STARTING A BUSINESS VENTURE
The Entrepreneurial Process: Evaluating Entreperneurial Attributes and Factors
What is entrepreneurship? Many people have defined entrepreneurship in many ways. According to Joseph Schumpeter, a Moravian born economist, entrepreneurship is the destruction of existing economic order via the introduction of new products or services. I believe entrepreneurship can be a little less dramatic, we cannot all be Apple computer start-ups. To me, entrepreneurship is merely the creation of one's own business enterprise to fill a perceived market need. Individuals start their own business for a lot of reasons, unemployment, ambition, economic forces, new ideas, or a deliberate career choice, I am certain the lists goes on and on. Whatever the reason, I believe there is an entrepreneurial process that weighs heavily on the creation of a successful start-up business.
Below I will overview entrepreneurial attributes and factors and how I understand them and their relationship to the successful business venture.
EVALUATING ATTRIBUTES AND FACTORS
I believe there are three (3) primary factors that contribute to the start-up of a business venture: (1) personal; (2) sociological; and (3) environmental. These factors will weigh heavily on the success of the business venture start-up.
Personal factors may include mentors or role models, friends and family, creativity, a need for control, values, risk taking attributes, need for achievement, ambition, education, experience, and of course opportunities. I am certain there are other personal factors, but these tend to contribute greatly to the entrepreneurial experience.
I believe that successful entrepreneurs tend to have a higher locus of control, they like to be in control of their own fate and they tend to be achievement oriented. They have a picture in their mind's eye of what their future will be like as a business owner. Successful entrepreneurs do not procrastinate, they like to make decisions in a New York minute, and follow through with swift implementation. They are positive, optimistic individuals who are committed to there ideas and decisions. They enjoy a challenge and are very dedicated and devoted to the success of their vision. In addition, I believe successful entrepreneurs are detail-oriented and are willing to share the ownership with employees who are dedicated to the same visions and success of the business.
I also believe education and experience are very important to the start-ups success. Knowledge or experience about the basic elements of operating a business will be of paramount importance. I also believe that role models or mentors who are themselves entrepreneurs will help drive the business venture; thus, if the start-up is guided by a successful entrepreneur/role model the odds of success are much greater.
I believe that environmental factors are just as important as personal attributes. Environmental factors include, but are not limited to, role models, creativity, opportunities, competition, resources, governmental policies, customers, suppliers, bankers, and investors.
Role models can be a big part of the entrepreneurial process. Take for example African-Americans and Native Americans, in the early 1990s these Americans possessed a far lesser percentage of business ownership than their population percentage represented, despite governmental policies promoting these minorities. One possible explanation is the lack of role models in the business sector to instill confidence. I am certain there were other contributing factors, education, etc., however, there has been an increase in minority business ownership and I believe this is at least partly due to increased confidence because of role models.
Obviously, where a market sector is economically thriving, and investors, bankers and the customer base are active, this environmental setting will be conducive to entrepreneurship, and role models abundant. Of course, competition, another environmental factor, may also be abundant. Thus, it is imperative to differentiate your product or service from the competition with innovative features, marketing or pricing strategies; unless of course your product or service is needed and there is little or no competition--the ideal environment for the entrepreneur.
Sociological factors also play an important role in the entrepreneurial venture. Family responsibilities can be very influential in the decision to start a company. An individual without dependents and who is unmarried will not have competing interests and have more time to dedicate to the business start-up. An individual without a mortgage, large car payments or other large financial responsibilities is more apt to take the risk associated with an entrepreneurial venture.
Age is another sociological factor that plays a role in the entrepreneurial process. Experience comes with age and optimism and energy is associated with youth. As an individual grows older they gain more experience, but they can also become more pessimistic. I believe the best case scenario is an individual with a good deal of managerial experience, but with a beginner's mind set, an excited can-do spirit. Some entrepreneurial ventures are best served by a partnership between a highly experienced and educated individual and a younger creative and ambitious counterpart. I believe that a balance between experience and youthful zest lies somewhere between 35-45 years of age.
At the onset the entrepreneur needs to assess the market demand for the product or service. Many great and innovative products and services have failed for many reasons, and some of the less impressive ideas flourished. In summary, I would recommend that before you engage in a new business venture consider your personal attributes, your environmental and sociological factors, and the market demand for products and services that are similar or the same as those to be offered by your new business venture.
The start-up of a new business venture involves a lot of preparation, including a business plan which I will discuss in my next article.