Concept of an Entrepreneur in Business

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Table of Contents

Introduction
Discussion
Conclusion
Reference List

Introduction

This essay talks about an entrepreneur. It seeks to define who an entrepreneur is, how one becomes an entrepreneur; whether he is born an entrepreneur already or whether he acquires the skills of entrepreneurship in life. It will therefore, examine various aspects that are likely to influence one into entrepreneurship.

It will analyze character traits inherent in an entrepreneur. These include an individual’s level of innovation and creativity, his ability to recognize and take up opportunities and the amount of risk one is willing to get into when starting a business.

It will focus on the effect of family and upbringing upon one in becoming an entrepreneur, the effect of culture and various policies by different governments and their impact upon an individual. At the end of the discussion, it will be established that an entrepreneur is both born and nurtured. One’s environment plays a critical role in shaping one’s ideas and character into becoming an entrepreneur.

Discussion

An Entrepreneur

This is a person who ventures into a business despite the risks inherent. He plans, starts, and runs the business growing it to maturity. Unlike a business man who runs a business and becomes part of a larger business community, an entrepreneur takes the risk to star up a new venture, which he expands and grows to a full business empire which he is master.

What Makes an Entrepreneur

Two propositions have been put forward to explain an entrepreneur. One is that he is born and not made and the other is that he is nurtured and not born. Those who argue than an entrepreneur is born posit that some people are born with certain innate characteristics necessary for entrepreneurship.

These individuals are more likely to take risks, identify and take up business opportunities and are more welcoming and ready to explore new experiences that seem promising to their businesses.

Some, like Shane (2010), argue that entrepreneurs are made. They further state that anyone has the capability of making an entrepreneur. All one needs is a passion, determination and good mentorship to become a good entrepreneur. The difference is that these people need to work harder than those born with characteristics of entrepreneurship.

To some extent, learning and adapting these skills by nurture is of benefits as an individual learns them from professionals who will guide him on how much of the skills are beneficial, and to what extent do the skills become harmful. This is unlike one who is born with the skills and does not know how to regulate them to attain balance between enough and too much.

For instance, an individual born with the traits of risk taking might overindulge to take risks even when failure is inevitable. One who learns the art of risk taking will be cautioned that some risks are not worth taking. It has been established that many entrepreneurs fail to succeed because they are too confident and reliant on their innate skills than those that they learn (Mount, 2009).

A survey from a business training program at the University of Southern California found out that people who got such skills through formal training and coaching were more likely to succeed than those who did not get such training at all.

Students learnt to sell items they were not even familiar with or which their cultures and religion prohibited them from associating with. Another study in Peru of women banking entrepreneurs showed that women who attended business training lessons increased their sales by 16% than those who did not.

Entrepreneurship requires persistence, optimism and hope that things will be well, coupled with hard work to attain one’s goals. These traits can be learnt and acquired by anyone who wishes to acquire them.

Scientific Proof

Scientific studies have been done on this topic to determine whether entrepreneurs are born or made. Scott Shane, a professor of entrepreneurial studies at Case Western Reserve University, co-directed a study that observed entrepreneurial activities of identical twins who share 100% of their genes.

The study concluded that 40% of entrepreneurial skills were inherited, while the other 60% was acquired through interaction with the environment.

Exposure to an entrepreneurship environment has tremendous effects on influencing persons, who would otherwise not venture into entrepreneurship. This is according to a study at Munich’s Ludwig Maximilians University which found out that such exposure had influence on 18% of students who had never dreamt of becoming entrepreneurs (Klein, 2010).

The two aspects of nature and nurture exist in interplay at making entrepreneurs. In spite of the lessons and exposure, one has to have the right attitude and confidence needed by an entrepreneur to make one.

On the other hand, one might possess the right attitude and traits necessary for entrepreneurship, but not have the right knowledge on how to handle contemporary challenges in the business world. The skills might end up being wasted.

Traits of an Entrepreneur

Innovation

As an entrepreneur, one must be able to think of ways, and in some cases alternative ways, to get things done. One needs creativity and an innovative mind that thinks fast how possible to carry out plan or achieve some goal.

Opportunity Recognition

An entrepreneur must able to recognize opportunities and take advantage of them to improve his business. A number of entrepreneurs have confessed to having strong intuition. They are able to predict trends and ‘feel’ that some venture is worthy or risky taking. They should be keen in analyzing market trends and whenever they spot an opportunity, they should take it up immediately.

Risk Taking

An entrepreneur is a risk taker from the onset of his start-up of a business. He goes out to venture into the unknown with possibility of success or failure.

Even when a business suffers setbacks, as it sometimes will, an entrepreneur should push on, and not pack up and leave. He is required to take up opportunities whenever he spots them. This is a risk as he is not certain whether they will pay of well, but he takes them up any way (Deakins & Freel, 2006).

An entrepreneur should be ready to live without a paycheck. This means that the venture has some ambiguities about the amount he will be taking home. It can be none or a lot. This is a risk he must embrace and be ready to work through. It is for this reason that many people prefer to take up jobs instead of entrepreneurship to guarantee their pay on a regular basis.

The Effect of Family, Upbringing and Environment on an Entrepreneur

Many entrepreneurs are made as a result of encouragement from their parents and family members. Up to 70% of them went through some ‘event’ during their childhood that shaped their desire to become entrepreneurs. This event could be bereavement of a significant family member that exposed the child to some sort of financial struggle (Gubrium & Holstein, 1993).

While the above case is true to a number of entrepreneurs, some do not have to go through any hardships. These are born into families where significant members of the family are entrepreneurs and influence them into the area.

They could start running established family businesses and then later develop entrepreneurship ideas that will expand the business or venture on their own. In such cases, these persons receive full support of the family by encouragement and financial support to attend college and receive necessary sills.

In some cases, the family may be passive to entrepreneurship activities but the individual has passion for certain business ideas. He may not receive support from his family, but the family may not also oppose his ideas. In such a case, the individual has to go out on his own to a large extent to start up the business.

Sometimes family may inhibit one from becoming an entrepreneur if they have witnessed bad experiences from such a venture. A real entrepreneur understands that entrepreneurship is about risks and will not back down from pursuing his ambition.

According to Aldrich (2003), the way one is also brought up can influence his desire to become an entrepreneur. If skills such as saving, budgeting, and raising money earning money are imparted on him from a tender age rather than being given freely, one can grow up knowing that they have to earn money and that every case is an opportunity to earn.

The opposite is also true. For a child who is not encouraged to earn money through various ways, but relies on parents and guardians for support, they may not know the importance of earning their own money. The child will grow up relying on others and is likely to seek employment more than start up a business.

Lastly, the environment is critical in shaping one’s entrepreneurial skills and ambition. If one grows up in a family or community with a substantial number of entrepreneurs, he interacts with them more than with other people. These interactions are likely to shape his desire of becoming one too.

Poverty is another environmental aspect that can turn one into an entrepreneur despite his real ambition. The child, due to lack of financial ability to see him through to college, may be forced to start up small business to meet his needs.

It is evident that many people in the rural areas become entrepreneurs than those in urban areas. It is not that they are born entrepreneurs than those in the urban areas; it is because they lack sufficient means to seek higher education and get jobs.

The Effect of Government Policies

Many entrepreneurs own small businesses. Therefore, they suffer the greatest impact of governmental policies than large firms.

For instance, small businesses have been found to pay more for health policy for their workers than large businesses do. Such costs become overwhelming to an entrepreneur who, at the start up of a business, struggles to balance between branding the business and building a strong customer base.

Governments enact and control policies that touch on entrepreneurship in a great deal and if these policies are not well regulated, they adversely affect small businesses.

Inflation, for instance, is determined by interest rates set by the Federal Reserve, policies on cost of labor are controlled and regulated by the federal sector, business regulations and procedures such as licensing, certification, and permits are done by governments. These have not been favorable to entrepreneurs as they are designed in ways that benefit large businesses through economies of scale.

Governments have, however, be credited for trying to protect entrepreneurs from unfair competition from large businesses. One such policy used to protect the business is rewarding them a set percentage of government contracts.

Starting and Growing a Business

Starting up a business is a detailed task that requires an entrepreneur to lay down a concrete plan that will see him through the business. The entrepreneur then takes baby steps to grow the business to maturity. Such a process needs persistent and focus because of the many hurdles likely to be incurred.

The process of growing a business requires much similar tactics as those of starting up a business. The entrepreneur will still have to take steps at a time, although this time they may not be baby steps as he has some experiences and will have conquered the initial hurdles.

He is more familiar with the tactics involved and more confident of his actions and the direction of the business. However, he still needs to be persistent and hardworking (Kellermanns & Eddleston, 2006).

It is normal that when starting up a business, an entrepreneur will employ someone or a few people to assist him. As the business grows, it is necessary that he quits being the manager and employ a management team that will be responsible for managing the business fully.

This is recommendable for a business to avoid the owner’s subjectivity while handling issues. This should not lead to a conflict of interest between the entrepreneur and the management team as the team is directly under the entrepreneur even if they control the day to day running of the business.

Conclusion

An entrepreneur is a risk taker, who goes out of his way to put some business idea into practice. Anyone can become an entrepreneur with the right training. With sheer determination, he can become a successful entrepreneur.

One needs to be innovative and have a creative mind that seeks ways of solving issues, be able to recognize and embrace opportunities is they present themselves, and be willing to take risk as long as it is reasonable promising.

Reference List

Aldrich, H., 2003. The Pervasive Effects of Family on Entrepreneurship: Toward a Family Embeddedness Perspective. Journal of Business Venturing, Vol. 18 (5): 573-596.

Deakins, D., & Freel, M., 2006. Entrepreneurship and Small Firms. McGraw-Hill Education: Berkshire.

Gubrium, J., & Holstein, J., 1993. Family Discourse, Organizational Embeddedness, and Local Enactment. Journal of Family Issues, Vol. 6(3): 321-345.

Kellermanns, F., & Eddleston, K., 2006. Entrepreneurship: Theory and Practice. Journal of business venturing, Vol. 7(4): 23-26.

Klein, K., 2010. Are Entrepreneurs Born or Made? Small Business, Vol.3 (1):23-26.

Mount, I., 2009. Scientists and Academics Battle out the Nature Vs Nurture Debate. Small Business, Vol. 5(2):18-34.

Shane, S., 2010. Born Entrepreneurs, Born Leaders: How Your Genes Affect Your Work Life. Oxford: Oxford University Press.

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