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The Role of The The Role of The EntrepreneurEntrepreneur

Enterprise Tariq Mansuri - Role of Entrepreneur 2

Characteristics


Characteristics of entrepreneurs

Q1: Why does an entrepreneur need to possess initiative?

A: There is no-one to tell the entrepreneur what to do

Comment: Successful entrepreneurs need to balance a willingness to use initiative with a willingness to take advice. Even the most talented entrepreneur will soon reach a position where expert guidance on some matter (e.g. legal advice) will make the business more successful



Q2: Why does an entrepreneur need to possess creativity?

A: Entrepreneurs will often be faced with new situations, which will demand an imaginative response

Comment: Creativity needs to be understood in its widest sense. For example, someone with business flair setting up a clothes shop could employ someone with a flair for fashion to choose the clothes (and vice versa)



Q3: Why does an entrepreneur need to be hard working?

A: Entrepreneurs will be competing against established businesses. Entrepreneurs need to make up for their need to win new customers by working harder

Comment: Hard work and creativity go together in business. A winning idea has to be followed up by implementation – and implementing new ideas is always hard work



Q4: Why does an entrepreneur need to possess a

willingness to take calculated risks?

A: Setting up a business is statistically risky. Many fail in their early years

Comment: One common trigger for setting up a business is the experience of repeated redundancy. Traditional employment carries its risks too



Q6: Why does an entrepreneur need to have resilience?

A: Every new enterprise will meet setbacks. An entrepreneur has to be able to keep going in the face of such setbacks

Comment: Successful entrepreneurs often have a streak of hardship somewhere in their backgrounds. Setbacks in life may well lead to a renewed determination to do well. The crucial thing is how we respond to setbacks



Q5: Why does an entrepreneur need to have self-confidence?

A: Entrepreneurs take the leading role within their business – inevitably this demands more self-belief than working for someone else

Comment: While some are naturally more self-confident than others, like any other characteristic self-confidence can grow over time. ‘Nothing succeeds like success’


Entrepreneurs are optimisticoptimistic and

futurefuture orientedoriented

They believe that success is

possiblepossible and are willingwilling toto riskrisk

their resources in the pursuit of

profit.

They're fastfast movingmoving, willing to try

many differentdifferent strategiesstrategies to

achieve their goals of profits.

And they're flexibleflexible, willing to

changechange quicklyquickly when they get

newnew information.


Motivation


What motivates entrepreneurs?

Q7: What is the difference between working for a wage and working for profit?

A: A wage is traditionally a more stable form of income, paid in return for labour.

Comment: Setting up a business and working for a profit is more risky, and normally involves an up-front investment of financial capital (cash) – which may be lost. On the other hand, the potential rewards are greater too


What motivates entrepreneurs? Q8: Looking purely at the financial angle, why might

someone choose to set up a business for profit rather than working for a wage?

A: They may have a belief (whether true or false) that they will make more money that way

Comment: Alternatively, they may have accumulated sufficient capital to be able to take the risk, or traditional employment opportunities may be limited, or they may be able to rely on a spouse to provide an income from employment



Q10: Why might anyone wish to work independently?

A: Some people are more productive working independently and/or prefer the autonomy of not reporting to a boss

Comment: While an independent turn of mind is essential to any entrepreneur, no business person will ultimately be successful if they cannot also learn to co-operate with others



Q9: Why might someone wish to work from home?

A: This is a cheap and flexible arrangement. It may enable the person to fulfil other responsibilities, such as looking after children, the sick or the elderly – or may be combined with housework

Comment: Many large businesses started life in someone’s kitchen, bedroom or garage – and of course many will never outgrow their beginnings



Q11. What ethical reasons might there be for setting up a business?

A: Ethical beliefs are one source of the powerful motivation that any entrepreneur needs

Comment: This may either be general (e.g. to provide a better and/or cheaper service than rivals), or specific (e.g. to set up a business which is more environmentally friendly than existing options)


Role of the entrepreneur in business

development


▒ Business activity begins with the entrepreneur having a business idea. An entrepreneur is considered to be innovative; s/he forms a business where one did not exist before

▒ Entrepreneurs choose a level of personal, professional or financial risk to pursue opportunity.

▒ Entrepreneurs tend to identify a market opportunity and exploit it by organizing their resources effectively to accomplish an outcome that changes existing interactions within a given sector.

▒ Business entrepreneurs are viewed as fundamentally important in the capitalistic society.


Role of the Role of the entrepreneur entrepreneur in economic in economic developmentdevelopment


▒ Entrepreneurs occupy a central position in a market economy - it's the entrepreneurs who serve as the spark plug in the economy's engine, activating and stimulating all economic activity.

▒ The economic success of nations worldwide is the result of encouraging and rewarding the entrepreneurial instinct.

▒ Entrepreneurs seek disequilibrium--a gap between the wants and needs of customers and the products and services that are currently available.

▒ The entrepreneur then brings together the factors of production necessary to produce, offer and sell desired products and services.

▒ They invest and risk their money--and other people's money--to produce a product or service that can be sold at a profit


▒ An increase in the number of entrepreneurs leads to an increase in economic growth. This effect is a result of the concrete expression of their skills, and more precisely, their propensity to innovate. This can be termed as “the carrying out of new combinations”, by distinguishing five cases

(1) The introduction of a new good – that is one with which consumers are not yet familiar – or of a new quality of a good.

(2) The introduction of a new method of production, that is one not yet tested by experience in the branch of manufacture concerned, which need by no means be founded upon a discovery scientifically new, and can also exist in a new way of handling a commodity commercially.

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(3) The opening of a new market, that is a market into which the particular branch of manufacture of the country in question has not previously entered, whether or not this market has existed before.

(4) The conquest of a new source of supply of raw materials or half manufactured goods, again irrespective of whether this source already exists or whether it has first to be created.

(5) The carrying out of the new organisation of any industry, like the creation of a monopoly position or the breaking up of a monopoly position”

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▒ Through his innovative activity, entrepreneur seeks to create new profit opportunities.

▒ These opportunities can result from productivity increases, in which case, their relationship to economic growth appears quite clearly.

▒ Moreover, the disequilibrium created by the entrepreneur can be encouraging for additional innovations and profit opportunities.

▒ Therefore, more entrepreneurs means more growth, which in turn leads to more entrepreneurs… The phenomena seem to be self-feeding.

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۩ Entrepreneur sets up business for transformation of resources into products and services – and meet the needs of the people

۩ Business activity involves human activities. People manage activity

۩ Business activity involve production – manufacturing, retailing, mining and services – create employment opportunities

۩ Business creates wealth. Wealth results in a country’s economic growth

۩ The businessperson or entrepreneur is at the heart of the business world.

۩ Entrepreneurship, particularly among women in developing countries like Pakistan, seems to offer an improvement in the standard of living as well as a path out of poverty. Entrepreneurship is now growing at nearly three times the rate among women as it is among men

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Date post:	13-Jan-2015
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