In this paper I hope
to show how drive, determination, education and risk-taking can lead to a
fulfilling life as a small business owner and entrepreneur. I will examine what traits an entrepreneur
must have, what major challenges small business owners will face, and how small
businesses can use "global thinking."
The Good Entrepreneur
The
debate on the exact makeup of a good entrepreneur contains a vast number of
opinions and few can agree except on one point: entrepreneurs are above all
else "risk-takers." In her
book, Over-40 Job Search Guide, Gail Geary (2005) commented, "you
must be willing to sacrifice the corporate security of the consistent income,
health insurance, and retirement benefits for independence, time flexibility,
challenge, and increased income potential." (p. 194). Kevin Hillstrom and Laurie Collier Hillstrom
stated that other key factors in the makeup of an entrepreneur include
commitment, "business knowledge (business planning, marketing strategies,
asset management, etc.), self-confidence, technical and other skills, communication
abilities, and courage" (Encyclopedia of Small Business (2nd Ed.),
2002, p. 447). Trefor Jones offered a more etymological view of the
topic.
There is no simple
definition in economics of the term "entrepreneur".
It is translated from the French word entreprendre "to
undertake", as in someone who undertakes or initiates a project. Thus, entrepreneurs are responsible for the creation of firms
and seeing a project from its perception as an idea through to its creation,
development and subsequent use. Entrepreneurs also
engage in risk bearing, arbitrage and coordinating activities. (Business
Economics and
Managerial Decision Making, 2004, p. 268)
Managerial Decision Making, 2004, p. 268)
presents a more pragmatic way to look at entrepreneurs
by looking at what they do, namely run a business that they have either
started, purchased, or otherwise acquired.
The objective is the same for any business or firm, to "market and
sell its products or services profitably."
With small businesses the owner may have to shoulder the burden of
"all advertising, promotions, marketing, sales,
and public relations responsibilities" ("
In light of the wide
variety of "hats" the entrepreneurial small business owner wears, an
equally wide background may be applied.
"Advertising, marketing, promotions public relations, and sales
managerial jobs" are all well accepted with a "broad liberal arts
background." Majors that tend to
lend well to the field include sociology, psychology, literature, journalism,
and philosophy, as well as other topics (Training, other qualifications, and
advancement, para. 1 ).
With the many
qualities that make a good entrepreneur, success may completely rely on the
individual as Geary noted, "successful self-made business owners are
extremely risk tolerant, have strong interpersonal skills, and overtly express
their personalities in their work. Their
distinguishing personality trait is that they … feel that their product or
service is the "best on the block."
They also feel that they can "do it better" than anyone
else." (p. 208)
Visions of Success
Forming a business is
no small task and to even begin such an undertaking requires that the would-be
owner perform in different capacities.
Especially in it's infancy, a business will live or die by the
entrepreneur that dreamed up the idea and breathed life into it.
As the founder of the organization, the entrepreneur sets the
philosophy of the organization, establishes the strategic focus, and educates
new employees. In this role, the
entrepreneur lays the groundwork for the emerging corporate culture. In
addition, most entrepreneurs serve as the primary promoters for their new
start-ups. They must act as the new
venture's chief spokesperson in contacts with financial backers, prospective
clients, employees, suppliers, and others.
In addition, as founders (or founding team members) of organizations,
entrepreneurs are often called upon to provide counsel or advice to community
members or employees. The roles that an
entrepreneur must fill demand flexibility and creativity. In order to successfully manage a new
venture, and entrepreneur must be comfortable in all the roles (K. Hillstrom et
al, p. 449).
Jones broke the steps
that an entrepreneur takes in forming a business into four stages. The first stage can be best described as
conceptualization and planning. When the
entrepreneur finds an opportunity and has an idea, planning begins. When an adequate business plan is made it is
presented to supporters who may be interested in financially backing the new
company as well as "suppliers of other resources" (p. 272). The business cannot be created until the capital
and supplies are in place and the business plan becomes viable.
The second stage can
be described as actualization. This is
the point where plan and action meet and the small business is formed. All aspects of the plan must be organized including
acquiring the financing, purchasing of equipment, hiring of personnel, stocking
resources needed, and the beginnings of production. By the end of this stage enough products
should be completed to open up into the chosen market (p. 273).
The third stage can be
described as market testing. After the
business "stands-up" and small-scale production has begun, the owner
has to prove his concepts by selling the products or services he first
envisioned. Stage three is the first
time that the vision can be described as a functional business as the owner and
his staff are operating as intended on a day-to-day basis, continually
acquiring raw resources, producing product, marketing them to the customers,
and accounting for the sales. By the end
of this stage the company should have reached a level of production to meet the
market demands and the expectations of the entrepreneur and the financial
backers (p. 273).
The final stage
removes the entrepreneurial aspect from the business and takes it into a
managerial state. The company becomes
"a self–sustainable operation with revenue not only covering costs but
also making an acceptable level of profit" (p. 273)
One key to success is
"creative solutions to difficult problems [that] may make or break the
young and growing business" (K. Hillstrom et al, p. 447). The entrepreneur's creative management in
environments where resources are limited may make the difference between
success or failure.
"Entrepreneurial success is often directly predicated on the
business owner's ability to make do with the limited resources available to him
or her" (p. 447).
The Global Market
Entrepreneurs
tend to think big and there is no bigger market then the world. Since the challenges of owning a business may
seem vast, foreign markets might seem untouchable by most. However, by understanding the differences in
each targeted market, I believe it is possible for a small business to go
global. K. Hillstrom and L. Hillstrom
highlighted some of the major obstacles that a business of any size has to
navigate to be successful internationally.
While the overall concept of
marketing is the same worldwide, the environment within which the marketing
plan is implemented can be dramatically different from region to region. Common marketing concerns – such as input
costs, price, advertising, and distribution – are likely to differ dramatically
in countries in which a firm elects to market its goods or services. Business consultants thus contend that the
key to successful international marketing for any business – whether a
multinational corporation or a small entrepreneurial venture – is the ability
to adapt, manage, and coordinate an intelligent plan in an unfamiliar (and
sometimes unstable) foreign environment (p. 611).
There are two primary
marketing strategies for international business: "individualized marketing
strategy" where the differences in each place of business are considered
and separate plans are created for each; and "Global Marketing
Strategy" where all markets are treated the same. The individualized
markets generate a higher cost in terms of research and planning but
effectively reach each targeted market; while the global market keeps the
research costs down and accepts losses in localized markets that were not
effectively connected with (p. 613). I
believe that by learning the intricacies of an international market a small
business may be able to efficiently compete in the countries of its choice and
recognizing "that international opportunities can ultimately spell the difference
between success and failure" (p. 611) may open up prospects for success.
International
marketing relies on the same principles as domestic and has the same goal, to
profit from the business (p. 612). Two
vital factors that must be looked at when considering taking a business global
is the profitability of the goods/services offered and the ability of the
company to commit to the new market.
"Indeed, a business that is genuinely committed to establishing an
international presence must be willing to educate itself thoroughly on the
particular countries it chooses to enter through a course of market
research." (p. 612).
Conclusion
A
potential entrepreneur must educate himself on a variety of topics like
effective communication, accounting, business management, market research and
national/international law and politics, just to name a few. Dedication and commitment to the undertaking
will play an instrumental role in starting and nurturing a small business. Ultimately risk is the only thing that is
guaranteed; however, for those driven by a need to be self-actualizing and
independent, that are marked by confidence, that dare to see possibilities in
unusual places, and are willing to shoulder the burden and the risk,
entrepreneurship may be the best way to realize their dreams.
BIBLIOGRAPHY
Geary, G. (2005).
Over-40 Job Search Guide. Indianapolis: JIST Works.
Hillstrom, K.,
& Hillstrom, L.C. (2003). Encyclopedia of small business (2nd ed.).
Farmington Hills, MI: Gale Group, Inc.
Jones, T. (2004). Business economics and managerial
decision making. West Sussex, England: John Wiley & Sons Ltd,.
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