Chapter Two: Characteristics and Capabilities of the Entrepreneur PDF

Chapter Two Characteristics and Capabilities of the Entrepreneur Entrepreneurship ]44[ ]45[ Chapter Two: Characteristics and Capabilities of the Entrepreneur Chapter Two Characteristics and Capabilities of the Entrepreneur)*...

Chapter Two Characteristics and Capabilities of the Entrepreneur Entrepreneurship ]44[ ]45[ Chapter Two: Characteristics and Capabilities of the Entrepreneur Chapter Two Characteristics and Capabilities of the Entrepreneur)*( Intended Learning Outcomes: By the end of chapter two, the student should be able to: 1. Know the characteristics and capabilities that the entrepreneur ought to have. 2. Measure how far the successful entrepreneur has capabilities that can lead the individual to have a pioneering enterprise. 3. Identify how the pioneering enterprise can make its owner gratified. 4. Become aware of the privileges and problems of establishing the pioneering enterprise and how far it can gratify the entrepreneur. Key Concepts: 1. The characteristics and capabilities of the entrepreneur 2. Why establish a pioneering enterprise? The importance of the pioneering enterprise to the entrepreneur. 3. How far do you have the capabilities of the entrepreneur? )*( This chapter is by Professor Abdelhamid Abou Naaem, Professor of Business Administration, Faculty of Commerce, Cairo University. Entrepreneurship ]46[ ]47[ Chapter Two: Characteristics and Capabilities of the Entrepreneur A Success Story Mahmoud El-Araby: Receiving the Order of the Rising Sun from the Emperor of Japan A self-made business man started from scratch. He started a journey that involved a struggle and persistence, until he became one of the prominent men of trade, industry and economics in Egypt. He is a humble man and the positions he held did not change him. He did not accept the political prestige that he was offered, believing that economics has its proponents and politics has its own. He managed to build a big industrial fortress and have a prominent economic status without anyone’s support. He is a good role model for whoever has the ambition to succeed. Mahmoud El-Araby started working at the age of six with a capital of thirty piasters. He opened the first store in his own name in 1964 because the fixed job did not satisfy his ambitions. Al-Araby said, “The secret of success is to function with knowledge and logic, and to avoid being a swindler.” His Life and Upbringing: He was born in 1932 in one of the villages of the governorate of Menoufia. His father was a farmer who earned his living by cultivating land he did not own. He sent his son to the Kuttab at the age of three, so his son studied the Qur’an, but could not get a formal education because of his father’s financial condition. The Young Merchant Al-Araby started to trade at a very young age. About this stage he said, “I used to save forty or fifty piasters every year to give them to my brother to buy me products from Cairo before Eid El-Fitr (Feast of Breaking the Fast). These were fireworks and balloons that I displayed on a stone bench in front of our home to sell them, earning around fifteen piasters. I Entrepreneurship ]48[ would give all the money I collected to my brother to buy me similar products for the Bairam Feast. I continued doing this until the age of ten. At that time my brother suggested to my father that I go to Cairo to work in a perfume factory in 1942. I did this for only one month because I do not like jobs, closed places and routine work.” Al-Araby had his own philosophy concerning the term ‫ تاجر‬tager, meaning merchant, who carried out an activity that he believed in and practiced. For him, each of the four letters of the Arabic word had a significance: “‫ ”ت‬refers to taqua ‫ تقوى‬meaning piety; “ ‫ ا‬refers to amana ‫أمانة‬ meaning honesty; “‫ ”ج‬refers to gara’a ‫ جرأة‬meaning audacity; and “‫”ر‬ refers to rahma ‫ رحمة‬meaning mercy. Al-Araby later worked in a store in Al-Hussain district. His salary was 120 piasters a month and he continued working in this store until 1949. His salary became 320 piasters. At this point he decided to work in a wholesale rather than a retail store in order to develop his expertise in trade. His first salary from the new store was four pounds and he worked for this store for fifteen years. His salary increased to twenty seven pounds. In 1963, Al-Araby wanted to trade independently, but he did not have the means to start. Together with one of his colleagues at work, he thought about joining forces with a rich person. He and his colleague would contribute their time and effort, and the contribution of the other party would be financial. The budget of the enterprise was five thousand pounds. This is how he established his first store in Al-Mousky in Cairo, which he still owns until now. The Secret of the Profession Al-Araby said that the time he was drafted into the army taught him the value of strength, how important it is to own weapons to protect oneself, and not to wait for others to protect you. Al-Araby trade was based on school supplies, but in the 1960s the Egyptian government decided to provide the students with these supplies for free. This implied that Al-Araby trade was of no use, so he traded in electrical appliances instead. In the 1970s, Al-Araby shifted completely to electrical appliance at the time of the launching of the Open-Door Policy. He considered becoming the agent for one of the international companies. He met one of the Japanese students studying at the American University in Cairo who worked for the Japanese Company Toshiba and visited his store often. He wrote a report to his mother company and assured them that Al- ]49[ Chapter Two: Characteristics and Capabilities of the Entrepreneur Araby can be the best in representing Toshiba in Egypt. The company agreed to have him as an agent. In 1975, Al-Araby visited Japan and saw the factories of the company that he represents, stating “I do not deserve to live or the food that I eat.” When he saw the progress in Japan when he visited the Toshiba factories, he asked those in charge to build a factory for the manufacture of electrical appliances in Egypt. This happened based on the arrangement that 40 % of the components of the products would be locally made, which was later raised to 60 %, and then 65 % and now 90 %. With the development of production, the Toshiba Al-Araby Company was established in 1978. Al-Araby started his business with one employee, but now has twenty-two thousand employees that he calls his partners. He said, “Thank God I started in 1964 with one laborer. I was hoping I had ten, and when they became ten, I was hoping they became one hundred. In the year 2000 we had twenty thousand, now in 2018 we have twenty-five thousand and in 2010 we will have forty thousand. Having money is not what is important, what money! What is important is to serve others, employ human beings and help people.” He explained that the mother company in Japan employs one hundred and eighty thousand, and he hopes this will be the case in Egypt in order to help the youth and help overcome the problem of unemployment. The Social Role of the Company The Al-Araby Firm was established to serve the community. It makes use of Zakat and gives some people monthly support. This firm is also in charge of enterprises, like those concerned with the cleanliness of water in Asyut governorate. This enterprise will move on from Asyut to Suhag to the New Valley governorate. The Japanese Award The business man Mahmoud Al-Araby, who received the Order of the Rising Sun from the Emperor of Japan, said “I took an award from the Emperor of Japan known as the Order of the Rising Sun, not because I am handsome, since they make no undeserved compliments, but because I had an impact on the Japanese economy; thank God.” Source: Interview with Mahmoud Al-Araby. Al-Masry Al-Youm, 2018. Entrepreneurship ]50[ ]51[ Chapter Two: Characteristics and Capabilities of the Entrepreneur Chapter Two Characteristics and Capabilities of the Entrepreneur Introduction Since the entrepreneur is at the heart of entrepreneurship, this chapter will focus on the characteristics and capabilities that an entrepreneur ought to have. It is necessary to know that the entrepreneur is creative by nature and that creativity is the synonym of entrepreneurship. Creativity could be in having a new idea, service, material, enterprise or a new method of marketing. An entrepreneur must learn what entrepreneurship is, its basics and constituents because entrepreneurship involves a scientific and rational process that has firm foundations, as discussed in the previous chapter. Everyone would like to be rich by means of having a pioneering enterprise, but before hoping to be rich, we have to make sure that we have the tools for it. The number of enterprises that fail are more than those that succeed. In order to become a successful entrepreneur, you must know that there are requirements other than luck for the enterprise to succeed and be sustainable. Among these requirements are serious work and that the work environment can best be described as being enigmatic and is characterized by a great deal of uncertainty. The entrepreneur must understand well the environment in which s/he works and must interpret the needs in terms of unique and creative products and services. Many contemporary entrepreneurs like Al-Araby whose story is presented in the opening section of each chapter, and future entrepreneurs, often raise three difficult and strategic questions, namely, 1. Am I actually an entrepreneur? 2. Do I have the capabilities, characteristics and factors that will lead to success? 3. Do I have the background and enough experience to start and manage a new entrepreneurial enterprise? Accordingly, the purpose of this chapter is to measure how far the individual is capable of having a pioneering enterprise through answering these questions and others. The fact is that the requirements of the entrepreneurial enterprise must be in harmony with the aptitude, capabilities, desires and ambitions of the entrepreneur; and that the enterprise will fulfill these ambitions. The conclusion of this chapter will deal with the privileges that the individual will reap from the entrepreneurial enterprise, shedding light on the challenges that will be faced in order to address them. Entrepreneurship ]52[ First: Characteristics and Special Traits of the Entrepreneur For the entrepreneur to succeed in turning a creative idea into a successful innovative enterprise, several features, and cognitive, personal and leadership capabilities are needed. The following are the most important: 1. Technical Competence in the Specific Field One of the most important factors that leads to the success of a small entrepreneurial enterprise is excellence and efficiency in a specific field of business. The entrepreneur needs to have creative ideas that are new in the market and that can be transformed into a product that is different or innovative services. The implication is the owner must have a comprehensive view of what he is doing, and it should be done in a creative way. Although this seems simple, in fact it is not. We daily hear of dozens of enterprises that fail because the owner does not have the efficiency and awareness of what the business requires. The first factor, therefore, that leads to the success of small entrepreneurial enterprises is how the business is run. 2. Mental Ability The entrepreneur is the one who guides others and is the source of new ideas in the business. Thus, the entrepreneur uses this ability in formulating comprehensive and competitive plans for the enterprise. In order to be able to do this, he must have a broad vision of the enterprise. If the entrepreneur’s technical ability and expertise in the business helps him in figuring out how every activity can be carried out, his mental ability helps him in connecting these activities together in order to have a final product or service. At times the entrepreneur plays the role of the leader, indirectly by supporting the employees who face problems at work, by pushing them forward through advice and not letting them down. 3. Human Relations The human element is a determining factor in any organization because it is the factor that leads to success through utilizing and bringing together all aspects of the business. Therefore, one of the most important qualities of a successful entrepreneur is to be able to figure out the strengths of each employee and guide him/her in the right direction. In addition to this, the entrepreneur must be able to have harmony between his employees, followers, consumers and his surrounding environment. In short, s/he should be skilled in communicating with those who work with him/her, in ]53[ Chapter Two: Characteristics and Capabilities of the Entrepreneur encouraging them in ways that suit them, and in leading them to have a sense of belonging for the success of the enterprise. The entrepreneur ought to encourage his employees to disagree with him/her, listen to their advice with an open mind, so that they would not hesitate to voice their own point of view, and to be honest and truthful when there is a problem. Finally, the entrepreneur must have a strong relationship with his employees because this will enhance their dedication and hard work. Remembering their birthdays and sharing his/her private car or supporting them during crises can be effective (Abou Naaem, 2018). 4. High Achiever Successful entrepreneurs often have great accomplishments and can take decisions. They are thus wo/men of action not words. They assess what they do through results and always ask the following question: Did my efforts succeed? The motivation to be an achiever is identified by how far the individual strives and perseveres in order to achieve his/her goals and succeeds, resulting in satisfaction. This is the case in contexts that involve assessing one’s performance with a view to a level of excellence. Atkinson identified the most important indicators that are motivations for achievement as follow,  Trying to reach a goal with persistence.  Competing with others and knowing the effort and speed needed to achieve the goal.  Achieving what must be accomplished according to standards of excellence at work.  Avoiding doing anything that is below standard.  Feeling responsible for the results of one’s actions and the level of one’s work.  Gathering information and understanding it well.  Being concerned about the future and working towards a level of performance that influences the future. 5. Independence This refers to the desire of the individual to perform the activities independently and with confidence that this is the way to achieve the goals. The one who seeks to be independent refuses to follow the group that s/he belongs to in every way. Such groups force individuals to play specific roles and act in specific ways. This hinders individuals from being independent. Entrepreneurship ]54[ 6. Curiosity Being curious is to be inclined to search for what is new, or the desire deal with contexts that are different and somehow unusual in order to discover and raise questions about these contexts. In more general terms, these are known as follows,  to be inclined to deal with events or situations that are attractive and relatively new and exploring details about them.  to be inclined to deal with exciting events or situations that are unusual and finding out about them.  to be inclined to deal with varied attractive operations. 7. Risk-taking This is one of the characteristics that reflects how far the person desires to act in a way that involves a high level of risk-taking. It is interesting that risk-taking is closely linked to creative thinking. Torrance defines creativity as adventurous thinking which is characterized by avoiding traditional and dogmatic ways of thinking. If a risk-taker chooses to take risks rather than a traditional route, s/he in this case is a creative person who seeks to get rid of stereotypes and avoids rigidity. Therefore, researchers claim that risk-taking is a decisive quality of character in the creative behavior of the entrepreneur. 8. Persistence Persistence is the inclination of the individual to continue trying in order to accomplish a certain mission, despite the hardships and difficulties one faces, and holding on to the goal despite negative results and frustrations. Simply put, it is the ability of the person to endure adversities and challenges to achieve the goal. In this sense, persistence is a feature that is closely linked to creative thinking that leads to original ideas for innovative enterprises. The role of persistence is not limited to how efficient the individual is in dealing with traditional problems, but is extended to how to face unusual or unconventional problems. (Moataz Abdallah 2007) 9. Non-conformism By nature, those who are creative tend to avoid conforming to what is prevalent in society in terms of standards and strict molds. The results of various studies have shown that there is a positive link between creativity and non-conformism. The results also show that creativity and adhering to the prevailing traditions in different fields brings about a negative outcome. The person who is prone to creative thinking generally criticizes the ]55[ Chapter Two: Characteristics and Capabilities of the Entrepreneur conformity that others follow, the stereotypes and molds that are prevalent in society. Such a creative person has special interests that are different in content from those that pertain to the clear and general concerns of the society. 10. Self-actualization Maslow defined the motive to self-actualization as “the full realization of one’s potential” and of one’s “true self.” It is the desire of the individual to achieve what s/he would like to accomplish. This is the context in which the individual uses all capabilities, talents and expertise to the best of his/her ability in order to improve him/herself. This also means that the individual can make use of what is available to accomplish the goal, through achieving the peak of one’s potential. A self-actualized person reaches the apex of what s/he would like to be. Maslow identifies a group of characteristics that distinguish those who achieve self-actualization. Some of these are, they  Perceive reality efficiently and can tolerate uncertainty;  Accept themselves and others for what they are;  Are spontaneous in thought and action;  Are problem-centered (not self-centered);  Have an unusual sense of humor;  Can look at life objectively;  Are highly creative;  Are resistant to enculturation, but not purposely unconventional;  Are concerned with the welfare of humanity;  Are capable of deep appreciation of basic life-experience;  establish deep satisfying interpersonal relationships with a few people;  Have peak experiences;  Need privacy;  Have a democratic attitude;  Have strong moral/ethical standards. Maslow (1968 5) 11. Creativity A. Originality This is the most important quality needed for creative production. It refers to producing something new, unique, not a duplication. This is accompanied with the use of the imagination and behaving in an unexpected Entrepreneurship ]56[ way, which is unconventional. In this case we are faced with a person who has the two basic qualities of creativity, namely being unique and ingenious. Behaving in a way that is different and based on the imagination, make this person, thus, has the two qualities necessary to describe him/her as creative. If a third quality is added to the previous two, namely relevance, we are then faced with real and comprehensive creative behavior. B. Intellectual Fluency This refers to the ability of the person to introduce as many ideas as possible in a specific time period, so long as these ideas are meaningful and relevant to the issue at hand. These ideas are significant in dealing with the issue or in discussing a certain problem. In such a case, the person can provide a comprehensive view of the issue. C. Flexibility This means the individual’s mental ability to be flexible, change his perception in considering various situations, and move from one way of dealing with an issue to another without being limited to one way of thinking. Such a person will not insist on adopting a certain position, if a better or different one proves to be better. Guilford, who defined flexibility as the ability to simultaneously propose a variety of approached to a specific problem, dealt with it from three angles; first, the ability to adapt in contexts that require changing one’s perspective while doing simple everyday tasks. Second, one has to be able to be free from rigidity in solving problems. Third, one has to be able to spontaneously change his/her perspective when this is needed. D. Sensitivity to Problems The creative person can be critical and is aware that reform is needed. In such a case, s/he has a theory of reform. That is s/he does not accept the status quo throughout, but explores possibilities and is critical, meticulous and experimental. Everything ought to be studied and errors should be detected in contexts that others regard as ideal. Having a critical sense, asking questions, following up dealing with details and areas that can involve multiple perspectives are all necessary activities (Ayman Amer 2003 and Zain Alabedeen Darwish 1983). E. Maintaining Direction This refers to the ability of the creative person to continue trying in one direction or the other until s/he reaches the goal. An idea becomes the seed of a fruitful tree through effort, hard work and dynamic energy until the ]57[ Chapter Two: Characteristics and Capabilities of the Entrepreneur creative person reaches the peak of creativity in various ways. The following are the four ways of being creative, A. Innovation is to introduce something new that the market needs, that is no one has preceded the entrepreneur in introducing this enterprise or service before. Ideas and chances are available since the dawn of history, as many claim, but it is the successful entrepreneur who grabs the opportunity. Hilton, the founder of the well-known chain of hotels in his name, said that he succeeded because he managed to seize the opportunity while others failed. He said that others could have successful if they had done what he did, but they did not take the initiative. B. “Only Connect” involves bringing pieces together and coming up with something new. The owner of a small business can collect the pieces, link and put them together to figure out the possibilities and manage to have a successful enterprise. C. Imitation indicates that if the person cannot be an innovator, imitating good ideas by others can help. This requires exploring what the leaders in the field of this business are doing. Many pioneering enterprises can start by modifying a service or a product. D. The Transfer of Successful Ideas is also possible through applying successful ideas from one field to another. When the owner of Mac Donald’s started having a chain of stores all over the United States, for example, others carried out the same plan but with different products. Now, chicken and pizza, and even ice cream are available in chains like Mac Donald’s. 12. Making Use of the Experience of Others Learning about the experiences of those who preceded us in the field we are interested in is the most important step that a person must take before becoming an entrepreneur. These experiences give the person enough information about the steps that lead to success in order to follow them, and those that lead to failure in order to avoid them. This is why this book introduces the experiences of successful entrepreneurs at the beginning of every chapter. These can be a source of light for an entrepreneur who would like to start a small enterprise for the first time. Dear reader, now you can ask yourself whether you have all the requirements of a successful entrepreneur discussed earlier or only some of them? What is the ratio of what you have compared to what you do not Entrepreneurship ]58[ have? The relative success of your enterprise will depend on the characteristics and capabilities you have or do not have. If you have them, your enterprise will have a 100% chance of success. If you only have 10%, chances are your enterprise will have a 10% chance of success. In order to assess how far you can become an entrepreneur, answer the questionnaire at the end of the chapter. Second: Why have an Entrepreneurial Enterprise? What is the importance of an Entrepreneurial Enterprise for the Entrepreneur? Why do some of us desire to have a small entrepreneurial enterprise of their own rather than have a job? The answer is there are special ambitions that cannot be fulfilled except through this enterprise. Therefore, the next section will deal with the benefits of such an enterprise, together with the problems that inevitably happen with enterprises like these. 1. The Benefits of Establishing an Entrepreneurial Enterprise An entrepreneurial enterprise has the following benefits: A. Independence An entrepreneur has good qualities that can prepare him/her to be a leader. Consequently, such qualities allow him/her to object if the boss requires that s/he follows the rules and regulations more strictly. The entrepreneurial enterprise gives one the chance to be one’s own boss; in other words, one does not have a boss who gives orders or limits one’s freedom in applying creative ideas. One successful business man said “I cannot and would not like to work under anyone’s leadership. I prefer to be my own boss. A private enterprise allows you to implement your own plans, follow your own ambitions and be independent in managing the enterprise. Having a boss who gives you orders and controls you will limit your freedom in applying your ideas.” B. Financial Gains If you are efficient in managing your own business, you will make a fortune and become famous. You will get more money than you ever will if you work for someone or have a government job. Your fortune will multiply and what you can get from a small enterprise might be ten times as much as what an employee receives. C. Community Service Entrepreneurship is regarded as a main generator of job opportunities and, therefore, affects the growth on the national economy. Many of us often observe that the society is in need of a product or a service that is not ]59[ Chapter Two: Characteristics and Capabilities of the Entrepreneur available. The doctor, who discovers a medicine to treat cancer, for example, or virus C because this medicine does not exist, is serving the community and the entire world. This is the same in any other job or industry. The owner of a small entrepreneurial enterprise is, thus, serving the community he lives in through this enterprise and rightly feels that s/he is playing a role in developing his society. S/he is opening a new market and fulfilling a need. S/he can also be making a new technological product or service available that will make the lives of people easier. Facebook and Microsoft are but two examples. D. Job Security Now that governments cannot employ all graduates, thousands and in fact millions of graduates have the problem of finding jobs. This is why when one thinks of a small entrepreneurial enterprise as an undergraduate, one is solving the most important problem in one’s life, namely finding a good job. If this idea is made possible, one has thus secured a job for him/herself and for others as well. E. Family Employment One can benefit oneself and others as well. If job security involves creating a job for oneself, having a small entrepreneurial enterprise can help members of your family, neighbors and even colleagues who do not have your ambitions can in time work for you. Al-Araby Firm has 22000 employees most of whom live in Menoufia and Qalyubia governorates. Al- Araby in this case is serving his community. The other major benefit is that the entrepreneur provides his/her children with a brilliant future full of ambitions and chances through a successful enterprise in the market, one they can pursue. F. Challenges One of the most important issues for the human being is to initially prove himself to himself, and to the society in the second place. S/he proves himself as a successful person who is productive and contributes to society. Every one of us tries to prove that s/he can succeed like others, and can be a successful entrepreneur like Talaat Harb, Othman Ahmed Othman, Sawiris, Ghabbour and others. But are there no problems in establishing and managing small entrepreneurial enterprises? There are problems that must be known so that the entrepreneur can face them through the ideas, principles, and practical tools that are introduced in this book. Entrepreneurship ]60[ 2. The Problems of Entrepreneurial Enterprises A. Sales Fluctuations Often, major firms are stable, and the sales are at a higher rate than small firms. The result is the employee who works in these big firms can plan his life according to the internal stability of the firm in which he is employed. The opposite is true in the case of small firms because the sales are not stable and naturally this affects the employees in making them insecure. In small enterprises the main problem is not having experts who want secure jobs. The entrepreneur has to be able to attract skilled employees and has to be able to keep them by giving them all the possible incentives that will make a difference. B. Competition One of the main problems of small enterprises is competition. The entrepreneur can start his/her enterprise and work for four or five years without making satisfactory earnings. There are many famous restaurants in Cairo, for example, but when Wimpy and KFC and others entered the competition, these restaurants started suffering from the competition because these multinationals are run by professional management. This is why these are stronger than those run by individuals with experience and a good reputation, which are not enough in facing giant international firms. The same applies to supermarkets when big companies like Carrefour went into business. In such a competitive environment, where there is professional and scientific management, the owner of a small enterprise has to have professional management as well. S/he has no other alternative. C. Increased Responsibilities The owner or the entrepreneur is responsible for almost everything in his enterprise. The problem becomes more serious when the enterprise grows. The owner plays the role of the accountant and oversees the account book of the enterprise; makes the deals with customers; employs the personnel; and manages the enterprise. The work load is, thus, heavy for long hours and in fact throughout the week. And since the human being has a limit in terms of time and energy, when the burden increases all the time with the growth of the enterprise, the responsibilities of the owner of the enterprise increase. The result is the owner becomes incapable of managing all these aspects. ]61[ Chapter Two: Characteristics and Capabilities of the Entrepreneur D. Financial Losses When one person is in charge of taking all the decisions (which are varied: technical and marketing decisions, and those that have to do with production or finances), it is impossible for all these decisions to be right. What is stored could be more or less than what is needed, and the products could be more or less expensive than what the competitors produce. Reducing the price of the product might not lead to the expected increase in sales, or the advertising campaign might not have the expected positive results. These are all areas that involve decision making. The owner of the enterprise bears all the losses that are the outcome of these decisions. If many wrong decisions are made, the owner will be bankrupt. The solution is to resort to specialists and consultants in taking these decisions so that the owner can guarantee that the decisions are as correct as possible. E. Relations with Employees Because the number of employees in such an enterprise is small, the owner supervises what they do directly. This direct supervision limits the communication between the employees while they are at work. Considering that the employee spends most of his time at work without talking, we can imagine how this affects him/her. This does not mean that employees should devote their time to talking to one another rather than work, but it is important to allow them to socialize. There is another problem in small enterprises and that is determining who does what. Because those who work are few, the owner sometimes pressures some to do many tasks, while others do less. The other problem has to do with financial compensation: generally, there are no objective, formal or just rule for the distribution of financial awards among the employees which leads to dissatisfaction. The result is lack of concentration, leading to having a bad product or service which makes the client angry. Another possibility is the employee leaves the job in search for one that is better, and in this case the enterprise losses a good employee. F. Laws and Regulations Like other enterprises, the entrepreneurial one must abide by laws and legislations, the most important of which is the social insurance law for those employed in these enterprises. The owner pays a sum of money as insurance for everyone employed. The law also requires that taxes are collected for every item sold (sales tax). One important step is the enterprise must apply for a permit before initiating any activities and medical reports Entrepreneurship ]62[ must be issued for all the employees who conduct work that has to do with food, drink or coiffeurs, for example. G. Risk of Failure One of the most serious problems that the owner of an entrepreneurial enterprise is faced with is the loss of part or all the money s/he invested in the enterprise as a result of inadequate decisions. For instance, the enterprise might not be able to continue because of an economic depression, unlike in big companies that can withstand such a problem. If the owner loses all his/her money, the result is bankruptcy, withdrawal from the market, and the loss of the dream. Third: How far do you have the characteristics and capabilities of an Entrepreneur? The following questionnaire (number 1-2) measures the preparation for the entrepreneurial enterprise and how far the entrepreneur has the required characteristics and capabilities: Respond to the statements of the questionnaire to figure out whether you have what is needed or not. ]63[ Chapter Two: Characteristics and Capabilities of the Entrepreneur Questionnaire (1-2) in Preparation for Entrepreneurship )*( Guidelines The following are expressions that revolve around some of the personal qualities that distinguish the entrepreneur and that determine whether s/he can succeed or not in his work. What you need to do is read these expressions carefully and insert the following sign ) √ ( in the column of your choice determining what applies to your behavior or conduct at work. You need to realize that there is no correct or incorrect answer, what is important is the accuracy in choosing the answer that best reflects your point of view. Not Scarcely Moderately Very Fully Statements True1 True 2 True 3 True True 4 5 1 I take the initiative in asking questions to know what I need to know. 2 I continue working for the longest time hoping to reach a creative solution. 3 I have confidence in myself and in my ability to achieve my goals. 4 I love the tasks that challenge my abilities. 5 I can discover the shortcomings and weaknesses in my surroundings. 6 I can proceed with my work despite the difficulties I face. 7 I can change the direction of the work to solve problems. 8 I quickly identify the problem I am facing. 9 I distinguish between what I can control and what I cannot in determining the causes of the problem. 10 New ideas come about one following the other. 11 I can reach my goal despite the seriousness of the difficulties. 12 I start the new enterprise with a great deal of enthusiasm. )*( Prepared by Professor Moataz Sayed Abdalla. Entrepreneurship ]64[ 13 I tried to find solutions for more than one problem at the same time. 14 I can reconcile unusual issues. 15 Others find it difficult to cope with me at work. 16 Once I wake up, I am constantly working. 17 I move from one task to another without resting. 18 I make a great effort to be special in my field. 19 I feel I have excessive energy. 20 I prefer to lead different social activities. 21 I think of more than one solution for the problem that I face. 22 When I face a problem, I start by finding out what the problem is. 23 I collect data about the problem I am facing. 24 I assess the solutions after examining the context of the problem. 25 I enjoy work that involves ambiguity and that can be puzzling in finding solutions. 26 I use my own ideas and special ways in dealing with the issues that I face. 27 I deal with issues in my own way that can be different from how others deal with them, even if this leads to conflict. 28 I enjoy changing the usual ways of carrying out certain tasks. 29 I examine the problem from different perspectives to be aware of its varied aspects. 30 I can deal with problems that do not initially have clear solutions. 31 Being adventurous is one of my main qualities. 32 I often feel that life is boring, and change is needed. 33 I have confidence facing the changes that happen in my life. 34 Conventional administrators who do not develop themselves annoy me. 35 I am always in search for what is new. ]65[ Chapter Two: Characteristics and Capabilities of the Entrepreneur The answers to the questions and assessing the grade that I got: After addressing the previous reflection questions, count the grades that you got:  The questionnaire is made up of 35 reflections and the highest grade you can get is 175 (35 x 5) and the least you can get is 35 (35 x 1).  If you get more than 150 grades, you have the potential to be an excellent and successful entrepreneur. You can establish an enterprise and manage it efficiently and successfully.  If the grade you got ranges from 100-149, you can become a very good entrepreneur and can establish an enterprise and manage it well.  If you get a grade that ranges from 75-99, this means you have to develop some of your skills and make an effort in order to be able to establish an enterprise that can succeed.  If the grade you get is less than 75, this means that you need to study, assess your situation, find out what the difficulties and problems that you will face are in order to become a successful entrepreneur. You need to make sure that you can bear all the difficulties and problems involved in having an enterprise of your own. This can be done with the professor teaching the course. Entrepreneurship ]66[ Exercises and Questions Search … Discuss… Imitate… Create Question One: 1. Search for: Mahmoud Al-Araby, the entrepreneur who started working with three Egyptian pounds. He established Al-Araby Group with his children and siblings. What king of work does this firm do? Then, find information that you can use to draw a timetable to show how this firm developed since it started until now and the stages it went through. Discuss with your colleagues how you can make use of this experience in starting your own enterprise. 2. What is the turning point that led him to become an entrepreneur? 3. What do you admire about Mahmoud Al-Araby’s journey? 4. What are the lessons that you can learn from this journey? 5. Did he have an impact on the country? What did he offer his country? 6. Can you follow his footsteps? How? Explain. Question Two: Are these statements true or false? 1. Harmony between the requirements of entrepreneurship on the one hand, and the talents, capabilities, desires and ambitions on the other is not vital. 2. When the goals of the entrepreneur do not coincide with the benefits that the enterprise accomplishes, this leads to achieving these goals easily and consequently to the success of the enterprise. 3. Entrepreneurship is not a main driving force for creating new job opportunities that leads to the development of the Egyptian economy. 4. Competition constitutes one of the main problems of having a small entrepreneurial enterprise. 5. Division of tasks and determining who works with who is one of the problems of small entrepreneurial enterprises. 6. The most serious problem that the owner of an entrepreneurial enterprise faces is losing most, or all the money invested in the enterprise. 7. Individualism is the concept of having one strong person who take all the decisions on his own in the enterprise. How far is this appropriate? ]67[ Chapter Two: Characteristics and Capabilities of the Entrepreneur Question Three: 1. Independence in taking decisions is one of the most important: a. Benefits of the entrepreneurial enterprises? b. Drawbacks? c. Reasons for its failure? d. Reasons for its success? 2. Bearing the responsibility is one of the most important a. Benefits of the entrepreneurial enterprises? b. Drawbacks? c. Reasons for its failure? d. Reasons for its success? 3. The philosophy centered on the team focuses on: a. The employees contribute in decision taking. b. One person taking the decision. c. Identifying the structure of the enterprise. d. All the above. 4. If the grade you get in the questionnaire concerning the capabilities that equip you to be a successful entrepreneur is 100, you a. Can become a successful entrepreneur. b. Need to enhance some of your capabilities. c. Should be better off working as an employee. d. A and B. 5. If the grade you get in the questionnaire concerning the capabilities that equip you to be a successful entrepreneur is 170, you a. Can become a successful entrepreneur. b. Need to study and make an effort. c. Should be better off working as an employee. d. A and B. 6. If the grade you get is 75, you a. Can become a successful entrepreneur. b. Need to enhance some of your entrepreneurial capabilities. e. Need to study and make an effort. c. A and B. 7. There are --- ways to develop the creative process: a. Four b. Five c. Three d. All the above. 8. The entrepreneur is characterized by his appreciation for --- accomplishments: a. Scarce b. Moderate c. Ordinary d. None of the above. Entrepreneurship ]68[