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Types of entrepreneurs and
their characteristics
COVERAGE
Identify internal entrepreneurial motivators Identify external entrepreneurial motivators Classify entrepreneurs based on characteristics Self assessment techniques
Introduction
Additional concepts
Entrepreneurship A Mindset
In broader perspective, Entrepreneurship is more of a mindset of
venturing at various levels :1. Individual level : Innovator, Entrepreneur or
IntrapreneurApplication in normal life or for a new business or at existing
job
2.Organization level : Competitive Innovation, Corporate Entrepreneurship
towards constant improvement to create tomorrow's competitive advantage faster than competitors
Mind set cont,,
3.Country level : Innovative Culture, Entrepreneurial Activity, Global Competence, Field Supremacy
to establish country’s supremacy in selected fields and use them as growth drivers for the economy, and also, to develop newer models for social development.
Entrepreneurship
Derived from the French word ENTREPRENDRE meaning Undertaker or Go Between
With time the understanding about entrepreneurship has gone through considerable change :
Entrepreneurship – Understanding with time
3.Element of Undertaking something or Going betweenPeople undertook to sell the goods of a passive investor through
new trade routes and taking a percentage4.Endorsement as a Risk TakerThis aspect got viewed first time around 17 century - because
merchants, farmers, craftsmen were seen to Buy at certain price and Sell at certain price.
5.Differentiation - Capital Provider and Capital UserAn entrepreneur is a capital user but may not have his own
capital, hence seek it from a capital provider.
Entrepreneurship – Understanding with time cont…
Notion of InnovationEntrepreneurship is not only doing new things but also about
doing existing things in a new way Importance of surviving in Competition became a partWith more entrepreneurial activity, there has been an
unprecedented increase in competition Ability to understand all forces at work in environmentThat’s what it calls for today
Who are Entrepreneurs?
Are people who : create new businesses in situations of risk and uncertainty with objective of profit and growth through resource mobilization and opportunity capitalization
What causes the entrepreneurial massive or rapid success(boom)
Entrepreneurs as heros Entrepreneurial education Economic and demographic factors Technological advancements Independent life style International opportunities Unemployment Government support
Beliefs about Entrepreneurs:Common Myths
They are Gamblers and Extensive Risk Takers
They are Born, not Made
They are Academic or Social Misfits
They have the Money for Stakes
They are simply Lucky
They are Day Dreamers
They do it for only fPower and Money
conservative Thoughts They are ready to break away and try their own ways
They use failures to build their strengths
They are ready to slog (toil) and slog to be successful
They are prepared to fail and fail again
Common Myths About Entrepreneurs
Myth 1: Entrepreneurs Are Born Not Made This myth is based on the mistaken belief that
some people are genetically predisposed to be entrepreneurs.
The consensus of many studies is that no one is “born” to be an entrepreneur; everyone has the potential to become one.
Whether someone does or doesn’t become an entrepreneur, is a function of the environment, life experiences, and personal choices.
Common Myths About EntrepreneursAlthough no one is “born” to be an entrepreneur, there are
common traits and characteristics of successful entrepreneurs• Achievement motivated• Alert to opportunities• Creative• Decisive• Energetic• Has a strong work ethic• Is a moderate risk taker• Is a networker• Lengthy attention span
• Optimistic disposition• Persuasive• Promoter• Resource assembler/leverager• Self-confident• Self-starter• Tenacious• Tolerant of ambiguity• Visionary
Common Myths About Entrepreneurs
Myth 2: Entrepreneurs Are GamblersMost entrepreneurs are moderate risk takers.The idea that entrepreneurs are gamblers
originates from two sources:Entrepreneurs typically have jobs that are less structured,
and so they face a more uncertain set of possibilities than people in traditional jobs.
Many entrepreneurs have a strong need to achieve and set challenging goals, a behavior that is often equated with risk taking.
Common Myths About Entrepreneurs
Myth 3: Entrepreneurs Are Motivated Primarily by Money.
While it is naïve to think that entrepreneurs don’t seek financial rewards, money is rarely the reason entrepreneurs start new firms.
In fact, some entrepreneurs warn that the pursuit of money can be distracting.
Common Myths About Entrepreneurs
Myth 4: Entrepreneurs Should Be Young and Energetic. The most active age for business ownership is 35 to 45 years old. While it is important to be energetic, investors often cite the strength of
the entrepreneur as their most important criteria in making investment decisions.What makes an entrepreneur “strong” in the eyes of an
investor is experience, maturity, a solid reputation, and a track record of success.
These criteria favor older rather than younger entrepreneurs.
CHARACTERISTICS OF ENTREPRENEURS
Vision High Energy Level Need to achieve Self-confidence and Optimism Tolerance for Failure Creativity Tolerance for Ambiguity Internal Locus of Control
CHARACTERISTICS Cont… Vision An overall idea for how to make their
business a success. High Energy Level Hard work of the entrepreneur
compensates for small staff and limited resources available.
Need to achieve Enjoy the challenge of reaching personal
goals and are dedicated to personal success.
Self-confidence and Optimism Believe in their own ability to succeed and
instill optimism in others.
CHARACTERISTICS Cont…
Tolerance for Failure Try and try again when others would give up and
view setbacks and failures as learning experiences. Creativity Typically conceive new ideas for products and
services and devise innovative ways to overcome difficult problems and situations.
Tolerance for Ambiguity Take uncertainty in stride but not reckless
gamblers. Internal Locus of Control Believe they control their own fates and take
personal responsibility for success and failure.
a. Entrepreneurial motivators
Entrepreneurial motivators
Internal entrepreneurial motivators These include
desire to succeed, survival, self-actualisation, adventure, independence, profit maximisation
External entrepreneurial motivators
These include; infrastructure, export/import incentive schemes, pricing policy, credit facilities, education, role models, technology, environment
b. Classification of entrepreneurs and entrepreneurial core competencies
.
a) Based on Functional Characteristics.1. Innovative entrepreneur: Is the one who introduces
new goods or new methods of production or discover new markets.
2. Imitative or adoptive entrepreneur: Does not innovate, but imitate techniques and technology innovated by others.
3. Fabian entrepreneur: They display great caution and skepticism in experimenting with any change in their enterprise.
4. Drone entrepreneur: Are characterized by a die-hard conservatism and may even be prepared to suffer the loss of business.
Classification of Entrepreneurs
b) Based on the Development Angle.1. Prime mover: This entrepreneur sets in motion a powerful
sequence of development, expansion and diversification of business.
2. Manager: Does not initiate expansion and is content just staying in business.
3. Minor innovator: Contributes to economic progress by finding better use of existing resources.
4. Satellite: Assumes a supplier’s role and slowly moves towards a productive enterprise.
5. Local trading: Limits his enterprise to the local market.
Classification
c) Based on Types of Entrepreneurial Business.1. Manufacturing: Produces the products that can be
sold using resources and supplies. E.g. Textiles, chemical & related products, industrial machinery etc.
2. Wholesaling: Sells products to the middle man.3. Retailing: Sells products directly to the people who
use or consume them.4. Service: Sells services rather than products.
Classification
d) Based on Nine Personality Types of entrepreneurs:1. The Improver: Uses the company as a means to improve
the world.2. The Advisor: Provides an extremely high level of
assistance and advice to customers.3. The superstar: Here the business is centered on the
charisma and high energy of the CEO.4. The Artist: This personality is the reserved but a highly
creative type (e.g. web design and Ad agencies).5. The Visionary: Business is built based on the future vision
and thoughts of the founder.
Classification
6. The Analyst: Company focus is on fixing problems in a systematic way. Often the basis for science, engineering or computer firms.7. The Fireball: Business is full of life, energy and optimism.8. The Hero: Have an incredible will & ability to lead the world and your business through any challenge.9. The Healer: Provide nurturing and harmony to your business.
Classification
e) Based on Schools of thought on Entrepreneurship. There are six schools of thought on entrepreneurship each
with its own underlying set of beliefs. The great person school of entrepreneurship The Psychological characteristics school of entrepreneurship. The Classical school of entrepreneurship The Management school of entrepreneurship The Leadership school of entrepreneurship The Intrapreneurship school of entrepreneurship
Classification
NO CORE COMPETENCIES
ENTREPRENEURIAL ACTIVITIES
1. Initiative Does things before asked for or forced by events
2. Perceiving opportunities
Identifies opportunities and mobilises necessary resources to make good an opportunity
3. Persistence Takes repeated or different actions to overcome obstacles
Entrepreneurial Core Competencies
4. Information gathering Consults experts for business & technical advice. Seeks information on client’s or supplier’s needs.
5. Concern for quality work States desire to produce or sell a better quality product or service.
6. Commitment to contractual obligations
Makes a personal sacrifice or expends extraordinary effort to complete a job.
7. Efficiency orientation Finds ways and means to do things faster, better and economically
Core competencies
8. Planning Various inter-related jobs are synchronised according to plan
9. Problem solving Conceives new ideas and finds innovative solutions
10. Self - confidence Makes decisions on his own and sticks to them in spite of initial setbacks
11. Expertise Possess technical expertise in area of business, finance, marketing etc.
Core competencies
12. Self-critical Aware of personal limitations but tries to improve upon them by learning from past mistakes or experiences from others.
13. Persuasion Persuades customers and financiers to patronise his business.
14. Use of influence strategies Develops business contracts. Retains influential people as agents. Restricts dissemination of information in his possession
Core competencies
15. Assertiveness Instructs, reprimands, or disciplines for failing to perform
16. Monitoring Develops a reporting system to ensure that work is completed and that it meets quality norms
17. Credibility Demonstrates honesty in dealing with employees, suppliers and customers even if it means a loss in business
Core competencies
18. Concern for employee welfare
Expresses concern by responding promptly to their grievances.
19. Impersonal relationship Places long term goodwill above short term gain in a business relationship.
20. Expansion of capital base Reinvests a greater portion of profit to expand capital base.
21. Building product image Does everything possible establish a niche for his product in the market.
Core competencies
Entrepreneurship – New Trends
Part Time Activities Home Based Concepts Co-preneurs (teams of two) Immigrant Entrepreneurs Multilevel Marketing Web based Opportunities Franchise Retailing National / Transnational Networking Corporate Dropout Teaming
Stages of Entrepreneurship
Propensity to Enterprise Idea Generation Venture Startup Business Run (Stabilization/ Growth) Business Expansion Moving Out (Harvesting/ Succession) -Stagnation/ Failure can happen at any stage -One stage may not necessary lead to
another
Why small businesses fail?
Management incompetence Lack of experience Poor financial control
lack of capital tax customer credit
Failure to develop a strategic plan Uncontrolled growth Poor location Improper inventory control Inability to make the entrepreneurial transition
The key DO’s
Know your business in depth
Develop a solid business plan
Manage financial resources
Understand financial statements
Learn to manage people effectively
Self assessment techniques
An entrepreneur needs to assess him/herself in some factors deemed important for success in businessThere are four Capital Factors
associated with success in business: Human factors, Psychological factors, Sociological factors, and Financial factors.
1. Human Capital Human Capital refers to the set of skills, knowledge and
abilities we develop through education, training and experience.
Important areas of Human Capital include; Technical skills, Business skills, Education, Experience, and Wisdom and judgment.
2. Psychological factors This measure your entrepreneurial “mindset” or the
attitudes, traits and characteristics associated with success in entrepreneurship. Some factors related to this are;
Passion Faith and commitment Tolerance of risk and uncertainty Adaptability Drive and determination Energy
3. Sociological factors An entrepreneur’s sociological capital is his or her
sphere of social connection in; family, social, professional and recreational networks, entrepreneurial role models and supporting networks, comprising lawyers, bankers,
accountants, suppliers, potential customers, and investors. Research has consistently linked strong social
networks to success in entrepreneurship.
4. Financial factors New businesses, like most things, take money to get
started. You’ll need start-up capital to buy office furniture, computers, and
other equipment. You’ll need operational capital to run the company before you
make your first sale, and you’ll need personal financial reserve capital – money to pay your household and living expenses before your company has started to generate cashflow.
Most businesses don’t become profitable until the third year of operations on average – so you must determine whether or not you can weather the financial storm that will ensue without a secure income.
As an entrepreneur you need to assess yourself in individual areas.
The areas in which you find yourself good can be utilized as your strength meanwhile discovering your weak spots and taking appropriate measures to improve on them.
