- has possession of a new enterprise, venture or idea and assumes significant accountability for the inherent risks and the outcome
- chooses a level of personal, professional or financial risk to pursue opportunity
- identifies a market opportunity and exploits it by organising their resources effectively to accomplish an outcome that changes existing interactions within a given sector
- is the main person behind a firm
- can demonstrate his quality as a leader by choosing the right managers for the firm
The word has a French derivation meaning “one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods”.
There are several key words and phrases within the above definitions that allow us to firmly distinguish the entrepreneur from the enterprising business owner and manager. These are worth highlighting; “new idea”, “significant risk”, “identify a market opportunity”, “an outcome that changes”, “and his quality as a leader”. Maybe an example would cement the understanding: a person who buys a franchise is a business owner/manager and posses “enterprise”, a person who owns the product/service and distributes the franchise, is an entrepreneur.
Being an entrepreneur is definitively a tricky business (no pun intended), as many new ventures fail. Even in the best of economic climates, starting a new venture as an entrepreneur is rife with risks. In my view, entrepreneurs must possess high levels of passion and commitment. To further enhance the potential for success, they require a certain independent or resilient nature, motivation and communication skills, leadership qualities and a certain je ne c’est quoi. All that is required after that is organisational abilities, funding and a large glob of good luck.
“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.” Peter F. Drucker
And that quote is the key to entrepreneurial success. Entrepreneurs are more passionate than experts and more creative than gamblers. This ability to accept failure as feedback, and have the passion to continue through financial adversity and social constraint makes the entrepreneur a rare commodity. An entrepreneur seeks out change and has the courage and creativity to address it.
The most obvious form of entrepreneurship is that of starting new businesses, however, in recent years, the term has been extended to include social and political entrepreneurial activity.
“The critical ingredient is getting off your butt and doing something. It’s as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.” Nolan Bushnell
Entrepreneurs emerge from the business population, utilising a combination of opportunities, creativity and well-positioned people. An entrepreneur may perceive that they are among the few to recognise or be able to solve a problem. A critical feature that distinguishes the entrepreneur from the enterprising business person is the fact that the entrepreneur takes action.
We all have ideas. We all complain about the failure or inefficiencies of certain products and services. The entrepreneur is prepared and committed to actually do something about it. The Ethiconimist does this altruistically and ethically.
Definition – Social Entrepreneur
• a person who uses commercial means and markets to harness the resources to help make the world a better place
Social entrepreneurs are an increasing phenomenon. In line with the traditional beliefs about entrepreneurship, it is possible to see that being an entrepreneur is as much about exploiting the opportunity within the market as it is about making personal wealth. Social entrepreneurs do act within a market but their main aim to create social value through the improvement of goods and services, offered to the community, rather than to simply create a personal fortune.
Generally, their main aim is to help offer a better service improving the community as a whole. Predominately social enterprises run as non-profit operations where revenues are channelled into a social cause and any profits, if indeed any are made, are used strictly for the development of this social cause.
“In embracing change, entrepreneurs ensure social and economic stability.” George Gilder
In the context of the above quotation, it can be understood that social entrepreneurs can use their experience and skills to effect social change and to support social stability. It is easier to understand that the attributes of passion and commitment are more relevant in this area of entrepreneurship as the returns are social not strictly financial.
The key issue is that a true entrepreneur makes it happen. They possess the ability to see an opportunity, to visualise a solution and then to make tangible their vision. Action is the key, whether for a traditional entrepreneur, or a socially-oriented individual. I have heard it said that entrepreneurs are born, and not created by experience. That maybe true bearing in mind the requirements for passion, motivation, creativity and the like. Enterprise and business ownership undoubtedly require similar qualities so maybe we are talking semantics, but the following Richard Branson quote may illuminate the difference:
“I never wanted to be a business man; I just wanted to change the world.” Richard Branson
Branson is a particular role model of mine. He is the first ever businessman to create eight different multi-billion pound turnover organisations and he runs all of these on his personal values, rather than just strict profit/shareholder requirements. To me, that is the key to entrepreneurship.
Work for your values, not just your shareholders; choose to be an ethiconomist.
This article been taken from Phil’s new book, available from the end of March 2010