Who is an Entrepreneur?
Entrepreneurs
play a vital role in the economic development of a country. Economic
development of a country depends primarily on its entrepreneurs. An
entrepreneur is often considered as a person who sets up his own business or
industry. He has initiative, drive, skill and spirit of innovation who aims at
high goals. The entrepreneur is the individual that identifies the opportunity,
gathers the necessary resources and is ultimately responsible for the
performance of the organization. Entrepreneurs are action oriented, highly
motivated individuals who take risks to achieve goals.
Concept
of Entrepreneur:
The story of
defining entrepreneur and entrepreneurship will sound like the story of six
blind men describing an. elephant. There is hardly any commonly agreed upon
definition among economic pundits.
The word
“entrepreneur” is derived from the French word entreprendre which means to
initiate or undertake. In the early sixteenth century, the Frenchmen who organized
and led military expeditions were referred to as “entrepreneurs”. The term
entrepreneur was applied to business in the early eighteenth century by French
Economist Richard Cantillon. According to him, the entrepreneur buys factor
services at certain prices with a view to sell their products at uncertain
prices in the future. Richard Cantillon conceived of an entrepreneur as a
bearer of non-insurable risk.
Another
Frenchman, J.B. Say, expanded Cantillon’s ideas and conceptualized the
entrepreneur as an organizer of a business firm, central to its distributive
and production functions. Beyond stressing the entrepreneur’s importance to the
business, Say did little with his entrepreneurial analysis. According to J.B.
Say, an entrepreneur is the economic agent who unties all means of production,
the labour force of the one and the capital or land of the others and who finds
in the value of the products his results from their employment, the
reconstitution of the entire capital that he utilizes and the value of the
wages, the interest and the rent which he pays as well as profit belonging to
himself. He emphasized the functions of co-ordination, organization and
supervision. Further, it can be said that the entrepreneur is an organizer and
speculator of a business enterprise. The entrepreneur lifts economic resources
out of an area of lower into an area of high productivity and greater yield.
The New
Encyclopedia Britannica considers an entrepreneur as an individual who bears
the risk of operating a business in the face of uncertainty about the future
conditions. Leading economists of all schools, including Karl Marx have
emphasized the contribution of the entrepreneurs to the development of
economies, but Joseph A. Schumpeter who argues that the rate of growth in an
economy depends to a great extent on the activities of entrepreneurs, has
probably put greater emphasis on the entrepreneurial function than any other
economist.
In the words of
Joseph A. Schumpeter, “The entrepreneur in an advanced economy is an individual
who introduces something new in the economy – a method of production not yet
tested by experience in the branch of manufacture concerned, a product with
which consumers are not yet familiar, a new source of raw material or of new
markets and the like”. The function of an entrepreneur according to him is to
“reform or revolutionize the pattern of production by exploiting an invention
or more generally, an untried technological possibility for producing a new
commodity”. According to Schumpeter, an entrepreneur is an innovator, who
introduces something new in the economy. Innovation may be: (a) introduction of
a. new product, (b) introduction of new methods of production, (c) developing
new markets and finding fresh sources of raw materials, and (d) making changes
in the organization and management.
Knight
described entrepreneurs to be a specialized group or persons, who bear
uncertainty; and uncertainty is defined as the risk which cannot be calculated.
The entrepreneur, according to Knight, is the economic functionary who undertakes
such responsibility which, by its very nature, cannot be insured or salaried.
He also guarantees specified sums to others in return for assignments made to
them.
Peter F.
Drucker, in his book “Innovative Entrepreneurs” defines entrepreneurs as innovators.
Entrepreneurs search for change and exploit opportunities. According to him
“Innovation is the specific tool of entrepreneurs, the means by which they
exploit changes as an opportunity for a different business or a different
service. It is capable of being presented as a discipline, capable of being
learned, capable of being practiced. Entrepreneurs need to search purposefully
for the sources of innovation, the changes and their symptoms that indicate
opportunities for successful innovation. And they need to know and to apply the
principles of successful innovation”. He further said that an entrepreneur is
one who always searches for changes, responds to it, and exploits it as an
opportunity.
Cunningham and
Lischerson in their recent work have described six possible schools of thought
on entrepreneurs. The first school of thought i.e. ‘Great Person School’ says
that an entrepreneur is born with an intuitive ability – a sixth sense and this
sense helps him in start up stage. The second school of thought, i.e.
‘Psychological Characteristics School’ explains that entrepreneurs have unique
values attitudes, and needs which drive them and help them especially in
start-up stage. The third school, i.e. ‘Classical School of Thought’ says that
central characteristic of entrepreneurial behavior is innovation. This
characteristic helps the entrepreneur much in start-up and early growth.
‘Management School’ is the fourth school of thought and it says entrepreneurs
are organizers of economic venture and they organize, own, manage and assume
its risk. Such functional orientation helps them in early growth and maturity.
The fifth school of thought is the ‘Leadership School’. According to this
school, entrepreneurs are leaders of people and they have the ability to adopt
their style to the needs of people. Such leadership personality suits them most
during early growth and maturity situations. ‘Intrapreneurship School’ is the
sixth school of thought. Intrapreneurship is the act of developing independent
units, to create market and expand services within the organization.
Intrapreneurship is needed by an entrepreneur during the situation of maturity
and change.
Burton W.
Folsom, Jr. distinguishes between what he calls a "political
entrepreneur" who seeks profit for his business by using political
influence to obtain favors and arrangements with government from a "market
entrepreneur" who seeks to profit without utilizing political influence. Entrepreneur is concerned more than simply
“starting a business.” The definition of
entrepreneurship is a creation process through which entrepreneurs identify
opportunities, allocate resources, and create value. This creation of value is often through the
identification of unmet needs or through the identification of opportunities
for change. Entrepreneurs see “problems” as “opportunities,” then take action
to identify the solutions to those problems and the customers who will pay to
have those problems solved.
Whatever is the
definition, across the world entrepreneurs have been considered instrumental in
initiating and sustaining socio-economic development. There are evidences to
believe that countries which have proportionately higher, percentage of
entrepreneurs in their population have developed much faster as compared to countries
which have lesser percentage of them in the society, discover new sources of
supply of materials and markets and they establish new and more effective forms
of organizations. Entrepreneurs perceive new opportunities and seize them with
super normal will power and energy, essential to overcome the resistance that
social environment offers. In sum, the concept of entrepreneurs is intimately
associated with the three elements-risk bearing, organizing and innovating.
Features
of an Entrepreneur
If we go
through the business history of successful entrepreneurs in our country, we
come across the names of Tata, Birla, Gulshan Kumar, Modi, Kirlosker, Dalmia
and others who started their business with small size and made good fortunes.
The scanning of their personal features shows that there are certain
characteristics of entrepreneurs which are found usually prominent in them.
Successful entrepreneurs are action-oriented, they have the ability to visualize
the steps from idea to actualization. They are both thinkers and doers,
planners and workers, get involved-they adopt a hands-on approach, can tolerate
ambiguity-enterprise always consists of action in uncertainty, accept risk but
understand and manage it; overcome rather than avoid mistakes – they don’t admit
they are beaten, see themselves as responsible for their own destiny-they are
dedicated, setting self-determined goals and believe in creating markets for
their ideas, not just in responding to existing market demands.
An entrepreneur
is a job-giver and not a job-seeker. This means that he is his own boss. The
characteristics which make him his own boss are given below:
(a) Strong achievement orientation.
(b) Unwavering determination and commitment.
(c) Self-reliance and independence.
(d) Hunger for success.
(e) Self-confidence and self-faith.
(f) Sustained enthusiasm.
(g) Single-mindedness.
(h) Strong reality orientation.
(i) Willingness to accept responsibility.
(j) Courage.
(k) Ability to survive defeat.
(l) Become wealthy and stay humble.
An entrepreneur
is a highly achievement oriented, enthusiastic and energetic individual.
Characteristic
of successful entrepreneurs:
Qualities of Successful Entrepreneurs are list below-
1. They dream
big: - Successful entrepreneurs have the ability to envision a new reality and
the will to bring it to fruition. They have crazy big dreams, even though to
some these dreams may not be realistic or practical. But it is the big dreamers
who really succeed. They are possibilities thinker who believe there are
possibilities and are not limited by commonly held boundaries. They look beyond
to ask the “what ifs” questions. They look for answers and solutions and aren’t
daunted by challenges. In fact, they relish challenges.
2. They have a
passion for positive change: - The entrepreneurs who make it big know that they
have a unique contribution to make to society. They start a business, not just
to change their own lives, but also to make a difference in the world and make
it a better place. They want their products or services to succeed not only in
terms of profits but to bring about positive change in the communities they
live in by solving existing problems or filling existing gaps. They are
motivated by their desire to improve circumstances at the broader level.
3. They have a
clear vision of what they want to achieve: - Successful entrepreneurs have the
vision for the future – what they want to achieve, what opportunities they
need, and how they can accomplish it. Their vision gives them purpose and helps
maintain their focus on what they want the business to achieve. It also helps
them overcome the many humps and challenges they meet along the way.
4. They engage
in calculated risk taking: - Contrary to common wisdom, entrepreneurs are not
risk addicts. Instead, they take reasonable risks. While taking risks is part
of the entrepreneurship process, those who succeed weigh the options, see what
else is out there, and careful about the types of risks they are willing to
take for themselves and those that might rely on them.
5. They are self-directed
and self-motivated:- Entrepreneurs have a strong faith in their ideas, their
capabilities and in themselves. After all, to succeed, they constantly need to
ask themselves the hard questions and then come up with ways to answer them.
They have “intestinal fortitude” or that “fire in the belly.” They love to be
their own boss, carving their own paths along the way. .
6. They are
results-driven: - Successful entrepreneurs are passionate about results. They
want their actions to have a direct impact on results. They want the job done.
They also have the ability to conceptualize the whole of a business; not just
its individual parts, but how they relate to each other. They are individuals
who always come up with new ideas.
7. They have a strong
desire to be independent:- Entrepreneurs love to be in charge and be their own
boss. They want to be in control. They carve their own path, relying on their
own talents, instincts and skills. They don’t take orders from anyone and do
not need validation from superiors judging them whether they are worthy of a
promotion or capable of handling more responsibilities. They move and make
decisions on their own, without waiting for someone to push them. While being
in charge can be daunting at times, the rewards of seeing the results of all
the hard work are tremendous.
8. They know
how to sell. Business is all about selling: - Whether selling their idea to an
investor, negotiating with a bank for a loan, talking to a supplier, or directly
selling to customer, entrepreneurs know how to sell. The business is bound to
fail if the entrepreneur does not know how to sell. If they do not have sales
skills, they are smart enough to partner with someone who excels at it.
9. They have a
powerful drive to accumulate wealth: - Entrepreneurs appreciate what money
could bring to their lives – and embrace it. They know that financial success
can afford them with opportunity, freedom, and well-being. They view starting
their own businesses as an opportunity to earn far more than they could ever
from working for others. Win, lose or draw, entrepreneurs want to be master of
their own financial destiny.
10. They
embrace fear: - Successful entrepreneurs strongly believe in themselves. In
fact, many of them are supremely confident individuals. However, their strong
belief in themselves doesn’t necessarily mean that they don’t experience
self-doubt. They do! They experience fear, but instead of running away from
their fears, they embrace what they fear the most and just plod on.
11. They exhibit
tolerance towards ambiguity: - Even though there is no assurance that a
business will succeed, entrepreneurs are not daunted by this uncertainly and
instead continue to pursue the idea of starting a business.
12. They see
opportunities where others do not: - Those who succeed in business have finely
honed business skills based on their environment, education, experience and
innate intuitive abilities. What sets them apart is their inherent sense of
what is “right” for a business. They have the ability to spot opportunities for
growth, with loads of courage to pursue these opportunities. They love the
challenge of pitting their resources and skills against the environment.
13. They are
not afraid to make mistakes: - Successful entrepreneurs are not afraid of
making mistakes because they see it as an opportunity to learn and improve.
They don’t focus on blame and retribution, and instead work on finding
solutions to rectify the mistake and prevent it from happening again.
14. They seek
out help when needed: - Successful entrepreneurs realize that they don’t know
everything. They will pull in resources and seek the advice of experts to help
them achieve their goals. They know that they key to getting things done is to
find the right people who can do the job. They understand their strengths and
weaknesses – and find people who can complement them in areas that they need
the most.
15. They have
the willingness and capacity to persevere: - Entrepreneurs possess a high level
of energy, sustainable over long hours to make the business successful. They
welcome the responsibility that goes to owning a business. They are tenacious,
always finding a way to display persistence or able to dig deep within oneself
to find it. When things don’t go their way, they are able to handle thousands
of rejections along the journey.
16. Good
interpersonal skills: - They recognize that much of their success will depend
on how well they deal with people. While success in entrepreneurship takes rugged
individualism, it’s a “team sport” at its core.
17. Discipline:
- Successful entrepreneurs possess huge doses of discipline. Discipline is
important to stay focused on their objectives and vision. The process of
building an idea into a business entails working on a lot of details — some of
which the entrepreneur may not want to deal with — but it is discipline that
makes the entrepreneur work on completing every task. As an entrepreneur, it is
easy to go off strategy, including the allure of not working (for home-based
entrepreneurs, that mean sleeping or watching TV instead of working), and
discipline keeps them on the right track.
18. They keep
their focus: - Successful entrepreneurs understand that focus is a key
ingredient to the success of their business. They know the importance of
identifying and concentrating on making the unique aspects of their business as
superb as possible. They are clear on what their business stands for, and stick
to it. They don’t have to grab all opportunities that come their way or try to
do too much too quickly. They keep their eyes on the prize and spend their
resources, time and energy in focusing on the attainment of their goals —
running and developing a successful, profitable and viable business. Every day,
their focus is how to further enhance their business.
19. They are
flexible: - Successful entrepreneurs are always on their toes, ready to make
the shift if needed. They know that as the business grow, the needs of their
business changes and they will require help in developing and executing their
vision. Their managerial skills become critical, and their understanding of the
market and competition becomes crucial. They know that sleeping on the job is
the worst mistake an entrepreneur can make, and they always strategize and
prepare for change.
20. They love
what they do: - Successful entrepreneurs are passionate with what they do. They
love what they do, and their work feels more like fun, play and inspiration.
They more they are having fun and loving what they do, financial rewards come
easier. They are energized by the activities and challenges of their business.
Even if they fail often, their passion keeps them going until they get it
right.
Before
committing yourself to the extraordinary investment of time, energy and money
that starting a business requires, you need to engage in some personal
soul-searching. You need to review your pluses and minuses, your strengths and
weaknesses to determine if you are a suitable match for the challenge.
Remember, the entrepreneur IS the business – its originator, its motivating
force, and its energy. Without the needed ingredients, the business can fail as
quickly as it started.
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