He or she is an individual who is able to start, manage and give direction to an enterprise. Such an individual has to possess a high degree of initiative and has to take high risks in order to achieve success in her/his endeavours.
Another definition states that entrepreneurship is a “process of creating something new with value, by devoting the necessary time and effort, assuming the accompanying financial psychic, social risks and receiving the resulting rewards of monetary and personal satisfaction and independence”.
For the above mentioned process to be achieved, an entrepreneur has to possess certain qualities. The following is a list of 9 major qualities of an entrepreneur:-
- Self confident
- Proactive and decisive with high energy
- Self motivated
- Vision and flair
- Willingness to take greater risks and live with even greater uncertainty.
- Antecedent – Influences
- Entrepreneurial Culture
This is when there is change, one is able to see opportunity whilst others only see problems or do not see anything at all. Entrepreneurs are able to generate a profit from such a situation. They also seek out for such opportunities and are able to generate money. On the other hand, change produces uncertainties and ordinary people are disrupted by them. Entrepreneurs however love such a scenario and are not bothered by uncertainties.
The problem entrepreneurs encounter
The problem entrepreneurs have, is failure to focus on just one opportunity at a given time. They see opportunities everywhere and find it difficult to follow through on any one opportunity. Instead they are distracted by other new opportunities. This is the reason why entrepreneurs are not able to grow their businesses beyond a certain size.
The ability to innovate has been present in every civilization. “Innovation is about seeing new opportunities for old designs” said Neil Kelly. It is also the ability to spot opportunities and it is the most important characteristic of entrepreneurs. This is the prime tool used by entrepreneurs to create opportunity, innovators develop something unique. They reform or revolutionize the pattern of production by exploiting an invention or an untried technological method of producing a new commodity; it is about producing an old product in a new way; it is also about opening a new source of supply of material or a new outlet for products by organizing a new industry. The concept of innovation and newness are an integral part of entrepreneurship. Innovation, i.e is the act of introducing something new is one, the most difficult tasks for the entrepreneur.
It takes ability to create and conceptualize but also ability to understand all the forces at work in the environment. Newness can consist of anything from a new product to a new distribution system, to a method for developing a new organizational structure.
3) Self confident
This is the ability to be confident in one’s own judgment and to start up one’s own business when the current situation is uncertain. Entrepreneurs build up their client’s confidence by developing a business plan that addresses the issue of future uncertainty. The business plan can also become a useful management tool and a symbol of certainty for a business owner in a world of uncertainties.
Entrepreneurs need self confidence to grow their businesses since they face a lot of uncertainties.
4) Proactive and decisive with high energy
Entrepreneurs are proactive in that they seek out opportunities and do not rely on luck.They are also more decisive than other people-they act quickly and decisively to make the most of the opportunity before somebody else does.
Problems they face:-
Entrepreneurs are restless and easily bored. They can also be diverted by the most recent market opportunity. They do things at twice the pace of others – they are unwilling and unable to wait for others to complete tasks. Entrepreneurs do not have patience as a virtue. Entrepreneurs seem to work 24hours a day and their work becomes their life, they fail to separate the two. It also places family relationships under strain.
In this quality, entrepreneurs tend to learn by doing. They usually act first and then learn from the outcomes of the actions taken. This is important in decision making, each small action taken and its outcomes contribute to the learning process.
5) Self motivated
Entrepreneurs have an urge to succeed in their economic goals , this is so because they are highly self motivated. They have an exceptionally strong inner need for achievement far much more than an owner manager. Running one’s own business is a lonely venture without anyone to motivate and encourage you.
Therefore, there is need to be self motivated, committed and determined to be successful. The strong inner drive psychologist call type ‘A’ behaviour – is quite unique and can almost be compulsive behaviour.
Entrepreneurs have other things that motivate them such as money. But money is like a badge of their success that allows them to measure their success or achievement. They are driven by their exceptional need to achieve. ‘A’ types are goal – focused, wanting to get the job done quickly. They tend to be reactive, focusing on the future and often not in control of the present.
6) Vision and flair
Entrepreneurs need to have a clear vision to succeed in what they want to achieve. This is part of their fabric for motivation. They also bring along their employees and customers. The flair comes by being in the right place at the right time. Timing is very important and it is everything. So innovation needs to be on time in order for the business to succeed. Late innovation results in copy-cat products or services that are unlikely to be outstanding success. Successful entrepreneurs are often asked the question- whether their success was due to good luck or good judgment? An honest answer is probably a bit of good luck and a bit of good judgment.
7) Willingness to take greater risks and live with even greater uncertainty.
True entrepreneurs are always willing to take far greater risks and live with far greater uncertainty. They are often willing to put their own home on the line and risk all – they believe strongly in their business idea. Growth businesses face rapid change even with careful management, they are very risky. Growth businesses require large amounts of capital and entrepreneurs are willing to risk all for the prospect of success.
Anne Notley said “you have to have nerves of steel and be prepared to take risks. You have to be able to put it all on the line knowing you could lose everything”.
8) Antecedent – Influences
Inherent character qualities are important but there are other influences at work in the process of entrepreneurship. The cognitive theory shifts emphasis from individual qualities to situations that lead to entrepreneurial behaviour. Research is showing “Antecedent Influences” which is the entrepreneurs history and experience of life (Carter and Cachan, 1988). All people are born with character traits but we are influenced by the social environment that we find ourselves in e.g .our family, ethnic group, education, etc . These influence our values, attitudes and our behaviours. These are antecedent influences.
Educational attainment provides the basis for better learning through life, enabling entrepreneurs to deal better with business problems and giving them a greater openness and more outward orientation.
It also might give entrepreneurs a higher learning expectation that can only be attained by growing the business. It gives them greater confidence in dealing with customers and others business professionals.
b) Employment and unemployment
Storey, after a research concluded that “if a founder is unemployed prior to starting a business, that company is unlikely to grow as rapidly as where the founder was employed’ Also unemployment gives people a strong push into self employment because options to them are limited. They may also lack the necessary skills to grow the business and have lower aspirations than those who leave employment to start their own business.
What is needed to make a business grow is positive motivation – a real desire, an ambition, almost a need to achieve certain internally generated goals or pursue some market opportunity. A well educated manager who leaves his/her managerial job to start a business will most likely succeed in business. This is because he/she has the positive motivation to start a business. Also those who tend to succeed in business are middle aged (or very young) and they are willing to share ownership of the business. Growth does not just happen by chance but the entrepreneur must want it for them to succeed.
9) Entrepreneurial Culture
Hofstede (1980) defined culture as” the collective programming of the mind which distinguishes one group of people from another”. This is a pattern of taken- for -granted assumptions. It fosters positive social attitudes towards entrepreneurship.
1. Individualism and collectivism
The degree to which people prefer to act as individuals rather than groups. Individualistic societies are loosely knit social frame works in which people operate as individuals or in immediate families. Collectivist societies are composed of tight networks in which people operate as members of ingroups and outgroups expecting to look after and to be looked after by other members of their ingroup. In an individualistic culture the task prevails over personal relationships. The atmosphere is competitive. In the collectivist culture the opposite is true.
Power Distance- this is the degree of inequality among people that the community is willing to accept.
Low power distance countries endorse egalitarianism, relations are open and informal, information flows are functional and unrestricted and organizations tend to have flat structures. They are more empowered cultures.
High power distance cultures endorse hierarchies, relations are more informal, information flows are formalized and restricted and organizations are rigid and hierarchical.
Uncertainty Avoidance – this is the degree to which people prefer to avoid ambiguity, resolve uncertainty and prefer structured rather than unstructured situations.
Low uncertainty avoidance cultures
Tolerate greater ambiguity, prefer flexibility, stress personal choices and decision making, reward initiatives, risk taking, team play and stress the development of analytical skills.
High uncertainty avoidance cultures prefer rules and procedures, stress compliance, punish error and reward compliance, loyalty and attention to detail.
Masculinity vs femininity
This defines quality of life issues.
Masculine virtues are those of assertiveness, competition and success. Masculine cultures reward financial and material achievement with social prestige and status.
Feminine virtues are those such as modesty, compromise and co-operation. In feminine cultures issues such as quality of life, warmth in personal relationships, service and so on are important and in some societies having a high standard of living is thought to be a matter of birth , luck or destiny.
The major qualities of an entrepreneur therefore consists of personal inherent characteristics as well as antecedent influences and the entrepreneurial culture of which an individual is part of.
Personal qualities play a major role in the life of an entrepreneur. An entrepreneur possesses an opportunistic quality which enables him/her to recognize opportunity and make money. On the other hand, innovation and newness is a concept which is an integral part of entrepreneurship. And entrepreneur also has self confidence which enables them to be confident in one’s own judgement and to start up one’s own business when the current situation is uncertain. They are also proactive in that they seek out opportunities and do not rely on luck. They are decisive and have the ability to act quickly.
Entrepreneurs are highly self motivated because they have an urge to succeed in their economic goals. A clear vision is also necessary in order for an entrepreneur to succeed; and they are usually at the right place at the right time.
True entrepreneurs are always willing to take greater risks and live with far greater uncertainty.
Antecedent influences on the other hand, deal with situations that lead to entrepreneurial behaviour i.e. the entrepreneur’s history and experience in life. The social environment in which we find ourselves e.g. our family, ethnic group, education etc.
Another influence is the entrepreneurial culture which is the collective programming of the mind which distinguishes one group of people from another. This is what allows positive attitudes towards entrepreneurship.
Therefore an entrepreneur’s major qualities not only consist of personal inherent characteristics but also the history and experience in the life of an individual and his/her social attitude.