Entrepreneurship Defined

Etymology

Entrepreneurship comes from the French verb 'entreprendre' which means 'To undertake,' is the act and art of being an entrepreneur or one who undertakes innovations or introducing new things, finance and business acumen in an effort to transform innovations into economic goods. This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses (referred as Startup Company); however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations.[1]

Entrepreneurship in General

According to Paul Reynolds, entrepreneurship scholar and creator of the Global Entrepreneurship Monitor, "by the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Participating in a new business creation is a common activity among U.S. workers over the course of their careers."[2] And in recent years has been documented by scholars such as David Audretsch to be a major driver of economic growth in both the United States and Western Europe. "As well, entrepreneurship may be defined as the pursuit of opportunity without regard to resources currently controlled (Stevenson,1983)"[3]


 

Types of Entrepreneurial Activities

Entrepreneurial activities are substantially different depending on the type of organization and creativity involved. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating many job opportunities. Many "high value" entrepreneurial ventures seek venture capital or angel funding (seed money) in order to raise capital to build the business. Angel investors generally seek annualized returns of 20-30% and more, as well as extensive involvement in the business.[4] Many kinds of organizations now exist to support would-be entrepreneurs including specialized government agencies, business incubatorsscience parks, and some NGOs. In more recent times, the term entrepreneurship has been extended to include elements not related necessarily to business formation activity such as conceptualizations of entrepreneurship as a specific mindset (see also entrepreneurial mindset) resulting in entrepreneurial initiatives e.g. in the form of social entrepreneurshippolitical entrepreneurship, or knowledge entrepreneurship have emerged.

Characteristics of an entrepreneur

Entrepreneurs have many of the same character traits as leaders,[10] similar to the early great man theories of leadership; however trait-based theories of entrepreneurship are increasingly being called into question. Entrepreneurs are often contrasted with managers and administrators who are said to be more methodical and less prone to risk-taking. Such person-centric models of entrepreneurship have shown to be of questionable validity, not least as many real-life entrepreneurs operate in teams rather than as single individuals. Still, a vast literature studying the entrepreneurial personality argues that certain traits seem to be associated with entrepreneurs:

  • Bird - mercurial, that is, prone to insights, brainstorms, deceptions, ingeniousness and resourcefulness. they are cunning, opportunistic, creative, and unsentimental.
  • Busenitz and Barney - prone to overconfidence and over generalizations.
  • Cole - found there are four types of entrepreneur: the innovator, the calculating inventor, the over-optimistic promoter, and the organization builder. These types are not related to the personality but to the type of opportunity the entrepreneur faces.
  • Collins and Moore - tough, pragmatic people driven by needs of independence and achievement. They seldom are willing to submit to authority.
  • Cooper, Woo, & Dunkelberg - argue that entrepreneurs exhibit extreme optimism in their decision-making processes.
  • John Howkins - focused specifically on creative entrepreneurship. He found that entrepreneurs in the creative industries needed a specific set of traits including the ability to prioritise ideas over data, to be nomadic and to learn endlessly.[11]
  • David McClelland - primarily motivated by an overwhelming need for achievement and strong urge to build.

Qualities

  1. Disciplined -- These individuals are focused on making their businesses work, and eliminate any hindrances or distractions to their goals. They have overarching strategies and outline the tactics to accomplish them. Successful entrepreneurs are disciplined enough to take steps every day toward the achievement of their objectives.
  2. Confidence -- The entrepreneur does not ask questions about whether they can succeed or whether they are worthy of success. They are confident with the knowledge that they will make their businesses succeed. They exude that confidence in everything they do.
  3. Open Minded -- Entrepreneurs realize that every event and situation is a business opportunity. Ideas are constantly being generated about workflows and efficiency, people skills and potential new businesses. They have the ability to look at everything around them and focus it toward their goals.
  4. Self Starter -- Entrepreneurs know that if something needs to be done, they should start it themselves. They set the parameters and make sure that projects follow that path. They are proactive, not waiting for someone to give them permission.
  5. Competitive -- Many companies are formed because an entrepreneur knows that they can do a job better than another. They need to win at the sports they play and need to win at the businesses that they create. An entrepreneur will highlight their own company’s track record of success.
  6. Creativity -- One facet of creativity is being able to make connections between seemingly unrelated events or situations. Entrepreneurs often come up with solutions which are the synthesis of other items. They will repurpose products to market them to new industries.[12]
  7. Determination -- Entrepreneurs are not thwarted by their defeats. They look at defeat as an opportunity for success. They are determined to make all of their endeavors succeed, so will try and try again until it does. Successful entrepreneurs do not believe that something cannot be done.
  8. Strong people skills -- The entrepreneur has strong communication skills to sell the product and motivate employees. Most successful entrepreneurs know how to motivate their employees so the business grows overall. They are very good at highlighting the benefits of any situation and coaching others to their success.
  9. Strong work ethic -- The successful entrepreneur will often be the first person to arrive at the office and the last one to leave. They will come in on their days off to make sure that an outcome meets their expectations. Their mind is constantly on their work, whether they are in or out of the workplace.
  10. Passion -- Passion is the most important trait of the successful entrepreneur. They genuinely love their work. They are willing to put in those extra hours to make the business succeed because there is a joy their business gives which goes beyond the money. The successful entrepreneur will always be reading and researching ways to make the business better.

Successful entrepreneurs want to see what the view is like at the top of the business mountain. Once they see it, they want to go further. They know how to talk to their employees, and their businesses soar as a result.

References

  1. ^ Scott Andrew Shane (2003). A General Theory of Entrepreneurship: the Individual-Opportunity Nexus. Edward Elgar Publishing. ISBN 1843769964.
  2. ^ Paul D. Reynolds (2010). Entrepreneurship in the United States: The Future Is Now. Springer. ISBN 1441942750.
  3. ^ Paul D. Reynolds (1997). "LEVERAGING RESOURCES: BUILDING AN ORGANIZATION ON AN ENTREPRENEURIAL RESOURCE BASE". Frontiers of Entrepreneurship Research, 1997. Babson College.ISBN 0910897182.
  4. ^ Mark Van Osnabrugge, Robert J. Robinson (2000). Angel Investing. John Wiley & Sons. ISBN 0787952028.
  5. ^ Joseph A. Schumpeter (2012). Capitalism, Socialism and Democracy. Routledge. ISBN 0415107628.
  6. ^ Frank Hyneman Knight (2002). Risk, Uncertainty and Profit. Beard Books. ISBN 1587981262.
  7. ^ "Searching for the invisible man". The Economist. Mar 9 2006. pp. 67. Retrieved 23 December 2012.
  8. ^ Zoltan J. Acs, David B. Audretsch (2010). Handbook of Entrepreneurship Research: An Interdisciplinary Survey and Introduction. Springer. ISBN 144191191X.
  9. ^ "What is GEM?". Global Entrepreneurship Monitor. Retrieved 23 December 2012.
  10. ^ Tanya Prive (19 December 2012). "Top 10 Qualities That Make A Great Leader". Forbes. Retrieved 23 December 2012.
  11. ^ John Howkins (2002). The Creative Economy: How People Make Money from Ideas. Penguin UK. pp. 155–158. ISBN 0140287949.
  12. ^ Vuong, Quan Hoang; Napier, Nancy K.; and Tran, Tri Dung (December 2012). "A Categorical Data Analysis on Relationships between Culture, Creativity and Business Stage: The Case of Vietnam"International Journal of Transitions and Innovation Systems 2 (3-4): N.A.. Retrieved 25 December 2012.
  13. ^ Johansson, Dan (December 2004). Economics Without Entrepreneurship or Institutions: A Vocabulary Analysis of Graduate Textbooks1. pp. 515–538. Retrieved 23 December 2012.
  14. ^ Napier, Nancy K.; Dang, Le Nguyen Vu; and Vuong, Quan Hoang (September 2012). "It takes two to tango: Entrepreneurship and creativity in troubled times - Vietnam 2012"Sociology Study 2 (9): 662–674. Retrieved 25 December 2012.
  15. ^ Ebbena, Jay; Johnson, Alec (November 2006). "Bootstrapping in small firms: An empirical analysis of change over time"Journal of Business Venturing 21 (6): 851–865. Retrieved 23 December 2012.

Further reading

  • Tony Bailetti (February 2012). "Technology Entrepreneurship: Overview, Definition, and Distinctive Aspects". Technology Innovation Management Review. Retrieved 23 December 2012.
  • Dr Thomas N Duening, Robert D. Hisrich, Michael A Lechter, Esq. (2009). Technology Entrepreneurship: Value Creation, Protection, and Capture. Academic Press. ISBN 0123745020.
  • Jessica Livingston (2007). Founders at Work: Stories of Startups' Early Days. Apress. ISBN 1590597141.
  • Anders Lundstrom, Lois A. Stevenson (2005). Entrepreneurship Policy: Theory and Practice. Springer. ISBN 038724140X.
  • Richard Swedberg (2000). Entrepreneurship: The Social Science View. Oxford University Press. ISBN 019829462X.

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