Entrepreneurship is to start a new business or venture and create new products in the market. They need to manage risk due to the uncertainty environment they are operating in. Entrepreneurship is in pursuit of the opportunity to do what they want to do, and without considering the resources currently controlled. The resources can be something such as money, gorgeous office or an army of people. Actually they do not need these resources to be an entrepreneur. So the statement that "All you need is money to be an entrepreneur" is wrong. The spirit of entrepreneurship is innovation and risk-taking, and the ability to succeed in the changing situation in the competitive global marketplace. (Hillstrom, 2002)
There are seven perspectives to look at the nature of entrepreneurship: Creation of wealth, the creation of enterprise, the creation of innovation, the creation of change, the creation of employment, creation of value and creation of growth. Entrepreneurship is involved in a continuous process and opportunity-driven behavior. The entrepreneurs will create the value that none has created before; they will use a unique way to put the resources together. (Moriis, Kuratko & Covin, 2010)
Dispelling the myths
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Some people made statements such as "All you need is luck to be an entrepreneur" and "Entrepreneurs are born, not made" "All entrepreneurs need is money". In fact, these are wrong perception and due to a lack of research and understanding. (Kuratko, 2008)
Myth 1:"All you need is luck to be an entrepreneur". Actually entrepreneurs are doers. They are also thinkers. Entrepreneurs tend toward action; most of them doing things are methodical and very carefully plan how to move every step. They have plans and ideas. They can be successful and do not depend on luck.
Myth 2: Entrepreneurs are born, not made. Some of the people maybe have innate traits to be an entrepreneur, but not all of them are born. Actually entrepreneurs can be taught, you can learn how to be an entrepreneur such as analytical ability, willingness to take risks, knowledge of human resource, marketing and finance.
Myth 3: All entrepreneurs need is money. Venture needs money to survive it is true; many venture failures because of a lack of capital it is also true, but money is not the only reason to make a company to close down. The reason of failure may be due to the problems such as lack of the knowledge of finance, managerial competence, improper investment and etc.
Many successful entrepreneurs still start their business even though they lack of capital and they overcome the problem by building their ventures from ground zero. Actually money is just a resource. For most of the entrepreneurs, having the passion to do what they want to do or love to do is more important.
Become an entrepreneur
You need to have a great idea. It doesn't matter that you don't have money, but you must have a great idea. If you got a great idea, first you need to evaluate whether this idea can be realized or not, and then think about the resources that are necessary to materialize it. Entrepreneurs need to listen to various voices through survey, word of mouth conversation, social media platform and public consultation. And you also need to explicit find out the target market of your product, list what they like, what they want or need, the age group of those people and their purchasing power.
You should write a business plan. Take the time to figure out what you really want, and then make a plan to execute the actions. (Reference) The business plans should include details and descriptions such as the following: Product description: What is your product, what is it looks like, what is the reason for attractive the people to buy it. Market Analysis: Who is your target market, they will go where to shopping and where is that location. Competition: Who will be your competitor, what are your strengths and what are their strengths, how can you defeat your opponent. Marketing: How to sale your product, you will choose what type of advertising. Sales: You will go where to sell your product, the customers can go where to buy that product, what is your expected sales volume. Manufacturing: How do you make your product, explain your product's detail, what materials do you need to make your product, when and where will you manufacture that product. Finance: What is your estimated cost and gross profit? (Farrell, 2001)
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Select a target market and contact potential customers. Pitching your idea to the investor, made them invest to your company. And you should tell them the benefits of a partnership, the attractive of the partnership of the product and the profitability of the venture. Sell and distribute your product. If you are getting profits that means you are on the right track. By listening to others' success story, you could learn something from them to improve your business. (Tart, 2011)
Here are three things all entrepreneurs must have. (Dykeman, 2010)
The first one is the desire to help people; when you are doing business, you are directly or indirectly helping people. You are providing the goods and services that people really want or need. If they do not need those things they will not buy the product that means you have no business.
The second is the ability to solve problems; the reason why people need business is because there are challenges for them to get what they want, something they had to get or they do not know how to do, therefore they need someone to solve the problem for them.
The last one is the ability to get things done. The most important thing is having the ability to get things done. You require skills, knowledge, experiences and problem solving techniques. These are the key tools for an entrepreneur. This is not only one's skills; you need the ability to get help and to engage other entrepreneurs to work in partnership to get things done.
The chairman of Emeritus of Barshop & Oles Company, Sam Barshop is one of the successful examples. He said" creative, active and always hyper- which is important to be an entrepreneur" (Nelson & Bell, 2003) There are a lot of entrepreneurs around the world, but not everyone can be successful. All successful entrepreneurs have these common characteristics:
Do what they enjoy. They will never feel tired when they doing something they are really love to do. The trait of successful entrepreneurs is they don't even consider their business as work- it's their passion, source of energy and mission. (Taylor & Fischer, 2010); Get to know your customers. It's your job to know what your customer really wants or needs, such as the preference of material, color and type of services. It's better for you to provide product and provide according to the customers' preference; (Lane, 2001) Manage money wisely. Cash flow is the lifeblood of any business enterprise. There are two aspects about how to manage money wisely: The money that you receive from your clients in exchange for the goods or services you provide. This is income. The money that you spend on inventory, supplies, wages or other items to keep your business running, this is expenses. (Stephenson, 2008)
Human resource management (HRM)
HR plays a pivotal role in the success of any entrepreneur. It is not easy for the entrepreneur to do such job, like recruit, allocate the work, motivate or retain employees (keep talents) who can really help development of the business. 4 keywords to HRM (human resource management) are including recruitment, selection, training and development. Here are some tips for the entrepreneurs about the Human Resource Management. (Reference)
Recruitment refers to the process of attracting, screening, and selecting a qualified person and him/her with appropriate qualifications to apply for a job. A successful entrepreneur should know how to recruit the right people at the right time in the right place.
A successful entrepreneur should be very careful to make the decision in this part. Selection is making the right hiring decision and hire the right people will be more effective and powerful. The company selects high quality employees can reap substantial benefits, but if the company does the wrong selection decisions can cause irreparable damage. (Compton. Morrissey& Nankervis, 2006)
Entrepreneur should seen training as a long term investment. The main objectives of training are provided the employees gain knowledge, acquire skills and change attitude for their present jobs.
Development is to work hard to improve the employees' abilities and working skills for their present job, and how to beyond today's job and has a more long term focus, the development will make the company do some changes and grows. (Mondy, 2010)
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Appropriate give rewards and punishment to the employees, as the people's requirement to change the HR practices, build employee's confidence and give them the motivation to do their job. Although entrepreneurs can hire someone to do the HR's job for them, but a successful entrepreneur also needs to know HR practices inside out.
It is important for the entrepreneur to have the right marketing mix which is product, price, place, promotion and people.
The product must have the right features to attract the customers. If the customers are not interesting in the product, they will not buy it that means you are doing losing proposition; the price must be right. Consumer will need to buy in large numbers to produce a healthy profit. The product should not selling over than the cost price too much, no one want to buy the expensive things; The place of getting the product to the customer must be right, just as no one will be selling luxury products in underdeveloped country; Promotion is the communication between the seller and buyer, sometime promotion is the management strategy of the company. (Tehrani, 2008)
To sum up, the ideal marketing mix is: the right product sold at the right price in the right place and using the most suitable promotion is every what successful entrepreneur should know.
Everything in the business needs money. A successful entrepreneur must know about the finance of entrepreneurial, because entrepreneurial finance is designed to help managers make better investment and financing decisions in entrepreneurial settings.
A conscientiousness entrepreneur should be able to: understand how business decisions and the market will affect the cash flow, profits etc; Analyze financial performance of business units. Clearly know about the forecasts of sales, income and expenses of the company. Evaluate the viability of the value of the business. If entrepreneurs know about accounting will be much better for them to understand the financial operation. It doesn't matter that you have not enough money to do the business, sometimes relationship can be counted as an intangible capital. You can loan from the bank, your family or your friends, you can find some partners to run the company with you or some investor to invest money to your company. (Taylor & Fischer, 2010)
My conclusion of this report is that I disagree the notion "All you need is money to be an entrepreneur". Entrepreneurs needing money are inevitable. But money is not the most important things for the entrepreneurs. I think a good idea and proper planning are more important. Money is just a resource, and it does not mean everything. If you think money is everything and it is the only reason that can make you become a successful entrepreneur, then every rich man, super star (singer or artist) can all be an entrepreneur. But why they never spend that money to develop an entrepreneurial venture, and give up what they are doing. It is because they are loved what they are doing, they have a passion to do that, have no interest in doing business. (Murphy, 2010)
To be an entrepreneur depends on many aspects, not just about money.