Introduction to Entrepreneurship

Who is an Entrepreneur?
Definition of an Entrepreneur
One who creates a new business in the face of risk and uncertainty for the purpose of
achieving profit and growth by identifying significant opportunities and assembling
the necessary resources to capitalize on them.
Entrepreneurial traits

Desire for responsibility.

Entrepreneurs feel a deep sense of personal responsibility for the outcome of ventures they
start. They prefer to be in control of their resources, and they use those resources to achieve
self-determined goals. Deborah Sullivan, a lifelong serial entrepreneur realized at the age of
16 that she did not want to spend her life working for others. “You’re stuck by all of these
different rules [when you work for someone else],” she says. “I wanted to create something
for myself.” Sullivan has been an entrepreneur since she was 22 years old, when she
launched a hair salon and spa in Atlanta, Georgia. In 2012, at the age of 60, Sullivan started
Consign Werks, a consignment shop in Greenville, South Carolina, which she says has been
the most gratifying of her entrepreneurial ventures perhaps because she knew almost nothing
about the business until she spent months researching and learning everything she could
about consignment shops.
Preference for moderate risk.
Entrepreneurs are not wild risk takers but are instead calculated risk takers. Lee Lin, who left
his job at a large investment bank to start RentHop, an online service that helps renters find
the ideal apartment in New York City, says that entrepreneurs who risk everything typically
do not stay in business very long. Lin says that to minimize risk, he manages his company’s
finances carefully and focuses on profitable growth opportunities. A study of the founders of
the businesses listed as Inc. magazine’s fastest-growing companies found no correlation
between risk tolerance and entrepreneurship. The common belief that entrepreneurs prefer
taking big risks is a myth. Unlike “high-rolling, riverboat gamblers,” entrepreneurs rarely
gamble. Their goals may appear to be high—even impossible—in others’ eyes but
entrepreneurs see the situation from a different perspective and believe that their goals are
realistic and attainable.
Self-reliance:

Entrepreneurs must fill multiple roles to make their companies successful, especially
in the early days of a start-up. Because their resources usually are limited, they end
up performing many jobs themselves, even those they know little about. Yet,
entrepreneurs demonstrate a high level of self-reliance and do not shy away from the
responsibility for making their businesses succeed. Perhaps that is why many
entrepreneurs persist in building businesses even when others ridicule their ideas as
follies.
Confidence in their ability to succeed.

Entrepreneurs typically have an abundance of confidence in their ability to succeed

and are confident that they chose the correct career path. Entrepreneurs’ high levels of
optimism may explain why some of the most successful entrepreneurs have failed in
business—often more than once—before finally succeeding.
Determination
Some people call this characteristic “grit,” the ability to focus intently on achieving a
singular, long-term goal. Studies show that grit is a reliable predictor of achievement
and success, whether the goal involves launching a successful business, winning the
Scripps National Spelling Bee, or excelling in professional sports.(One recent study
concludes that top performance in the National Football League’s Combine, in which
players who are entering the league’s draft perform short physical and mental tasks,
has no consistent statistical relationship to subsequent performance in the league.)
Successful entrepreneurs demonstrate high levels of determination, especially in the
face of challenging circumstances.
Desire for immediate feedback. Entrepreneurs enjoy the challenge of running a business, and they like
to know how they are doing and are constantly looking for feedback. The feedback they receive from
their businesses drives them to set higher standards of performance for their companies and themselves
High level of energy. Entrepreneurs are more energetic than the average person. That energy may be a
critical factor given the incredible effort required to launch a start-up company. Long hours and hard
work are the rule rather than the exception, and the pace can be grueling. According to a recent survey
by Bank of America, 72 percent of small business owners work more than 40 hours per week. Another
recent survey by Sage Software reports that 37 percent of business owners work more hours per week
than they did just five years ago. Will Schroter, an entrepreneur who has launched numerous
companies, including Go Big Network, an online community for entrepreneurs, says that he works at
1:30 in the morning because he is the founder of a start-up and start-up founders often don’t have time
to sleep because their work is never-ending.
Future orientation.
Entrepreneurs have a well-defined sense of searching for opportunities. They look
ahead and are less concerned with what they did yesterday than with what they might
do tomorrow. Not satisfied to sit back and revel in their success, real entrepreneurs
stay focused on the future. A year after William Roetzheim’s software company,
Marotz, landed on Inc. magazine’s list of the 500 fastest-growing companies in the
United States, he sold it and launched another company, Cost Xpert Group, which
sells a cost estimating tool he had developed at Marotz.
Skill at organizing.

Building a company “from scratch” is much like piecing together a giant jigsaw
puzzle. Entrepreneurs know how to put the right people together to accomplish a task.
Effectively combining people and jobs enables entrepreneurs to transform their
visions into reality. “Great entrepreneurship is in the execution,” says Eric Paley, an
entrepreneur-turned-venture-capitalist
Value of achievement over money. One of the most common misconceptions about
entrepreneurs is that they are driven wholly by the desire to make money. To the
contrary, achievement seems to be entrepreneurs’ primary motivating force; money is
simply an added advantage. What drives entrepreneurs goes much deeper than just
the desire for wealth. Economist, “Joseph Schumpeter” claimed that entrepreneurs
have “the will to conquer, the impulse to fight, to prove oneself superior to others, to
succeed for the sake, not of the fruits of success, but of success itself.” Entrepreneurs
experience “the joy of creating, of getting things done, or simply of exercising one’s
energy and ingenuity.”
The Entrepreneurial process
Identifying an opportunity:
This aspect is considered as the first step towards the creation and running a
successful firm. Entrepreneurs have the ability to identify the opportunities where
other people see impossibilities and hurdles. Identification of opportunities at an
appropriate time is considered as important criteria for entrepreneurs as it offers the
advantages of being the first mover. This offers an opportunity for the business to
stay ahead of the others in terms of market credibility, profits and better economies of
scale. Entrepreneurs sense these opportunities as they are highly creative and are
equally open to new ideas. Besides, managing the seamless operations in their
business ventures, they often accept challenges in the road map for success (Lall &
Sahai, 2007).
Establishing a vision:
Besides seeking opportunity, an entrepreneur can develop a futuristic vision for the
business by establishing the business mission, objectives and the goals of the
company. Entrepreneurs can create a vision for the business by visualizing them
through their optimism and perseverance. Vision helps the entrepreneurs to steer the
company in proper direction and also facilitates them to adapt and navigate through
different market conditions prevailing in the markets (Lall & Sahai, 2007).
Persuading others:
Entrepreneurs do not necessarily work in isolation. However, they are often working
with other people in their business venture. It becomes highly important for the
entrepreneurs to create and develop a foundational team, which consists of founding
group members who could work together to accomplish the goals and objectives of
the firm. In addition, the entrepreneur can draft a detailed business plan to guide the
group members to achieve the goals, objectives, mission and consequently the vision
of the company. The participants in these ventures can be investors or stakeholders,
and also members who participate in different business functions of the firm, such as
finance, marketing, accounting and HRM (Lall & Sahai, 2007).
Gathering resources:
Besides spotting opportunities, establishing vision and persuading other individuals;
entrepreneurs require enormous amounts of information and resources to help them
achieve their mission. In this phase, the entrepreneurs are driven purely by seeking
resources to operationalize their ventures. It becomes very important for the
entrepreneurs to spot and acquire genuine resources for developing their structures,
information systems, financial strength, operational capacities and human capital. In
addition, once the resources are gathered, a proper procurement policy is required for
healthy functioning of the entire business operation (Lall & Sahai, 2007).
Gather resources for information:

With an increasing demand to seek real-time information. Entrepreneurs are relying on data,
information and knowledge through information systems for managing their business
processes. The use of information systems has been hugely beneficial for managing
company’s business processes and also the personnel who use them. The use of information
systems offers the personnel, suppliers, customers and other participating stakeholders to
share appropriate information on real-time basis. This would help the entrepreneurs to
understand the condition and situations of their business processes and eventually the
position of the business on a daily basis (Lall & Sahai, 2007).
Create new venture:

Once the entrepreneur organizes all the required resources and information required
in the above mentioned stages, the next phase for the entrepreneur is to create a new
business venture which involves hard work to gather resources and allocate them to
respective business functions (Lall & Sahai, 2007).
Change/adapt with time:

As change has become inevitable in contemporary business environments, entrepreneurs are

required to constantly upgrade their business processes for developing seamless operations.
Entrepreneurs are often required to understand their present and their future requirements to
provide uninterrupted products/services to their customers/ In addition, entrepreneurs are also
required to understand the current and emerging issues of the company, and acquire resources
(financial, human capital, machinery, material) accordingly. This requires entrepreneurs to
look for emerging technologies and resources for providing seamless flow of products or
services and adapt to dynamic business environments accordingly (Lall & Sahai, 2007).
How Entrepreneurs Should Proceed
With a New Venture

There are several steps an entrepreneur should keep in mind while starting off a new venture, namely:
1. Strategic Planning:
is the first step when one starts with a new venture. You have to collect, screen and analyze information
about the current business environment. In Strategic Planning a careful consideration is given to all the
factors which may or may not harm the growth of your venture.
KNOW YOUR TARGET MARKET:
While starting a new venture, one should analyze its target market. The people whom you
want to sell your product or service. By doing this you’ll have a clear vision of your
prospective customers which in turn will help you to devise marketing campaigns according
to your specific target market.
DEVISE A BUSINESS PLAN:
Business plan for a new venture is also very important. It helps in formulating the
vision, mission, marketing and sales projections, financial projections etc. Financial
projections are very important as it forecasts how much time your product needs to
cover its breakeven costs etc.
SWOT analysis is also done at this stage which further analyses your Product’s
Strengths, Weaknesses, Opportunities and threats.
DETERMINE THE LEGAL STATUS OF YOUR VENTURE.
You have to determine the legal status of your venture whether it has a limited liability or un-limited. It
is better to employ a lawyer who can give advice on carrying out these sensitive financial matters.

MARKETING AND BRAND AWARENESS CAMPAIGNS

A unique and creative logo should be designed in order to stand out from the rest of the business
entities. This phase includes making awareness of your target market about your product which can be
done by using various marketing channels. Some of them are Social Media, Print Media, Electronic
Media, OOH (Out of home) etc. World has become a global village so it’s very easy to reach out to your
target market by using all these marketing mediums.
MAINTAIN YOUR FINANCES:
Once cash flows start coming you need to have a proper system to record all the
transactions. For this you’ll need the services of an accountant to maintain all the
inventory sold and inventory in-hand which will forecast your Profits and Losses.

DETERMINE YOUR GOALS:

Another important aspect is to forecast your goals that from 10 years where you wants
to see your business. This will help in planning and shaping your business according
to the emerging needs and requirements.