20. Entrepreneurial motives and characteristics.

 Self-confidence- successful entrepreneurs are people who

believe that they are going to succeed. They think they have a
winning formula for their business and can persuade other
people, for example, to buy the product or help finance the
business.
 Self-determination-successful entrepreneurs are ones who think
they can take control of the events going on around them and
they can influence those events and turn them into something
that will benefit their business.
 Judgement- A successful entrepreneur is someone who gathers
information and listens to advise. At the same time, they may
able to see what where the business might go in the future and
what they want out of the business. This helps them to make
judgements and decisions.
 Being a self starter- to be a successful entrepreneur, you have to
be a self starter. Entrepreneurs are able to work independently
and can take decisions. They have their own ideas about how
things should be done and they are able to develop those ideas.
 Commitment- entrepreneurs work longer hours than those with
a normal jobs. Running your own business can sometimes be
more stressful because of the risk that are always present so
successful entrepreneurs are ones who are committed to what
they do.
 Initiative-successful entrepreneurs are able to take the initiative
in situations. Theyt don’t allow events to overwhelm them by
doing nothing. They are able to change and be proactive.
 Preseverance-all businesses have successes and failures and
there is always an element of risk to perform poorly or even fail.
 Successful entrepreneurs have to show perseverance and they
have to be able to get through the bad times and the setbacks.
Skills required by entrepreneurs-
 Organising-entrepreneurs play an important organisational role.
In this organisational role, entrepreneurs will be planning,
scheduling, giving instructions, prioritising setting up systems,
monitoring, time managing and meeting deadlines. If things go
wrong, entrepreneurs will sometimes be ‘free fighting’, that is
resolving conflict, dealing with business issues and sorting out
problems.
 Financial management- the main aim of financial management is
to make sure the business has enough money whenever it is
needed. This might involve budgeting, cash flow forecasting,
chasing debts, keeping up-to-date financial records, arranging
loans and overdrafts, analysing financial information.
 Communications- entrepreneurs will need to interact with a
wide range of different stakeholders which might include
customers, employees, suppliers, the local community and the
authorities. Entrepreneurs will need to develop effective face to
face communication skills to deal directly with people. If
entrepreneurs have good communication skills their businesses
are likely to perform better.
 Decision making- entrepreneurs will have to solve problems
when they occur. Decision making and problem solving require
entrepreneurs to process, analyse and evaluate information.
 Negotiating- negotiating often means agreeing the terms of a
contract, such as agreeing a price for undertaking some work or
completing an order for a customer. However, negotiation might
also be needed when dealing with the suppliers and employees.
 Entrepreneurs need to be able to get their point across in a calm
and confident manner, develop argument with reasoning, know
when to compromise and try to arrive at a settlement that is
agreeable to both parties.
 Managing- entrepreneurs need to recruit the right people in the
first place and then show clear leadership and direction. People
should be easier to manage if their needs are met and if they are
treated with respect and valued.
 IT skills- entrepreneurs will be able to run their business more
efficiently if they have good it skills, for example: they might
need to use social media to help raise the profile of the business,
and direct potential customers to the business website, use
computer software to give presentations, use specialist for
designing products for example, and design documents such as
invoices, order forms, job descriptions expense claim forms,
flyers and newsletter, etc.
Reasons why people set up businesses
Financial motives: many people set up a business because they want
to make money and profit is the driving force behind many
entrepreneurs and most businesses would not exist if it does not have
the desire to make profit. Two approaches to making profit can be
identified.
 Profit maximization-some entrepreneurs try to make as much
profit as possible in a given time period. This is called profit
maximization. Entrepreneurs who try to maximize profits are
likely to take bigger risks because there is usually a direct
relationship between risk and reward. These entrepreneurs are
motivated by money and their key focus is the financial return
on their efforts.
 Profit satisficing- some entrepreneurs aim to make just enough
profit to maintain their interest in the business. This is called
profit satisficng. One reason why some entrepreneurs do not
seek to maximize profits is because they don’t want to take on
the extra responsibility of expanding their business which is
often required to make more profit. Also some entrepreneurs
run ‘lifestyle' businesses which means a business that generates
enough profit to provide the flexibility needed to pay for a
particular lifestyle. This type of businesses allows owners to
spend more time pursuing other interest or with family.

 Non-financial incentives: for some people other motives for

setting up a business might be as important or more important
than making money. They will obviously need to make enough
profit in order for the business to continue in operation but the
main driving force is non financial.

 Ethical stance- minority of people set up business in support of a

moral belief they possess. An example might be setting up a
business to generate ‘clean' electricity. A keen environmentalist
might feel that setting up a solar farm could contribute towards
the reduction of carbon emissions.

 Social enterprise- these are organisations that trade with the

aim of improving human and environmental well being. They are
sometimes referred to as non for profit organisation. Social
enterprises have a clear social and environmental mission and
generate most of their income through trade or donations. Fair
trade is an example of a social enterprise.
 independence- lot of people want to be their own boss. This is
an important non- financial motive for setting up of business.
This entrepreneurs are driven by the desire to be independent.
The freedom to make all the decisions when running a business
is very appealing as some people dislike being told what to do at
work. Being able to make your own decisions is often regarded
as the main key benefits of being an entrepreneur.
However. in practice this independence may be limited. Work
has to be done. Taxes have to be paid. Those financing the
business, like a bank giving a loan, have to be kept satisfied that
the business will continue to survive. But those who own their
own business, in general, do have more independence than
those who work for an employer.
 Home working- there are two key benefits for home workers.
Time and expense spent travelling to and from work is
eliminated. They also enjoy more flexibility, for example-they
can take meals and breaks whenever they want and a parent
may be able to fit work around the needs of their children.
Examples include writers, accountants, software designers,
tutors etc.