This topic describes the most common characteristics associated with successful entrepreneurs, entrepreneur self-assessment and the differences between the entrepreneur, the small businessman and the managers. Topic 2 Identifying Entrepreneurial Characteristics LEARNING OUTCOMES By the end of this topic, you should be able to: 1. Identify sixteen characteristics of successful entrepreneurs; 2. Evaluate your entrepreneurial inclination potential using the entrepreneur self- assessment test; and 3. Describe at least three differences between businessmen, managers and entrepreneurs.
CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS The following discussion provides a brief summary of characteristics most commonly associated with successful entrepreneurs. Even though new characteristics are continually being added to the list, it does provide important insights into the entrepreneurial perspective. Figure 2. 1: Characteristics of successful entrepreneurs (a) Initiative and Responsibility Most researchers agree that effective entrepreneurs actively seek and take the initiative. They willingly put themselves in situations where they are personally responsible for the success or failure of the operation.
Entrepreneurs feel a personal responsibility for the outcome of ventures in which they are associated. They like to take the initiative in solving problems where no leadership exists. (b) High Degree of Commitment Launching a venture successfully requires total commitment from entrepreneurs. This commitment helps entrepreneurs to overcome business-threatening mistakes and obstacles. EntrepreneursE commitment to their ideas and ventures determine how successful those ventures ultimately become. (c) Opportunity Orientation Entrepreneurs focus and start on opportunities rather than on resources, structure, or strategy.
They begin with opportunities and let their understanding of them guide other important issues. Entrepreneurs have a well-defined sense of searching for opportunities. In searching for new business opportunities, entrepreneurs observe the same events other people do, but they see something different. Entrepreneurs are not only capable of searching for opportunities but are also capable of seizing the extraordinary ones. (d) Moderate Risk-Taker Entrepreneurs are not wild risk-takers; they are calculated risk takers. When entrepreneurs participate in any venture, they do so in a very calculated, carefully thought out manner.
They often avoid taking unnecessary risks. (e) Confident and Optimistic Entrepreneurs typically have an abundance of confidence in their ability to succeed. They tend to be optimistic about their chances for success, and usually their optimism is based on reality. The high level of confidence and optimism explains why some of the most successful entrepreneurs have failed in business, often more than once, before finally succeeding. (f) Creative and Innovative Creativity and innovativeness are important for entrepreneurs to gain a competitive advantage in their ventures.
Through their creative and innovative minds and imagination, entrepreneurs can produce unique goods and services for customers. Creativity is not inherited, it can be learned. (g) Seeking Feedback Entrepreneurs like to know how they are doing and are constantly looking for reinforcement. They actively seek and use feedback to improve themselves and their venture performance. From feedback, entrepreneurs can learn from their mistakes. (h) Drive to Achieve Achievement seems to be the primary motivating force behind entrepreneurs.
Entrepreneurs are self-starters who internally have a strong desire to compete, excel, pursue and attain challenging goals. One of the common misconceptions about entrepreneurs is that they are driven wholly by the desire to make money. To entrepreneurs, money is simply a symbol of achievement, not the driving motive. (i) Ability to Set Vision Entrepreneurs know what they want to achieve. They have a vision or concept of what their firm can be. Not all entrepreneurs have predetermined visions for their firm. In many cases, this vision develops over time as the entrepreneur begins to realise what the firm is and what it can become. j) Skilled at Organising Building a venture from the very beginning is not easy. So, entrepreneurs know how to put the right people together to accomplish a task. Entrepreneurs are able to organise their resources in an effective way so as to transform their visions into reality. (k) Internal Locus of Control Entrepreneurs believe that the success or failure of their venture depends on themselves.
Their accomplishments and setbacks are within their own control and influence, and they can affect the outcome of their actions. l) Tolerance of Failure Entrepreneurs do not become disappointed, discouraged, or depressed by failure. They use failure as a learning experience. In difficult times, they still look for opportunities. Most entrepreneurs believe they learn more from their early failures than from their early successes. (m) High Level of Energy Entrepreneurs are more energetic than the average person. Entrepreneurs need to have a high level of energy so as to cope with the extraordinary workload and the stressful demands they face. That energy may be a critical factor, given the incredible effort required to start-up a company.
n) Team Building Most successful entrepreneurs have highly qualified and well-motivated teams that help handle the ventureEs growth and development. (o) Independent Entrepreneurs are independent people. They like to accomplish tasks in their own way. This does not mean entrepreneurs must make all the decisions. They want to have authority to make important decisions. (p) Flexibility Entrepreneurs are not rigid in their venture. They are flexible and have the ability to adapt to the changing demands of their customers and businesses. In this rapidly changing world economy, rigidity often leads to failure.
SELF-ASSESSMENT FOR ENTREPRENEURS There are many instruments that can be used to assess and measure the potential inclination towards entrepreneurship in individuals. Among them are instruments proposed by Robinson, Stimpson, Huefner and Hunt (1991). Today, there are many online interactive tests and quizzes on entrepreneurial inclination potential to test your level of entrepreneurial potential. The purpose of the entrepreneur self-assessment test is to get insights on the entrepreneurial inclination potential in individuals. It is not to find out whether individuals can become entrepreneurs or not.
Anyone has the potential to become an entrepreneur, regardless of age, race, gender, colour and national origin. Entrepreneurship is not a genetic trait; it is a learned skill. Each individual has a chance to be an entrepreneur. So, from this entrepreneur self-assessment test, you can see your standing and do something to improve your level of inclination towards entrepreneurship if you are interested in becoming a successful entrepreneur. What are the common characteristics of successful entrepreneur? In your opinion, why are the previously mentioned characteristics essential in becoming a successful entrepreneur?
ACTIVITY 2. 1 What is the purpose of the entrepreneur self-assessment test? You can try one of the online tests by accessing http://bizmove. com/other/quiz. htm. Compare your score with your friends. ACTIVITY 2. 2 THE DIFFERENCES AMONGST BUSINESSMEN, MANAGERS AND ENTREPRENEURS In this subtopic, we are going to look at the differences between businessmen, managers and entrepreneurs adapted from Zimmerer (1998). 2. 3. 1 The Differences between a Businessman and an Entrepreneur Entrepreneurs are not synonymous with businessmen, especially the small businessman. This is due to the fact that not all businessmen are entrepreneurs.
However, all entrepreneurs are businessmen. Businessmen do have the characteristics of most entrepreneurs, but those characteristics are at a lower stage compared to entrepreneurs. Several characteristics can be used to differentiate the small businessman and the entrepreneur Table 2. 1 exhibits the differences between a small businessman and an entrepreneur. 2. 3. 2 The Differences between a Conventional Manager and an Entrepreneur There are some differences between managers and entrepreneurs. Table 2. 2 shows the differences between managers, especially a conventional manager and an entrepreneur.