Chapter 3

THE INDIVIDUAL ENTREPRENEUR

 Is there an exact entrepreneurial

profile in terms of characteristics and background?

This chapter addresses this question by

looking at an individuals feelings about Control, Independence &

Willingness to take risks; ones family, education & occupational backgrounds; motivation; skills; male versus female entrepreneurs;

Entrepreneurial Feelings

Entrepreneurial Feelings
Locus of Control

A quality indicating the sense of control that a person has over his life.
Internal Locus of Control

Believing that ones success depends on ones own efforts.

External Locus of Control

Believing that ones life is controlled more by luck or fate than ones own efforts.

Table 3.1
Checklist for Feelings about Control When things go right and are terrific for you, Yes do you think, Its mostly luck!? Do you think that if you decide to do Yes something, youll do it and nothing can stop you? If you want something, do you ask for it rather than wait for someone to notice you and just give it to you? Yes No No

No

Even though its scary to try something new, Yes are you the kind who tries it? Even though people tell you it cant be Yes done, do you have to find out for yourself?

No No

Entrepreneurial Feelings
Feelings of Independence and Need

for Achievement
Need for Independence signifies the

feeling of being ones own boss and is one of the strongest needs of an entrepreneur. Need for Achievement is derived from Mcellands Need Theory, which states that a person with a high need for achievement is driven by the desire to succeed and measures that success against a personal standard of

Table 3.2
Checklist for Feelings about Independence I want to be financially independent. I often need to ask other peoples opinions before I decide on important things. If my friends wont go to a movie I want to see, I will go by myself I want the approval of others. I hate to go shopping for clothes alone Yes Yes Yes Yes Yes No No No No No

Entrepreneurial Feelings
Risk Taking
Starting a new venture involves putting

at stake money, hard work and lots of time. This involves a certain amount of risk as success is not guaranteed and all efforts and resources could go wasted. Only a person willing to risk it all can succeed.

Table 3.3
Checklist for Willingness to Take Risks Do you like trying new foods, new places, and totally new experiences? Can you walk up to a total stranger and strike up a conversation? Do you need to know the answer before youll ask the question? Do you need to know that its already been done before you are willing to try it? Can you take risks with money, that is, invest, and not know the outcome? Yes Yes Yes Yes Yes No No No No No

Entrepreneurial Background and Characteristics

Childhood Family

Background

A childs future occupation is shaped by what kind of environment he or she has at home. Being the first born is also believed to have some effect on the selfconfidence of the person and ability to start a new venture. If a parent is an entrepreneur then its natural that the child will find it easy to become one as well. Their support is also a deciding factor in the

Birth Order

Parents Occupation

Social Status

Relationship with parents (Fathers for female E)

Entrepreneur Statement

My father was so consumed by the venture he started and provided such a strong example, it never occurred to me to go to work for anyone else

Entrepreneurial Background and Characteristics

Education
There are numerous success stories of

entrepreneurs who were high school dropouts. But most of the entrepreneurs have some kind of higher education to their credit. It is not necessarily business related education but is enough for the entrepreneur to better understand his Technical Vs MBA degree business and define new ways to grow it.

Entrepreneurial Background and Characteristics

Personal Values
An entrepreneur has a very distinct set

of values that make him break off from conventional practices and start his own venture. Values like: superior product quality; quality service to the consumers; flexibility to adapt to change in the market; high caliber management; and Leadership traits- creativity- opportunism- intution honesty and ethics in business practices, define an entrepreneurs mind frame. When is it permissible to tell a lie?

Entrepreneurial Background and Characteristics

Age
It is necessary that an entrepreneur

begins the new venture at a time when he has the maximum amount of energy experience- financial support The optimal age for such activity would be somewhere from the age of 22 to the age of 45. At this time a person has the right amount of stamina and experience.

Entrepreneurial Background and Characteristics

Work History
Lack of opportunities- frustration & boredom-> Motivation launching new venture

The work history of a person is one

of the major factors in prompting a person to start a new business. If the person was not satisfied with his past experience, then he might find it easier to come up with good business practices that suit his taste and yield the Managerial experience/skills kind of results that he wants. And what he has learnt from his experience may also help him in growing the business.

Motivation
Every entrepreneur is motivated by

one thing or the other when starting a new venture. The motivational force helps the person overcome all the problems associated with the business and guides him towards the achievement of his goals. This motivation could be making money or being independent of

Role Models
A role model is important in an

entrepreneurs life because it influences every action that he performs. A role model can be ones parents, siblings, close relatives or other entrepreneurs. An entrepreneur follows the example of his role model in everything and feels motivated when trying to

Support Systems

Moral-Support Network Individuals who give psychological

support to an entrepreneur. Entrepreneurs need to establish a moral-support network of family and friendsa cheering squad.
Friends can provide: Advice. Encouragement. Understanding. Assistance. Relatives can be strong sources of moral

Support Systems
Professional Support Network
Entrepreneurs need advice and counsel

throughout the establishment of the new venture which can be obtained Expert in field- advising buddy from: How to find a mentor ? Self employed- Consultants, lawyers Clients & buyers- word of mouth Mentors
Business associates
advertising Suppliers- trends & competition industry New developments & provide overall industry data

Shared hobbies-sporting events-clubs Trade associations Schools alumni ( source of referrals,

Male Vs Female Entrepreneurs

Differences in terms of motivation,

business skills, occupational background, support systems and sources of funding Men- drive to control their own destinies, to make things happen Women- need of achievement arising jobForming 70 % of new businesses frustration- promotional opportunities 8.5 M small businesses employing over 17 M
people 45% increase since 90s

Characteristics Male Entrepreneurs Motivation

Female Entrepreneurs

Achievement, Personal Achievement, Independence, Job Satisfaction Independence

Departure Points Dissatisfaction with current job, Job Frustration, Change in Layoff, Opportunity for Personal Circumstances, Acquisition, Sidelined Recognition of Opportunity Sources of Funds Personal Assets and Savings, Personal Assets and Bank Financing, Investors, Savings, Personal Loans Loans from Friends and Family Occupational Background Experience in Line of Work, Recognized Specialist, Competent in a Variety of Business Functions Opinionated and Persuasive, Goal Oriented, Innovative, Idealistic, High Level of Self Confidence, Enthusiastic and Energetic, Must be Own Boss Experience in Area of Business, Service-related Background, Middle Management Experience Flexible and Tolerant, Goal Oriented, Creative , Realistic, Medium Level of Self Confidence, Enthusiastic, Energetic

Personality Characteristics