Literature Review on Entrepreneurial Qualities and Characteristics

CHARACTERTICS OF AN ENTERPRENEUR 1

2.1 Introduction

An entrepreneur is the person who is a leader as well as the manager. And necessarily in the

same order. The entrepreneur always starts with finding a leader and then a manager.

(Forbes, 2013)

2.2 Definition of terms

A successful entrepreneur is the one who has achieved his goals and in accordance with his

own perception, values and the purist of the gaols. Further, Timmons and Spinelli (1994)

described the entrepreneur as someone who: possesses not only a creative and innovative flair

and other attitudes and behaviours but also solid general management skills, business know-

how, and sufficient contacts.

(www.fiereproject.eu, 2015)

An entrepreneur must have a very good understanding of the markets. They must know what

the customer want and how their products must be modified and change with the changing

requirements of the market. He must have good ideas.

(Businesscase studies.co.uk, 2015)

Any person can start a business irrespective of his or her age, his or her creed, his or her

religion. An entrepreneur must have the following characteristics in order to be successful:

1. Passion: any person who has just started off his business is in the look for a much

deeper purpose other than mere mechanics of running the business. The mission is to

start a business. The main aim of Yes Man Matches is to empower the people to

realise the most important and irreplaceable thing in life, which is time. He gets up in

the morning without any intention to waste his day. In a person is inclines towards a

start-up company, then no one can stop him from turning his dream into reality. If he

does not have that spark, then even working for late hours coupled with getting up

early in the morning will not take the business anywhere.

2. Perseverance: the entrepreneurs must have the ability to deal with the obstacles.

Since, Rome was not built in a day, so does the business. The entrepreneur must get

used to the people saying no. He needs to be of strong mind-set. He must be so strong

that he must get up even if the business fails a lot of times. A study was undertaken of

the new entrepreneurs, when about 10 were interviewed, they had the same thing to

say that they were unable to get the patents for the business and if they would not

have had this trait, they would have easily given up. He must follow up. People will

present a number of excuses not to call you back but the main thing is that you must

CHARACTERTICS OF AN ENTERPRENEUR 2

never give up. If the entrepreneur shows determination towards any given task, then

he is bound to get the positive results.

3. Resourcefulness: an entrepreneur has a very limited number and amount of assets that

are available at his disposal. He must know how to make the best use of the same.

Tapping the limited amount of the resources is the key.

4. Open mindedness: as an entrepreneur, he must think that has no business plan but he

must learn to consider the opinion of the others. Then after considering the present

situation and the circumstances, he must adjust the same. As Mark Cuban once said,

“Follow the green, not the dream.” If your dream start up won’t make you any money,

you may need to change your focus. When my friend Morgan Schwanke started On

My Block, he originally wanted to focus solely on a social platform for college

students to find off-campus housing. He now concentrates his start up on every aspect

of renting an off-campus space; it provides tenant listings to landlords and facilitates

the making of rent payments.

5. Sponge like nature: being an entrepreneurs is a process of learning. He must make

sure that he is learning something new each day. If he is not learning anything new,

then he must decide to leave the start-up world. He must be able to soak in everything

just like a sponge does. The more a person learns, the better it’s for him.

Entrepreneurship is also about a 9 to 5 job. He must only and only think about his

business. He must live, think, breathe, eat his business idea and think of how could it

be made a success.

(www.enterpreneur, 2014)

6. He must be very good at networking since without the contacts, the business cannot

grow. He must have the ability to learn. The people learn from the practices of IET

and derive ideas from them.

7. He must have a belief in his own abilities and ideas.

8. He must be able to generate ideas. He must keep on think as to how he can improve

his products and render new services so as to make the business profitable.

9. He must keep on motivating himself. He should have the vision to see through the

things and see the exact emotions and the intentions that are behind a person.

10. He must have the ability to have just more than the ideas for the business and the

many different ways through which he can achieve his objectives.

11. He should be able to research and evaluate the various aspects of the business,

beginning from development through the function of finance, production, marketing

and sales.

12. He must have the ability to take the decision even if they are exposed to risks.

13. His focus should also be to ensure that his products are sold at a profit.

(Businesscase studies.co.uk, 2015)

The following are further characteristics or the qualities of an entrepreneur:

1. Strong leadership qualities: a leader is the ones who has a goals set in his mind and

who values that goal even if it brings unpleasant experiences. He is the person who

has the ability of directing the entire team towards the common goal in the way

through which the entire team is motivated and works effectively. He trusts and

CHARACTERTICS OF AN ENTERPRENEUR 3

respects his team and demonstrates the positive work qualities and confidence and

helps in the creation of the values through them. A leader who is not followed by

anyone is no leader.

2. Highly self-motivated: an entrepreneur is the person who goes out into the world with

the aim of making changes. Nobody will gain anything by sitting back and by waiting

to find them. The most successful entrepreneurs in the world have only been the

people that have enjoyed an intense personality. Leaders are the people who enjoy the

challenges and try to solve the problems that confront them. They are the people that

adapt well to the changing environment. He keeps on changing the goals from time to

time and drive the people towards them by motivating them. He is the person who is

passionate about the ideas and is determined to achieve the same.

3. Strong sense of basic ethics involved: any business is sustainable only when it follows

a certain code of ethics. The main thing to be kept in mind is the fact that the cheaters

and the thieves win in the shorter term, they do not last for long. The business that

aims to succeed will have the highest standards of ethics to follow. They will have the

highest standards of integrity and they will not compromise on anything. If an

entrepreneur cannot prove himself to be a credible businessman, then he will

eventually run out of business. When working with clients, it is important that the

entrepreneur accepts to his mistakes and offers a solution for the same rather than

lying about the same or blame others of dwell upon the problems itself.

4. Willing to fail: the successful entrepreneurs are willing to take risks even they have a

high probability of failure. In fact, the successful entrepreneurs state that they are able

to take the best decision of their lives in the worst cases. But they also say that even in

the most favourable times and with the best decision, things do not go as have been

planned and in turn there is a high possibility of a failure. The old people say that

“nothing ventured, nothing gained”, it is actually exactly the same. So, an

entrepreneur must never be afraid to take the risks.

5. Know what you do not know: the entrepreneurs must learn what they do not know

and then learn it. The successful entrepreneurs have a very strong personality and this

is because they have learnt what they did not know earlier. They are confident and not

egoistic. They are not self-centred to the point where they prohibit from seeing the

bigger picture altogether and then making the right decision for the business.

6. Competitive spirit: an entrepreneur likes challenges. Starting up a new business in

itself is a war to win the and then new challenges crop up every now and then. It is a

challenge in itself to grow from nothing to a powerhouse so that either it earns a lot of

money or is so effective that if it is sold, then it is sold at a profit.

(MBDA., 2015)

(Forbes, 2014)

(Lifehack.orhg, 2015)

(Ccsenet.org, 2015)

7. Age: Kristiansen and Indartistated that the most successful entrepreneurs are

relatively young and aged 25-44 years.

(Waset.org, 2015)

CHARACTERTICS OF AN ENTERPRENEUR 4

2.3 Previous studies

All the emerging researchers have found that the concepts of social capital and founding team

of entrepreneurship is also very important. But it is also true that the many of the conclusions

that have been drawn from the literature must be very strictly reviewed and believed with

caution since the methods that are used to derive the conclusions have a number of

shortcomings attached with it. The major shortcoming in this is that the studies that analyses

the samples derives these samples from the new ventures that makes the observed association

between the variables very difficult to interpret and that may sometimes give out some

negative feedback and results. This is very important and holds a great amount of implication

both for the researchers as well as for the policy makers. The studies also suggest that the

study of the performance of the entrepreneurs benefit to a great extent from the development

of the rigorous and a systematic research program that identifies the drivers of the

performance of the entrepreneurs as the distinctive economic activity.

(Sorensen and Chang, n.d.)

As per a researcher, any discussion that is related with the qualities of an entrepreneur starts

with the human capital. This is the first and the foremost requirement when any business is to

be set up is the presence or the existence of the talented people who are open and are willing

to take risks so as to implement an idea. The regions that have the high entrepreneurial

activity usually take 2 approaches. The first is the make an attempt to increase the pool of the

potential entrepreneurs. This is attempted by engaging the educational institutions, investing

money in the researches and promoting the innovation and commercialization.

The second approach is associated with the focussing on providing the support to the existing

entrepreneurs by giving them advices, educating them and offering them the services that

would help them in the development of the processes in the business for handling them same

in the most efficient manner.

When we review the literature, we may realise that the entrepreneurs are born since they have

that special something in them that helps them in taking risks and they are born with it but

then, there is also some literature that suggests that the entrepreneurs are not born, they are

developed. Lichtenstein and Lyons during the year 2001, state that the supply of the

entrepreneurs can never be taken for granted but they refuse to accept the fact that there is

nothing that could be done in order to change it. In order to change the supply of the

entrepreneurs in any particular region, the policy makers must and must invest in the research

and development and in the education of that region.

2.4 Related theories

Geotz and Freshwater published a literature during the 2001 that stated the impact of the

financial and human entrepreneurial capital and the ideas of the entrepreneurial activities at

the state level and found that the raw ideas and the basic innovations were associated with the

activities of the entrepreneurs. They also realised that the ideas and the human capital had

some sort of interaction between them. When the results were reviewed, they realised that

there are opportunities that exist that could expand the entrepreneurship by increasing the

human capital in the state. The researchers further stated that such an expansion would go on

CHARACTERTICS OF AN ENTERPRENEUR 5

to increase the effectiveness with which the ideas have been translated into the output of

entrepreneurship.

The growth of entrepreneurs is fuelled and is instigated by the innovative ideas, states and the

regions that are concentrated with the entrepreneurial activities that focus on the programs

and initiatives that encourages the innovation. The most effective way of fuelling the

innovative ideas and the propelling the growth of the entrepreneurial growth of the

companies is by investing in the education and research. A report that was established during

the year 2002 by the National Commission on Entrepreneurship stated that the policymakers

must keep some amount aside so as to spend on the research and the development activities in

the physical science so that it remains in conformity with the investment in the life science.

Further, the amount spent could be used in providing the incentives for the universities so that

the same could be used to roll out the growth of the entrepreneurial companies and this also

provides the incentives to the various colleges as well as the universities in order to produce

more number of graduates in science and engineering. The commission also stated that the

public policy is very effective when it comes to the businesses that do not go on their own.

The report further focussed on the intervention policies of the federal government and it also

made recommendations at the state and the local levels. The state and the local policymakers

have an access to the limited amount of the resources in order to support the research at the

large scale but, on the other hand, it can help in building the institutional research capacity by

providing an adequate support to the institutions of the higher education thereby developing

the special initiatives in order to encourage the students to take the subjects like science and

engineering. This will also go on to facilitate the university and the industry collaboration and

would eliminate the barriers that exists today to commercialisation of research.

(urban.csuohio.edu, 2015)

In accordance with another literature review, the concepts of the entrepreneur and the

entrepreneurship tracks these concepts to the historical succession. The entrepreneurship is

the practical activity that appears in ambiguity. This creates the scientifically theoretical

framework that has been carried since the outset of the 18th century. In this respect. There are

a number of opinions of the nature of entrepreneurial activities. The main feature that has

been described by the researchers is the presence of the drive to take risks. Many of the

authors have regarded the concept of innovation as being the core of the concept of

entrepreneurship. Whereas, many more have identified the presence of the use of the

opportunities as the basic condition of entrepreneurship. The research revealed that there

were two concepts that went hand in hand and without one, the other would be of no use.

In accordance with the findings of Sanchez 2011, wherein the studies were conducted mainly

in the entrepreneurship from an economic, managerial orsociological perspective. And this

study focussed less on the sociological perspective. In accordance with Den Prag (1999), a

possible direction of the future research would be the study of the leadership entrepreneur

relation. The research also stated that the researches must be directed towards the putting the

different perspective of the entrepreneurship approach in the integrated framework. The

review further stated that the research on the subject must be broadened in order to identify

the new features of the entrepreneur that is specific to the context that is being studies.

(SergiuRosu, 2012)

CHARACTERTICS OF AN ENTERPRENEUR 6

Besides the fact of the presence of the quality like innovation, the on the job training is also

very important to become an entrepreneur. Further, the other important characteristics

includes the formal education, personal characteristics, tactical knowledge, social capital and

the availability of the financial capital or the wealth of an individual.

(www.wsb.edu.pl, 2015)

2.5 Research Framework

A study was undertaken in accordance with which the requirement of becoming an

entrepreneur is the need of an achievement, focus of control, creative thinking. The family,

society education ad economic environment are also very important.

(Rnd2.ncue.edu.tw, 2015)

In accordance with the study wherein the neoclassical theory was used, the following were

the revelations (Blanchflower and Meyer, 1991):

1. An entrepreneur is a person who expects the maximises of his utility as is his or her

workers

2. All the individuals that observe and have the capability to take an advantage of the

new business opportunities

3. The probability distribution of the risk associated with the business can objectively be

measured and can be known to each and every one. The entrepreneurs have the higher

levels of risk tolerance and that is the main reason of their success.

(Branch, 2012)

An entrepreneur must possess the ability of control himself in the most depressing situations.

The success of an entrepreneur comes from his own ability which is popularly called the

inside force and from outside which is also termed as the external force.

(Iiste.org, 2015).