Characteristics of Entrepreneurship

Introduction

Entrepreneurship is progressing more in the news. Governments world wide praise, glorify, or honor its benefits and put into practice plan of action aimed at promoting it. There are quite a lot of grounds for this concentration, and a feeling of excitement for entrepreneurship. Proprietor-supervisors of small ventures manage greater part of business enterprise in most countries. These enterprises strengthen business relation, and by this means increasing economic effectiveness. Some entrepreneurs establish new markets for original products, bringing into existence new jobs and increasing economic growth.

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Entrepreneurship is the focal point of huge interest, in business, academic, political, and social circles worldwide. In 1998, the British government made public a white paper, “Our Competitive Future: Building the Knowledge Driven Economy,” which brought into focus a sequence of proposals to boost Entrepreneurship and the commercial society in Britain.

In line with this, for the development of small businesses and enterprises, there are some of the desirable characteristics that one must poses as an entrepreneur.

Consequently, entrepreneurship is vital for the development of both individual firms and general economies. Through the originality entrepreneurship promotes, new produce, processes, and organizations materialize. Entrepreneurship presents the essential elasticity and dynamism for answering to new market possibilities and disputes. Accordingly, it is essential to recognize entrepreneurship, and how it takes place, the distinctiveness of entrepreneurs, the issues that give confidence or dishearten it, and how it fluctuates across continents. 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.

In his disclosure and debatable journal, Theo does not only take the reader in the wake of the outlook on Dragons’ hideaway, he elucidates how he prepared his wealth. He further fixes a master class in business techniques that will permit those reading this book to gain knowledge or skills about how they too can make better their business expertise (Paphitis, 2009).

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Theo remembers how his family changed location and how as an underprivileged settler, he took any job he could, the initial one being as a tea boy for Lloyd’s. While there, regardless of his impairment of dyslexia, he set out to get the initial march on an occupation that would give him a large amount of wealth or prosperity. He discloses the techniques that carried him to the peak. However, this book will give something useful or necessary to all who enjoys reading with the possibility due to a favorable combination of circumstances to learn from one of the most triumphant businessmen and put his thoughts into cognition.

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. Therefore, in accordance with the instances stated in Paphitis (2009), it should be emphasized that the actual importance of enthusiastic vision in entrepreneurship is defined by the necessity to regulate the implemented projects, as well as improve the existing business course. He states that enthusiasm is the ruling force of any business, and in accordance with his own example, it should be stated that his decision to buy Ryman’s company contradicted with business rules. However, few believed that this was a reasonable decision. Hence, as it is stated in his book (Paphitis, 2009, p. 132):

When Ryman went into bankrupt, I approached the administrators and bought the company. I had to turn it around by improving relations with suppliers, and enthusing the management team, cementing the company’s reputation for turning failing companies into highly successful and profitable businesses.

Hence, Paphitis is the successful owner of Ryman, Contessa, and Partners. Additionally, he co-owns Red Letter Days. In fact, these actions may be regarded as a complete enthusiasm. Few would dare to restore bankrupt companies, while there is small evidence of success.

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To evaluate the role entrepreneurship might play in society and its development, it the following statement should be mentioned: “The entrepreneurial process is a long-term, human-centered practice of innovation that transcends industrial, sectoral, race, sex, and class lines” (Verloop, Wissema, 2004, p. 412). According to psychologist, entrepreneurs show evidence of the desire to attain, an interior power, tendency for taking risk, and forbearance of uncertainty.

Each section of the populace comprises an amount of people temperamentally willing to be entrepreneurs. But the degree to this is based upon the ecological, intellectual, economic, and educational support.

Bates (1993), argued that, “The individual peculiarity linked most powerfully with admission into self-employment are wealth investments, culture, and age (p.255). The essential features provide as accompaniments, not replacements, for one another. Established capital cannot overcome inadequacies in entrepreneurial ability, education, and loans to less-skilled persons in most cases are not paid back. Business endurance is established by most of the same traits that determine the achievement of individual entrepreneurs. New managers of businesses with undecided powers hear as time progresses.

Socialization

Social entrepreneurship has numerous descriptions Johnsom (2000), what they have in common is a crisis Settling, scenery together with the analogous prominence on increasing and carrying out enterprises that generate considerable outcome in the form of altered social results and consequences. Johnson further noted that the proficiency of communal enterprises are ‘quite replicable’ if social entrepreneurship is described as mainly contributing businesses and management proficiency to the nonprofit sector. Researchers established the identity of social entrepreneurship as: people who have masses of money in other places and now desires to give back to promote social aspirations.

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. Considering Paphitis’ background, it should be stated that his attempts to overcome the difficulties associated with dyslexia became the necessary stimulus for him. This made him purposeful, and properly oriented in the world of business.

The brightest example of entrepreneur socialization of Paphitis is his attempts to take active part in football development. Hence, as it is stated in his book (Paphitis, 2009):

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As chairman, I took Millwall out of administration, took the team to Wembley Stadium, saw their first ever official appearance at Millennium Stadium, and saw the Lions win promotion to Division One as champions. I’m working hard for reducing the levels of football hooliganism, and appointing as Millwall manager Dennis Wise, who guided the club to their first official appearance in the FA Cup Final in 2004.

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).

Resources

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.

The key people who assisted in providing support to Theo were Mark Moran and Tony Kleanthous. Mark Moran helped with the commercial property markets, leading to the rise in mobile telephones which were brought into the company. Mark was the chairman while Tony was the director, hence they both helped in the management of the company.

Paphitis while at a City of London Insurance Broker, worked as a tea boy and later on as a filling clerk. Just as any other person, the desire to earn more pushed him to work as a sales assistant for Watches of Switzerland. Theo Paphitis is an honest and fascinating star of Dragons’ Den. Now, in his informative and disputable journal, as he elaborates how he made his wealth. Paphitis also provided lessons in business methods that are useful to people with passion in business related courses.

Innovation

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. This may be regarded as quite ridiculous statement, nevertheless, innovation aspect of market activity may be regarded as the necessary aspect of effective business activity. The clear instance of innovations is stated in Theo’s philosophy (Paphitis, 2009): “I aim at attributing success to my natural common sense. Hence, my favorite motto is a famous business school motto: KISS: Keep It Simple Stupid. There are three reasons to be in business: To make money, to have fun – and to make money.” This principle made him to get involved into football activity. The key aim was to have fun, another aim of getting involved into this sphere if his previous analysis of the possible benefits from football.

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. (John et al. 2004). The use of new technologies has lead to even the development of systems in the business (Verloop and Wissema, 2005).

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).

References

Aaker, D. (2010). Developing Strategies. Web.

Bates, E. (1993). Comprehension and production in early language development: Comments on savage-Rumbuagh, S., Murphy, J., Sercik, R., Brakke, K., Williams, S., & Rumbuagh, D., Language comprehension in ape and child. Monographs of the Society for Research in Child Development, Serial No. 233, Vol. 58, Nos. 3-4, 222-242.

Blanchflower, D. and Oswald, A. (1998). What makes an Entrepreneur? Journal of Labor Economics, 16(3), 12-13.

Cramer, J et al. (2002). Low Risk Aversion Encourages the choice for Entrepreneurship: an empirical test of a truism. Journal of Economic Behavior and Organization, 48(6), 2-14.

Ebbena, J. and Johnson, A. (2006) Bootstrapping in Small Firms: An empirical Analysis of Change over Time. Journal of Business Venturing, 21(5), 12-15.

Evans, P. and Wurster, T. (2000). Blown to Bits: How the new economics of information transforms strategy. New York: Harvard Business School Press.

John, F. et al. (2004). The Pure Play Method. Essentials of Managerial Finance. New York: Dryden Press, 20(5), 623–624.

Johnsom, N. (2000). Learning the distribution of object trajectories for event recognition. Image and Vision Computing 14, 609-615.

Paphitis T. (2009). Enter the Dragon: Enterprise and Small Business Development. Prentice Hall.

Pew Research Center. (2010). Internet, Broadband, and Cell Phone Statistics. New York: Pew Research Center.

Porter, M. (1985). Competitive Advantage: Creating and sustaining superior performance. New York: Free Press

Porter, M. and Millar, V. (1985). How Information Gives You Competitive Advantage. New York: Harvard Business Review.

Ridderstrale, J. and Nordstrom, B. (2002). Funky Business. Prentice Hall: Financial Times.

Stefik, M., and Stefik, B. (2004) Breakthrough: Stories and Strategies of Radical Innovation. Cambridge, MA: MIT Press.

Tidd, J., Bessant, J. and Pavitt, K. (1997) Managing Innovation: Integrating Technological, Market and Organizational Change. Chichester, UK: John Wiley & Sons.

Verloop, J., and Wissema, G. (2004) Insight in Innovation: Managing Innovation by Understanding the Laws of Innovation. Boston, MA: Elsevier

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