Entrepreneurial background and characteristics 4

Entrepreneurial background and
characteristics
5/20/2015 Entrepreneurial Leadership-HIMS

Small Business Owners
• Small business owners are people who own a
major equity stake in a company with fewer
than 500 employees.
• In 1997 there were 22.56 million small
business in the United States.
• 47% of people are employed by a small
business.
Entrepreneurial Leadership-HIMS5/20/2015

Employee Satisfaction
• In companies with less than 50 employees, 44% were
satisfied.
• In companies with 50-999 employees, 31% are
satisfied.
• Business with more than 1000, only 28% are
satisfied.

28
31
44
0
10
20
30
40
50
less than 50 50-999 1000+
Number of Employees
SatisfactionPercentage
less than
50
50-999
1000+

Advantages of a Small Business
• Greater Opportunity to get rich
• Feel more important
• Feel more secure
• Comfort Level

Disadvantages of a Small Business
• Lower guaranteed pay
• Fewer benefits
• Expected to have many skills
• Too much cohesion
• Hard to move to a big company
• Large fluctuations in income possible

Why NOT to be an Entrepreneur
• Uncertainty of income
• Risk of losing entire invested capital
• Lower quality of life until business gets
established
• High levels of stress
• Complete responsibility
• Constant depression during initial phase (do
or die)

Who are entrepreneurs?
• Common traits
– Original thinkers
– Risk takers
– Take responsibility for own actions
– Feel competent and capable
– Set high goals and enjoy working toward them

• Common traits
– Self employed parents
– Firstborns
– Between 30-50 years old
– Well educated – 80% have college degree
and 1/3 have a graduate level degree

Why should you be interested?
• Many young people have succeeded:
– Michael Dell - Dell Computers
– Frank Carney - Pizza Hut
– Paul Orfalea - Kinko’s
– Fred DeLuca - Subway.
– Kristy Taylor - SkinCareRx.com
• Opportunity to reap large profits

Successful and Unsuccessful
Entrepreneurs
• Successful
– Creative and Innovative
– Position themselves in
shifting or new markets
– Create new products
– Create new processes
– Create new delivery
• Unsuccessful
– Poor Managers
– Low work ethic
– Inefficient
– Failure to plan and
prepare
– Poor money managers

Characteristics of Entrepreneurs
Successful
Entrepreneurs
Key Personal
Attributes
Good Technical Skills
Strong Managerial
Competencies

Key Personal Attributes
• Entrepreneurs are Made, Not Born!
– Many of these key attributes are developed early in life, with
the family environment playing an important role
– Entrepreneurs tend to have had self employed parents who
tend to support and encourage independence, achievement,
and responsibility
– Firstborns tend to have more entrepreneurial attributes because
they receive more attention, have to forge their own way, thus
creating higher self-confidence

Key Personal Attributes (cont.)
• Entrepreneurial Careers
– The idea that entrepreneurial success leads to more
entrepreneurial activity may explain why many
entrepreneurs start multiple companies over the course of
their career
– Corridor Principle- Using one business to start or acquire
others and then repeating the process
– Serial Entrepreneurs- A person who founds and operates
multiple companies during one career

• Need for Achievement
– A person’s desire either for excellence or to succeed in
competitive situations
– High achievers take responsibility for attaining their goals,
set moderately difficult goals, and want immediate
feedback on their performance
– Success is measured in terms of what those efforts have
accomplished
(McClelland’s research)

• Desire for Independence
– Entrepreneurs often seek independence from others
– As a result, they generally aren’t motivated to perform
well in large, bureaucratic organizations
– Entrepreneurs have internal drive, are confident in their
own abilities, and possess a great deal of self-respect

• Self-Confidence
– Because of the high risks involved in running an
entrepreneurial organization, having an “upbeat” and self-
confident attitude is essential
– A successful track record leads to improved self-confidence
and self-esteem
– Self-confidence enables that person to be optimistic in
representing the firm to employees and customers alike

• Self-Sacrifice
– Essential
– Nothing worth having is free (no pain no gain)
– Success has a high price, and entrepreneurs have to be
willing to sacrifice certain things

ENTREPR E NEURIAL FEELINGS
There is no "true entrepreneurial profile"- entrepreneurs come
from many educational backgrounds, family situations, and
work experiences.
A potential entrepreneur may presently be a nurse, secretary,
assembly line worker, sales person, mechanic, home maker,
manager or engineer.
A potential entrepreneur can be male or female and of any race
or nationality.

ENTREPR E NEURIAL BACKGROUND
Only a few background characteristics have differentiated the
entrepreneur from the general populace or managers.
Childhood Family Environment
The impact of birth order and social status has had conflicting
research results.
There is strong evidence that entrepreneurs, both male and
female, tend to have self-employed or entrepreneurial fathers.
Having a father who is self-employed provides a strong
inspiration in the example of independence and flexibility of self-
employment. This feeling of independence is often further
enforced by an entrepreneurial mother.

Education
Education appears important in the upbringing of the entrepreneur, in the level
of education obtained and in playing a major role in coping with problems.
Although formal education is not necessary for starting a new business, it does
provide a good background.
In education, entrepreneurs experienced some disadvantage, with few having
degrees in engineering, science, or math.
The ability to deal with people and communicate clearly in written and spoken
work is also important.
Academic qualification is a barrier or facilitator in the way of
entrepreneurship?
Article …………..

Age
Entrepreneurial age is the age of the entrepreneur reflected in the experience.
Entrepreneurial experience is one of the best predictors of success.
In chronological age, most entrepreneurs start their careers between ages 22
and 55.
Earlier starts in an entrepreneurial career seem to be better than later ones.
Generally, male entrepreneurs start their first venture in their early 30s, while
women tend to do so in their middle 30s.
Between 30-50 years old

Work History
Dissatisfaction with one’s job often motivates the launching of a new venture.
(Gift within trouble)
Previous technical and industry experience is also important once the decision
to start a business is made.
Experience in the following areas is particularly important: financing; product
or service development; manufacturing; development of distribution channels;
and preparation of a marketing plan.
As the venture becomes established, managerial experience and skills become
more important.
Entrepreneurial experience becomes increasingly important as the complexity
of the venture increases.

5/20/2015 Entrepreneurial Leadership- HIMS
MOTIVATION
While motivations may vary, the reason cited most often for becoming
an entrepreneur independence-not wants to work for anyone else.
Other motivating factors differ between male and female entrepreneurs.
Money is the second reason for men’s starting a venture.
Job satisfaction, achievement, opportunity, and money are the second
order reasons for women
Video….

Entrepreneurial background and characteristics 4

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