The Entrepreneurs Intended Learning Outcomes

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MODULE II

THE ENTREPRENEURS

Intended Learning Outcomes

At the end of the module, the student will be able to:


• define entrepreneur
• identify the characteristics of entrepreneurs
• recognize the role of entrepreneur
• explain what motivates an entrepreneur

A. Entrepreneur, Definition
An entrepreneur is an individual who creates a new business, bearing most of the risks and
enjoying most of the rewards. The entrepreneur is commonly seen as an innovator, a source of
new ideas, goods, services, and business/or procedures.
Entrepreneurs play a key role in any economy, using the skills and initiative necessary to
anticipate needs and bring good new ideas to market. Entrepreneurs who prove to be successful
in taking on the risks of a startup are rewarded with profits, fame, and continued growth
opportunities. Those who fail, suffer losses and become less prevalent in the markets.
Key Takeaways
• A person who undertakes the risk of starting a new business venture is called and
entrepreneur.
• An entrepreneur creates a firm, which aggregates capital and labor in order to produce
goods or services for profit.
• Entrepreneurship is an important driver of economic growth and innovation.
• Entrepreneurship is high-risk, but also can be high-reward as it serves to generate
economic wealth, growth, and innovation.

B. Characteristics of entrepreneur/ship
“The entrepreneur has an enthusiastic vision, the driving force of an enterprise.” The
entrepreneur's vision is usually supported by an interlocked collection of specific ideas not
available to the marketplace. The overall blueprint to realize the vision is clear; however details
may be incomplete, flexible, and evolving. The entrepreneur promotes the vision with
enthusiastic passion. With persistence and determination, the entrepreneur develops strategies to
change the vision into reality. The entrepreneur takes the initial responsibility to cause a vision to
become a success. Entrepreneurs take prudent risks. They assess costs, market/customer needs
and persuade others to join and help. An entrepreneur is usually a positive thinker and a decision
maker.
1. Entrepreneurs are decision makers
An entrepreneur is not only concerned with identifying and taking the initiative to avail a fruitful
business opportunity and laying down the basis of a business machinery but in fact,
entrepreneurs also act as decision-making bodies. Entrepreneurs need to be extremely judicious
decision makers as the sole responsibility to make all the important decisions about the running
and management of a business entity lies with them. They make important decisions concerned
with the selection of products or services that they are to provide to the consumers, operational
and manufacturing procedures and the feasibility of a business idea, product or a service in the
marketplace.
2. Entrepreneurs are analysts and observant
However, what an entrepreneur really needs to be is highly insightful of consumers’ needs. A
more abstract definition of entrepreneurs may relate to individuals who identify various needs
and requirements of a consumer market that remain unfulfilled.
Once identified, the entrepreneurs take the initiative to set up an enterprise with the rudimentary
objective to deploy the business machinery towards the fulfilment of identified unfulfilled
consumer needs to generate optimum profits for themselves.
3. Entrepreneurs are Innovators
Considering the aforementioned explanation of the role of an entrepreneur, an entrepreneur may
also be termed as an innovator, who deals in the manufacture and delivery of novel ideas,
products, services and procedures to meet an unfulfilled consumer demands.
As entrepreneurs are commonly considered as risk takers and leaders, an entrepreneur needs to
have immense self-belief in his abilities and confidence in the feasibility of his business idea.
Only then they will be able to optimally avail the most out of the opportunities presented to them
and execute their business ideas and concepts.
Though the term ‘entrepreneur’ finds its root in the 18th-century literature, the concept of
enterprising exists since the beginning of time. The birth of the concept of enterprising is usually
attributed as a result of the realization among humans, concerning the need to deliver services
and goods to survive.

C. How Entrepreneurs Work


Entrepreneurship is one of the resources economists categorize as integral to production, the
other three being land/natural resources, labor and capital. An entrepreneur combines the first
three of these to manufacture goods or provide services. They typically create a business plan,
hire labor, acquire resources and financing, and provide leadership and management for the
business.
Entrepreneurs commonly face many obstacles when building their companies. The three that
many of them cite as the most challenging are as follows:
1. Overcoming bureaucracy
2. Hiring talent
3. Obtaining financing
D. Entrepreneurs Help Economies
Nurturing entrepreneurship can have a positive impact on an economy and a society in several
ways. For starters, entrepreneurs create new business. They invent goods and services, resulting
in employment, and often create a ripple effect, resulting in more and more development. For
example, after a few information technology companies began in India in the 1990s, businesses
in associated industries, like call center operations and hardware providers, began to develop too,
offering support services and products.
Entrepreneurs add to the gross national income. Existing businesses may remain confined to their
markets and eventually hit an income ceiling. But new products or technologies create new
markets and new wealth. And increased employment and higher earnings contribute to a nation’s
tax base, enabling greater government spending on public projects.
Entrepreneurs create social change. They break tradition with unique inventions that reduce
dependence on existing methods and systems, sometimes rendering them obsolete. Smartphones
and their apps, for example, have revolutionized work and play across the globe.
Entrepreneurs invest in community projects and help charities and other non-profit organizations,
supporting causes beyond their own. Bill Gates, for example, has used his considerable wealth
for education and public health initiatives.
Successful entrepreneurship needs determination, freedom, discipline, connectivity and an
abundance of skills in planning. People with a complete package of physical strength combined
with perseverance, mental strength, and self-discipline have the passion and urge to succeed.
With proper motivation, we get the following outcomes:
• Heavy industrialization: Tremendous growth can be seen in industrialization. Example:
Companies like TISCO, TELCO have been set up and are flourishing.
• Self-employment: A common man gets a chance to make a difference, set a new standard
of industrial growth.
• Economic growth: When there is growth in an individual’s economy, there is a growth in
the company’s economy, which in turn results in the growth of that particular area and country.
Example: Emergence of smart cities concept.
• Creating new jobs: More entrepreneurship leads to more job openings. More job
openings leads to more employment opportunities.
• Proper social benefit: When a country’s economy grows or increases we see that more
advanced and proper social benefits are provided to the general public like construction of roads,
school, hospital, colleges, etc.
Entrepreneurial drive is the inbuilt encouragement some people possess to make something
happen. It is the energy that pushes one forward as a founder and forces not to give up in the face
of failure, ultimately leading to success.

Questions for Entrepreneurs


Embarking on the entrepreneurial career path to “being your own boss” is exciting. But along
with all your research, make sure to do your homework about yourself and your situation.
A Few Questions to Ask Yourself:
• Do I have the personality, temperament, and mindset of taking on the world on my own
terms?
• Do I have the required ambiance and resources to devote all my time to my venture?
• Do I have an exit plan ready with a clearly defined timeline in case my venture does not
work?
• Do I have a concrete plan for next "x" number of months or will I face challenges
midway due to family, financial or other commitments? Do I have a mitigation plan for those
challenges?
• Do I have the required network to seek help and advice as needed?
• Have I identified and built bridges with experienced mentors to learn from their
expertise?
• Have I prepared the rough draft of a complete risk assessment, including dependencies on
external factors?
• Have I realistically assessed the potential of my offering and how it will figure in the
existing market?
• If my offering is going to replace an existing product in the market, how will my
competitors react?
• To keep my offering secure, will it make sense to get a patent? Do I have the capacity to
wait that long?
• Have I identified my target customer base for the initial phase? Do I have scalability
plans ready for larger markets?
• Have I identified sales and distribution channels?
Questions That Delve into External Factors:
• Does my entrepreneurial venture meet local regulations and laws? If not feasible locally,
can I and should I relocate to another region?
• How long does it take to get the necessary license or permissions from concerned
authorities? Can I survive that long?
• Do I have a plan about getting the necessary resources and skilled employees, and have I
made cost considerations for the same?
• What are the tentative timelines for bringing the first prototype to market or for services
to be operational?
• Who are my primary customers?
• Who are the funding sources I may need to approach to make this big? Is my venture
good enough to convince potential stakeholders?
• What technical infrastructure do I need?
• Once the business is established, will I have sufficient funds to get resources and take it
to the next level? Will other big firms copy my model and kill my operation?
The term entrepreneur refers to individuals who prefer to make their professional careers running
businesses themselves rather than getting employed at another company or organization. They
assume all the relevant risk factors and profit earning opportunities related to their business idea
and the delivery and manufacture of their products and services.
The 6Cs that motivate entrepreneurs to establish their own business are as follows:
• Change – Entrepreneurs frequently want change, not only change, they also want to be
the bearers of change. They are solution givers and want to interrupt the status quo. They have a
vision like "I want to assemble the world's information" or "I want to put an AC at every desk"
and they take an attempt to make this change. In this attempt, some succeed and some fail.
• Challenge – Some people love challenges and they opt for starting a new business as it is
very challenging to handle big problems. These people find typical job in a big corporate as
boring and not challenging enough.
• Creativity – Running one’s own business is all about being more creative and having the
independence to make new discoveries. For example, testing a new website design, launching a
new marketing scheme, creating inventive items that solve a known issue in a different way,
creating new advertising campaigns, etc. One needs to have an infinite room to welcome and
introduce creativity in a small business.
• Control – Some people tend to start a business because they don't want to be pushed
around and work for a product/company in which they have no way to shape their destiny. They
want to be their own boss having their own time, own pace, location of their choice, employees
of their choice and have a progressive role in deciding the direction of the company.
• Curiosity - Successful entrepreneurs are always anxious and ask - "what if we do X this
way?” They want to have more than one option to do a work and choose the best one from them.
They want to understand the customer's perceptions, point of views, markets and competitors.
They are frequently anxious to see how their particular theory like "people want to do A with B"
works. In this aspect, they can’t be differentiated from a scientist who is trying to prove his
theorem.
• Cash – The last but not the least part is the cash. Money says it all. Many non-
entrepreneurs have a misconception that cash comes first for entrepreneurs but this is never
really true. If this would be the case, then there is no reason for an Ellison or Gates to keep
expanding their business aggressively after they have made more than billion dollars. However,
money is not the primary motivation.
From the above discussion, it can be said that the highest motivating factor is the urge to get
something or the drive to do something differently.

References

Osorno Rene D., Bajao Grayfield., (2020). Entrepreneurship in Tourism and


Hospitality,Wiseman’s Book Trading Inc.
Greene Cynthia., (2015) Entrepreneurship, Cengage Learning Asia Pte Ltd

Discussion Questions
1. Define entrepreneur.
2. Discuss the characteristics of an entrepreneur.
3. How do entrepreneurs venture into a business?
4. How do entrepreneurs help the economy?
5. Explain what motivates entrepreneurs to establish their own business.

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