Understanding the Entrepreneur

• An entrepreneur is someone who organizes, manages, and assumes the risks of a business enterprise.

Who is the Entrepreneur?

• Takes and accepts risks.
• Owns ventures.
• Manages.
• Establishes new ventures and develops existing ones.
• Identifies opportunities in the market.
• Applies their expertise.
• Processes market information.
• Brings innovation.
• Provides market efficiency.
• Maximizes investment returns.
• Provides leadership.

Entrepreneurs as Managers

• Entrepreneurs are always managers, but managers may not always be entrepreneurs.
• Entrepreneurs create, while managers are custodians.
• Entrepreneurs take risks, while managers seek stability.
• Entrepreneurs are personally responsible, while managers might just be merely responsible
• Entrepreneurs achieve, while managers target.
• Entrepreneurs are future-oriented, while managers are oriented on current operations.

Types of Entrepreneurs

• Basic survivalist: Operates as an entrepreneur to survive until obtaining formal employment or another entrepreneurial opportunity.
• Pre-entrepreneur: Involved in welfare-based entrepreneurship where profit maximization is less important than the collective.
• Subsistence entrepreneur: Involved in independent income-generating activities and operates as a small-scale vendor.
• Micro-entrepreneur: Formal-sector entrepreneur with zero to 10 employees.
• Small-scale entrepreneur: Formal-sector entrepreneur with 11 to 49 employees.

Categories of Entrepreneurs

• Intrapreneur: An entrepreneur within an existing organization, also known as a corporate entrepreneur.
• Solo self-employed individual: Includes agents, repairmen, brokers, accountants, and physicians who work alone or with a few employees and perform personally.
• Dealer to dealers: Knowledgeable business people engaged in various forms of trades, directly or indirectly related to their work.
• Team builders: Individuals who build larger companies through hiring and delegation.
• Independent innovators: Create companies based on ideas for better products or services.
• Economy of scale exploiters: Locate their businesses in areas with lower rent and taxes.
• Capital aggregators: Smart entrepreneurs who use experience and expertise to pool financiers to engage in business.
• Acquirers: Entrepreneurs who acquire businesses.
• Independent investors: Pure inventors who develop and market their new products or inventions.

Entrepreneurial Characteristics "The Big Five"

• Need for achievement.
• Need for autonomy.
• Locus of control.
• Calculated risk-taking propensity.
• Entrepreneurial self-efficacy.

Personal Entrepreneurial Competencies (PECs)

• Achievement Cluster
  • Opportunity-seeking
  • Persistence
  • Commitment
  • Risk-taking
  • Values Efficiency and Quality
• Planning Cluster
  • Goal Setting
  • Information Seeking
  • Systematic Planning and Monitoring
• Power Cluster
  • Persuasion and Networking
  • Self-Confidence

Attributes of Entrepreneurs

• Initiative.
• Strong persuasive powers.
• Moderate risk-taking ability.
• Flexibility.
• Creativity.
• Independence / Autonomy.
• Problem-solving ability.
• Need for achievement.
• Imagination.
• High belief in control of destiny.
• Leadership.
• Hard work.

Need for Achievement

• High energy levels to chase goals.
• Confidence that success will be achieved.
• Measurement of success.

Autonomy & Control

• Autonomy involves doing things "my way".
• Locus of control includes the ability to believe that that you steer your own destiny.

Risk Taking

• Calculated risk-taking involves the willingness to pursue an opportunity knowing that there might be a reasonably risk involved

Self-Efficacy

• Entrepreneurial self-efficacy includes the belief that a person can start and complete an activity

Myths About Entrepreneurs

• Entrepreneurs are born, not made.
• Anyone can start a business.
• Entrepreneurs are gamblers.
• Entrepreneurs want the whole show to themselves.
• Entrepreneurs are completely independent.
• Entrepreneurs are solely motivated by money.
• Entrepreneurs seek power and control.
• Entrepreneurs work harder than managers in big companies.
• Entrepreneurs experience great stress and pay a high price.
• Starting a business is always risky and ends in failure.
• Money is the most important start-up ingredient.
• Entrepreneurs should be young and energetic.
• If an entrepreneur is talented, success will always be swift.
• Any entrepreneur with a good idea can raise venture capital.
• If an entrepreneur has enough start-up capital, he or she cannot fail.

Risks to Entrepreneurs

• Financial risk: Financial outcome of the new business venture is unknown.
• Career risk: Being removed from the formal employment sector and needing to start from the bottom again.
• Family and social risk: Family uncertainties, social alienation, money issues, and long working hours.
• Physical and psychological risk: Eating habits, long working hours, lack of exercise Work related stress. These risks can be overcome by networking, planned vacations, delegations, good communication, regular exercise, and healthy eating habits.

Key terms

• **Autonomy:**Independence.
• Family risk: The uncertainties a family will face.
• Achievement: Goals that need to be achieved.
• Financial risk: The risk around money.
• Taking Propensity: Likelihood of taking a risk.
• Locus of control: The ability to be self sufficient.
• Entrepreneurs: Individuals willing to take a risk.
• Physical and psychological risks: Health related risks.
• Social risk: Risk to socialization.
• Entrepreneurial self-efficacy: Confidence in completion.
• Entrepreneurial mind-set: Characteristics of an entrepreneur.