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The Nature and Importance of Entrepreneurs

The Nature and Importance of Entrepreneurs. Objectives. Define entrepreneurship Identify the basic types of startup ventures Explain the entrepreneurial decision process Explain the role of entrepreneurship in the economic development. Describe the entrepreneurial profile. Entrepreneurship:

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The Nature and Importance of Entrepreneurs

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  1. The Nature and Importance of Entrepreneurs www.AssignmentPoint.com

  2. Objectives • Define entrepreneurship • Identify the basic types of startup ventures • Explain the entrepreneurial decision process • Explain the role of entrepreneurship in the economic development. • Describe the entrepreneurial profile www.AssignmentPoint.com

  3. Entrepreneurship: is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence- Robert Hisrich (1985) www.AssignmentPoint.com

  4. Entrepreneur stems from French: means between-taker or go between. Our definition involves four aspects: The creation process. The devotion of time and effort. The assumption of risk. Rewards of independence, satisfaction, money. www.AssignmentPoint.com

  5. Concept of Entrepreneur Three behavior is found in an entrepreneur: • Initiative taking • Organizing & reorganizing of social and economic mechanisms to turn resources and situations to practical account • The acceptance of risk and failure. www.AssignmentPoint.com

  6. Historical View of entrepreneurship According to Abbot: • An entrepreneur is a person who directs his business using his own capital According to Robinson: • An entrepreneur is a person who has the drive, ambition, energy and motivation to give a small business the strong thrust it must need to succeed. www.AssignmentPoint.com

  7. Schumpeter’s view: • Entrepreneurship is essentially a creative activity with innovative features in terms of : • using any untried technology • Producing a new commodity • Producing an old one in a new way • Opening a new source of supply of materials • New outlet of products • Reorganizing a new industry www.AssignmentPoint.com

  8. Modern View • Entrepreneurship is viewed as the undertaking of an enterprise comprising the function of risk bearing, organizing, innovating • He is responsible for proper functioning of factors of production • He formulates the business shaping long term policies of the enterprise and assumes the risk of uncertainty. • He is the talented and motivated person who sees the opportunities for introducing and accepting the new ideas. Thus entrepreneurship is meant the function of creating something new, organizing and coordinating the undertaking risk and handling economic uncertainty. www.AssignmentPoint.com

  9. Key Elements in Entrepreneur’s Background • Supportive childhood family environment. • Having a father who is self-employed helps. • Education is important. • Personal values • Aged 22-45 when starting venture. • Work history: dissatisfied with company job but has technical knowledge. Bill Gates www.AssignmentPoint.com

  10. Entrepreneurial Profile • Desire for responsibility • Preference for moderate risk • Confidence in their ability to succeed • Desire for immediate feedback • High levels of energy • Future orientation • Skill at organizing • Value of achievement over money www.AssignmentPoint.com

  11. Psychological characteristics: Need for achievement Need for power Independence Propensity to take risk Innovativeness Self confidence Aggression Economic characteristics: Support Business experience Access to capital & mgt. skill Experience in technology Occupational background time Characteristics of an entrepreneur www.AssignmentPoint.com

  12. Sociological characteristics: Leadership Family background Ethnic status values General characteristics: Age Education Pleasing personality Tactful Person of integrity www.AssignmentPoint.com

  13. Types of Entrepreneur 4 types of entrepreneur • Technical entrepreneur • Opportunistic entrepreneur • Innovative entrepreneur • Imitative entrepreneur www.AssignmentPoint.com

  14. Technical entrepreneur: Person with highly technical skill They try to develop technology based organization Opportunistic entrepreneur: Profound academic knowledge and practical experience Prefer to be good manager than a technically skilled person Maintain good social relations www.AssignmentPoint.com

  15. Innovative entrepreneur: Creator of new ideas Capable of managing the factors of production in the most efficient and effective way. Imitating entrepreneur: If a person follows his boss and starts a new business. They adopt other people’s knowledge, technology, technique. www.AssignmentPoint.com

  16. Functions of an entrepreneur • Organize the factors of production in order to produce goods and services • Look for new opportunities • Develop new ideas • Bear all kinds of risk • Make decisions • Update technology • Maintain equilibrium in economic development • Perform social responsibilities • Implement innovative thoughts and ideas in reality • To use their experience and knowledge in practice • To perform managerial functions www.AssignmentPoint.com

  17. motivated to achieve independence and ‘make things happen.’ Departure point: job dissatisfaction, layoff. Support group: friends, professional acquaintances. Initiates between ages 25-35. More likely to start a business in manufacturing, construction or high tech. motivated to accomplish a goal and achieve independence. Departure point: job frustration, change in personal circumstances. Support group: spouse, family, close friends. Initiates between ages 35-45. More likely to start a service business. EntrepreneursMen Vs. Women Most other dimensions show no differences. www.AssignmentPoint.com (Hisrich & Peters, p. 76)

  18. Owner Age at Business FormationNational Federation of Independent Business www.AssignmentPoint.com

  19. Among Entrepreneurs… • Optimizers • 21% • Freedom and flexibility is the most important • Want their companies to grow • Focus on profit instead of revenues • Highly knowledgeable about financial issues • Use technology to keep costs ↓ and productivity↑ • They feel that they maintain control • Good balance between home and business lives www.AssignmentPoint.com

  20. Among Entrepreneurs… • Hard workers • Love their work • Put extra hours to achieve their targets • Detail oriented • Most growth-oriented • Financially aggressive • Exercise broad control over the details of running their businesses www.AssignmentPoint.com

  21. Among Entrepreneurs… • Jugglers • 20% • The most involved in the operations • Difficult time delegating • Lack of time • High energy – multiple tasks at the same time • Embrace technology • Feel pressure to maintain positive cash flow www.AssignmentPoint.com

  22. Among Entrepreneurs… • Sustainers • 15% • Most often inherited or bought their businesses • The least comfortable with technology • Very conservative • Do not strive for growth • Good balance between home and business lives www.AssignmentPoint.com

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