Ent3 the individual-entrepreneur

THE INDIVIDUAL ENTREPRENEUR

Chapter 3

Is there an exact entrepreneurial profile in terms of characteristics and background?

This chapter addresses this question by looking at an individuals feelings about Control, Independence & Willingness to take risks; ones family, education & occupational backgrounds; motivation; skills; male versus female entrepreneurs; entrepreneurs VS inventors & general entrepreneurial profiles

Entrepreneurial Feelings


Locus of ControlA quality indicating the sense of control that a person has over his life. Internal Locus of Control

Believing that one’s success depends on one’s own efforts.

External Locus of Control

Believing that one’s life is controlled more by luck or fate than one’s own efforts.

Table 3.1

Checklist for Feelings about Control

When things go right and are terrific for you, do you think, “Its mostly luck!”?

Yes No

Do you think that if you decide to do something, you’ll do it and nothing can stop you?

Yes No

If you want something, do you ask for it rather than wait for someone to notice you and “just give it to you”?

Yes No

Even though it’s scary to try something new, are you the kind who tries it?

Yes No

Even though people tell you “it can’t be done,” do you have to find out for yourself?

Yes No


Feelings of Independence and Need for Achievement Need for Independence signifies the

feeling of being one’s own boss and is one of the strongest needs of an entrepreneur.

Need for Achievement is derived from Mcelland’s Need Theory, which states that a person with a high need for achievement is driven by the desire to succeed and measures that success against a personal standard of excellence.

Table 3.2

Checklist for Feelings about Independence

I want to be financially independent. Yes No

I often need to ask other people’s opinions before I decide on important things.

Yes No

If my friends wont go to a movie I want to see, I will go by myself

Yes No

I want the approval of others. Yes No

I hate to go shopping for clothes alone Yes No


Risk Taking Starting a new venture involves putting

at stake money, hard work and lots of time.

This involves a certain amount of risk as success is not guaranteed and all efforts and resources could go wasted.

Only a person willing to risk it all can succeed.

Table 3.3

Checklist for Willingness to Take Risks

Do you like trying new foods, new places, and totally new experiences?

Yes No

Can you walk up to a total stranger and strike up a conversation?

Yes No

Do you need to know the answer before you’ll ask the question?

Yes No

Do you need to know that it’s already been done before you are willing to try it?

Yes No

Can you take risks with money, that is, invest, and not know the outcome?

Yes No

Entrepreneurial Background and Characteristics

Childhood Family Background A child’s future occupation is

shaped by what kind of environment he or she has at home.

Being the first born is also believed to have some effect on the self-confidence of the person and ability to start a new venture.

If a parent is an entrepreneur then its natural that the child will find it easy to become one as well.

Their support is also a deciding factor in the success of the entrepreneur.

Birth Order

Parents Occupation

Social Status

Relationship with parents (Fathers for female E)

Entrepreneur Statement

My father was so consumed by the venture he started and provided such a strong example, it never occurred to me to go to work for

anyone else

Entrepreneurial Background and Characteristics Education

There are numerous success stories of entrepreneurs who were high school dropouts.

But most of the entrepreneurs have some kind of higher education to their credit.

It is not necessarily business related education but is enough for the entrepreneur to better understand his business and define new ways to grow it.

Technical Vs MBA degree

Entrepreneurial Background and Characteristics Personal Values

An entrepreneur has a very distinct set of values that make him break off from conventional practices and start his own venture.

Values like: superior product quality; quality service to the consumers; flexibility to adapt to change in the market; high caliber management; and honesty and ethics in business practices, define an entrepreneur’s mind frame.

When is it permissible to tell a lie?

Leadership traits- creativity- opportunism- intution

Age It is necessary that an entrepreneur

begins the new venture at a time when he has the maximum amount of energy – experience- financial support

The optimal age for such activity would be somewhere from the age of 22 to the age of 45.

At this time a person has the right amount of stamina and experience.


Work History The work history of a person is one of

the major factors in prompting a person to start a new business.

If the person was not satisfied with his past experience, then he might find it easier to come up with good business practices that suit his taste and yield the kind of results that he wants.

And what he has learnt from his experience may also help him in growing the business.


Lack of opportunities- frustration & boredom-> Motivation launching new venture

Managerial experience/skills

Motivation

Every entrepreneur is motivated by one thing or the other when starting a new venture.

The motivational force helps the person overcome all the problems associated with the business and guides him towards the achievement of his goals.

This motivation could be making money or being independent of others and being one’s own boss.

Role Models

A role model is important in an entrepreneur’s life because it influences every action that he performs.

A role model can be one’s parents, siblings, close relatives or other entrepreneurs.

An entrepreneur follows the example of his role model in everything and feels motivated when trying to personify his role model.

Individuals who give psychological support to an entrepreneur.

Entrepreneurs need to establish a moral-support network of family and friends—a cheering squad. Friends can provide:

Advice. Encouragement. Understanding. Assistance.

Relatives can be strong sources of moral support, particularly if they are also entrepreneurs.

Support SystemsMoral-Support Network

Entrepreneurs need advice and counsel

throughout the establishment of the new venture which can be obtained from: Mentors Business associates

Trade associations Personal affiliations

Support SystemsProfessional Support Network

Expert in field- advising buddyHow to find a mentor ?Self employed- Consultants, lawyers

Clients & buyers- word of mouth advertising

Suppliers- trends & competition industry New developments &

provide overall industry data Shared hobbies-sporting events-clubs

Schools alumni ( source of referrals, advice)

Male Vs Female Entrepreneurs Differences in terms of motivation,

business skills, occupational background, support systems and sources of funding

Men- drive to control their own destinies, to make things happen

Women- need of achievement arising – job frustration- promotional opportunities

Forming 70 % of new businesses8.5 M small businesses employing over 17 M

people 45% increase since 90’s

Characteristics

Male Entrepreneurs Female Entrepreneurs

Motivation Achievement, Personal Independence, Job Satisfaction

Achievement, Independence

Departure Points

Dissatisfaction with current job, Layoff, Opportunity for Acquisition, Sidelined

Job Frustration, Change in Personal Circumstances, Recognition of Opportunity

Sources of Funds

Personal Assets and Savings, Bank Financing, Investors, Loans from Friends and Family

Personal Assets and Savings, Personal Loans

Occupational Background

Experience in Line of Work, Recognized Specialist, Competent in a Variety of Business Functions

Experience in Area of Business, Service-related Background, Middle Management Experience

Personality Characteristics

Opinionated and Persuasive, Goal Oriented, Innovative, Idealistic, High Level of Self Confidence, Enthusiastic and Energetic, Must be Own Boss

Flexible and Tolerant, Goal Oriented, Creative , Realistic, Medium Level of Self Confidence, Enthusiastic, Energetic

Support Groups

Friends, Professional Acquaintances, Business Associates, Spouse

Close Friends, Spouse, Family, Women’s Professional Groups, Trade Associations