For the development of small businesses and enterprises, there are some of the desirable characteristics that one must poses as an entrepreneur. This is due to the hurdles that it comes with. Literature refers to it as entering the dragon. Dragon here may be the competition or the nature of the market where one is establishing a business. This uncertainty of the environment calls for very good and well calculated decisions on the variables of the market. For one to be successful, certain traits must be considered. According to this book, several characteristics are given for a successful entrepreneur. This includes needs achievement, focus of control, attitude to risk, proactive and initiative taking and creativity and vision. This paper, discusses only two characteristics; attitude to risk and creativity and vision. The paper then goes ahead to discuss the role of socialization in entrepreneurship.
Characteristics of Entrepreneurs
There are so many characteristics of entrepreneurs. These include risk taking, innovation, creativity and vision among others. Issues of risk taking are given a favorable consideration in this book. As a role model, entrepreneurs need to make very risky decisions in the dynamic environment. Bearing higher risks makes a good entrepreneur. Many approaches to these characteristic points out that people with higher experience can succeed in taking a risk. Ability and knowledge come with risks connected to each decision one may make. Cramer et al. (2002) points out that there is a positive relationship between the wealth one has in entrepreneurship and the risk attitude one has. An example is a case where two people open the same business at the same time. A risk taker may have a higher hand in succeeding in the business even in a risky environment. The main question is whether ones decision to start a business is based on the willingness to bear risk (Porter and Millar, 1985).
The next characteristic is creativity and vision. Habitual creation and modernization is an important feature in entrepreneurship. This is due to the varied opportunities that exist in entrepreneurship. Ebbena and Johnson (2006) points out that innovation has a role to play in both theory and practice. Personal creativity and innovation is needed in the enterprise. Intelligence is needed in changing the risks into opportunities with very creative ideas. New products are anchoring measures of exploring the opportunities and discovering new ventures. Creativity highlights the ability to bring into existence in order to create a new way of production through knowledge and viable imaginations. Bringing change in a brilliant way by using practical ideas which no one else has ever thought of with passion and commitment is creativity. It has been witnessed in a number of companies where a new product comes into the market and the skills and ideas behind it make the product succeed.
Enthusiastic vision in this text is a moving force, a driving force of entrepreneurship. The vision should comprise complete information and ideas which are well designed and specific to the market. The entrepreneur then develops well laid strategies in line with the vision and takes prudent risks with cost monitoring and mastering of the changes in the economic growth.
Socialization is another important element in entrepreneurship. The role of early life experiences influences the entrepreneurship tendency to behave in an entrepreneurial way. Socialization leads to the entrepreneur’s behaviors and decisions to be entrepreneurs at an early age. Four major factors influence the socialization aspect of the entrepreneurs. This can be categorized into family issues, education, the social class and the role played by the media. Blanchflower and Oswald (1998) identifies that these factors influences decisions that one may make as an entrepreneur. It is evident that such aspects are encountered at an early stage in life. The socialization pressures in the business are interpreted differently. The diversity in the social life leads to one reacting to a particular problem differently from another person. This leads to different decision by different people on the same issue. Outsiders have a positive impact on the socialization in that those are well adapted to the environment have a high chance of succeeding in the business. Early life experiences are dictated by the family background. A high profile role of an entrepreneur is dictated by the role models one has in the family setup. The family comes with a culture and a responsibility which influences decisions and behaviors of an entrepreneur. The social background also gives access to finances and capital. Different lifestyles are developed depending on the society and the exposures that lead to success in the environment.
Lastly the socialization aspect has a positive impact on the education and career choices since the social background of an entrepreneur leads to ones career choice. Those from the lower social background have a different perspective of becoming an entrepreneur as compared to the high class people (Porter, 1985).
Beginning a business requires a number of finances to aid in setting up the business. After starting the business, the business owner needs funds to develop the business and ensure that the business expands in the right manner. It is therefore of great importance that the business owner understands the various means he will use in acquiring enough funds for the business (Paphitis, 2009). These sources of finance can be categorized into internal sources and external sources. Internal sources are the traditional savings through loans borrowed from a lending source. These loans can be given to the owner of the business after making a request. The loans are to be returned with some interest. Business funds can also be raised from profits retained from the business. This is because as the business operates, it will make some profit which can form a very good source of funds for the business. Lastly, the working capital of the business and the sale of the business assets contribute greatly to the sources of funds for the business. The business assets that have been faced off can be sold and the money used as a source of funds to the business (Aaker, 2010).
In external sources of finance, the major source of finance is the capital ownership where shareholders are the sole owners of the business. In this case, the shareholders will be responsible for contributing shares to the business. The company can decide to sell its shares to the general public so that the public have a share in the overall profit made by the company. This money can be utilized in large expenses incurred by the company such as the initialization of a particular product where the company plays a role in advertising the product until it will reach a stage where the products has grown and is mature to bring more money into the business. This money is also important for the development and design of new and other business products (Ridderstrale and Nordstrom, 2002).
Another important source of funds for the business is through the process of leasing and hire purchase. This method of acquiring business finances involves renting equipment that the business may use for a period of time without necessarily owning the properties. A contract may be signed by a company specializing in repair and maintenance of the products. Such a deal may also involve the business replacing the equipment with another newer model every time the equipment is spoilt. Hire purchase involves purchasing the equipment and paying the amount in installments. The businesses will not own the property until all the installments are finished.
Every business needs some key people that would be of benefit to the operations of the business. In the business, there should be a good understanding of the major people involved in different business operations. Each person has a role to play in the business. These roles may range from administrative to operational duties. In the business, there should be good planning, organizing, coordinating, controlling and staffing responsibilities. Due to the complexity of the market and the changes in the market cycles, there should be key people fully responsible for different operations. Hiring should be done carefully and different roles distributed to different people. When one person tends to do everything in the business, then it may be hard for the person to keep all the business sectors go on smoothly. Depending on the kind of business, key people should be hired to assists the business operates smoothly.
Innovation is the act of developing a new process or a product in a way that can match the competition of the existing market (Stefik and Stefik, 2004). Innovation comes with radical changes which involves modification and development. Sources of information include the following. First is through the unexpected events which include failures and successes. When there is a failure in the product, it gives the business to pay more attention to what lead to the failure or success of the product. This is because the development will be in line with the standards of the business. The next source of innovation is incongruities. This leads to innovative ideas since out of the perceptions in the business new ideas can arise. These perceptions are tied to the realities in the business (Pew Research Center, 2010).
Market changes lead to creativity in the business and also in the whole market industry. The success of the business depends on the structures of the business (Tidd, Bessant and Pavitt 1997). As new ideas are created, the company takes a new dimension. Due to the changes in the structure of the business, there is a great response to the growth of the market. The change in the market structure has a direct influence on some ideas that may come as a result of the new dimension taken by the business.
New knowledge or new technology is a very good source of innovation in the business. Many businesses whether small or big relies on technology in its innovation moves. The internet world has proved to be a very good source of innovation since most of the ideas about other innovations from other business setups are available in the internet. The internet has reduced the need to borrow ideas from other sources from far places. The internet has a direct influence on the time at which the business operations are carried out. The use of new technologies has lead to even the development of systems in the business (Verloop and Wissema, 2005). The consumers can now demand for new ideas and innovative new products and immediate access to information, gods and services (John et al. 2004).
To balance innovation and the business, the business should consider customer intimacy. This should be aimed at developing a new way of doing things. The customers should be served in a unique way so that they feel the business is caring for their needs. Values of the business should be new, vision should be reinvented and new strategies developed. This creates a new value of the products to the customers mind. The customer’s problems should be discovered and ways of tackling the customers wants reinvented. This will help in developing a new synergy for all the customers hence a growth in their customer’s database (Evans and Wurster, 2000).
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