The concept of entrepreneurship - Essay Example

0 Introduction Entrepreneurs are responsible for start-up and growth of all businesses and without them, business management would not exist as a field of study (Nieuwenhuizen, 2004). All businesses except state owned enterprises were established and grown by entrepreneurs and research has shown that there are various measures that that can be implemented in order for one to succeed in such kind of business. Against this backdrop, this paper seeks to critically evaluate the characteristics and traits that are necessary for one to start as well as to manage successfully a business venture. The paper starts by explaining the meaning of entrepreneurship in order to gain a clear understanding of the whole concept. This is followed by a clear outline of the traits required for one to start up a small scale business venture. Basically, it can be noted that successful entrepreneurs possess key characteristics that determine their success in business. The main points discussed in the paper will be summed up at the end of the paper. 2.0 Meaning of entrepreneurship The concept of entrepreneurship can be defined as the process of searching the environment to identify business opportunities for improvement, to mobilise resources and implement actions to maximise these opportunities (Bowler, 1996). Thus, the kind of business venture normally involves an element of risk for which a profit reward is usually sought. Entrepreneurship also encompasses aspects such as the introduction of new goods or improving the new ones, developing the new methods of production, opening new markets as well as creating new forms of business organisation. As such, it can be observed that this is not an easy feat to achieve given that there are certain characteristics and traits necessary to start, manage and develop an entrepreneurial enterprise. Some of these traits required for staring up business are discussed below. 2.1 Entrepreneurial traits and characteristics The entrepreneur is always looking for business opportunities because he has the courage to take the risk to start a business. Whilst other people would like to believe that entrepreneurs are born with special characteristics, it would be more accurate to say that entrepreneurship is learnt behaviour (Wickham, 2001). The longer one continues to scout for business opportunities the more one notices profitable business opportunities. Thus, a prospective entrepreneur must always analyse himself and determine weak and strong points that characterise his personality. It can be observed that entrepreneurs possess particular characteristics that set them apart from people are not intent on starting an enterprise of their own (Burke, 2007). Each entrepreneur has got a unique combination of characteristics and traits at his disposal for achieving success. 2.1.1 Philosophy of life The entrepreneur often tries things where the majority of people will back off (Gundill, 2006). Entrepreneurs are self starting and they are always looking for opportunities to which others have not even dreamed of and one notable aspect about these people is that they are enterprising and they approach all things positively. Through innovation and creativity, an entrepreneur is able to identify an opportunity in the market and looks at both the positive as well as negative aspects that are related to that opportunity. The key success factor of the entrepreneurs in this particular case is that they always look at positive aspects of a given situation then look at the challenges later. This enables them to be better positioned to take the risk and approach the situation with caution fully knowing the measures that can be implemented in order to overcome the challenges or any other negative aspect that can impact on the business venture. It can be observed that every big business starts off as a small business and a good example can be drawn from the cases of McDonald’s hamburger, Apple computer as well as Ford car (Steinhoff & Burgess 1993:4). McDonald’s for instance is a renowned fast food restaurant but it started off as a small enterprise. Bessant & Tidd (2007), posits to the effect that an entrepreneur is always looking for new opportunities, either in existing enterprise or in the creation of a new enterprise and in most cases, the consumers do not realise that they need the services until they are in existence. 2.1.2 Achievement orientation A strong achievement orientation is an important characteristic of a successful entrepreneur given that he does his level best to make persistent efforts to excel despite failures and factors they cannot control. McClelland (1961 as cited in Nieuwenhuizen, 2004) suggests that the need to achieve something is a basic tenet for successful entrepreneurs. Thus, a person who is oriented towards achievement always tries to do things better, more efficiently and faster in order to achieve the desired goals by that particular person involved. Achievable goals are often set and measures to achieve these goals are decided where motivation is seen as a very important ingredient for successful entrepreneurship. A person who is concerned about achieving the set goals is determined to portray a self image so as to be able to motivate the other people to share his own vision. If the targeted consumers in particular realise that their needs are likely to be satisfied by the new enterprise, they will also develop a positive attitude towards it which can positively contribute to the success of the business. For instance, small business is a dominant form of organisation for American business. According to the Small Business Administration (SBA), these small enterprises account for 52 % of all US workers (http://economics.about.com/od/smallbigbusiness/a/us_business.htm ).This entails that there were more than 19 million small firms providing products, services, and information within United States. 2.1.3 Leadership abilities The success of any business venture largely depends on the leadership traits displayed by the leaders in a particular organisation. Basically, leadership is the ability to influence the behaviour of other people towards the attainment of set goals and objectives (Robbins, 1993). An effective leader inspires and motivates the interests of the other people towards the set goals. An entrepreneur cannot be successful in isolation and this is the main reason why there is need to motivate the employees as well as to involve the stakeholders’ ideas such as customers as they are affected directly or indirectly by the operations of this particular business venture. A successful entrepreneur has to possess a locus control of the human resources involved in that particular business venture. Information gathering about the interests and needs of the customers is very important in that it makes the people believe that they are part of the venture (Burke, 2007). Thus, a successful entrepreneur must be skilled in persuading other people to share his own ideas which can positively influence the operations of the enterprise. 2.1.4 Organising and problem solving abilities When an entrepreneur experiences problems or failure, he does not blame others or the circumstances that led to such problems. A successful entrepreneur does not run away form from problems but he analyses the situation to determine the cause of the problem or failure then try to find amicable solutions to the problem (Bowler, 1996). Problems are inevitable in the operations of any given organisation hence it is imperative for any entrepreneur who is concerned about the success of his business venture to anticipate problems as well as probable solutions that can be put in place. Instead of blaming the situation or other people, a true entrepreneur will take steps that are necessary for the business to survive and grow. The other aspect of a true entrepreneur is that he often tries to convert a negative situation into a positive scenario which can be beneficial to the enterprise as well as the customers in the long run. An entrepreneur believes in his or her abilities and is often convinced that he or she can make a difference hence he acts accordingly. A holistic approach has to be taken when dealing with problems given that these can negatively impact on the viability of the business venture as a whole if they are not dealt with in an amicable manner. Problems may not be avoided in any given business venture and this is the reason why entrepreneurs have to be better positioned to deal with such situations. Another viable alternative is concerned with giving the members of the enterprise the autonomy to deal with the problems they may encounter in their operations as this will enhance their decision making capabilities. 2.1.5 Willingness to take risks Entrepreneurs take calculated risks and this entails that the risk associated with the business opportunity must not be too great (Ducker, 1985). Every business opportunity is somehow associated with risk but successful entrepreneurs are not scared of risk as they first calculate the magnitude of the risk on the viability of the organisation then decide about the measures that can be implemented in order to deal with the situation. The level of the risk must not be too low either given that this will give rise to competition which is always seen as a threat to the viability of the enterprise. If competition is high, it means that all the enterprises will be competing for the same customers which may affect the viability of the enterprise in the long run. Some of the risks in the market are foreseen while others are not hence it is very important to make informed decisions with regards to dealing with this particular scenario. Some risks can positively contribute to the viability of the organization if a holistic approach is taken in dealing with them. After all, research has indicated that establishing a business venture is characterised by different risk factors which can be converted into opportunities for business (Burke, 2007). Where there is no risk, it can be noted that the viability of the enterprise may be negatively impacted since this will be a reflection that there are weak opportunities for establishing a strong and viable business venture. 2.1.6 Perseverance Entrepreneurs are people who persevere despite failures (Bowler, 1996). They often believe in their own ideas and businesses and despite criticism from the others, they will continue. The main characteristic of entrepreneurs in this case is that they do have a vision and they can visualise their ideas. If they believe that they are likely to face problems in their business ventures, they often take necessary precautions that do not jeopardize the survival of the enterprise. Successful entrepreneurs do not easily succumb to problems given that they have committed themselves to their businesses and they will manage to pull through. Perseverance is a key characteristic that is very important in everybody’s personal life especially in the business world. Challenging situations are often encountered and these have to be dealt with in a carefully designed manner so that a lasting solution can be found to the problem identified. In spite of setbacks and difficult situations that can be encountered, entrepreneurs are able to make quick decisions in order to address the problem identified. They do not lose heart when they make mistakes or fail and they often exercise patience until a task has been completed and the goal has been reached. Therefore, entrepreneurship is more like a journey which is mainly concerned with the achievement of the desired goals. Some situations are challenging but these are not invincible if a holistic approach is taken. A person who is determined to reach the set goals is committed to the enterprise and he puts optimum effort to make sure that the desired goals are achieved. It can also be seen that successful entrepreneurs are open to criticism as they use it as a decision making factor that can be put in place in order to address the a challenging situation. 2.1.7 Need for pro activity According to Nieuwenhuin (2004), this concept of pro activity entails that the entrepreneur often does things before he is forced by the situation to take a particular course of action. In other words, a successful entrepreneur will scan the environment in advance in a bid to establish if there are any obstacles or threats that can negatively impact on the viability of the business venture in the long run. It is very important to scan the environment given that it will enable the entrepreneur to anticipate probable solutions that can be implemented in order to deal with the situation. For instance, a successful entrepreneur has to make sure that he is close to the customers and can receive immediate feedback about the products and the customer’s need. Customers become loyal when they are treated as special and this pro activity has to be implemented in order to ensure that the business venture can achieve success in the long run. Measures to deal with customer concerns should be anticipated in advance. The success of the small business ventures hinges on the ability of the entrepreneurs to anticipate some of the factors that can challenge their business. This impacts on the decision making process of the organization given that the entrepreneur has to be better positioned to deal with various situations that can emerge during the operations of the enterprise. Needs of the stakeholders have to be taken into consideration when dealing with decisions that are meant to improve the enterprise’s viability. 2.1.8 Greater motivation An entrepreneur’s whole life revolves around the business and they often work long hours and are prepared to take an extra mile to satisfy the needs of the customers (Bowler, 1996). Entrepreneurs are motivated and it can be observed that people who work for larger organisations are not as motivated as these. The entrepreneurs should be involved in all aspects of the whole enterprise and should be aware of what is happening at all levels and in all sections of the business. It is also important for them to perform tasks and communicate with all members of the staff as well as others involved in the business venture such as suppliers and clients. This is very important given that it is designed to create a mutual and long lasting relationship with all the stakeholders involved. Personal involvement in the enterprise is a virtue and successful entrepreneurs often dedicate their skills, expertise as well as resources to establishing and building the enterprise. More often than not, they provide their commitment by using their own money in the enterprise as well as working long hours for the sake of the enterprise (Bowler, 1996). In some cases, the entrepreneurs can earn very little money from the activities of the enterprise but they will continue to soldier own until their dreams have been realised. It is also important for these people to be self reliant as well as confident about their operations if they are concerned about the success of their personal businesses. 2.1.9 Ability to adapt faster The decision making processes of small businesses are quicker as a result of the fact that there are no management levels from whom approval is needed (Bowler, 1996). If the price of the product for instance needs to be adapted, it can be done immediately as long as it can be noted that there are opportunities for taking that particular stance. On the other hand, it can be seen that the products as well as services can be improved immediately given that the entrepreneur is capable of implementing the decisions personally. A successful entrepreneur is also characterised by the ability to react quickly if a business opportunity arises in the market since there is no permission required to implement such a vital move. 3.0 The identification of feasible small business ideas The setting up of a small business enterprise is a process that is characterised by various stages and it is also influenced by different factors. Thus, in order to manage and develop an entrepreneurial enterprise successfully, there is need for potential entrepreneurs to take into consideration various measures that can positively contribute to the success of their business ventures. This section of the paper looks at different stages that can be implemented in order to succeed in managing and developing a business venture. Usually, developing a business venture is not an overnight event hence there is need to take a holistic approach in determining all the success factors that can positively contribute towards the development of the enterprise. There are push and pull factors that lead people to start their own business. According to Ristimaki (ND), “push factors mean those influences, which push individuals toward entrepreneurship and pull factors mean influences, which pull people towards entrepreneurship.” Factors such as unemployment, market opportunity as well as appropriate response to the needs of the society are all factors that can be considered as pull or push in as much as entrepreneurship is concerned. Essentially, entrepreneurship is mainly concerned with recognizing and creating opportunity where the aim is to utilise the opportunity through scanning and analysing the environment to establish a market gap that is overlooked by large corporations. 3.1 Business opportunities According to Gundill (2007), the business idea is the starting point towards managing and developing an entrepreneurial enterprise. Every idea must be researched in order to establish if it is feasible or profitable given that the essence of entrepreneurship is to look for ways to satisfy the consumers by improving the existing products and services or producing new inventions. In order to be successful, your business venture has to be customer oriented where there is need to satisfy the customer needs. This is where marketing plays an important role where it seeks to establish the market potential and the right plans for marketing the product or service offered will be decided. In most cases, it can be seen that successful entrepreneurs research their business idea to see if it can qualify to be regarded as a sound business opportunity. Factors such as the needs for the customers, business environment as well as competitive advantage immensely contribute to the development of a business idea. As such, there is need for the entrepreneur to take them into consideration. 3.2 Marketing opportunities Certain forces of the environment affect the enterprise and some of these variables are economic, socio-cultural technological, political as well as physical factors (Burke, 2007). These factors and trends in the business environment have an impact on the enterprise given that these developments cannot be controlled by the individual enterprise. However, it is essential that they are taken into account when entrepreneurs analyse their marketing activities which can significantly contribute to the viability of their enterprises. In some cases, some of these variables represent threats while in some cases, they represent opportunities. It is therefore important for the entrepreneurs to be in a better position to attempt to convert the threats into business opportunities. 3.3 The market The focus on any business venture should be satisfying the needs of the customers. Being truly market or customer oriented means that the entrepreneur is aware of what the customers want to buy, where and how they want to buy it, how they intend to use it for example (Bowler, 1996). Successful entrepreneurs must therefore be in a position to study their customers, find out who they are and how they make buying decisions. One viable method of obtaining all this information can be obtained through market segmentation. Basically, market segmentation is a process that is concerned with dividing the market into smaller segments comprising of people with the same needs and interests. Demographic factors such as age, income levels, education, occupation, geographical area as well as culture and language play a pivotal role in segmenting the market. After the market has been segmented, the entrepreneur has to select one particular segment on which to focus on marketing campaigns. More often than not, successful entrepreneurs often go for a large market share in one segment. Segmenting the market is not an end in its own but there is need to continually scan the environment to check for the factors such as competition. Every business faces a wide range of competitors. It is imperative for the entrepreneur to possess characteristics that can allow him to harness on the weaknesses of the competitors in order to create an opportunity. 4.0 Conclusion Over and above, it can be noted that the concept of entrepreneurship is mainly concerned with identifying small business opportunities in the market that are often overlooked by large organizations. As discussed above, it can be noted that there are both pull and push factors that influence the individuals to start their own small businesses or to be self employed. In most cases, the situation obtaining on the ground compels them to invest in a business venture and this is called a push factor. A pull attracts people to invest in a particular business. Small businesses have been growing at a tremendous rate in many economies as a result of different factors. The need to satisfy the customers significantly contributes to the success of small businesses. There are various business opportunities that can be harnessed by enterprising people to start their own successful businesses. These opportunities can be transformed into successful business ventures but it has been observed that there are key characteristics as well as traits that are required in order for one to become a successful entrepreneur. As discussed above, entrepreneurship is not an event but it is a process that requires a holistic approach in order to operate the business venture in a viable manner. It is also important for the entrepreneurs to continually scan the market for new business opportunities. Establishing a successful business requires the entrepreneurs to possess some of the key traits discussed above in order to achieve their desired goals. 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