Entrepreneurs need strong leadership skills to guide a business. Key qualities include intelligence, initiative, innovation, self-confidence, communication skills, and the ability to coach employees. Profit is essential for a business to survive and grow by rewarding risk, enabling reinvestment, and allowing businesses to fulfill social obligations. Entrepreneurs should regularly self-assess their management style, organization structure, communication, production, marketing, personnel policies, finances, and relationships with external stakeholders to strengthen their business and overcome weaknesses. There are many sectors where entrepreneurs can start businesses, such as pharmaceuticals, insurance, tourism, banking, transportation, communication, education, food, garments, agriculture, and brokerage.

1. LESSON 7 ENTREPRENEURSHIP NOTES
Leadership Qualities of an entrepreneur
Entrepreneurs need to be good leaders because they are persons who take charge of or
guides performance of an business activity. To be a good leader, one must possess good
qualities. The leadership qualities of an entrepreneur include:
1. Intelligence i.e must have good educational and/or technical knowledge
2. Initiative- be able and willing to do the right thing at the right time without being
told by the others
3. Innovative – should be imaginative in order to develop new ideas and come up
with new ways of handling the activities
4. Self-confidence- courage to solve problems and face challenging situations
5. Communication skills- should be well understood when communicating
6. Coach and guide- should be able to coach and guide efforts of the other employees
7. Human skills- should have good interpersonal skills i.e ability to relate well with
the others
8. Administrative skills i.e ability to plan, organise, to direct and control the activities
of his group/ of the business. This enables him to run the organization smoothly
and in orderly manner.
9. Discipline - this enables him to command discipline of his employees
10. Patience - this enables him to take appropriate decisions and not hasty decisions
Necessity of Profit Orientation in Entrepreneurship
All business decisions are influenced by economic considerations like return on capital
or profit. It is true that profit is the main purpose of business, and it is absolutely
necessary for survival and growth. This implies that if profit is taken away from business,
then there is no sense in undertaking business activities
The role of profit in entrepreneurial business activities can be justified on the following
grounds:
1. It is the indicator of efficiency- an enterprise which uses minimum resources and
maximizes profit is said to be efficient.
2. It is also an indicator of effective managerial control over subordinates
3. It is the reward for risk and uncertainties- Business means risk and uncertainities.
Business should make profits adequate to cover risk if the enterprise is to survive
4. Industrial growth- Profit is essential for growth and expansion of business activities
in future
5. Return on investment- profit is justified as a measure on investment i.e profit is the
reward to the owner who risk his investment in anticipation of good return. It is

2. important to enable the entrepreneur to recover the cost of innovations, research
and development
6. Survival of business - A business enterprise must ensure survival against
competition, change in technology, consumer behavior, political situation,
government policies etc. Any change in the business surrounding cause problem of
survival, thus in order to survive and stay in the uncertain business world, profits
are important
7. Social obligation- profit is essential if the business is to achieve its social obligations
such as providing higher dividends to investors, better working conditions and
welfare facilities to employees
8. It is the basis for comparison between firms. It is used to distinguish between
successful and non-successful firms
9. Profit is a source of revenue for the government i.e. is used when computing taxes
to be paid to the government
10. Profit improves goodwill and prestige of the enterprise
Need for Self-assessment of an entrepreneur and his firm
There is need for continuous self-analysis of an entrepreneur and his firm in order to
identify their strengths and weaknesses. This helps to consolidate the strengths and to
overcome the weaknesses. The weaknesses may include:
1. Problems relating to styles of management- entrepreneur usually follow autocratic
style of management, where he may not consult his employees in decision-making.
After self-evaluation, the entrepreneur may have to follow situational style of
management which depends on the situations
2. Problem of organizational structure- Entrepreneurs believes in centralization of
authority. The organization structure is rigid i.e not flexible, and the chain of
command needs to be followed strictly by the employee. After self-evaluation, the
entrepreneur may relax the chain of command
3. Problem of communication- entrepreneur emphasizes more on downward
communication i.e from top level to lower level. Communication is also more formal.
With self-evaluation, the entrepreneur may end up encouraging upward and lateral
communication
4. Problem of production- such problems include poor product design and poor
production planning and control. If this is a problem, the entrepreneur may
reconsider customer requirement, material requirements and production facilities
after self-evaluation
5. The entrepreneur may face marketing problems related to improper pricing policies,
poor distribution system and poor promotion strategies. Self-evaluation enables the
entrepreneur to consider cost of production, demand and competition in the market

3. before setting prices of his products. He may also have to evaluate distribution
systems and methods of promotion in order to success in the market
6. Problems related to personnel/employees policies such as lack of training and
development, and faulty placement. After evaluation, he may correct those problems
7. Problem of finance such as poor management of the working capital. After self-
evaluation, the entrepreneur may come up with new ways of managing finances
including looking for new sources of the finance
8. Problem with external agencies such as: customers, suppliers and government
authorities. After self-evaluation, the entrepreneur may undertake: corporate
advertising, publicity and public relations to improve the relationship with external
agencies
Scope/areas of Entrepreneurship
The entrepreneurs have scope in the following areas:
 Drugs and pharmaceutical industry
 Insurance companies
 Travel and tourism industry
 Banking industry
 Transport
 Communication
 Education
 Food industry
 Garments
 Agriculture
 Brokerage