An entrepreneur is able to start something new, they are able to view the environment in a different way from the common people, therefore, they end-up generating initiatives which are differentiated from the existing ones.
Entrepreneurs either develop on the already existing products and services or initiate new ones.
Entrepreneurs are able to acquire and harmonize the factors of production in order to be able to generate products or services that will bring value to the consumers.
Businesses are risky ventures especially new ones. The risks are mainly as a result of unforeseen future and uncertainty of success. Even though entrepreneurs invest their money, time, and knowledge into their ideas with readiness to bear the risk or enjoy the reward that may emanate from the investment.
Entrepreneurship is a process and a way of life that must start from the mind. Many entrepreneurs start by seeing an opportunity then imagining the possible business idea to sustain the available opportunity.
It is this thinking that defines the conduct of an entrepreneur thus making them to act towards developing the idea in their mind and later implementing it into a real business.
Conceiving the business makes it easy for the entrepreneur to have a prototype experience of the business thus the entrepreneurial mindset is the most powerful tool of the entrepreneur.
The entrepreneurial mindset enables the entrepreneurs to even think of how they can diversify their current businesses to solve certain problems in the society or to fill a market gap.
The vision is the long-term goal that an entrepreneur wants to achieve in their business. It gives the entrepreneur a sense of direction and purpose. Successful entrepreneurs are able to formulate appropriate strategies to be used to achieve the vision.
An entrepreneur with no vision may be unable to control the direction that their business takes.
Entrepreneurs believe in earning returns by taking investment risks. They, therefore, have no fear of loss in case their new ventures fail. However, they take considerable time to assess the risk and expected returns and decide on whether the venture is worth investing in.
Entrepreneurs are able to able to seek new ventures, new partnerships, business networks, or even competition advantages.
For a business to succeed it must surpass its competitors in its operations, therefore, entrepreneurs seek for the best opportunities and utilize them before the competitors can come in.
The business world keeps on changing thus an entrepreneur needs to be dynamic both at a personal level and in their businesses. Entrepreneurs are able to adopt business processes changes, technological changes or even the need to shift the investment into a new venture.
Entrepreneurs are committed to achieving their goals. They, therefore, work extra harder to ensure that their businesses prevail.
The current world of business is very competitive and therefore, entrepreneurs realize their success by developing more advanced or unique products than their competitors. Thus increasing customers’ experience which later results to customer’s loyalty.
Majority of business transactions involve money, therefore, an entrepreneur needs to have good skills in managing their revenues, expenses, and profits in order to ensure the financial stability of their businesses.
Before starting a business there is a need to plan the business and organize on how to acquire resources, as the business is operating there is a need to coordinate and control various business processes. Therefore, an entrepreneur needs to be skilled in those management concepts.
In every business, internal and external problems must be experienced and thus an entrepreneur needs to have problem-solving skills.
Human capital is a major factor of production to any business, the management of human capital influence the productivity of a business. Therefore, in order to attain high productivity entrepreneurs need to be knowledgeable in human resource management.
The background mainly focuses on where entrepreneurs come from.
Some entrepreneurs are from very supportive backgrounds while some come from very harsh backgrounds where it is hand for businesses to prevail.
A supportive/ cordial background can provide the entrepreneurs with the resources needed to start a business venture. Such resources include the factors of production (land, labor, and capital), while a hostile background has limited resources that the entrepreneur can use to initiate, develop, and grow their business.
Some entrepreneurs come-up with their business ideas as a result of the prevailing conditions in their background. The present problem creates a business opportunity. Therefore, different backgrounds will give different entrepreneurs different business ideas.
The background environment of an entrepreneur can also influence their success or decision making.
The macro environment such as the government legislation can prevent the entrepreneur from implementing their ideas. Others include perceived moral and cultural values which may make an entrepreneur to refrain from providing the products and services which are against the societal believes despite the existence of the gap in the market.
The environment can also promote or deter the progress of a business due to factors such as competition levels, society’s response to change, technological advancement, barriers to entry, and other industry related factors.
Experience in the industry/ business makes many entrepreneurs be familiar with recurring conditions and business cycles. They, therefore, are able to control the risks that come together with such cycles/ conditions. This reduces cost since risk control is less costly than damage repair.
However, experience at times can mislead entrepreneurs and make them make a decision without a critical analysis of the situation to detect changes and their associated risks and privileges.
In the current business world, consumers of products and services desire more differentiated ones. A less experienced entrepreneur will have difficulties in understanding competition trends which are essential in developing new and unique products. The level of experience that can be considered to be desirable to be innovative depends upon the entrepreneurs’ ability to understand the prevailing environment and adjust accordingly.
There are multiple tactics that a business can use to gain a competitive edge, however, a less experienced entrepreneur may not be able to apply them in that particular market. An experienced entrepreneur, on the other hand, will have a clear understanding of various market segments, differentiation, cost leadership, and focus techniques.
Understanding the strengths and weaknesses of an individual entrepreneur and those of the business enables the entrepreneur to position themselves and their businesses in the market so that they can know the strategies to use to maximize on the strengths and eradicate the weaknesses. With strengths being the positive characteristics of a business if maximized on the business can gain its full competitive ability.
Ignorance to the law is no defense. Lack of experience which may make an entrepreneur be ignorant about the law may result in legal battles that may even lead to the closure of the business venture. Also, failure to observe industry standards will result to production of substandard products.
Entrepreneurship requires some education and business skills to address business issues that require the entrepreneur’s personal input, especially where the entrepreneur is the one running the business. The success of the business in this scenario is dependent upon the skills of the entrepreneur.
However, the entrepreneur may opt to hire expatriates in the industry that the venture operates in. This is the direction that many entrepreneurs follow because it is more effective and efficient especially to large businesses. The entrepreneur delegates the managerial responsibilities to the hired managers thus the higher the quality of the managers the higher the success of the business. Also, in this case, the entrepreneur gets an opportunity to see other business opportunities unlike when the entrepreneur is only focused on running the initial business.
References
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Drucker, P., 2014. Innovation and entrepreneurship. Routledge. Forbes (2018). [online] Forbes.com. Available at: https://www.forbes.com/profile/jack-ma/#717272cd1ee4 [Accessed 25 Sep. 2018].
HigherNationals (2018). Highernational | HigherNationals. [online] Highernationals.com. Available at: https://www.highernationals.com/ [Accessed 25 Sep. 2018].
Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
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