The determinants of a successful entrepreneurship

https://www.blogger.com/blog/post/edit/preview/1991252217317526875/1186285046452449870 Peter Drucker, noted that although the term entrepreneur has been used for over 200 years "there has been total confusion over the definition" substantial disagreement concerns the concept of entrepreneurship and the individual who is called an entrepreneur.

According to the article published in the Advanced Management Journal, Michael Morris states that early definitions of entrepreneurs were developed by economists. This definition emphasized factors such as risk and financial capital. Thus, one of the earliest references to the term entrepreneurship has been traced to Richard Cantillons' work in the field of economics in 1734. To Cantillon, entrepreneurship is self-employment with an uncertain return. In the early 1900s, Joseph A. Schumpeter had described an entrepreneur as a person who carried out new combinations which may take the form of new products, processes, markets, or organizational forms or sources of supply. Schumpeter is known for his concept of creative ‘’destruction’’ which states that entrepreneurs are a force for change and make existing products obsolete. Such a definition and others during this period emphasized innovation. Research at the end of 1990 often focused on the personality traits of people who chose to work in corporations.

Sources of ideas:

Where does the idea of establishing a new business originate? Research shows many sources, some of the more common ones, based on a description on a survey of some of the fastest-growing private companies. Nearly half (45 percent) of people responding reported that they got the idea from the experience gained while working in the same profession. Then, moving into their own business was not complicated by the task of getting to know who’s who and what’s what in the business. They knew how this operates; they typically had a network of contacts-so important at the start of a new business.

The years of being in the business gave those insights into unfulfilled needs and now those needs translated into opportunities for new business. The industry experiences as a source of ideas for new business leads to the conclusion that the most promising preparation for an entrepreneur may be conventional jobs and providing the means to discover opportunities upon which to start a business.

The merit of the approach is being much more living above mistakes arising from inexperience. By this, mistakes are never welcome, even in a well–established organization. Many of our most successful small businesses were founded by individuals who learned what it takes to succeed while working for somebody else.

However, whatever business one embarked upon the tendency that I could do better is one of the attributes of a successful entrepreneur. These responses were given by many respondents. The confidence level enjoyed by many entrepreneurs, they feel that their abilities and perseverance will give them the edge to succeed at something in which others are already engaged. The inspiration to enter into business often starts with dissatisfaction with something that is currently on the market.

About 15 percent of the entrepreneurs surveyed said that an unfilled niche in the consumer marketplace, gave them the idea to start their business. This is a variation of the idea source just described. Many think that the founders of successful enterprises were people who engaged in careful planning, but only 8 percent of the responses to the survey cited the idea for the business as having resulted from a “systematic” search for business opportunities.

There are two basic approaches for people to search for opportunities for entering into business. Some of these approaches are: by looking at their skills, abilities, background, etc, to determine what kind of business they should start. This is known as the inside-out approach, which is based on the key determinant of business success. This approach to entry into business is sometimes known as idea generation. Such an approach involves identifying your most promising skills and generating ideas as to how these skills might be shaped into the foundation of a business. Some skills have a great deal of economic potential, while others do not.

The inside-out approach is reflected in that famous piece of advice for prospective entrepreneurs, if you built a better mousetrap, the world will beat a path to the door. The idea that your capabilities determine the right business has a sound business. When you provide something that sets you apart, you have established a possible basis for a successful business. Then, to follow this approach, the first concern is to identify the product or service that can make our business unique. The best advice is to be creative and consider everything that is possible.

However, idea generation should identify possibilities with the evaluation of those possibilities to be made later. The logic is to define what our business can do or is capable of doing.

The outside-in approach:

They turn this process around, looking first for existing opportunities. Hereby, the outside-in approach, also called opportunity recognition, has as its basis the idea that a business can succeed only if it responds to or creates, a need in the market. The process to translate from general conditions or trends to specific opportunities. Many of our nation's most noted successful businesses resulted from recognition by their founders of the significance of two or more societal or economic conditions. Hindsight, allows us to identify the trends and understand their significance, the task of the entrepreneur, however, is much more difficult, for it requires spot ling the trend before others have exploited it as an economic opportunity. A requirement of opportunity recognition is environmental scanning. It means deliberately searching for developments that can be translated into economic opportunity. News of these opportunities can come from many sources. Newspapers allow the entrepreneur to stay abreast of emerging trends in society, fashion, technology, home, and work-life, as may affect the public

Ø Business periodicals provide coverage of change in the economy.

Ø Trade journals and trade shows describe the events affecting a particular industry.

Ø Government publications cover a wide range of topics. For instance, publications that give information on new parents from parent offices and reports on foreign markets that are published by the department of commerce.

Ø Product licensing information is provided by independent brokers, universities, and corporations.

All these are some of the more commonly used sources; they are by no means the only ones. Entrepreneurs are always looking for news of economic developments that will provide an opportunity for a new business.

Serendipity: Many businesses are established as the result of something other than a deliberate plan or search on the part of the founder. These starts are known as serendipity, and then serendipity is defined as the faculty of making happy chance finds.

A serendipitous start is one in which the right factors come together in such a way to allow it to happen. For instance, a man about to take over a company that is about to be liquidated, the taking over is to be reborn a new business.

Innovation:

One f the characteristics associated with successful entrepreneurship is innovation. People find a better mousetrap and use innovation as the basis for a new business. This is a classic pattern of entrepreneurship, and we have seen countless examples of it in our economy. When Fredrick Smith developed the hub and spoke system, no company could provide nationwide overnight package delivery. This kind of successful innovation supports the view that entrepreneurship and innovation go hand in hand.

However, in every case of a creative idea leading to success, there are many instances of innovations that did not make it. As the author of an article in the publication “business and economic history” put it, failure, the lack of technical and commercial success for a product in the marketplace is endemic to innovative technology.

An attempt at capitalizing on innovation has its own set of problems that can keep it from succeeding. Another reason to doubt the link between innovation and entrepreneurship is that most new businesses are very similar to many that already exist. The man who opens Calabar restaurant may be serving a new market, maybe providing wonderful food and service, and may offer an excellent menu-a combination of factors allowing him to succeed. Whether any of these elements constitute innovation, however, is doubted. Many similar examples of businesses starting and succeeding despite doing something that has been done many times before it can be found. However, while innovation is held by many people to be an essential ingredient of an entrepreneur, it is neither sufficient nor necessary for entrepreneur success.