Building essential characters of an entrepreneur

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Introduction:

Outside snow flakes were falling on the ground and weather was at its bitterest of the year. Inside, in his office, Graham Barnes peered into his laptop checking the accounts for the day and later replying to clients. Later, he planned to study the documentation of a prototype model for a software project. It had been a busy day. It always was.

Graham Barnes was the CEO of a software firm. This company had been his brainchild and he enjoyed his work immensely from the beginning.

7 years earlier, Graham was an employee in a multinational software firm, drawing a huge salary along with other perks. Also, he had an opportunity to work with the best minds in the industry.

However he was caught in the entrepreneur bug as he started his own firm. He felt that it was important to create something of value and implement all his pet ideas about business. His mind reminisced the day he decided he had enough of the corporate world 6 years back.

Year 2000

Getting out of his car, Graham Barnes looked at the uniformity of the landscape of his office; sure they looked imposing and a campus feel with over 500 employees.

His day was full of projects, evaluations, deadlines and having to sit through quarterly appraisals. He met Reginald and a typical conversation would run like this:

Graham: “Hey, what's up with you? You should be home resting”.

Reginald: Yes, but I have this damn deadline to complete

Graham: “Hmmm..I got a lot of work to do too. Once, I complete this project, I am going to go on a holiday.”

Graham Barnes thought back to the previous day. His daughter, Veronica, all of five years was pleading with her dad.

Graham would have constantly assure her of an impending break, “We'll go honey. Another 3 days, and Daddy's holidays will start too.”

But sadly something would come up in the last minute and he would cancel his holiday bookings and look sheepish before his wife and young daughter. Software clients are never easily satisfied.

2006

Graham had quit and started his own company. He thought he would have flexible time and ultimately, he would be boss of his own life and time. But it had not been that way. For the first five years, he had had to work dreadfully hard. But there seemed to be a difference.

Yes, it was still difficult to go on vacations, But, he was doing all the things that he was passionate about. And more than anything else, he could say “no” now to a project that he knew his team would not be able to deliver on the timeline. He had been able to treat his team well. He was generous when it came to their vacations besides offering ESOPs to key people.

It was no small wonder then that the company was doing so well.

Golden Words:

POWER

P PERSISTENCE to continue till you succeed

O OPPORTUNITY to be transform industry and society.

W WILL POWER to win against odds

E ENDURANCE to make it happen

R REALISTIC goals for the future

Chapter Highlights

Q: What does Entreprener21 or e21 mean?

A: Entrepreneur 21 indicates the entrepreneur of the 21st century. It refers to the modern age entrepreneur with innovative ideas to transform path breaking ideas into business opportunities and achieve outstanding success in the 21st century.

Every entrepreneur needs to create value. The 21st century, being the digital era, the entrepreneur needs to address needs for customers attuned to the virtual medium. The entrepreneur 21 needs to build a business that appeals to the needs of the Gen Y and next generation buyers.

Q: What is the difference between a small business owner and an entrepreneur?

A: A small business owner typically works very hard and not overtly ambitious or methodical enough to grow or take advantage of the opportunities on the web. Usually a business owner is central to the business and the business cannot function without him.

In contrast an entrepreneur selects a business with high potential for growth and allows for growth in such a way that it is possible for the business to function without him, if required by hiring a competent team.

Q: Does every entrepreneur need to have a flash of genius?

A: Not necessarily, flash of genius is rare. Most entrepreneurs did not start out with a compelling idea for a product or service but still made it big. What is required is evidently a good dose of intelligence, common sense, and above all an endurance to stay the course.

Q: What are the advantages in being in a business?

A: Being in a business has many advantages: more income so that you can retire early. Apart from financial security, it is ability to use innovative ideas and transform the industry and benefit society, at large. Being an entrepreneur gives you an avenue to play out your passionate ideas without any fetters.

Q: What are the advantages and disadvantages of being an entrepreneur?

A. Advantages:

  • Being your own boss
  • Able to realize your dreams
  • Able to achieve potential
  • Able to incorporate ideas and culture that you like into your company

Disadvantages:

  • It is risky and face uncertain and irregular incomes
  • Have to be bootstrap and work long hours
  • Make all the decisions by themselves
  • Realize that you are the SOLE reason for success or failure

Q: Which business should you start?

A: The business that you intend to start can be as varied as software, meat processing, janitor cleaning etc. But the most important ingredient to starting a business is to be motivated and be passionate. Skills and know-how regarding that industry might act as another important factor to obtain success.

Q: Does a job ensure security?

A: Earlier jobs indicated security, but now layoffs are common not only in firms with losses but also in firms earning good revenues. Slowly the word “job security” is becoming medieval and even obsolete in our times. So one might as well join the entrepreneurial bandwagon for there is little security even for an employee.

Q: Why do some businesses fail?

A: There is no definitive reason as to why new ventures fail but the most common causes for failure are:

  • Poor business planning and preparation
  • Managerial incompetence and lack of experience
  • Poor financial control
  • Inappropriate location
  • Lack of inventory control
  • Inability to make the entrepreneurial transition

Q: What are the characteristics of an entrepreneur?

A:

  • Commitment and Determination with an independent streak
  • Continually search for ideas that can be transformed into opportunities
  • Leadership and Tolerance of risk, ambiguity and uncertainty
  • A high degree of self-confidence
  • Creativity, self reliance, ability to adapt
  • Passion for excellence

Q: What must be an entrepreneur's operating philosophy?

A:

  • Involve themselves in activities that give energy. Just have fun
  • Ability to figure the next step and then going whole hog; no half-measures
  • Optimism and a belief that nothing is impossible
  • An urge to improve status quo; eye for improvement
  • Ability to take calculated risks
  • Most importantly, given to self learning and an ear for constructive criticism

Quite simply this: treat others as you would want to be treated, share the wealth that is created with those who contributed to it and thirdly, give back to the community.

Q: What are the different things that could stop you from being an entrepreneur?

A: There are millions of people working at jobs and nearly all of them have wondered sometime or someplace about having a business enterprise of their own. However, not everyone actually chooses to do so. For some, it is merely a passing thought with a variety of reasons coming in the way:

  • Fear of failure, rather the unknown
  • A financially satisfactory and emotionally rewarding job
  • Lack of business knowledge and technique
  • Confusion and lack of clarity or even being in the wrong business
  • Family responsibilities: Everyday bills need to be paid, daily chores need to be completed, children need to be taken care of, and other commitments need to be fulfilled.
  • Lack of initiative: People set themselves into familiar routines: a particular job, and set of people to work with and to socialize, daily habits, and so on.
  • Lack courage and confidence to go “solo”

Goals & Objectives

Goal 1:

To Reach the TIPPING POINT - from an employee to being an Entrepreneur

Objectives

Compare the pros and cons of working in a regular job and being an entrepreneur
(Prepare a list depending on your current situation in life for an honest appraisal)
Compare the advantages and disadvantages of being an entrepreneur
(List the pluses and minuses of taking the entrepreneur route given your situation in life)

Goal 2:

Evaluate who you are and where you stand

Objectives

Identify personality type

(Examine your personality type: are you a natural risk taker or are you one of those with a need for stability?)
Identify your knowledge and skill sets with reference to starting a business
(Identify your skills in the proposed venture. Answer this question: do you have it in you to run an enterprise and manage people to share your vision?)
Identify your resources before you start your business (finance, infrastructure etc)
(It is time to think of the financial implications of starting a business. How much of savings do you have to run the business? For how long can you sustain?)

Goal 3:

Learn and Build essential characters and skills to become a complete E21

Objectives

Research the pre requisite qualities and skills of successful entrepreneurs
(Do your homework by studying the travails of your role models)
Identify your entrepreneurial qualities and skills
(List out the skills needed to succeed in your enterprise. Is it technical ability? Or people management? Or new product innovation?)
List qualities and skills that act as your strengths
(Is that project in tune with your internal strengths? Is there a personality matching with the proposed activity?)
List qualities and skills that you need to enhance
(Jot down the list of attributes you need to acquire and work for improvement. Can you identify your weaknesses and do you have the courage to convert them to strengths?)
Identify ways to strengthen qualities and skills
(Is there a training course for overcoming your weakness? Time to polish up your communication skills? Acquire industrial training?)

Case Study 1

Lance Hamon was fond of his aunt and a role model in his growing years. He had grown up in a low-income neighborhood in California and no one ever thought of Hamon shaping up to any good. Most of Hamon's friends had low income jobs, and some of them had ended up in jail, on drugs, or still worse, dead.

(Hamon is from a very humble background)

Initially, like his friends, Hamon too had no intentions of going to college. He went to the Midwest, United States “to get out of town”. He worked at physically demanding jobs for low pay. Realization dawned that the best jobs went to those who were educated and had a college education. That spurred him on to enroll himself at a local community college and worked towards two associate degrees- one in arts and anthropology and the other in political science.

(An early recognition that menial jobs are not rewarding and a need to for college education)

Soon after, he was hired by a fortune 500 company and worked there for a period of six years. However he soon found that he was not meant to be the traditionally typical corporate employee.

(Working for a fortune 500 company for a person of Hamon's background is itself credible. Yet he has an urge to think big and beyond)

He was a free thinker and corporate culture did not reward creativity or free thinking. Conformity was valued at the cost of creativity and Hamon felt suffocated. So, although he was being paid good money now, the company started downsizing. Hamon knew that he was no longer safe.

(Conformity and lower levels of job security make him think outside the system)

Hamon also detested when he used to “clock in” everyday. Hamon had to clock in twice a day at the entrance gate with a sinking feeling that it “took a little piece of me”. Hamon wanted his freedom and be his own boss. So he entered real estate and eventually, partnered with another real estate agent. Now, both Hamon and his partner earn a six-figure income though in their first year in business.

(A shot at an entrepreneurial venture)

Hamon soon realized that he was the worst boss he ever had, working impossibly long hours. Initially he thought that starting his own business meant that he would give himself a lot of time off. On the contrary, he logs in at least 55 hours a week and often on weekends too.

(Commitment and motivation to excel)

Young and single, there is nothing to limit his time spent on his two passions-business and traveling. By the beginning of 2006, Hamon had already been to Europe twice. Not bad for a person born in abject poverty and an abandoned father.

While traveling, he is a keen observer with an eye to spot business trends and cultural shifts from each country to another. Any idea from one industry can be transplanted to new areas and transformed to opportunities that work.

(An eye for new business opportunity and urge for continuous learning)

Hamon's goal is to just be happy. He believes in “chasing dreams that can become reality; not chasing fantasy.” His philosophy is - “all entrepreneurs must be willing to risk and be willing to fail”. He believes that you must “know yourself and know who you are. Then you can know others. You can't build bridges without it.”

(A healthy sense of personal values and culture)

Points for reflection:

  • Hamon's ability to lift himself from his situation
  • An early realization that menial jobs don't pay
  • Discontentment and insecurity even in a white colour job
  • An aptitude for learning and risk taking
  • A balanced philosophy to life.

Case Study 2

Sir Richard Branson

Born in 1950, he had a somewhat unusual but privileged upbringing. When he was four years old, his mother, Eve pushed him from the car one day and told him to find his own way home.

Some distance from home, he got lost completely and had to knock on stranger's doors for directions. Again, while other parents banned their children from climbing trees, his mother made him climb right to the top.

(Learning the lessons in survival early in life)

Such experiences developed his self-confidence and self-belief enormously; so even though he suffered from dyslexia he was always confident in his own ability. Although he gained 6 0-levels, he was frustrated by the rigidity of the formal education system and at 16, persuaded his barrister father to let him leave school and start a business publishing a student newspaper with his school friend, Jonny Gems.

(Disgust at the restriction of formal education and an almost natural instinct to strike it on one's own)

The concept was very simple: the paper would focus on students and carry features written by celebrities including rock stars, movie stars, intellectuals and leading politicians. It would make money by selling advertising space to major corporations

(An innovative product for student market)

With a donation of £4 from Richard's mother to help cover postage and telephone expenses, the business was started from the basement of his parents' home in the Bayswater area of London. Branson persuaded a respected magazine designer to work for no fee and his friends to work for £12 per week. Also, he negotiated a printing contract for 50,000 copies.

(Overcoming initial funding obstacle and gift of the gab to make a renowned designer to work for gratis)

The first edition of the “Student” was published in January 1968, On the cover was the picture of a student drawn by Peter Blake (the cover designer for the Beatles' “Sergeant Pepper” album), it carried a message from the headmaster of Stowe school (where Branson had been a student). It read:

“Congratulations, Branson. I predict that you will either go to prison or become a millionaire”.

However, the venture was not successful. Like many other start-up businesses, it had cash flow problems. So, in April 1970, together with two colleagues, John Varnon and Tony Mellor, Branson established his second business - Virgin Records - to sell records by mail order.

(Ability to lift himself out of failures and still have the enthusiasm for new projects)

From a humble and somewhat dubious beginning, the current Virgin empire has evolved to a £3 billion operation with 200 companies employing 25,000 people.

There is no centralized Virgin headquarters, not even a corporate boardroom because the company does not hold regular Board meetings. Branson works as though he was running a startup and communication is very informal.

(A friendly and employee friendly corporate culture)

According to Branson, “One of the problems about formal meetings is that they lead to frustration. People who leave companies with formal structures don't leave because of salaries. If they come up with a good idea, they're told to wait until the next meeting. Then they're told they have to make another presentation to another group, then another. Then the board takes it on advisement. And he's gone off to another company.

With Virgin, we make decisions on the phone. If you've got a good idea and I like it, you can get on with it.”

(Instilling an atmosphere that encourages and rewards new ideas)

For Branson, informality is very important to the retention of an entrepreneurial, innovative culture. Tom Bower (2000) suggests he operates in this way because “For all his reputation as an innovator, ideas are not Branson's speciality” - he builds on other people's ideas.

An informal system of communication is possible because the company is structured into 150 small companies. When any company becomes large, it is split up. For example, Virgin Records, was structured into 40 different companies before it was sold to Thorn EMI in 1992

According to Branson, informal communication and organizational structure are important, but the most important is people - recruiting the best and keeping them motivated.

“The girl who opened what will be the best bridal shop in Europe was flying on the airline as an air hostess. She came to me with an idea and I said, Go to it. She did. Now it's Virgin Bride. By having the freedom to prove herself, she excelled.”

Richard Branson has not read any business text or taken a course in management. He has learned by experience - by trying and from making mistakes. As he says,

“I've learned every day by doing things different and new”.

Points for reflection:

  • Branson training at home and overcome dyslexia
  • A natural entrepreneurial instinct
  • Ability to keep trying despite initial failures
  • Fostering a corporate culture of informality
  • Instilling a corporate that rewards new ideas.

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