Chapter 3

THE INDIVIDUAL ENTREPRENEUR

 Is there an exact entrepreneurial profile in
terms of characteristics and background?

 This chapter addresses this question by looking

at an individuals feelings about Control,
Independence & Willingness to take risks;
ones family, education & occupational
backgrounds; motivation; skills; male
versus female entrepreneurs;
entrepreneurs VS inventors & general
entrepreneurial profiles
Entrepreneurial Feelings

 Locus of Control
A quality indicating the sense of control that
a person has over his life.
 Internal Locus of Control
Believing that one’s success depends on one’s
own efforts.
 External Locus of Control
Believing that one’s life is controlled more by luck
or fate than one’s own efforts.
Table 3.1
Checklist for Feelings about Control
When things go right and are terrific for you, do you Yes No
think, “Its mostly luck!”?
Do you think that if you decide to do something, Yes No
you’ll do it and nothing can stop you?
If you want something, do you ask for it rather than Yes No
wait for someone to notice you and “just give it to
you”?
Even though it’s scary to try something new, are you Yes No
the kind who tries it?
Even though people tell you “it can’t be done,” do Yes No
you have to find out for yourself?
Entrepreneurial Feelings

 Feelings of Independence and Need for

Achievement
 Need for Independence signifies the feeling of
being one’s own boss and is one of the strongest
needs of an entrepreneur.
 Need for Achievement is derived from Mcelland’s
Need Theory, which states that a person with a
high need for achievement is driven by the desire
to succeed and measures that success against a
personal standard of excellence.
Table 3.2
Checklist for Feelings about Independence
I want to be financially independent. Yes No
I often need to ask other people’s opinions before I Yes No
decide on important things.
If my friends wont go to a movie I want to see, I will Yes No
go by myself
I want the approval of others. Yes No
I hate to go shopping for clothes alone Yes No
Entrepreneurial Feelings

 Risk Taking
 Starting a new venture involves putting at stake
money, hard work and lots of time.
 This involves a certain amount of risk as success is
not guaranteed and all efforts and resources could
go wasted.
 Only a person willing to risk it all can succeed.
Table 3.3
Checklist for Willingness to Take Risks
Do you like trying new foods, new places, and Yes No
totally new experiences?
Can you walk up to a total stranger and strike up a Yes No
conversation?
Do you need to know the answer before you’ll ask Yes No
the question?
Do you need to know that it’s already been done Yes No
before you are willing to try it?
Can you take risks with money, that is, invest, and Yes No
not know the outcome?
 Entrepreneurial Background and
Characteristics
 Childhood Family Background  .
 A child’s future occupation is Birth Order
shaped by what kind of
environment he or she has at
home.
 Being the first born is also
believed to have some effect on Parents Occupation
the self-confidence of the person
and ability to start a new venture.
 If a parent is an entrepreneur
then its natural that the child will Social Status
find it easy to become one as
well.
 Their support is also a deciding
factor in the success of the Relationship with parents
entrepreneur. (Fathers for female E)
Entrepreneur Statement

My father was so consumed by the venture he

started and provided such a strong
example, it never occurred to me to go to
work for anyone else
Entrepreneurial Background and
Characteristics
 Education
 There are numerous success stories of
entrepreneurs who were high school dropouts.
 But most of the entrepreneurs have some kind of
higher education to their credit.
 It is not necessarily business related education but
is enough for the entrepreneur to better
understand his business and define new ways to
grow it.
Technical Vs MBA degree
Entrepreneurial Background and
Characteristics
 Personal Values
 An entrepreneur has a very distinct set of values
that make him break off from conventional
practices and start his own venture.
 Values like: superior product quality; quality
service to the consumers; flexibility to adapt to
change in the market; high caliber management;
and honesty and ethics in business practices,
define an entrepreneur’s mind frame.
Leadership traits- creativity- opportunism- intution

When is it permissible to tell a lie?

Entrepreneurial Background and
Characteristics
 Age
 It is necessary that an entrepreneur begins the
new venture at a time when he has the maximum
amount of energy – experience- financial support
 The optimal age for such activity would be
somewhere from the age of 22 to the age of 45.
 At this time a person has the right amount of
stamina and experience.
Entrepreneurial Background and
Characteristics
Lack of opportunities- frustration & boredom->
 Work History Motivation launching new venture
 The work history of a person is one of the major
factors in prompting a person to start a new
business.
 If the person was not satisfied with his past
experience, then he might find it easier to come
up with good business practices that suit his taste
and yield the kind of results that he wants.
Managerial experience/skills
 And what he has learnt from his experience may
also help him in growing the business.
Motivation

 Every entrepreneur is motivated by one thing

or the other when starting a new venture.
 The motivational force helps the person
overcome all the problems associated with
the business and guides him towards the
achievement of his goals.
 This motivation could be making money or
being independent of others and being one’s
own boss.
Role Models

 A role model is important in an

entrepreneur’s life because it influences every
action that he performs.
 A role model can be one’s parents, siblings,
close relatives or other entrepreneurs.
 An entrepreneur follows the example of his
role model in everything and feels motivated
when trying to personify his role model.
Support Systems
Moral-Support Network
 Individuals who give psychological support to
an entrepreneur.
 Entrepreneurs need to establish a moral-
support network of family and friends—a
cheering squad.
 Friends can provide:
 Advice. *Encouragement.
 Understanding. *Assistance.
 Relatives can be strong sources of moral support,
particularly if they are also entrepreneurs.
 Support Systems
Professional Support Network

 Entrepreneurs need advice and counsel

throughout the establishment of the new venture
which can be obtained from:
 Mentors Expert in field- advising buddy
How to find a mentor ?
 Business associates Self employed- Consultants, lawyers
Clients & buyers- word of mouth advertising
Suppliers- trends & competition industry

 Trade associations New developments & provide

overall industry data
 Personal affiliations Shared hobbies-sporting events-clubs
Schools alumni ( source of referrals, advice)
Male Vs Female
Entrepreneurs
 Differences in terms of motivation, business
skills, occupational background, support
systems and sources of funding
 Men- drive to control their own destinies, to
make things happen
 Women- need of achievement arising – job
frustration- promotional opportunities
Forming 70 % of new businesses
8.5 M small businesses employing over 17 M people
45% increase since 90’s
Characteristics Male Entrepreneurs
Motivation Achievement, Personal
Independence, Job Satisfaction
Departure Points Dissatisfaction with current job,
Layoff, Opportunity for Acquisition,
Sidelined
Sources of Funds Personal Assets and Savings, Bank
Financing, Investors, Loans from
Friends and Family
Occupational Experience in Line of Work,
Background Recognized Specialist, Competent
in a Variety of Business Functions
Personality Opinionated and Persuasive, Goal
Characteristics Oriented, Innovative, Idealistic,
High Level of Self Confidence,
Enthusiastic and Energetic, Must be
Own Boss
Support Groups Friends, Professional
Acquaintances, Business Associates, Women’s Professional Groups,
Spouse
Female Entrepreneurs
Achievement, Independence
Job Frustration, Change in
Personal Circumstances,
Recognition of Opportunity
Personal Assets and Savings,
Personal Loans
Experience in Area of Business,
Service-related Background,
Middle Management
Experience
Flexible and Tolerant, Goal
Oriented, Creative , Realistic,
Medium Level of Self
Confidence, Enthusiastic,
Energetic
Close Friends, Spouse, Family,
Trade Associations