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THE INDIVIDUAL ENTREPRENEUR

Chapter 3. THE INDIVIDUAL ENTREPRENEUR. Is there an exact entrepreneurial profile in terms of characteristics and background?

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THE INDIVIDUAL ENTREPRENEUR

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  1. Chapter 3 THE INDIVIDUAL ENTREPRENEUR

  2. Is there an exact entrepreneurial profile in terms of characteristics and background? • This chapter addresses this question by looking at an individuals feelings about Control, Independence & Willingness to take risks; ones family, education & occupational backgrounds; motivation; skills; male versus female entrepreneurs; entrepreneurs VS inventors & general entrepreneurial profiles

  3. Entrepreneurial Feelings

  4. Entrepreneurial Feelings • Locus of Control A quality indicating the sense of control that a person has over his life. • Internal Locus of Control Believing that one’s success depends on one’s own efforts. • External Locus of Control Believing that one’s life is controlled more by luck or fate than one’s own efforts.

  5. Table 3.1

  6. Entrepreneurial Feelings • Feelings of Independence and Need for Achievement • Need for Independence signifies the feeling of being one’s own boss and is one of the strongest needs of an entrepreneur. • Need for Achievement is derived from Mcelland’s Need Theory, which states that a person with a high need for achievement is driven by the desire to succeed and measures that success against a personal standard of excellence.

  7. Table 3.2

  8. Entrepreneurial Feelings • Risk Taking • Starting a new venture involves putting at stake money, hard work and lots of time. • This involves a certain amount of risk as success is not guaranteed and all efforts and resources could go wasted. • Only a person willing to risk it all can succeed.

  9. Table 3.3

  10. Childhood Family Background A child’s future occupation is shaped by what kind of environment he or she has at home. Being the first born is also believed to have some effect on the self-confidence of the person and ability to start a new venture. If a parent is an entrepreneur then its natural that the child will find it easy to become one as well. Their support is also a deciding factor in the success of the entrepreneur. Entrepreneurial Background and Characteristics Birth Order Parents Occupation Social Status Relationship with parents (Fathers for female E)

  11. Entrepreneur Statement My father was so consumed by the venture he started and provided such a strong example, it never occurred to me to go to work for anyone else

  12. Entrepreneurial Background and Characteristics • Education • There are numerous success stories of entrepreneurs who were high school dropouts. • But most of the entrepreneurs have some kind of higher education to their credit. • It is not necessarily business related education but is enough for the entrepreneur to better understand his business and define new ways to grow it. Technical Vs MBA degree

  13. Entrepreneurial Background and Characteristics • Personal Values • An entrepreneur has a very distinct set of values that make him break off from conventional practices and start his own venture. • Values like: superior product quality; quality service to the consumers; flexibility to adapt to change in the market; high caliber management; and honesty and ethics in business practices, define an entrepreneur’s mind frame. Leadership traits- creativity- opportunism- intution When is it permissible to tell a lie?

  14. Entrepreneurial Background and Characteristics • Age • It is necessary that an entrepreneur begins the new venture at a time when he has the maximum amount of energy – experience- financial support • The optimal age for such activity would be somewhere from the age of 22 to the age of 45. • At this time a person has the right amount of stamina and experience.

  15. Entrepreneurial Background and Characteristics Lack of opportunities- frustration & boredom-> Motivation launching new venture • Work History • The work history of a person is one of the major factors in prompting a person to start a new business. • If the person was not satisfied with his past experience, then he might find it easier to come up with good business practices that suit his taste and yield the kind of results that he wants. • And what he has learnt from his experience may also help him in growing the business. Managerial experience/skills

  16. Motivation • Every entrepreneur is motivated by one thing or the other when starting a new venture. • The motivational force helps the person overcome all the problems associated with the business and guides him towards the achievement of his goals. • This motivation could be making money or being independent of others and being one’s own boss.

  17. Role Models • A role model is important in an entrepreneur’s life because it influences every action that he performs. • A role model can be one’s parents, siblings, close relatives or other entrepreneurs. • An entrepreneur follows the example of his role model in everything and feels motivated when trying to personify his role model.

  18. Support Systems Moral-Support Network • Individuals who give psychological support to an entrepreneur. • Entrepreneurs need to establish a moral-support network of family and friends—a cheering squad. • Friends can provide: • Advice. • Encouragement. • Understanding. • Assistance. • Relatives can be strong sources of moral support, particularly if they are also entrepreneurs.

  19. Support Systems Professional Support Network • Entrepreneurs need advice and counsel throughout the establishment of the new venture which can be obtained from: • Mentors • Business associates • Trade associations • Personal affiliations Expert in field- advising buddy How to find a mentor ? Self employed- Consultants, lawyers Clients & buyers- word of mouth advertising Suppliers- trends & competition industry New developments & provide overall industry data Shared hobbies-sporting events-clubs Schools alumni ( source of referrals, advice)

  20. Male Vs Female Entrepreneurs • Differences in terms of motivation, business skills, occupational background, support systems and sources of funding • Men- drive to control their own destinies, to make things happen • Women- need of achievement arising – job frustration- promotional opportunities Forming 70 % of new businesses 8.5 M small businesses employing over 17 M people 45% increase since 90’s

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