15 characteristics of a successful entrepreneur

The characteristics of a successful entrepreneur are:

An entrepreneur should possess all such characteristics with the help of which he can perform as a successfully. Most common attributes of an entrepreneur can be courage, good-judgement, initiative, skillful, competent, perseverance and emotional stability. Let us discuss these characteristics in detail.

CHARACTERISTICS :

(1) Calculated Risk-taker :

A risk situation occurs when one is required to make a choice between two or more alternatives whose potential outcomes are not known and must be subjectively evaluated. A risk situation involves potential gain or loss. The greater the possible loss, the greater is the risk involved.

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An entrepreneur is a calculated risk-taker. He enjoys the excitement of a challenge but he does not gamble. An entrepreneur avoids low-risk situation because there is a lack of challenge and he avoids high-risk situation because he wants to succeed. He likes achievable challenges.

An entrepreneur likes to take realistic risks because he wants to be successful. He gets greater satisfaction in accomplishing difficult but realistic tasks by applying his own skills. Hence, low-risk situation and high-risk situation both are avoided because these do not satisfy the entrepreneur.

(2) Innovator :

Schumpeter differentiates between an inventor and innovator. An inventor discovers new methods and new materials and an innovator is the one who utilizes those discoveries and inventions. Not only this, the entrepreneur further exploits the inventions commercially and thus produces newer and better goods which give him profit and satisfaction.

Innovation may occur in the following forms :

(i) The introduction of new goods.

(ii) The introduction of new methods of production.

(iii) The opening of a new market.

(iv) The conquest of a new source of supply of raw-material.

(v) The carrying out of the new form of organisation of any industry.

The entrepreneur locates ideas and puts them into effect in the process of economic development. According to Baumol, an entrepreneur is a Schumpetarian innovator and something more than a leader.

There is a distinction between an entrepreneur and a manager. According to Schumpeter, a manager is one who deals with day-to- day affairs of the business whereas an entrepreneur is the owner and makes policies and takes decisions.

Rogers and Shoemaker have summarized their findings concerning the attributes of an innovator. The innovator according to them is :

(i) More educated

(ii) Higher in social standing

(iii) Less dogmatic

(iv) More empathetic

(v) Better equipped to deal with abstraction

(vi) More receptive to risk in general

(vii) Higher in achievement motivation

(viii) Higher in social participation

(ix) More cosmopolitan

(x) More often engaged in inter-personal communication

(xi) A more active information seeker

(xii) More knowledgeable about innovations

(xiii) An opinion leader

(xiv) More in contact with persons outside the social systems.

(3) Organiser :

An entrepreneur has to bring together various factors of production, minimize losses and reduce the cost of production. Initially, he may take all the decisions but as the enterprise grows, he starts delegating the authority. He produces that best results as an organizer. Not only this, it is the entrepreneur who has to pick or select the right piece of land, choose the right person and opt for the financer. He must be able to inspire loyalty and hard work amongst the workers to raise productivity and efficiency. In order to expand the business, he must have willingness to delegate authority and trust his sub-ordinates and managers although shaping of long-run policies of the enterprise would remain in his hands.

An enterprising entrepreneur should be energetic, resourceful, alert to new opportunities and able to adjust the changing conditions. As J.B. Say observes, an entrepreneur must have “Judgement, perseverance, and knowledge of the world as well as business. He is called upon to estimate, with tolerable accuracy the importance of specific product ; the probable amount of demand, and the means of its production, at another, buy or order the raw material, collect labourers, find consumers, and give at all times rigid attention to order and economy, in a word, he must possess the art of superintendence and administration.”

(4) Creative :

Creativity, as a field knowledge, seeks to explain how humans, either individually or collectively, reach solutions that are both novel and useful. Innovation means the effort to create purposeful ventures.

Harry Nystrom states that innovation may be defined as radical, discontinuous change and creativity is the ability to devise and successfully implement such changes. Successful innovations depend on creativity and one of the most important requirements of an entrepreneur is to be creative as creativity may be taken as the cause and successful innovation as the effect.

(5) Achievement Motivated :

McClelland explicitly introduces the need for achievement motivation as a psychological motive and implicitly emphasized the need for achievement as the most directly relevant factor for explaining economic behavior.

Achievement motivation is a drive to overcome challenges, to advance and to grow. An entrepreneur is achievement-oriented person, not ‘money hungry’. He works for his desire for challenge, accomplishment and service to others.

Achievement concern refers to the accomplishment of excellent, innovative and risk involving tasks. The organizational goal of an entrepreneur can be boosted by inculcating in him the need for achievement.

Galbraith point out that lack of ambition is the cause of backwardness of many countries. Ambition is an under one’s own resourcefulness. It electrifies actions. Spirit of need for achievement, if inculcated in people, earn drive people to specific actions and the nation can adopt the path of development

(6) Technically Competent :

Success of an entrepreneur depends largely upon his ability to adopt latest technology. Technical knowledge implies the ability to devise and use new and better ways of producing and marketing goods and services. An entrepreneur must have a reasonable level of technical knowledge. Technical knowledge is the ability that people can acquire with hard work.

An entrepreneur who has a high level of administrative ability, mental ability, communication ability, human relations ability and technical knowledge can be more successful than a person with low level of these abilities. A dynamic entrepreneur must also be interested in changing the pattern of production to suit the requirements.

(7) Self-confident :

It is necessary for an entrepreneur to be self-confident. He should have faith in himself, only then he can trust others.

In an expanded business, delegation of authority is a must and only a self-confident entrepreneur can delegate his authority. He can seek cooperation of his staff and inculcate a sense of team work in them.

(8) Socially Responsible :

In the context of the universal urge for social change and economic development, the old concept of an entrepreneur seeking certain advantages for himself is no longer acceptable. The changing environment calls for a socially conscious entrepreneur who is not threatened by progress of others. On the contrary, he acts in full awareness of social repercussions of his actions. His entrepreneurial ability may create jobs for others. He may invent new products and new manufacturing methods. He may innovate new ways of doing things. All these have social consequences. An entrepreneur should think of projects of social significance and of importance to others. He should expand his entrepreneurial activities, in order to help in creating conditions for social change and for development of businesses which benefit the society. Such an attitude for others raises the level of entrepreneurship from that of an individual activity to a meaningful social endeavour.

(9) Optimistic :

An entrepreneur should approach his task with a hope of success and optimistic attitude. He attempts any task with the hope that he will succeed rather than with a fear of failure. Such a hope of success enhances his confidence and drives him towards success.

(10) Equipped with Capability to Drive :

Drive is a person’s motivation toward a task. It comprises of such personality traits as responsibility, vigour, initiative, persistence and ambition. An entrepreneur must exert considerable effort in establishing and managing his business. Those entrepreneurs who work hard in planning, organising, coordinating and controlling their businesses are more likely to have a successful business than the entrepreneur who is lost and haphazard.

(11) Blessed with Mental Ability :

Mental ability that contributes to the success of an entrepreneur consists of overall intelligence, i.e., IQ, creative thinking ability and analytical thinking ability. An entrepreneur must be intelligent, adaptable, creative and he must be able to engage in analysis of various problems and situations in order to deal with them.

(12) Human Relations Ability :

personality factors such as emotional stability, personal relations, sociability, consideration and tactfulness are important contributors to entrepreneur’s success. One of the most important facets of human relations ability is one’s ability to “put himself in someone else’s place and to know how the other person feels. This is the ability to practice empathy.

The entrepreneur must have good relations with his employees, customers etc. He must be aware of the needs and motivations of customers if he is to adequately train his employees to maintain good customer relations.

(13) Communication Ability :

An entrepreneur must possess the quality of communicating effectively in written and oral communications. Good communication also means that both the sender and the receiver understand and are being understood.

Robert D. Hisrich has highlighted the following key characteristics of an entrepreneur.

(i) Motivator (ii) Self-confidence (iii) Long-term involvement (iv) High energy level, (v) Persistent problem-solver (vi) Initiative (vii) Goal setter (viii) Moderate risk taker.

(14) Decision-Making :

An entrepreneur must be clear and creative when it comes to decision-making. He must believe in himself and should be possessing ability to take decisions effectively. Decisions taken should be based on quantitative facts. Decisions which affect organization’s future and are likely to be irreversible must be taken with great care.

An entrepreneur might have to take decisions without the assistance of quantitative data or experienced support staff, then he has to be more creative than just a conventional manager. Such problems have to be seen from different angles and answers must be sought in an innovative way. Decisions taken must improve the future profitability of the enterprise. Entrepreneur’s past experience, intuitive decision-taking ability, rational approach, problem-solving ability, creativity, innovativeness etc. will help him take quick and accurate decisions. A rational approach is a logical and sensible way to solve business problems. Hot only this, decision taken is not enough unless it is implemented. Boldness and enthusiasm are required to implement a decision. Once a decision is implemented, all doubts and uncertainties should be left behind. A positive attitude of the entrepreneur, a sense of security allows him to make key decisions with little fear of the consequences. Such qualities make him leader and others followers. Ability to deal with ambiguity and uncertainty help the entrepreneur in attaining the goals and aspirations of his organisation.

Here are some tips to become a good decision-maker. (1) Define the Problem (2) Collect information and relevant data (3) Begin with a ‘brain storming’ session and discuss the problem with each other (4) Never criticize or reject any solution suggested during the brain storming session (5) Encourage group members to come up with potential solutions (6) Reduce the number ot alternatives to three or four after discussion (7) Consider each alternative extensively and determine the best to meet your needs. (8) Implement decisions. Decision-making is an art ; the more one practices it, better expert he/she becomes.

(15) Business Planning :

A thousand-mile Journey begins with but a simple step . The decision to become an entrepreneur is the first step followed by the choice of the product. As the business venture is undertaken, need for planning arises. It is the rigor and thoroughness of the business plan which could be behind the successful entrepreneur throughout his venture’s life.

Planning is really nothing more than decision making that is, deciding what to do, how to do and when to do. It is vital for the success of a business. As a business person puts it .

”Planning is so important today that it occupies a major part of the time of the most respected men in business. Planning allows us to master change. It forces us to organize our expectations and develop programs to bring them about. Planning is the most effective way to draw out the best in all of us-our best thinking, out best interests and aims and to enable us to develop the most efficient way of achieving our maximum goals.

Business Planning begins the moment you decide to open business, to the moment you open the business, to the years you are actively engaged in business, A business plan, if updated every year goes a long way in serving the entrepreneur throughout venture’s life, irrespective of the fact whether he is full-time or part-time, traditional or home-based, running u tiny unit or a cottage industry.

The idea of a business plan is not new, what is new is the growing use of such plans by entrepreneurs. It has been a misconception that starting a business calls for little planning. The fact is that all business needs planning. Most of the entrepreneurs don’t prepare formal business plan. They don’t plan rigorously do it entirely in their heads. This lack of formal planning explains why some entrepreneurs fail.

Not only outside pressures, but insiders also have an interest in the business plan. These pressures force entrepreneur to develop their businesses on paper before investing time and money. These pressures flow from creditors, investors, shareholders, etc. when the entrepreneur approaches for money. These outside pressures are healthy.

• Entrepreneurs benefit because a business plan makes them better appreciate what it will take to succeed.
• Business plan give better information to the outsiders to decide whether to help finance the entrepreneur.
• The entrepreneur’s employers may also use the business plan as a blue print for harnessing their energies for years to come.

Business planning is imperative if entrepreneur has a vision and needs an idea of where he wants his business to be. Just as one would not think of launching a manned space capsule without a flight plan, so one should not think of launching a new business without a business plan (Format of a business plan has been given in chapter ‘Venture Capital).

In addition to the characteristics discussed earlier, researchers have found some qualities which contribute to an entrepreneur’s success. These qualities happen to be :

(1) Initiative

(2) Personality

(3) Technical competence

(4) Good Judgement and intelligence

(5) Leadership

(6) Courage

(7) Self-confidence

(8) Honesty and sincerity

(9) Compatibility

(10) Confidence in employees

(11) Ability to delegate authority

(12) Ability to criticize and readiness to accept criticism.

(13) Aggressiveness

(14) Decision-making ability .

(15) Mental calibre

(16) Foresightedness

(17) Imagination

(18) Perseverance

(19) Patience

(20) Sense of Justice

(21) Resourcefulness

(22) Scientific mind

(23) Ingenuity

(24) Organisational ability

(25) Politically conservative

(26) Ability to coordinate activities

(27) Hopeful

(28) Skill in inter-personal relations

(29) Willingness to learn

(30) Worried

(31) Self-sacrifice

(32) Sense of Justice

(33) Integrity

(34) Loyalty

(35) Considerate.