Entrepreneurs What is an Entrepreneur? An entrepreneur is someone who creates an innovative economic organization for the purpose of gain or growth under conditions of risk and uncertainty. What is Entrepreneurship? By default, entrepreneurship is the creation of a business for the purpose of gain or growth under conditions of risk and uncertainty. Entrepreneurship requires a vision, and the passion and commitment to lead others in the pursuit of that vision, and a willingness to take calculated risks. Entrepreneurs and Small Business Since entrepreneurs typically “create something out of nothing,” it stands to reason that the companies they create usually start small. Most people therefore tend to associate “entrepreneurs” with “small businesses,” however, this is not always true. Entrepreneurs and Small Business Would someone who starts up a small dry-cleaning store and has no intention of making it grow and expand be considered an entrepreneur? Why? Why not? Importance of Entrepreneurs and Small Business Small businesses are very important to the Canadian economy Although these businesses are “small” in size, their aggregate affect on the Canadian economy is large. Importance of Entrepreneurs and Small Business In terms of numbers … of the approximately 2.2 million businesses in Canada: 58% are self-employed individuals and 41% employ fewer than 50 people. Less than 1% of all businesses in Canada employ more than 50 people, and Less than 0.1% employ more than 500 people. Importance of Entrepreneurs and Small Business History has shown that major innovations are as likely to come from small businesses as they are from big businesses. For example, small businesses invented the: PC; transistor radio; photocopier; jet engine; air conditioning; and the ballpoint pen. Much of today’s most innovative software is being written at new start- up companies. What does it take to be an Entrepreneur? Ross Perot once said that to become an entrepreneur you must “never give up, never give up, never give up.” Psychologists have studied this question with mixed results. Some research suggests that the entrepreneur’s personality characteristics include: self-confidence, a high level of motivation, a high energy level, persistence, initiative, resourcefulness, the desire and ability to be self-directed, and a relatively high need for economy. What does it take to be an Entrepreneur? More recent research has focused on the “proactive personality.” Proactive behaviour reflects the extent to which people take action to influence their environments. Complete the Proactive Personality Test … “Is Entrepreneurship for Me?” Is Entrepreneurship for Me? Scoring Key To calculate your proactive personality score, add up your responses to all statements, except item 3. For item 3, reverse your score … I.e. a 7 on the test is scored as a 1, a 6 as a 2, etc. Is Entrepreneurship for Me? Analysis and Interpretation This instrument assesses proactive personality. It identifies differences among people in the extent to which they take action to influence their environments. Proactive personalities identify opportunities and act on them; they show initiative, take action, and persevere until they bring about change. Research finds that the proactive personality is positively associated with entrepreneurial intentions. The higher your score, the stronger your proactive personality. For instance, >85 = high proactivity. Should you be an Entrepreneur? Answer these questions: Are you a self-starter? No one will be there prompting you to develop projects and follow through on details. How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors, staff, bankers, and professionals such as lawyers, accountants, and consultants. Will you be able to deal with a demanding client, an unreliable vendor, or a cranky employee, in the best interests of your business? Should you be an Entrepreneur? How good are you at making decisions? Small-business owners make decisions constantly, often quickly, under pressure, and independently.. Doyou have the physical and emotional stamina to run a business? Can you handle 12-hour workdays, six or seven days a week? How well do you plan and organize? Research indicates that good plans could have prevented many business failures. Furthermore, good organization (not just of employees, but also of financials, inventory, schedules, production, and all the other details of running a business) can help prevent problems. Should you be an Entrepreneur? your drive strong enough to maintain Is your motivation? Running a business can wear you down. Some business owners feel burned out by having to carry all the responsibility on their shoulders. You’ll need strong motivation to make the business succeed and to help you survive slowdowns, reversals, and burnout. How will the business affect your family? The first few years of business start up can be hard on family life. The strain of an unsupportive spouse may be hard to balance against the demands of starting a business. There also may be financial difficulties until the business becomes profitable, which could take months or years. Intrapreneurship Intrapreneurship is the development, within a large corporation, of internal markets and relatively small autonomous or semi-autonomous business units, producing products, services, or technologies that employ the firm’s resources in a unique way. Intrapreneurship usually does not just mean creating products that are similar to what the company already sells. It leads to something new for the corporation a represents a break from the past. Intrapreneurship Intrapreneurial activities have helped corporations like Cisco Systems, Sun Microsystems, and Intel create and spin off several successful companies. Without intrapreneurship companies would exist until they become obsolete. Intrapreneurship is key to companies re-inventing themselves.