WHAT IS AN ENTREPRENEUR?
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1 WHAT IS AN ENTREPRENEUR? Introduction Let s look at what the word entrepreneur means. An entrepreneur is: Any person who identifies an opportunity in the market, gathers resources and creates and grows a business venture to meet these needs. He or she bears the risk of the venture and is rewarded with profit if it succeeds. Chair in Entrepreneurship, University of Pretoria An entrepreneur, therefore, owns and runs their own business and assumes the risk for the potential of profit. So, opening a small business involves both risk and financial investment. An entrepreneur decides to take control of his / her future and become self-employed, whether by creating his / her own unique business or working as a member of a team. The entrepreneur invests in their business, produces goods or sells services in return for profit. The next definition to consider is the word success. The dictionary definition of success is: Fortune, prosperous progress, achievement, attainment of wealth, influence or acclaim. Many of us equate success with money, and of course, money is important to all of us. However, we cannot substitute a meaningful life for money. There are millions of people all over the world who are miserable and unfulfilled. Their life lacks purpose. Therefore, one must establish one s purpose and goals in life. Ask yourself: What do you want from life? and then identify how you are going to achieve this. The real thrill of entrepreneurship is creating something from nothing. Entrepreneurship requires vision, creative thinking, a knack for getting things organized and a lot of hard work. Being an entrepreneur is no easy task, and therefore entrepreneurs should be saluted. Version 2: August 2017 Copyright My Cyberwall
2 Nelson Mandela put it perfectly in his book, A Long Walk to Freedom. A brave man is not he who does not fear, but he who conquers fear. The entrepreneur identifies opportunities and turns them into a successful venture. Although some entrepreneurs work on their own, others create jobs, which helps reduce unemployment and poverty, at the same time as helping the economy to grow. Even through many entrepreneurs run small businesses, they employ over half the number of people who work in the private sector (as opposed to the government / public sector) in South Africa. So, entrepreneurs are vital in the fight against poverty and unemployment because larger companies cannot create enough jobs. The government is trying to expand the economy of South Africa by encouraging and supporting small businesses in various ways. Version 2: August 2017 Copyright My Cyberwall
3 Why Become an Entrepreneur? People become entrepreneurs for many reasons. Look at these reasons below. Characteristics of an Entrepreneur The success or failure of most businesses, depends on the person at the top. In a small business, this means the business owner or entrepreneur. It takes certain characteristics to become successful in business. Very few people are lucky enough to be born with all these characteristics. Although there is no single entrepreneurial personality type, there are characteristics that many successful entrepreneurs share. Version 2: August 2017 Copyright My Cyberwall
4 These characteristics include: Drive and Attitude Entrepreneurs are nearly always competitive by nature and have a strong need for achievement. This motivation is the key factor in their success, as their desire to succeed drives them in business. Entrepreneurs make things happen rather than just thinking about things. They are positive and enthusiastic. Determination and Commitment Business success is never easy. It requires hard work and resilience to overcome obstacles that stand in the way. Successful entrepreneurs learn from their mistakes, are not easily discouraged and never give up. Hard work and personal sacrifice are usually involved in becoming a successful entrepreneur. People Skills and Leadership Entrepreneurs are interacting with other people all the time customers, staff and suppliers. Those with good people skills can communicate well with people from all walks of life. They are sociable and enthusiastic, and this inspires the people around them. Entrepreneurs also need support from their family and try to achieve a work-life balance. Planning and Organizational Ability The ability to plan and set goals is high on the list of success traits. A strong vision guides the entrepreneur to achieve success. The entrepreneur needs to be good at organizing and managing their time, as they have multiple priorities. Version 2: August 2017 Copyright My Cyberwall
5 Money Handling Skills Running a business involves managing finances, so good entrepreneurs understand the importance of keeping finances under control, especially managing cash flow. Creativity and Innovation The best entrepreneurs have a head for business. They are always on the look-out for opportunities and new ways of making money. They identify and act on these opportunities but can balance the risk with reality. Great entrepreneurs also are strongly orientated to achieving excellence in everything they do. They strive to be the best and always act professionally. Health and Stress Management Having the drive and ambition to succeed in business demands a high level of physical and psychological fitness to handle the pressure involved. It helps if the entrepreneur is fit, active and emotionally stable. Are Entrepreneurs Born or Made? Research has found that the ratio is around 50:50 and that genetic and environmental factors do play a role. Business experience and entrepreneurial heritage, i.e. a family background in business, has been found to be helpful. Research has also found that successful entrepreneurs often start their business early and don t always have formal qualifications. Version 2: August 2017 Copyright My Cyberwall
6 Advantages and Disadvantages of Becoming an Entrepreneur The advantages: Version 2: August 2017 Copyright My Cyberwall
7 The disadvantages: Entrepreneurial Actions The entrepreneur must carry out four main functions to operate a successful business. These actions include the following: 1. Buying Depending on the type of business, entrepreneurs need to buy items such as: - Stock Stock is items that will be sold by the business, for example, various drinks for a tuck shop. - Raw materials These materials are used to make the finished product, for example, fabric, for a T-shirt manufacturer - Equipment These are the machines used to operate the business and are a capital item (assets in the accounts of the business). Some businesses require a lot of expensive equipment, such as vehicles, computers, etc., while others need very little. Version 2: August 2017 Copyright My Cyberwall
8 The entrepreneur must try to obtain the best prices for all purchases by negotiating with suppliers of the products and services. Reliability of suppliers delivery time is critical. Another important factor when buying items, is to purchase quantity at the right time. Otherwise, wastage will occur. 2. Production Production means making the product by changing raw materials into finished goods. Service businesses do not make products. Manufacturing businesses produce goods. The entrepreneur of a manufacturing business needs to decide on the production process, i.e., what will be made and how it will be made. Version 2: August 2017 Copyright My Cyberwall
9 3. Selling Selling means persuading customers to buy goods and / services of a business. Without sales, there is no business. Selling involves marketing the business to prospective customers, through advertising, faceto-face meetings, social media campaigns, referrals, etc. 4. Making a Profit The overall aim of running a business is to make a profit. If a business does not make a profit, it will go bankrupt and will have to close. The entrepreneur needs to know how much money is coming into the business (income) and how much is going out (expenses). To make a profit, the entrepreneur has to maximize sales and minimize costs. Accurate financial records of both sales and costs must be kept and monitored carefully at regular intervals. Version 2: August 2017 Copyright My Cyberwall
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