WHAT IT TAKES TO BE A SUCCESSFUL ENTREPRENEUR?

ABSTRACT

The article speaks at length about the basic jargon of entrepreneurship like angel investors, venture capitalists and their role. It differentiates between entrepreneurship and intrapreneurship and the qualities that are essential for becoming a successful entrepreneur. The advantages of entrepreneurship and what triggers entrepreneurs to resort to innovation and it justifies that innovation and entrepreneurship are two sides of the same coin. It mapped out a plan for budding entrepreneurs to pursue their passion. At the end it has concluded that entrepreneurship is only for brave heart.

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KEY WORDS: Introduction, Angel Investors, Venture Capitalists and Their Role, Entrepreneurship vs. Intrapreneurship, Characteristics of Entrepreneurs, Advantages of Entrepreneurship, Innovation & Entrepreneurship, Entrepreneurship As a Career, Conclusion.

“An entrepreneur assumes the risk and is dedicated and committed to the success of whatever he or she undertakes” Victor Kiam.

INTRODUCTION:

Human beings have the inherent quality of competitive spirit. Individuals want to prove themselves as extraordinary with identity for themselves. Individuals chart their own routes for success. A few take the path of entrepreneurship to display their extraordinary abilities. Majority of them fail and only a few succeed in their entrepreneurial journey. Why? Is it due to lack of abilities or because of other reasons beyond human control? Let us look at the same. Before we begin let us get to know the jargon related to entrepreneurship.

ANGEL INVESTORS:

Angel investors will provide critical capital and guidance in turning the dreams of entrepreneurs into realities. A few provide mentoring to the entrepreneurs. By this they promote entrepreneurship and further employment opportunities indirectly. Angle investors are basically affluent people who offer their capital for the ambitious entrepreneurs for setting up new business ventures and they provide their knowledge as well in few cases. They are also called as business angels. Angels invest their own money. They could be retired and experienced people in their domain who are passionate in offering their services and guidance to the next generation. Angels are very much beneficial to the venture capital industry.

VENTURE CAPITALISTS:

Venture capitalists invest their money in new ventures, or growing companies and also in the companies that are starving from funds. Usually they are with deep pockets and entrepreneurs approach when they need more funding. They invest in high growth companies so that they can have quick, fast and high returns for early exit for reinvesting their funds in other start-ups. Their duration of investment may be approximately from 3 to 10 years. Venture capitalists need not be rich people but can pool the resources to make it a limited company. The risks involved are higher and as a result, their returns are also higher. In majority of the cases the failure rate is higher and proportionately their losses could be higher. As a result they keep high margins and expectations to offset the losses in other firms. They also involve in the functioning of the firm as they are accountable. Some entrepreneurs do not like their involvement as they meddle in the affairs of the company. That is the reason why few call them as vulture capitalists because of the same reason. But when we look at from the perspective of the venture capitalists there is a strong reason to involve in the formulation of the policies of the company as there is involvement of financial risk and also accountability. There are some venture capitalists who act as mentors to the entrepreneurs.

ROLE OF VENTURE CAPITALISTS:

Venture capitalists are a group of professionals who form a corpus and offer their investments for setting up new business enterprises. The capital comes from high net worth individuals and institutional investors. They invest in exceptionally high growth sectors where risk is high and returns are also high. They do not usually have more than 7 years of timeframe. They are aggressive and want quick results so that they can exit and go for funding other business ventures. There are five stages of VC funding and in the first stage they encourage the idea which they are convinced, in the second stage they generate the idea by minimizing the risk of failure, in the third stage they assist in setting up the enterprise, in the fourth stage they help in growth of the enterprise and in the fifth and final stage they exit the venture.

ENTREPRENEURSHIP VS INTRAPRENEURSHIP:

Entrepreneurship is the art and science of setting up a new business venture right from conceptualization to completion with an intention to earn profits. It is a discipline and it is being taught at the educational institutions. Those who do not like to work in any organization and those who are passionate in starting off their own will go for entrepreneurship. There are many risks involved in it. According to Wikipedia, Entrepreneurship is the practice of starting new organizations or revitalizing mature organizations, particularly new businesses generally in response to identified opportunities.

On the contrary, intrapreneurship is the art and science where an idea would be encouraged by the employer to try out without any risk on the part of the employee and with the risk on the part of the employer. If the idea clicks the employer would get huge benefits and the employee would get excellent rewards by way of promotions or incentives. By this way the new ideas of the employees are encouraged by the employer by encouraging the employees. Many companies encourage their employees to become intrapreneurs to encourage their creativity and innovation. Intrapreneurship is sometimes referred as ‘corporate renewal’ and it was coined by author and innovator speaker Gifford Pinchot.

According to Wikipedia, Intrapreneurship is the practice of using entrepreneurial skills without taking on the risks or accountability associated with entrepreneurial activities. It is practiced by employees within an established organization using a systemized business model.

Entrepreneur is the employer and the intrapreneur is the employee. While the former creates the empire of his own right from the scratch the intrapreneur gets everything equipped with regular pay checks. The returns for the entrepreneur are far higher than the intrapreneur as the risks are also higher. The entrepreneur always looks at the broad and big picture where as the intrapreneur looks at the small picture. To sum up it is ultimately the entrepreneur who takes the final call not the intrapreneur.

CHARACTERISTICS OF ENTREPRENEURS:

• They are basically optimists with an attitude of “do or die”. They believe in converting problems into prospects. They are undeterred by stiff opposition.
• They are passionate in what they are doing. They take up the tasks that they love the most. They are burning desire to become big. They have fire in their bellies.
• They believe in their gut feeling and intuition. They are excellent decision makers and are willing to risk to any extent.
• Money is not the motivation for them. They get immense satisfaction when they achieve something that is usually unachievable by others.
• Thinking big and dreaming big is one of the fundamental traits of entrepreneurs.
• Taking up a new idea, experimenting the same and learning lessons from failures is the quality of entrepreneurs. They are continuous learners and trailblazers leaving mark behind.
• Getting into the rat race is the least expected quality of entrepreneurs. They stand apart from the crowd. They follow the unconventional routes and strongly believe in innovation and creativity.
• Entrepreneurs are excellent communicators and effective net workers. These two skills promote their entrepreneurial ambitions. These two keep fueling their goals.
• They believe that change is constant and they keep reinventing themselves.
• Their energy levels are always higher and they always demonstrate their enthusiasm.
• They are round the clock workers and they enjoy working and they love crises and are very good trouble shooters.
• Team spirit is the essential ingredient for effective entrepreneurs. They bring synergy and leverage the same to reach their goals and objectives.
• They are self-starters and self-motivators.
• They don’t like routine and are always different. They are impatient and independent and always crave for recognition and prestige.
• They know their strengths and weaknesses better than others and have the uncanny ability to covert their weaknesses into strengths.
• Looking at the broad and big picture is the quality of the entrepreneurs. When confronted with problems they see for various complications and implications involved in it with their imagination.

ADVANTAGES OF ENTREPRENEURSHIP:

• Entrepreneurship ensures great satisfaction of creating your own rules and regulations and working with freedom as per your convenience. It provides a kind of excitement which is missing in employment.
• There is sense of independence to work as per your convenience. There is no one to boss over you.
• It is a kind of thrill as there is always an element of risk involved in it and this uncertainly provides you excitement. There is tendency to work harder so as to get the results. More the amount of hard work more the returns.
• It helps in stretching out your abilities and helps in widening your thinking base with a big picture.
• There is always an element of adventurism in entrepreneurship.
• Entrepreneurship encourages competition resulting into innovation and creation of new products and services. It makes the entrepreneurs always alert thereby adding dynamism and enthusiasm. It also helps in developing new markets. And it brings benefits to the consumers and customers by way of reduction in prices. Rather it is like more for less to the consumers.
• It promotes all kinds of sectors and especially the services sectors in the contemporary business world. Entrepreneurship can not be confused with ordinary business. The entrepreneurship involves creativity and innovation while the ordinary business involves with traditional functions.
• Helps you in expanding mental abilities extraordinarily as entrepreneurs plays multiple roles which is challenging.
• Lot of employment opportunities can be created. When work under somebody it only offers limited scope of working for somebody. Where as when you work independently more jobs can be created.

INNOVATION AND ENTREPRENEURSHIP:

“Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.” Peter F.Drucker.

Innovation is the process of implementation of new ideas. It is the process where new ideas are conceptualized and are made reality. It may come as a result of competition or may be as a result of need to have new products or services. Innovation is the conversion of knowledge and ideas into a benefit, which may be for commercial use or for the public good; the benefit may be new or improved products, processes or services. Innovation has several steps such as researching, discovering, developing, patenting, producing, marketing for viability and adopting. For survival of any enterprise it is necessary to innovate constantly. It is equally important to welcome change and adapt the change for achieving the desired objectives. Innovation and change go together. It is basically because when you innovate you need to change the things for the new conditions and environments. There are several types of innovations such as mechanical, chemical, biological, managerial and institutional and so on. It is the inventors and researchers who covert every problem into prospect through innovation. Ultimately it is the entrepreneurs who encourage the inventors and researchers to innovate so as to keep their enterprises vibrant. Majority of the companies earmark a percentage of their profits in R&D which does all the activities related to innovation. To put it succinctly innovation and entrepreneurship are two sides of the same coin to keep the enterprise kicking and alive.

ENTREPRENEURSHIP AS A CAREER:

Entrepreneurship as a career is catching up across the globe. As every problem leads to a prospect, the laid off employees begin thinking in terms of setting up their own enterprise. The dot.com era has produced many entrepreneurs and the technology is opening more gateways towards entrepreneurial adventurism. Those who dislike working under somebody and those who are fed up working under somebody are trying to set up their own enterprises to test their waters. Although success rate is low yet the zeal to entrepreneurship is strong among the youth. Universities are also coming out with course curriculum to encourage entrepreneurship among the students. The course content would help to have the theoretical outlines and guidelines to get acquainted with key concepts, case studies, policies and procedures and it will help to have apprentice in the selected companies as an experience and exposure. Mere theoretical knowledge would not help for becoming a successful entrepreneur. The students should work in companies for some time to understand the corporate culture, business ethics, policies and various basic functions of any organization. Working in a company also provides valuable contacts which help in setting up one’s own enterprise. According to the research findings, the success rate is higher among the entrepreneurs with business or working experience than that of others who do not have any experience at all. It is also advisable to work during the day time and set up enterprise as a part time till the business gets established. Once the business goes on with good speed and it requires full attention and also the confidence to earn the returns is higher then an individual can switch over smoothly to entrepreneurship on a full time basis. Society needs to be sympathetic towards the entrepreneurs who fail and the governmental support is necessary in case of failures to bail out the budding entrepreneurs.

CONCLUSION:

Becoming an entrepreneur is not a cakewalk. Entrepreneurship is for brave heart. There is no magic wand to entrepreneurial success. It requires lot of struggles and sacrifices to become a successful entrepreneur. Above all it requires the ability to experiment, willingness to take risk, facing failures, the uncanny ability to spot the opportunities and the knack to convert problems into prospects and last but not the least the passion to pursue till the end despite several constraints and setback.

T H E E N D