the market as per industry dynamics. To me, an entrepreneur is somebody who is always preparing himself to adapt to change and exploit new opportunities. References Adams, S. (2013, September 27). Is Apple The World's Most Innovative Company (Still)? . Retrieved September 10, 2014, from Forbes: http://www.forbes.com/sites/susanadams/2013/09/27/is-apple-the-worlds-most-innovative-company-still/ Ardichvilli, A., Cardozo, R., & Ray, S. (2003). 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