What is Entrepreneurship?
What is entrepreneurship? What personal qualities distinguish a good entrepreneur? You might think that after centuries of watching successful entrepreneurs, it should be easy to answer the last question.
The truth is that it is not at all easy to answer this particular question. People with different personalities have succeeded as entrepreneurs. And many of them are quite ordinary people, like your neighborhood painter or plumber.
And some have succeeded merely because of luck. They happened to start the right business at the right time. Or had the fortune to meet the right people who helped them succeed.
All these do not mean that there are no personal habits and traits that are helpful. Certain habits and qualities could definitely help entrepreneurial success.
In the following sections, we discuss two types of entrepreneurship. First is the kind of entrepreneurship that inspirational business books extol. Next comes the typical, hardworking, organized entrepreneurship. While the former kind of entrepreneurship might perhaps be hard to master, the second kind is definitely not. Using habit development exercises, you could cultivate relevant traits.
Entrepreneurship – the Inspirational Kind
This ‘born’ (and possibly mythical) entrepreneur could be described in general terms as follows:
- A person who is constantly looking around for business opportunities. Is there some product or service that people would like to have but are not getting now?
- Once the person spots an opportunity, he or she begins to develop a business idea to exploit that opportunity. Most likely, these would be ideas few others would have thought of.
- Unlike scatter-brained idea generators, the entrepreneur goes about translating thoughts into reality. Even if they are dead broke, they would find some way to raise the required resources.
- They would have excellent salesmanship qualities. Firstly to sell their business idea to prospective investors and lenders. Secondly, to sell the product or service of the business itself.
- Highly observant and wise to the ways of the world, they manage to learn and do all that is necessary to establish and grow their business, in the shortest possible time.
Mythical or true, there is much that you could learn from this kind of entrepreneur. These include:
- Looking around you for unsatisfied needs of potential consumers
- Developing innovative ways to build a business for satisfying the needs
- Translating the general idea into a practical business program
- Getting into action fast once you have an action program
- Getting out into the world and working with people to get things done
- The persistence and frustration tolerance that would see you through all kinds of disappointments and adversities
Like writers and artists, this kind of entrepreneur is distinguished by a creative bent of mind. You and I might not be all that creative. Does it mean that we have no hope?
Definiely not. Start your small business after careful preparation. Adopt the approach that you are in business for the long haul, gearing yourself to learn all that is involved. And you are quite likely to succeed. The careful preparation would ensure that you do not take up a ‘no-hope’ business. And the long-haul approach would result in observing things and picking up business skills (provided you are willing to learn). Let us look at the process in more detail.
Entrepreneurship – the Practical Kind
The ‘born’ entrepreneur described above seems to identify business opportunities instinctively. You can spot such opportunities in a more deliberate way.
Studying the Market
Go out into the market and closely observe the consumers of your product and your competitors. Talk to them about the product or service. Gradually, you will become aware of opportunities in the market. You might even come across innovative possibilities, such as a completely new product that would appeal to these customers.
We discuss market study in more detail in a separate article on Small Business Marketing. Let us focus on the other entrepreneurial traits.
Taking initiative is the essence of entrepreneurship. It is you who decide to start a small business. No boss is going to tell you what to do and how to do it. You have to find out what things need to be done, when to do them and how to go about it.
A strong motivation to take charge of your own life and succeed, to make lots of money, is what drives the entrepreneur. Without such motivation, you wouldn’t be prepared to risk an apparently ‘safe’ job for the uncertainties of your own business.
Let us stress the ‘apparent’ nature of job safety. The world is changing so fast that there is no guarantee the job would still be there tomorrow. A small business of your own (provided you select the right business and organize it in the right manner) is probably your safest bet.
Persistence and Flexibility
Persistence and flexibility go together. One without the other could actually cause more harm. Let us look closer at these traits.
Persistence is what keeps you going when results do not appear as you had hoped for. Results rarely appear overnight, because:
- You have to become familiar with the little things and best bargains that lead to profitable operations. This know-how could only be obtained through actual experience over a period of time.
- Only sustained experience of successes and failures could make you a real businessperson able to take the right business decisions at the right time.
- Prospective customers need to become aware of your offer and also come to trust you. This is a gradual process that needs time.
Additionally, you are quite likely to face adversities and unforeseen developments with serious consequences for your business. Again, it is persistence that would keep you going. Without persistence, you would not see the final success at the end of it all.
Flexibility in the present context means the ability to observe what is REALLY going on and adapt to the situation. You might have to give up many of your preconceived ideas.
The successful businessperson is constantly monitoring the results of his or her decisions and actions. You adopt what works and drop what does not. It is this process of learning from one’s successes and failures that distinguishes the successful person.
Flexibility is also needed to cope with changed situations. You might have planned for a certain course of action assuming a certain situation. When the situation is different, you have to quickly develop another, more appropriate, course of action.
Blind persistence without flexibility could cause big losses. You might be persisting with a wrong approach which is actually making things worse.
And too much flexibility is equally disastrous. If you are constantly changing plans or shifting to new businesses, you would not accumulate the know-how and skills that come only through persistence.
The Habit of Planning & Organizing
Doing business involves attending to a number of things. You have to:
- Find customers on a continuing basis for your product or service.
- Organize delivery of the product or service, often in a customized way, to the customers to their satisfaction.
- Attend to customer complaints in a way that enhances your reputation for dependability.
Each of these in turn involves innumerable small and big activities. You have to work with your employees, customers, suppliers, bankers, government officers and the public. The distractions of attending to so many different tasks would inevitably result in overlooking something or other. Unless you do things in a systematic way.
The systematic way involves planning things in advance, preparing schedules and checklists and using these while organizing for specific results. You should also check frequently that things are going as per schedule and that desired results are being achieved. You might even have to make fresh plans if the situation changes drastically.
The habit of planning, organizing and monitoring is thus an essential entrepreneurial trait. Without these habits, the following could happen:
- You do not achieve desired results and cannot find out why. Unless you have a route plan to a desired destination, wrong turns wouldn’t be noticed.
- You waste valuable resources because you have not planned a time-and-cost-efficient way to achieve what you want.
- In extreme cases, you might even be floating around aimlessly. And aimless activities do not achieve business results.
Willingness to Take Risks
Businesses involve risks. Despite the best planning and organizing, things could go wrong. New technology might make your processes obsolete and costly. Change in fashions could make your products old-fashioned. A natural disaster could wipe out your whole infrastructure.
The result could be not only loss of money but also of your prestige and self-esteem. If the very thought of these consequences upsets your stomach, you wouldn’t enjoy entrepreneurship.
Actually, there are ways to reduce risks. Insurance could help you guard against natural disasters and many other kinds of risks. Part-time working could safeguard you if the business fails (and the experience could help you proceed better with your next business).
Above all, the kind of preparation outlined on the pages of SmallBusiness-Start.com would help you almost eliminate the risks of failure.
Entrepreneurial Traits Summary
The habits and skills described above are the essential success factors:
- Willingness (and know-how) to study the market and work at identifying unsatisfied needs
- Habit of self-starting coupled with strong motivation
- Persistent and flexible, ready to learn by doing
- Habits of planning, organizing and monitoring
- Readiness to take risks and an awareness of how to minimize these
Habits could be cultivated with conscious effort. Skills could be acquired through training. And you become an entrepreneur as a result.
A few other things could supplement these to make your success easier. These include:
- Selecting a business that involves doing things you like. If you are doing things you like, you would be more willing to work hard for long hours, and make other sacrifices essential for success.
- Selecting a business that is in line with your background. If you select a business that utilizes any know-how or skills you have already acquired, your learning period would be shorter and success earlier.
- Good health and high energy levels. Establishing a business involves hard work and long hours. Without good health and high levels of energy, it might prove almost impossible to put forth the required effort.
- People skills. You would be working with many different kinds of people, such as bureaucratic officials, unreliable suppliers, cantakerous customers and difficult employees. Good people skills could definitely help you work effectively and get results.
- Helpful personal situation. A reserve of savings, or a family willing to put up with a lower standard of living during the initial difficult days, could eliminate a huge distraction.