ENTREPRENEURIAL VENTURES & EXPLORATION

OF THE ENTREPRENEURIAL MINDSET

Violet
07|08 |2018
 TABLE OF CONTENTS

Introduction 1

Entrepreneurship 1

- Entrepreneurship in the Public and Corporate Sector

- Entrepreneurial Profile: Will King, King of Shaves

Businesses 3

- Micro and Small Businesses

- Start-Ups

- Differences between Small, Medium and Large Businesses

Successful Entrepreneurs 4

- Traits

- Mindsets

- Motivations

- Entrepreneurial Profile: Helen Colley, Farmhouse Fare

Conclusions 7

Bibliography and References 8

INTRODUCTION

Entrepreneurship is one of the fundamental components of economic and social growth. It brings
forth national, regional and local development. For this reason, even though the entire concept of
entrepreneurship seems simple, the entire working of it is complicated and dynamic. An individual’s
entrepreneurial capabilities differ proportionately to life experience and knowledge they have
acquired. The report aims to discuss various aspects of entrepreneurs and entrepreneurship
extensively.

ENTREPRENEURSHIP

An entrepreneur is an individual who starts and runs a business with restricted resources, taking
account of risks and rewards associated with entrepreneurial ventures. Entrepreneurs do not use
existing business models.
An entrepreneurial venture refers to some risks that are taken to pursue an opportunity and to
establish a new business. The first product or service launch is typically innovative and brand new.

There are four types of entrepreneurial ventures:

-Independent Businesses
-Social Good Enterprises
-Established Companies
-High Growth Companies

The following table differentiates between them.

SOCIAL GOOD ESTABLISHED

TYPE INDEPENDENT BUSINESSES HIGH GROWTH COMPANIES
ENTERPRISES COMPANIES

FIRM Small Business Lifestyle Social Good Large Business Scalable Startup Second-Stage

Elephants; Major Innovation- Gazelles;

Less than 100
Microenterprises Desire to make a Brands with Focused Firms independently-
IDENTIFIER Employees
and Freelancers Social Impact Established that create or Owned with
Reputation change Markets High Growth

Create
Create Profit and Long-Term Significant Create Revenue Strategic
Maximize Impact
AIM Stability for Employment; for Revenue for for Founder and Growth; for
Sustainably
Business Profit Company and Investors Profit
Stakeholders

Restaurants;
Companies that Producers of life- $2-10M in
Retail Stores; Self-Employed
solve Global saving Revenue; >20%
FIELDS Construction Individuals; One- Corporations
Health Issues; medicines; IT Growth/Year for
Firms; Person Firms
Non-Profits Companies 4 Years
Agriculture

-Entrepreneurship in the Public and Corporate Sector

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“Public sector entrepreneurship is the promulgation of innovative public policy initiatives that
generate greater economic prosperity by transforming a status-quo economic environment into
one that is more conducive to economic units engaging in creative activities in the face of
uncertainty.” (Leyden and Link, 2015)

Entrepreneurship in the private sector involves establishing and operating businesses primarily for
profit.

Small Business Entrepreneurship: A standard definition of a small business is one that employs fewer
than 100 employees. These are independently owned and operated for-profit enterprises. 99.7
percent or approx. 27.8 million businesses in the United States are considered small.
These businesses include those of restaurants, retail stores, construction firms.
They employ 53% of the private sector workforce in the United States.

Lifestyle Entrepreneurship: Lifestyle businesses are for-profit enterprises that aim to earn the
founder/s a long-term, residual income through providing goods and services related to their
passions or fields of expertise. These include self-employed individuals and one-person firms.

Scalable Startup Entrepreneurship: These are innovation-led enterprises, that aim to create or
change existing markets through new technology-based goods and services. They typically generate
large amounts of money and create the most jobs and opportunity. High-growth.
Examples of these businesses include companies producing medical devices or developing life-saving
medicine, IT companies developing B2B software or apps and cleantech-geared firms.

Large Company Entrepreneurship: These are established corporations, often with above 500
employees that aim to bring in significant revenue for the organization and its stakeholders. They
are also called elephants and typically receive their capital from revenue, tax credits, and
subsidiaries. They also employ around 38% of the private sector workforce.

Social (Good) Entrepreneurship: Enterprises that are built on innovative solutions that solve global
health issues with their products or specific problems in developing countries are Social Good
Businesses. Non-Profits are included. These companies aim to create substantial social impact and
improve lives.

Second-Stage Companies: These are independently owned and operated for-profit enterprises that
have the potential to become dominant in their field. They are also called Gazelles. These companies
are called high-growth when they are at least three years old, have between $2-10m in revenue and
are experiencing a >20% growth per year for four years. High-growth companies have the potential
to create significant revenue, jobs, and economic impact by maximizing the right opportunities for
growth.

-Entrepreneurial Profile: Will King, King of Shaves

“When Will King decided he intended to call his shaving oil King of Shaves, he faced a problem. Using
the words ‘King of' was deemed to be a laudatory trademark implying that his product was the best,
and so was not allowed. King responded by simply hiring a patent attorney and arguing his case in
the European Patent Court. He won. King had always had trouble shaving because he had sensitive
skin and the razor would leave his face itchy and bleeding. So, one day his girlfriend suggested that
he put some bath oil on his skin before shaving and see if it made a difference. It did. He says: ‘It felt
fantastic. I didn't get any razor burn. I thought if this works for me, it will work for other people.'
Inspired by the discovery, he bought a selection of exotic and essential oils from an aromatherapy

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shop and mixed them at home to create a shaving oil. Then he tracked down the supplier and bought
large quantities of the oils, funding his venture by taking out a £10,000 loan and borrowing £30,000
from two friends in return for shares in the business. He says: ‘I filled 10,000 bottles by hand at home.
It took me two weeks.' King quickly decided that if his oil was going to be a success, it needed to be
stocked by Harrods. By the end of the first year, King had made sales of just £300, with most of the
oil sold to friends and family and had racked up losses of £30,000. When he needed £10,000 to pay
for a publicity campaign he had to sell 12.5 percent of the company to a friend's brother. Fortunately,
in 1994 he persuaded Boots to stock his oil, and by the end of his second year in business, sales had
risen to £58,000. He says. King also worked hard to get editorial coverage in the new wave of men’s
magazines such as FHM and GQ. In 1995 he launched a second shaving oil and the following year he
launched a range of men’s skin care products. King of Shaves products began to be stocked in major
supermarkets, and the company started making fragrances under license for the clothing chain Ted
Baker. The business, in which King has a substantial minority stake, was expected to have sales of at
least £30 million in 2010. Now 44 and divorced with one son, King thinks the secret of his success has
been to create a product that people need. It also comes down to a large dose of self-belief.”
(Bridge[a], 2010)

BUSINESSES

-Micro and Small Businesses

Microbusiness: Businesses that operate on microscopic scales, often with no more than ten
employees are microbusinesses. These include 96% of all businesses in the UK in 2016.

Small Business: A small business generally employs less than 100 people.
Small businesses employ 49.2 percent of the US private sector workforce and account for 43 percent
of total private payroll in the United States.
In the UK, over 99% of businesses in 2016 were small and medium enterprises. It is estimated that
more than 27 million people [25.7%] are employed under small-scale businesses across the UK, and
this includes both men and women. (Anderson, 2017).
Small businesses create more jobs than big businesses do.
It is also important to state that the overall growth of the small scale is surging, in comparison to the
big companies in the UK, and according to Anderson (2017), the primary reason for this growth
factor is the introduction of innovativeness and creativeness in the strategic and operational area in
the small businesses.

-Start-ups

A startup is a newly created business.

These aim to develop new products or services in uncertain circumstances. If they satisfy a new
need, they also have excellent growth potential. Startup entrepreneurship is so important to the
economy because it offers new jobs to the private sector workforce and brings competition into the
business environment. Without the new jobs from new startups, employment growth would be
negative.

-Differences between Small, Medium and Large Businesses

The usual definition of small and medium-sized enterprises (SMEs) is any business with fewer than
250 employees. There were 5.7 million SMEs in the UK in 2017, which was over 99% of all

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businesses. SMEs play a significant role in economic growth, providing the source for most new jobs.
Over 95% of enterprises are SMEs, which account for 60%-70% of employment in most countries.

Large businesses, with more than 250 employees, accounted for 0.1% of businesses but 40% of
employment and 49% of turnover.

“As larger firms downsize and outsource more functions, the weight of SMEs in the economy is
increasing. Besides, productivity growth – and consequently economic growth – is strongly
influenced by the competition inherent in the birth and death, entry and exit of smaller firms. This
process involves high job turnover rates – and churning in labor markets – which is an important
part of the competitive process and structural change.” (Mutegi, H., Njeru, P. and Ongesa, N. (2015)

Small businesses in the UK play a very crucial role in the economic growth and sustainability of the
country. A significant percentage of the population within the UK is employed, or in other words,
working for, small businesses; these small enterprises act as a core generator of employment in the
industry. With this employment, the flow of cash within the economy becomes active (Lewis, 2013).
Many small businesses that are successful or just emerging are opening up significant opportunities
for the local and regional population of the UK.

New jobs and opportunities are created by small businesses, which in turn contribute to the more
significant economic growth of the country itself. Apart from being a reason for the economic boost
and employment, they are also playing an important role in modernizing the entire UK's financial
structure as well as the lifestyle. When understanding the facts tabled here, it becomes more
evident, the role of small businesses and their contribution towards the social and financial economy
of the nation.

SUCCESSFUL ENTREPRENEURS

-Traits

Entrepreneurial skills can be learned but not taught.

Baum at al. (2014) determines that the entrepreneurial personality is formed at a childhood stage of
development, and the external environment in which a child grows up in has a significant influence
on his personality. Individuals who are raised in an environment of creativity and freedom have
shown prominent traits of leadership and management when compared to individuals who were
raised up in strict childhood environment.
A few characteristic traits and skills of successful entrepreneurs that differentiate them from other
business managers are discussed below:

- Charisma: This trait is essential for when pitching a product to another large company or attracting
angel investment.
- Innovation: Without this trait, entrepreneurs are just regular small business owners.
- Non-conforming: While all employed managers have to have specific qualifications to administrate,
entrepreneurs use their own experiences, ideas, and knowledge to create businesses their way.
- Passion: Entrepreneurs are passionate about their products and services and have a desire to
improve their services and enhance the experiences of their customers.

-Mindsets

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-Freedom-Oriented: They often start businesses because they prefer the independence and self-
sustainability entrepreneurship provides them. Entrepreneurship provides people with the freedom
to choose where they live, what hours they work, and what they do. Many people place priority on
lifestyle issues such as more family and leisure time.

-Opportunistic Mindset: Entrepreneurs spot opportunities where others do not. Disruptions, in their
perspectives are just opportunities to capitalize on.

-Tolerant of Risk and Failure: Most businesses have failed by the 4-year mark, so entrepreneurs and
business owners cannot give up in the face of failure and have to accept risk as a natural part of
achieving big goals.

-Non-Conformists: Entrepreneurs choose to do things their way. They often find the boundaries,
rules, and traditions of corporate life stifling and boring.

-Motivations

Economic Opportunity: The economic growth that spanned most of the last 25 years in America
created a substantial amount of wealth among new entrepreneurs and gave them many business
opportunities to capitalize on.

Lower Costs: Internet-based subscriptions and pay-per-use services have reduced business start-up
and operation costs. Small companies with rapid growth now have the option to substitute cloud
computing applications for networks of computers and large office spaces.

Shift to a Service Economy: The service sector accounts for 82.5 percent of the jobs and 79.7 percent
of the private sector gross domestic product (GDP) in the United States, both of which represents a
sharp rise from just a decade ago. Because of their relatively low start-up costs, service businesses
have become very popular among entrepreneurs. The booming service sector continues to provide
many business opportunities.

General profiles of entrepreneurs often include optimism and other entrepreneurial characteristics
such as self-confidence, independence in decision making, creativity, and willingness to accept risks.
Much of the work on entrepreneurial characteristics has discussed high achievement driven, action-
oriented, internal locus of control, tolerance for ambiguity, moderate risk-taking, commitment,
opportunistic, initiative, independence, commitment/tenacity, creativity, and optimism (Liang &
Dunn, 2003; Malach-Pines, Sadeh, Dvir, & Yafe-Yanai, 2002; Crane & Sohl, 2004; Liang & Dunn,
2008(1)). Optimism is also characterized as a negative factor in entrepreneurship, however. Being
overconfident and unrealistically optimistic drive entrepreneurs to over-estimate the odds they will
succeed (Baron & Shane, 2005; Hey, 1984). Optimism has also been linked to the risk tolerance and
high expectations (Petrakis, 2005). Optimists often deluded themselves into becoming
entrepreneurs with high risks of failure (De Meza & Southey, 1996).

Entrepreneurs approach the business and decision-making process differently because of the
personality traits they acquire through time and life experiences. Education and experience is the
most significant catalyst in the formation of an individual’s personality, and the same applies to an
entrepreneur. Baum et al. (2014) points that traits such as self-motivation, self-management, and
coordination are essential in an entrepreneur and they are derived from factors such as education
and life experience since it is these aspects that make individuals surpass challenges in their way. For
example, Richard Branson says that his risk-taking ability is primarily formed from his past

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experiences since he believes that with each challenge an opportunity for knowledge opens up for
the individual.

One of the more prominent terms that have come up in scholarly articles on the subject of
entrepreneurship is the word ‘risk.' The concept of risk carries a tremendous opportunity as well as
challenges for the individuals, and it is one of the profound character traits in successful
entrepreneurs. It is also crucial that this risk-taking factor in an entrepreneur has developed with the
factors of knowledge and life experience. Therefore, for an entrepreneur who is initiating a business
startup, risk is one fundamental factor that he or she must understand in all its aspect, because risk
does not mean blindingly taking a leap of faith, instead constituting the idea through the calculation
of challenges faced in the past, making the entire process effective and efficient.

Dollinger (1995) states that the need for achievement, the locus of control and the risk-taking
propensity are the most discussed personality characteristics of an entrepreneur while Wickham
(2006) considers six broad approaches to defining the entrepreneur as a person. The six approaches
that he discusses are the ‘great person,' social misfit, personality type, personality trait, social
development approaches and cognitive approaches. In the ‘great person' approach, an entrepreneur
is someone special, a person who is born great and who will accomplish greatness. A social misfit is
an entrepreneur who cannot fit into existent social situations and therefore, needs to create one of
its own. In the personality type approach, individuals can be grouped into categories based on their
responses on how they act in certain situations. The personality trait approach places traits in
continuously changing dimensions and psychologists have differentiated between three types of
traits, which are the ability traits, temperamental traits, and dynamic traits. In the social
development approach, personality is a more complicated issue, and it develops all the time. The
three categories of factors are innate, acquired and social. The cognitive approach tries to develop
an understanding of how people acquire and process information and utilize it to understand the
world better. (Wickham 2006: 12-15)

Interestingly, recent papers have collectively suggested that entrepreneurship might be more
predetermined than previously thought – entrepreneurship education has been proven to be
effective in primary school (Huber et al., 2014) and, to a lesser extent, in secondary school (Elert et
al., 2015), but not at all when individuals are older, that is, students (Oosterbeek et al., 2010) or
adults (Fairlie et al., 2015). Moreover, strong intergenerational associations in entrepreneurship
have attracted considerable attention. While part of this relationship has been shown to be genetic
(Nicolaou et al., 2008), parental role-modelling appears to be the main driver of the
intergenerational association in entrepreneurship (Lindquist et al., 2015). Additionally, exposure to a
dense entrepreneurial environment during formative years also increases the likelihood of entry into
entrepreneurship (Guiso et al., 2015).

-Entrepreneurial Profile: Helen Colley, Farmhouse Fare

“Born and brought up with two brothers on her parents’ dairy farm in Lancashire, Colley spent much
of her time thinking up things to do. At the age of 9 she made animals out of shells and sold them in
post offices, and at the age of 14 she set up a tearoom in the front room of the house. Colley also
learned the value of hard work. She says: ‘We all had to go out and work on the farm. It would be all
hands on deck. I did the hens and the calves. I also enjoyed baking and would help mum with the
cooking.’ From the age of 10, Colley started working in local restaurants and cafes. While doing a
course in hotel management, she decided to start her own business as a caterer. A bank agreed to
give her a £250 overdraft facility and her parents let her use their kitchen. At first, Colley got work
doing teas for a friend's parents who ran a funeral business. She also made pies and bread to sell in
post offices and local shops, getting up at 3 am to make bread. As word spread, she started catering

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for weddings and parties in marquees throughout the north of England. A few years later, her
company, Farmhouse Fare, now makes 45 different types of pudding and her wares are sold in all
leading supermarkets. In 2006 Colley sold the business to Daniels Chilled Foods for £10 million,
giving her £8.5 million for her share.” (Bridge[b], 2010)

CONCLUSIONS

This report explores the concept of entrepreneurs and entrepreneurship, discusses the typology of
entrepreneurial ventures, and the contribution of businesses and entrepreneurial ventures towards
the growth of a nation. It also explores the attributes of entrepreneurs; their motivations and
mindsets.

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BIBLIOGRAPHY AND REFERENCES

Leyden, D. P., & Link, A. N. (2015). Public sector entrepreneurship: U.S. technology and innovation
policy. New York. Oxford University Press.

Bridge[a], R. (2010). 30 Entrepreneurs. p. 25-30, Kogan Page Limited. Great Britain

Bridge[b], R. (2010). 30 Entrepreneurs. p. 139-144, Kogan Page Limited. Great Britain

Anderson, E. (2017). Britain hits record number of startups as more aspiring entrepreneurs take the
plunge. telegraph.co.uk. Retrieved 3 August 2018.
http://www.telegraph.co.uk/finance/businessclub/11692123/Britain-hits-record-number-of-
startups-as-more-aspiring-entrepreneurs-take-the-plunge.html

Baum, J. R., Frese, M., & Baron, R. A. (Eds.) (2014). The Psychology of Entrepreneurship. Psychology
Press

Wickham, P., 2006. Strategic Entrepreneurship. 4th Edition. Essex: Pearson Education Ltd.

Mutegi, H., Njeru, P. and Ongesa, N. (2015). FINANCIAL LITERACY AND ITS IMPACT ON LOAN
REPAYMENT BY SMALL AND MEDIUM ENTREPRENEURS. International Journal of Economics,
Commerce and Management, [online] Vol. III(ISSN 2348 0386), pp.1-26. Available at:
http://ijecm.co.uk/ [Accessed 4 Aug. 2018].

Liang, K. & Dunn, P. (2003). Love, Life, and Family Ties: Couples’ Assessment of New Venture
Creation and Business Development and Family Relationships, Proceedings of the Association for
Small Business and Entrepreneurship.
http://www.sbaer.uca.edu/research/asbe/2003/pdfs/hub/24Liang&.pdf

Malach-Pines, A., Sadeh, A., Dvir, D., & Yafe-Yanai, O. (2002) Entrepreneurs and Managers: Similar
Yet Different, The International Journal of Organizational Analysis, Vol. 10, No. 2, p. 174.

Crane, F. & Sohl, J. (2004), Imperatives to Venture Success, International Journal of Entrepreneurship
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Liang, K. & Dunn, J. (2008) (1). Are Entrepreneurs Optimistic, Realistic, Both or Fuzzy?. Academy of
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st
Baron, R. & Shane. S (2005). Entrepreneurship: A Process Perspective, 1 Edition, Mason, Ohio,
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Hey, J. (1984). The Economics of Optimism and Pessimism, KTKLOS, Vol. 37, Fasc. 2. University of
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Petrakis, P.E. (2005). Risk Perception, Risk Propensity and Entrepreneurial Behavior: The Greek Case,
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De Meza, D. & Southey, C. (1996). The Borrower’s Curse: Optimism, Finance and Entrepreneurship,
The Economic Journal, 106, March, Cambridge, MA, p. 385.

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