ENTREPRENEURSHIP dissected

Entrepreneurship is the activity of
creating or enhancing economic value. An entrepreneur is an
individual who harnesses potential innovative ideas and channels and
transforms greater
economic value. entrepreneur micro-economic actor Courage
and willingness to take on a risk Opportunity
costs, Sunk costs, Receptive to criticism Highly competitive nature High
need recognition High self-esteem Preference for change

Entrepreneurship is the activity of
creating or enhancing economic value. An entrepreneur is an
individual who harnesses potential innovative ideas and channels and
transforms them to give an output, (service or good) that has greater
economic value than in its initial state. An entrepreneur is a
micro-economic actor as he creates creates goods and services for the
economy.

What does it take to be an
entrepreneur?

Below I present a non-exhaustive list
of some key qualities of an entrepreneur. These do not mean one will
succeed, however without them, the chances of being a successful
entrepreneur are seriously limited.

Courage
and willingness to take on a risk (calculated)
:

One must be willing to put ones money
and time into a business idea that in over 50% of cases results in
failure. Often entrepreneurs have a marked preference for risk –
the higher the risk, the greater the willingness to invest – as
opposed to non entrepreneurs who are said to be risk averse (or have
risk aversion tendencies).

The economic value at risk is often
underestimated as most people are not aware or ignore opportunity
costs
. These opportunity costs or costs that are incurred
when one leaves a full time job and dedicates ones time exclusively
to an entrepreneurial activity.

Another cost often miscalculated or
ignored are sunk costs. These are costs that an
entrepreneur incurs when he reasons in the following manner – “I
have already spent so much, let me keep trying so that I do not lose
more” – this is incorrect and this leads to greater losses and
continued opportunity costs. What has been spent is spent and cannot
be recuperated.

Receptive to criticism

A system only works when it is
permeable to the outside. Entrepreneurs being part of the
micro-economic system and business environment are open to
constructive criticism and actually use this when deciding on
strategy and goals. An entrepreneur will disregard useless criticism
like it is impossible or it has never been done before and
concentrate on criticism that he can use to adjust his path if
necessary. This openness to criticism is vital to an entrepreneur who
wants to keep a competitive edge over his competitors.

Highly competitive nature / High
need recognition

An entrepreneur does not just want to
do things, he wants to do them in the best way, better than the
existing services/goods in this immediate and wider environment. In
doing so, this individual seeks recognition for his work from his
peers. An entrepreneur thrives in competitive environments and this
is where he is at his best.

High self-esteem (especially
intellectually)

Entrepreneurs are generally speaking
intelligent individuals. They are persons who have an unfailing
belief in their abilities to accomplish their goals. Entrepreneurs do
not spend their time looking for solutions to avoid failure rather
than excuses for failure.

Preference for change

Although this can seem self evident,
human nature is such that people have a natural tendency to be averse
to change. Imagine the vast number of daily activities that you
accomplish in a certain order without ever asking yourself the
question – “Isn’t there a better or more efficient way of doing
this?” An entrepreneur asks himself this question all the time.
He/She is always putting into question established criteria and
thinking of ways of disturbing the established order.

The factors listed above are not exclusive and other considerations such
as innovative idea, sources of financing, knowledge of business area,
market readinessBusiness Management Articles, marketing and contacts play vital roles. The above
mentioned factors are pre-dispositions if one wants to be an
entrepreneur.

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