Summary of the Reader Entrepreneurship for the exam of block 1.3 of the Communication course at Hanze University of Applied Sciences Groningen. The whole reader is summarized in this document.
What is an entrepreneur? What is entrepreneurship?
An entrepreneur is someone who assumes the financial risk of beginning and managing a new
venture. This venture may be based on a totally new idea, a new way of doing something, a new
location or attempting something no one else has done before. Entrepreneurships is seeing and
exploring opportunities through one’s own company or within a (larger) company with which you
create value, for yourself as well as for others. Value is about how satisfied the customers are.
Besides in your own business, creating value is also possible when you work withing a corporation:
intrapreneurship. An intrapreneur is a person, working within a large corporation, who takes direct
responsibility for turning an idea into a profitable finished product, through assertive risk-taking and
innovation. If you run a business on your own account and risk, you are a business owner. If you
generate own income and have no further ambitions to group or to be responsible for the income of
others you are a self-employed. However, if you have the ambition to grow, to take on challenges
and to take others along for the ride, you are an entrepreneur. Being an entrepreneur implies a
nature of being entrepreneurial: having and showing a set of competencies that support your dream
and success. You can use competencies like market awareness, creativity, flexibility, the ability to
take risks, dominance and perseverance, for example, to satisfy yourself and your customers.
The most frequent reasons for becoming an entrepreneur:
- You want to become your own boss: on your own terms without having to answer to another
individual.
- You want to pursue your own ideas. You are creative and innovative and have an eye for
spotting opportunities for new products or services that are not currently being offered by
your company or the market.
- You desire uncapped financial rewards. Working for someone else will never make you rich
and financially secure, so you have a goal to achieve significant earnings through running
your own business.
- You have drive, determination, patience and a positive attitude.
Why should you consider becoming an entrepreneur?
- Creating value: you can add value to the market by creating something that many people will
need and want. You can improve existing products or start a new concept to make people’s
live more meaningful, comfortable, productive or entertaining.
- Independence and control: you can work for yourself and your own goals. You can make
decisions and you have the opportunity to capitalize on your own strengths and invest in
your time how you please.
- Stimulating challenges: if you are ambitious, confident in your abilities, optimistic, unafraid of
change and hardworking, entrepreneurship can really stimulate your mind. With a ‘never-
give-up’ attitude you can overcome business challenges.
- Personal growth: being an entrepreneur forces you to educate yourself, become assertive,
develop your intuition and logic and learn how to respond to change quickly and carefully. It
also teaches you the value of being 100% self-reliant.
- Building relationships: you will meet like-minded people who have gone through similar
challenges as you. As a result you can develop friendships, form business alliances and learn
many tips and advice from those who have really succeeded.
- High earnings are possible: you have an uncapped potential for earnings, as you are in
control of your hours, how much you charge and when and how you work.
What are the risks and drawbacks encountered by entrepreneurs?
- Uncertainty of income
- Risk of losing their entire investment
, - Long hours and hard work
- Lower quality of life until the business gets established
- High levels of stress
- Complete responsibility
- Discouragement and occasional lack of motivation.
What does it take to be an entrepreneur?
A competence is something a person is very good at. Entrepreneurial competences:
- Need for achievement: entrepreneurs want to succeed, by devoting all their strength and
energy in their company. They always strive to do better than last time.
- Need for autonomy: successful entrepreneurs act independently of others, make their own
decisions, solve their own problems and successfully complete their activities on their own
strength.
- Need for power: having control over others and to impose your will on them. Entrepreneurs
know what they want and how they can influence others in order to attain their goals.
- Social orientation: the degree to which someone is focused on others. Entrepreneurs
understand that people and networks are necessary to realize their ideas. They easily make
contacts and permit business considerations to determine their social behaviour.
- Self-belief: the belief in you own abilities and in yourself relative to others. Entrepreneurs are
convinced of their ability to complete every task successfully and that their success depends
primarily on themselves.
- Endurance: continuing strongly in spite of negative developments or objections.
Entrepreneurs overcome each hurdle to achieve the goal and persist if they not make
immediate progress.
- Risk taking: being able to cope with uncertainties and the willingness to take losses.
Entrepreneurs spot chances pro-actively, with the willingness to realise the chance of a
desired outcome, despite the risks inherent to the change.
- Market awareness: the ability to visualize the needs of existing or potential customers and
linking them to your own company. Entrepreneurs anticipate the specific needs of a clearly
defined target group and indicate precisely what their competitors do.
- Creativity: the capacity to ‘play’ with thoughts and ideas and to see new possibilities.
Entrepreneurs are open to what is happening in their surroundings (from different angles)
and are challenged by the possibilities. They can convert problems into new opportunities
and dare to take risks.
- Flexibility: the ability to adapt. Entrepreneurs interpret the effects of opportunities or threats
in their environment and adjust their strategy or business plan accordingly.
The business plan – Do I need one?
Reasons for writing a business plan:
- Support a loan application
- Raise equity funding
- Define and fix objectives and programs to achieve those objectives
- Create regular business review and course correction
- Define a new business
- Define agreements between partners
- Set a value on a business for sale or legal purposes
- Evaluate a new product line, promotion or expansion.
A business plan is a written description of your business and its future, a document that tells what
you plan to do and how you plan to do it. It should prove that your business will generate enough
revenue to cover your expenses and make a satisfactory return for those who are willing to invest in
your business (bankers/investors). It contains the following sections:
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