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Entrepreneurship … Do YOU Have What It Takes?

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Fully one in ten adults in the United States today is an entrepreneur. This phenomenon is by no means restricted to North America. The leading country for entrepreneurship is Brazil with one in eight adults an entrepreneur. Australia is not far behind the U.S. with one in twelve. These countries – Brazil, the United States and Australia – lead the way. Contrast, for example, Germany (one in 25), the United Kingdom (one in 33), Finland and Sweden (one in 50) and Ireland and Japan (less than one in 100). (Source: Global Entrepreneurship Monitor 2000.)

ENTREPRENEURSHIP DEFINED

The Global Entrepreneurship Monitor 1999 defined entrepreneurship as “any attempt at new business or new venture creation, such as self-employment, a new business organization, or the expansion of an existing business, by an individual, a team of individuals, or an established business.”

ENTREPRENEURIAL ACTIVITY – AN HISTORICAL PERSPECTIVE

Entrepreneurship is a major contributing factor to the economic well-being of a country both in terms of economic growth and job creation. Traditionally, entrepreneurial ability tended to focus on the following four attributes:

Initiative – the entrepreneur takes the initiative to bring together the economic resources of land, labor and capital to produce a commodity (whether a good or a service) with the hope that such production will create a profitable business venture.

Decision-making – the entrepreneur makes the basic business policy decisions for the business, thereby setting the course of the enterprise.

Innovation – the entrepreneur is an innovator, attempting to introduce new products and new ways of doing things.

Risk-taker – the entrepreneur risks his or her time, effort, business reputation and invested funds in the entrepreneurial venture.

THE MODERN ENTREPRENEUR

Until recently, the above attributes, especially innovation and risk-taking, were the dominant factors that defined the characteristics of those who chose to become entrepreneurs.

Now, however, with corporate downsizing being a fact of life, many entrepreneurs find themselves thrust into the role by default.

The question for anyone either finding themselves in this position involuntarily or thinking about leaving corporate life for the heady world of entrepreneurship is whether you have what it takes to be successful … the “right stuff” in other words. Some people do, in spades. Others simply don’t. If you’re one of the ones who just doesn’t, either resign yourself to working for someone else or cultivate in yourself the qualities that successful entrepreneurs share. Believe it or not, entrepreneurs are not just “born”. Well, some, of course, seem to be natural-born entrepreneurs, but for the rest of us, the qualities of entrepreneurship can definitely be acquired by hard work and application.

COMMON ISSUES

The “common denominator” issues facing all entrepreneurs are planning, finance and implementation.

Planning

All entrepreneurs face the challenge of starting a new business, be it through innovation (inventing something new or doing something a different way), finding the right opportunity to get into, or buying a franchise. Whichever road you choose, it will involve serious planning.

Financing

Unless you have ready funds at your disposal, getting finance is the next major challenge and cannot be attempted until your business plan is in place. You will need to prepare funding proposals and applications for loans, venture capital, and funds from angel investors.

Implementation

This is make or break time. Many people think just getting started is the hard part – and it is hard. But where many businesses stumble is not in the planning and financing stages but in implementing their business plan. Why this is so is not certain. There are various hypotheses including the idea that ideas people and implementation people are two very different breeds and it is highly unusual to find one person who can do both. More likely though, is the simple fact that implementation requires such a broad range of skills that no one person can possibly be adept at all of them.

The real challenge and skill of the entrepreneur, then, is to recognize what you do well and then appoint employees or subcontractors to do the rest. Of course, if you’re running a business on a shoestring, this simply may not be possible! So be brutally honest and objective in assessing your particular strengths and weaknesses BEFORE you cash in your day job and your 401K.

The areas to think about in terms of implementation are the same as those encompassed by a broad definition of management: promotion (marketing and advertising), public relations, sales, employees, communications, legal issues, plant and equipment, risk management, disaster planning, crisis management, insurance, technology, computer systems, taxes, bookkeeping, finance, and the internet.

PERSONAL QUALITIES

Equally important as the common issues shared by all entrepreneurs are the personal qualities of the entrepreneur him or herself. To start you thinking about whether you have the right stuff to make a success of an entrepreneurial venture, here’s a list of character traits and work ethics common to successful entrepreneurs. Although it is not necessary that you possess all of them, you should possess most:

Passion – entrepreneurs have a strong passion for their idea or concept, so much so that their work is their play. If you don’t like what you do, you won’t stick it out when challenges come along, as they inevitably will.

Curiosity – entrepreneurs need to understand how things work. They ask a lot of questions. Curiosity therefore triggers innovation.

Sponges – entrepreneurs are sponges. They devour information about their industry and are always current on new and emerging trends and technologies, not only in their specific industry but in closely related industries. This habit of scanning their environment is a rich source of discovery of new opportunities. Entrepreneurs are ALWAYS looking for new markets, applications, products or twists on an old concept.

Optimism – entrepreneurs think of problems as opportunities for improvements and new ideas.

Forward looking – entrepreneurs are never satisfied with the status quo and are always proactively carving out their future.

Careful about money – entrepreneurs are careful with money and have a firm grasp on what things cost and their value to the business. This allows them to recognize a true bargain when they see one.

Started earning at a young age - entrepreneurs commonly displayed entrepreneurial leanings as a teenager seeking out entrepreneurial activities such as babysitting, lawnmowing and lemonade stands.

Competitive – entrepreneurs are naturally competitive and don’t let the grass grow under their feet.

Time conscious – entrepreneurs know the value of time and how to make the best use of it. You won’t find entrepreneurs spending much time on nonproductive activities. That said, entrepreneurs typically also recognize the value of downtime and time with family and will factor these activities into their schedule.

Risk takers – entrepreneurs are not afraid of taking calculated risks. They typically trust their hunches and act on them.

Usually loners – entrepreneurs generally prefer a solitary work environment as opposed to teamwork.

Professional – entrepreneurs are professional in their approach to work. They operate as they would in a corporate environment and don’t allow themselves to be distracted by outside influences.

High energy – entrepreneurs have a plan and a vision and they work it. Entrepreneurs are often health-conscious too, recognizing that the fitter they are, the better their minds work. So entrepreneurs will take time from their schedule to work out and eat well.

Flexible – entrepreneurs are nothing if not responsive to change. Although they appreciate the importance of having a plan and working that plan, they allow themselves room to react and respond to opportunities that may suddenly reveal themselves.

Nurture entrepreneurial spirit - entrepreneurs seek out and nurture the entrepreneurial spirit in their employees and reward them accordingly.

Confident goal-setters – entrepreneurs are confident and set long-term goals, both for themselves personally and their businesses. They view money and financial security as a measure of accomplishment and a source of peace of mind.

Persistent – entrepreneurs never give up. They persist until they succeed.

Learn from failure – entrepreneurs learn from their failures and those of others. Failure to an entrepreneur is nothing more than an opportunity waiting to be discovered.

Self responsibility – entrepreneurs take the initiative and personal responsibility for their success or failure (which is always a merely temporary state).

Resource utilization – entrepreneurs utilize ALL of their available resources.

Internal locus of control – entrepreneurs don’t believe in luck. They firmly believe that success and failure lies within their personal control or influence.

THE FUTURE OF ENTREPRENEURSHIP

As we all know, increasing numbers of people are electing to work from home either through telecommuting or running home businesses. While this trend has commonly been attributed to the growth in the number of working women wanting to be home for their children, over half of all people now working from home are men.

A recent Purdue University study concluded a number of factors seem to favor continued high rates of new firm formation:

1. Continuing high rates of change (change creates opportunities for new firms).

2. Continued growth of the service sector (the highest growth area for new firm formation).

3. Increasing number of virtual corporations in which firms outsource their functions, creating opportunities for entrepreneurs.

4. Positive climate for small business – a general perception that small business is a positive influence on the economic wellbeing of the country giving entrepreneurs legitimacy and respect.

5. Growth in international business opportunities.

With the traditional corporate-employment track seemingly on the decline, the trend of forming strategic alliances with other businesses that are closely aligned with yours or with someone who can add value to your product is emerging. In fact, futurists envision a return to extended community living with shared resources but individual living and working relationships with entrepreneurial activities being the basis of these communities. Strategic alliances are a first step along this path.

So, if you have determined entrepreneurship is for you, you can be confident that you are part of the wave of the future. But understand what it will demand of you and whether you are prepared to give what it will take. The allure of entrepreneurship is undeniably strong for many but make sure you’re going into it for the right reasons. Being miserable in your job does not automatically make starting your own business the best idea in the world. In fact, it could be the worst reason of all to get into business for yourself. The right choice may instead be to find another job that you won’t be miserable in. But if, taking into account everything that’s been said above, you’re adamant that you have what it takes, by all means take the bull by the horns and create something absolutely fabulous.

2001-2002 Elena Fawkner

Elena Fawkner is editor of A Home-Based Business Online … practical business ideas, opportunities and solutions for the work-from-home entrepreneur. http://www.ahbbo.com/

Entrepreneurship … Do YOU Have What It Takes?
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