MODULE 5 CHARACTERISTICS OF ENTREPRENEUR

Learning Objectives

At the end of the course, students should be able to:

1. Explain the various characteristics of an entrepreneur.

2. Differentiate entrepreneur and a leader.

Introduction

Entrepreneurs are not superhero. They don’t perform miracles. They are just
human beings like many of us, but distinct in some ways.

They have an inherent positive characteristics which lead them to business

success. Characteristics are distinguishing traits or qualities, like honesty, courage,
integrity or punctuality. Entrepreneurs have many favorable interdependent
characteristics which make them successful and extra-ordinary persons. However, their
business success depends on realistic goals and hard work. Usually, goals are
achievable if these are based on the abilities, interests and resources of individuals.

Entrepreneur, defined

There are several definitions or meanings of entrepreneur:

1. Cantillon defines entrepreneur as one who bears uncertainty, buys labor and
materials, and sells products at uncertain prices.
2. In French concept, he is an adventurer, undertaker, and projector. His function
is to supply and accumulate capital.
3. To Schumpeter, he is an innovator. He does new things in a new way. He
supplies new products, makes new techniques of production, discovers new markets and
develops new sources of raw materials.
4. Peter Drucker says that an entrepreneur always searches for change, responds
to it and exploits it as an opportunity.
5. Say, an economist, explains that an entrepreneur is one who shifts economic
resources from an area of lower productivity to an area of higher productivity and greater
yield.
6. The American Heritage Dictionary defines entrepreneur as a person who
organizes, operates and assumes the risk for business ventures.
7. The pure entrepreneur are those who launch their own ventures from scratch.
They develop scarce resources into successful business by instinct for opportunity, sense
of timing, hard work, and idea producing activity.

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 8. According to Geoffrey Meredeth, the author of The Practice of
Entrepreneurship, entrepreneurs are people who have the ability to see and evaluate
business opportunities, to gather the necessary resources and to take advantage of them,
and to initiate appropriate action to ensure success.
9. Medina defines entrepreneur as the person who undertakes entrepreneurial
activities. He identifies an economic need, considers offering a business solution,
proceeds to assemble the resources required and assumes the risk of either succeeding
or failing.
10. The New Encyclopedia Britannica treats an entrepreneur as an individual who
bears the risk of operating a business in the face of uncertainty about the future
conditions. This definition deals with uncertain future and that causes risk in the operation
of a business and entrepreneur is required to bear the risk.
11. According to Oxford Dictionary an entrepreneur is a person who sets up a
business or businesses, taking on financial risks in the hope of profit.

Characteristics of an entrepreneur

1. Reasonable Risk-Takers. Entrepreneurs enjoy challenges. But they are

careful and calculating. So, they shy away from high-risk situations, because these may
not be attainable. However, entrepreneurs also avoid low-risk situations, because there
are no challenges. A risk situation exists when results are not certain. Either it is success
or failure. In business, it is profit or loss.
As a matter of fact, life has many risks. Whether we like it or not, we make
decisions the results of which are not certain. We are lucky if we make the right decisions.
But entrepreneurs are different. They gather complete data about the situation, analyze
the data and make their decisions. Since they are confident in their abilities and optimistic
in the results of their decisions, they are not afraid to make difficult decisions. In view of
the risk-taking abilities of entrepreneurs, they make things happen rather than let them
happen.

2. Self-Confident. Entrepreneurs have strong faith in their abilities. They believe

they can be the best in their field. They do not accept things as they are. Because they
believe they can do things better.

Belief, affirmative thinking or positive thinking, enhances self-confidence. It has

been said that we succeed when we think success. Faith moves mountains.
Entrepreneurs are optimistic individuals or positive thinkers. They always think of
success. Such deep faith drives them to work with more enthusiasm and perseverance
to reach their goals. The Bible states:

“If ye have faith as a grain of mustard seed…nothing shall be impossible unto you.”

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 3. Hardworking. Successful people always attribute their success to hard work.
Thomas A. Edison said that success is 99 percent perspiration and 1 percent inspiration.
We can easily confirm this by observing top executives in governmental and non-
governmental organizations. They work far beyond the 8-hour schedule.

It is very seldom that lazy people succeed in life through their own efforts and
resources. On the other hand, success smiles on hardworking people. A Chinese, called
Chiquito in Tayug, Pangasinan, used to walk 5 to 10 kilometers every day in buying empty
bottles. Now, he is the richest Chinese in Tayug. There are many others who are like
Chiquito. They started with practically nothing except hard work and determination and
now they are rich.

Entrepreneurs, although they are hardworking, enjoy challenges and difficult tasks
and they love their work. Thus, their being hardworking is not really a sacrifice. When
people love their work, it is no longer work. It becomes a joy. In fact, people who are
always busy forget their worries or problems.

4. Innovative. Entrepreneurs are creative. They do things in new and different

ways. For example, they create new products or services, new methods of production,
new markets and new sources of raw materials. They love to explore the unknown, and
to blaze ne paths of progress.

Innovations are introduced to benefit both the economy and society. Changes are
made in response to the needs of people. For instance, the high costs of production
serve as an opportunity for entrepreneurs to introduce a technology that can reduce costs
of production. Much better, they should introduce an innovation which creates jobs for
the jobless masses. According to the legendary Mohandas Gandhi, the progress of a
country depends not on mass production, but on the production of the masses.

Innovations have provided us the products and services of modern civilization. We

have wonder drugs, colored TV, computers, robots, cellular phones, cars, airplanes,
home appliances and many more trappings of modern life. Without innovations, we would
still remain in our primitive stage of development. However, on the negative side,
innovations have given us pollution and diseases. Entrepreneurs, therefore, should not
only innovate for profit, but also ensure the protection of our environment.

5. Leadership. Entrepreneurs are leaders by the very nature of their functions.

They are people who are task-oriented. They are effective planners, organizers and
implementers. And they are achievers.

Here are the essential leadership qualities:

a. Selfless dedication
b. Purpose and Vision

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 c. Courage
d. Conviction
e. Enthusiasm
f. Integrity
g. Tact
h. Hard work

6. Positive Thinkers. Entrepreneurs are positive thinkers. They think of success

and bright sides. Such success consciousness leads entrepreneurs to success. Success
begets success. Dr Charles Flory, a noted American psychologist said that wealth does
not always come to the most intelligent or to the most ambitious individuals, but to those
individuals who think money.

There is nothing wrong with thinking and acquiring money and more money if it is
used properly. Those who have plenty of money can satisfy their legitimate human needs,
and be able to help others, especially the poor. There are many rich entrepreneurs who
are actively engaged in civic and humanitarian projects.

Individuals who always think of failures and other negative thoughts get exactly
what they think. Their failure consciousness or defeatist attitude gives them failure after
failure. The poor became poorer because they think of poverty. While the rich become
richer because they think of wealth.

7. Decision-Makers. Entrepreneurs make decisions. They cannot avoid this.

Being creative or innovative, they always make decisions on how to improve their
products, how to create new markets, how to increase consumer satisfaction, or how to
maximize profits. The success of their business depends on their ability to make the right
decisions.

Decision-making has six distinct phases:

1. Identifying the problem;
2. Gathering the data about the problem
3. Analyzing the data
4. Formulating alternative solutions
5. Selecting the best solution; and
6. Implementing the solution/decision

The aforementioned phases of decision-making is a scientific method of decision-

making. However, implementation of the decision is a different matter. It requires
leadership which involves skills in dealing with people.

In fact, there are many unschooled entrepreneurs. Yet they are successful. They
do not know anything about scientific method of decision making or modern management

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strategies, such as PERT-CPM, forecasting methods, break-even point analysis or linear
programming. They just rely on experiences, ideas or hunches. They are not afraid to
make decisions because of their risk—taking nature and self-confidence.

Characteristics of an entrepreneur according to Sujan Patel, Co-founder of Web

Profits

Owning a business isn't for everyone. The stress and hard work that come with it
makes many people unwilling to dive in.

It takes a special kind of person to be an entrepreneur - to come up with an idea

and put that idea into action. But not all ideas work out. But entrepreneurs don't see the
risk: they see the reward.

If you want to be an entrepreneur, you need to have the right personality and the right
attitude. Here are 10 essential characteristics to be successful as an entrepreneur:

1. Creative
Entrepreneurship starts with an idea. To be successful, you need to always be
thinking of new ideas and better ways of doing things.

In an interview in Martyn Lewis's book "Reflections on Success," Virgin Airlines

founder Richard Branson said, "I've gone into business, not to make money, but because
I think I can do it better than it's been done elsewhere. And, quite often, just out of personal
frustration about the way it's been done by other people."

Entrepreneurs are not satisfied with the status quo. They think outside the box and
look for opportunities to come up with new solutions.

2. Passionate
Perhaps the most important characteristic for entrepreneurs, passion is essential
to any business owner or working professional's success. Without passion, there is no
reason for your work and no drive to do it.

Entrepreneurs love what they do and are extremely dedicated to the businesses
they create. To be successful, you must be confident in yourself and your business, and
you must be proactive with what you do and how you do it.

3. Motivated
In an interview with The Computerworld Smithsonian Awards Program, the late
Apple founder Steve Jobs said, "I'm convinced that about half of what separates the
successful entrepreneurs from the non-successful ones is pure perseverance."

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 Because of their passion for their ideas, entrepreneurs are willing to put in the long
hours and hard work required to launch and run a successful new business. Are you self-
motivated? Entrepreneurs are their own boss, which means there's no one telling them
to do things. You must be in charge of your own time and how you spend it.

4. Optimistic
Do you see the glass half empty or half full? For entrepreneurs, it's always half full.
Entrepreneurs always look on the bright side and are constant dreamers. They look at
how they can do things better and make the world a better place. They never dwell on
the past or the negative. Instead, they focus on moving forward and moving up.

When they're confronted with challenges, entrepreneurs don't see them as

problems; they see them as opportunities. Challenges fuel entrepreneurs and make them
reach higher and do more.

5. Future-oriented
Because entrepreneurs are focused on moving forward, they are always looking
toward the future. Entrepreneurs are very goal-oriented and know exactly what they want.
They set their goals and everything they do is aimed at achieving those goals.

Having a strong vision helps propel you toward accomplishment. Consider setting
a goal for yourself - a north star that can guide you on your path to success.

6. Persuasive
To be successful in business, you have to know business. If you're a people person
and know how to get people to listen to you, you could be a successful entrepreneur.

Especially when first starting out, entrepreneurs need to gain buy-in from those
around them on their big idea. If it's an out-of-the-box idea, which it usually is, many
people will be skeptical before giving their support or investing any money. That's why
entrepreneurs need to use their persuasiveness to sell themselves and their ideas.

7. Flexible
According to professional development coach Ruchira Agrawal in an article for
Monster, "As an entrepreneur, you'll typically start out as a 'solopreneur,' meaning you
will be on your own for a while. You may not have the luxury of hiring a support staff
initially. Therefore, you will end up wearing several different hats, including secretary,
bookkeeper and so on."

Entrepreneurs know how to adapt to unfamiliar situations. If their business requires

that they learn how to build a website or send an invoice, they'll do it. Whatever it takes,
entrepreneurs are ready and willing. They always approach things with an open mind and
are willing to change course if they need to.

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8. Resourceful
In business, problems aren't a matter of if, but when entrepreneurs do not shy
away from challenges or conflicts. Instead, they face them head on and come up with a
solution. They know how to solve problems effectively.

Entrepreneurs also know how to make the most of what they have. Time, money
and effort are never used haphazardly. Everything has a plan and a purpose.

9. Adventurous
In an interview with Y Combinator president Sam Altman, Facebook founder Mark
Zuckerberg said, "In a world that's changing so quickly, the biggest risk you can take is
not taking any risk."

Entrepreneurs know that to be successful, they must be willing to take risks. While
they don't mind walking on the wild side, they don't take risks lightly. They know how to
plan for the unknown and make a calculated decision that is best for them and their
business.

10. Decisive
There is no room for procrastination in business. Entrepreneurs know what needs
to be done and don't hesitate to make the decisions that will lead them to success. They
don't let opportunities pass them by; instead, they seize the day and get the job done.

Activity Number 1

Prepare a short report about an entrepreneur and their characteristics which

contribute to their success.

Rubrics for the activity

96-100 91-95 86-90 81-85
Well- Well-organized Well-organized Well-organized
organized thoughts and thoughts and thoughts and
thoughts and ideas are ideas are fairly ideas are not
ideas are very satisfactorily evident evident
satisfactorily evident
evident
Grammar and Grammar and Grammar and Grammar and
format are very format are format are fairly format are not
highly highly observed observed
observed observed

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 Note: Output should be submitted via fb messenger one week after this session.

SAQ.
1. Explain the seven (7) characteristics of an entrepreneur.
2. Differentiate entrepreneur and a leader.

Rubrics for SAQ

96-100 91-95 86-90 81-85
Well- Well-organized Well-organized Well-organized
organized thoughts and thoughts and thoughts and
thoughts and ideas are ideas are fairly ideas are not
ideas are very satisfactorily evident evident
satisfactorily evident
evident
Grammar and Grammar and Grammar and Grammar and
format are very format are format are fairly format are not
highly highly observed observed
observed observed

References

Medina, Roberto G. (2014) Entrepreneurship and Small Business Management

Third Edition. Manila Philippines, Rex Bookstore

Pereda, Pedrito R et.al (2012) Entrep Pinoy Introduction to Entreprenuership.

Intramuros Manila, Pureflybooks Trading and Publishing Corp.

https://www.businessmanagementideas.com/entrepreneur/definitions-of-
entrepreneur-by-eminent-authors/19938

https://www.inc.com/sujan-patel/10-essential-characteristics-of-highly-successful-
.html

Prepared by:

NERY T VIVAS, DBA CAR

Associate Professor I

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