ENTREPRENEURSHIP

ENTREPRENEURSHIP

…..building business capacity! 

Entrepreneurship is defined as the process of making money, earning profits and increasing the wealth while displaying characteristics such as risk taking, management, leadership and innovation. The term entrepreneurship is a complicated term and gives various meaning depending on the situation. Nevertheless, there are certain characteristics of entrepreneurs which differentiate them from the ordinary men and women walking the streets.

The concept of entrepreneurship was first established in the 1700s, and since then the meaning has evolved. Many simply equate it with starting one's own business. Entrepreneurship underlies new business start-ups, small businesses and self-employment, founding and failure rates, innovation and creativity, and new market emergence. In my opinion, entrepreneurship has being considered by many as a slippery concept because most scholars who study it are really interested in the manifestations of entrepreneurship and less in the thing that makes entrepreneurs really distinct -  identity. Some people self-identify as entrepreneurs, which motivates them to be innovative, found new businesses, or do other things that bring about change. However, the outcomes of being an entrepreneur vary quite a bit and so if you merely study the outcomes, you’re really just studying the manifestation of entrepreneurship (and not all of the people involved in the outcomes even see themselves as entrepreneurs).

Many definitions of entrepreneurship can be found in the literature describing business processes. Entrepreneurship is an economic term used in describing the process of bearing the risk of buying at certain prices and selling at uncertain prices. Other, later commentators broadened the definition to include the concept of bringing together the factors of production. This definition led others to question whether there was any unique entrepreneurial function or whether it was simply a form of management. Early this century, the concept of innovation was added to the definition of entrepreneurship. This innovation could be process innovation, market innovation, product innovation, factor innovation, and even organizational innovation. Later definitions described entrepreneurship as involving the creation of new enterprises and the entrepreneur is the founder. 

Irrespective of the diverse entrepreneurial speculations, it is imperative we understand that entrepreneurs need certain level of leadership skills to direct their employees to achieve goals and objectives to make money. Entrepreneurs need managerial skills to run their business and make sure they create incremental wealth for themselves. Entrepreneurs need to have innovating skills to identify market opportunities and find out a way to make money out of them. They need to be innovative to come up with solutions for problems in the market to make profits. This is called Entrepreneurial innovation. On the other hand, not all innovators can be called Entrepreneurs. 

Entrepreneurs need to accept risk to exploit market opportunities to make money. They need to engage different strategies most of which are highly risk oriented. Entrepreneurs are based on fundamental of “Higher the risk higher the return” and vice versa. 

There has been a great deal of attention paid to the subject of entrepreneurship over the past few years, stemming primarily from the discovery by economic analysts that small firms contribute considerably to economic growth and vitality. Moreover, many people have chosen entrepreneurial careers because doing so seems to offer greater economic and psychological rewards than does the large company route. 

Considerable effort has also gone into trying to understand the psychological and sociological wellsprings of entrepreneurship. These studies have noted some common characteristics among entrepreneurs with respect to need for achievement, perceived focus of control, orientation toward intuitive rather than sen-sate thinking, and risk-taking propensity. In addition, many have commented upon the common, but not universal, thread of childhood deprivation, minority group membership and early adolescent economic experiences as a typology of entrepreneurship. 

However, detailed study of both the literature and actual examples of entrepreneurship tend to make a definition more difficult, if not impossible. Although risk bearing is an important element of entrepreneurial behavior, many entrepreneurs have succeeded by avoiding risk where possible and seeking others to bear the risk. One extremely successful entrepreneur has said; 'My idea of risk and reward is for me to get the reward and others to take the risks'. 

Creativity is often not a prerequisite for entrepreneurship either, but it is a functional characteristic of successful entrepreneurs. Many successful entrepreneurs have been good at copying others and they qualify as innovators and creators by adding a little twist to what they copied to produce their own original products. It is important to understand that there is no wisdom in re-inventing the wheel if you can access the ideas of someone who has done what you are trying to do. Process his ideas and add a little twist to it and you will arrive at a new products that can make you truly rich.

Certainly, it is important to understand that the entrepreneur is the key to the successful launch of any business. He or she is the person who perceives the market opportunity and then has the motivation, drive and ability to mobilize resources to meet it. The major characteristics of entrepreneurs that have been listed by many commentators include the following:

• Confident in the face of difficulties and discouraging circumstances.
• Innovative skills. Not an 'inventor' in the traditional sense but one who is able to carve out a new niche in the market place, often invisible to others.
• Results-orientated. To be successful requires the drive that only comes from setting goals and targets and getting pleasure from achieving them.
• Self confident and multi-skilled. The person who can make the product, market it and count the money, but above all they have the confidence that lets them move comfortably through unchartered waters.
• A risk-taker. To succeed means taking measured risks. Often the successful entrepreneur exhibits an incremental approach to risk taking, at each stage exposing him/her to only a limited, measured amount of personal risk and moving from one stage to another as each decision is proved.
• Total commitment. Hard work, energy and single-mindedness are essential elements in the entrepreneurial profile. 

ENTREPRENEURSHIP CREATES CAPACITY FOR VISION AND MANAGEMENT

In new and emerging businesses, the person who starts the business is often an entrepreneur; a visionary. The visionary is one who starts a business with a fresh idea. This fresh idea can be either to make something better or less expensively, or to make it in a new way or to satisfy a unique need. From the on set he is often not primarily interested in making money. The visionary wants to do something that no one else has done because they can, because it is interesting and exciting, and because it may be meeting some fundamental needs which will in-turn creates a larger sphere of influence. Once the business begins to have some success, then the nature of the processes needed change. 

At this stage, the new business experiences its first set of challenges. There is a need to provide answers to the following questions:

• How does the visionary entrepreneur transfer the skills and the inspiration that made the little enterprise a success into something larger?
• How does the business deal with cash flow constraints?
• How does it obtain the legitimacy necessary to enable it to borrow?
• How does the entrepreneur hire and engage the people who will help him build and drive the business in the right direction?
• How does the visionary entrepreneur manage his competition and loyal customers?
•  

Visionaries are notoriously poor at supervising staff, negotiating with investors, or training successors. The business now needs a professional management focus, which calls on a different set of skills, to manage and sustain growth, that are distinct from the skills necessary to start an enterprise and promote a vision. 

Applying management skills allows the adolescent enterprise continues to do well, but the business culture begins to change. The emphasis of management is structure, policies, procedures and the bottom line that is profitability. 

Certainly, as the business grows from immaturity to maturity, the visionary is faced with another fundamental challenge. This is the challenge of the establishment of a formidable management structure or governance to create checks and balances and to ensure that the management focus does not become too powerful and overwhelm the entrepreneurship necessary to create rapid growth and access new markets. 

Businesses in emerging industries go through these three stages characterized by:

·        Vision;

·        Management and;

·        Governance.

More so, as the business grows into a formidable and highly branded institutionalized company with appropriate administrative structures, the business encounters a new set of challenges that are common to all well established industries. Management is faced with the core responsibility of providing pragmatic answers to the following questions.

• How do we preserve the vision of the business?
• How do we balance growth, risk, and profitability?
• How do we establish an administrative system that holds management accountable without undermining its independence and flexibility? 

ENTREPRENEURSHIP IS A GREAT TASK OF CAPACITY DEVELOPMENT FOR EFFECTIVE AND INTELLIGENT BUSINESS MANAGEMENT

This business development cycle described above is common amongst successful businesses. The cycle itself raises the issue of what to focus on when attempting to select a business idea. The real danger for those involved in selection activities is that of selecting entrepreneurial qualities over managerial skills. This may thereby condemn the business to uneven growth, poor management and ultimate failure, as the enterprise does not respond adequately to new market and trading conditions. 

The focus of any predicative element in the selection process, therefore, needs to be on a balance of both entrepreneurial and managerial qualities. And the major determinant in selecting a participant for business management training must remain the business idea itself.

IT IS TIME TO BEGIN YOUR CAPACITY DEVELOPMENT. THE JOURNEY HAS JUST BEGUN, AND MANY CHALLENGES AND OPPORTUNITIES AHEAD TO ANALYZE, EXPLORE AND MAXIMIZE!

You shall receive in-depth teaching on the following topics. Take your time to explore this section.

1.     Entrepreneurial development.

2.     Entrepreneurial training.

3.     Entrepreneurial movement.

4.     Entrepreneurial process.

5.     Entrepreneurial policies.

6.     Entrepreneurial models.

7.     Entrepreneur.

8.     Entrepreneur resources.

9.     Women entrepreneurs.

10.                        Young entrepreneurs.

11.                        Millionaires.

12.                        Billionaires.

13.                        Entrepreneurship and technology.

14.                        Entrepreneurship and the environment.

15.                        Entrepreneurship and national economy.

To some economists, the entrepreneur is one who is willing to bear the risk of a new venture if there is a significant chance for profit. Others emphasize the entrepreneur's role as an innovator who markets his innovation. Still other economists say that entrepreneurs develop new goods or processes that the market demands and are not currently being supplied.

In the 20th century, economist Joseph Schumpeter (1883-1950) focused on how the entrepreneur's drive for innovation and improvement creates upheaval and change. Schumpeter viewed entrepreneurship as a force of "creative destruction." The entrepreneur carries out "new combinations," thereby helping render old industries obsolete. Established ways of doing business is destroyed by the creation of new and better ways to do them.

Business expert, Peter Drucker (1909-2005) took this idea further, describing the entrepreneur as someone who actually searches for change, responds to it, and exploits change as an opportunity. A quick look at changes in communications – from typewriters to personal computers to the Internet illustrates these ideas.

 

Most economists today agree that entrepreneurship is a necessary ingredient for stimulating economic growth and employment opportunities in all societies. In the developing world, successful small businesses are the primary engines of job creation, income growth, and poverty reduction. Therefore, government support for entrepreneurship is a crucial strategy for economic development.

 

Government officials can provide incentives that encourage entrepreneurs to risk attempting new ventures. Among these are laws to enforce property rights and to encourage a competitive market system.

Different levels of entrepreneurship may stem from cultural differences that make entrepreneurship more or less rewarding personally. A community that accords the highest status to those at the top of hierarchical organizations or those with professional expertise may discourage entrepreneurship. A culture or policy that accords high status to the "self-made" individual is more likely to encourage entrepreneurship.

This session is tailored to critically examine the fundamental elements of entrepreneurship. Each sub category combines the thinking of mainstream economic theorists with examples of practices that are common to entrepreneurship in many countries. In all the content is intended to help you develop entrepreneurial skills, understand why and how people become entrepreneurs, know why entrepreneurship is beneficial to an economy, and see how governments can ensure economic growth throw the creation of policies and measures that encourage entrepreneurship.

If you find this session helpful, kindly send in your comments and feedback by making use of the comments box. We also welcome any suggestion on how to make this session more resourceful.

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Precious O.U. Ogholaja