Introduction
Entrepreneurship is commonly perceived as starting businesses. According to Dees, 2001, p.1, the term entrepreneurship was coined from French in the 17th and 18th centuries. Elnaugh, (2008) book describes stories of entrepreneurship in a more specific approach. The term implied to individuals with adventurous ideas, motivated and stimulated by economic advancement to searching creative and better ways of doing things, especially commercial things. The persons venturing usually possess characteristics such as ability to bear risks, ability to collect and find financial resources, ability to build up motivational in organization set up.
Actually, businesses are learning experiences and part of socialization thoughts. As argued by Elnaugh, (2008) Challenges met by an entrepreneur are primary vital aspects for success and growth. Elnaugh views these challenges as excitement part of entrepreneurship. Besides, the entrepreneurs usually possess technical knowhow in venturing and especially marketing. The person venturing in the commercial activities have certain attributes that boost the above characteristics. These include innovation and creativity, dynamic in environmental change, purposed to gain profit in the venture and he/she is a risk taker.
In all Elnaugh stories, entrepreneurs are brought out as businesspersons who actually conceive, organize commercial venture, and undertakes frequent risks in his investment. For example, Elnaugh brings forth his story as to be contributed by her childhood activities with Dad and Mum. The childhood experiences provide adequate background to conceive ideas latter in life. Moreover, entrepreneur differ to a great extent on the creativity level, innovation and leadership demonstrated by an individual, and levels of venturing intensity and the independence in entrepreneurship.
Present and potential businesspersons have broad spectrum of ideas and options to choose when venturing in an entrepreneurship arena. There are also failures in the business environment. Nevertheless, entrepreneurs are faced with investment aspect such as key characteristics of an entrepreneur, idea generation, innovation and creativity, resources availability and personal and business failures. The report will discuss and compare the characteristics of the entrepreneur with those commonly cited in the entrepreneurship literature and Elnaugh, (2008) stories. In addition, idea generation particularly in resources and socialization, characteristics and failures in business are discussed in depth.
Characteristics of an entrepreneur
Entrepreneurs must possess some key qualities of a capitalist in the commercial ventures they undertake. In fact, businesspersons need not possess all the characteristics or attributes of becoming entrepreneurs, but should at least possess certain qualities required to succeed in the venture they are undertaking. Elnaugh, Ivan, Michelle, Simon and the rest brings out similar characteristics. Ivan is charismatic and focused in business activities. The book conclusions on the entire featured entrepreneurs including Elnaugh have exhibited similar characteristics in entrepreneurship ventures.
Most researchers and scholars have indicted that, there are essential traits that businesspersons need to possess to succeed in the kind of venture they undertake. As indicated in Elnaugh, (2008) stories, these essential entrepreneurship elements are; independence, risk takers and bearers, success and achievement motivated, opportunistic in commercial activities, creativity and innovativeness, quick learners. In addition, entrepreneurs must have essential attributes regarding integrity, reliability, focused, initiative and responsibility, flexible, confidence, planners and perseverance (Kumar 2008, p. 42).
Elnaugh book featured individuals exploit the above traits and apply then in the business opportunities. Usually some opportunities in business environment require many of the attributes while other opportunities require very little. As noted from the book, the rightness of an individual in business is more dependent on the requirements of a particular opportunity. According to Johnson et al. (2003, p.3) it is accepted that entrepreneurs are agents for change, provide innovativeness and creativity, generate business ideas, and help business venture grow and expand.
In essence, Elnaugh views entrepreneur to possess qualities such as innovativeness, creativity, independence, motivated, stimulated by achievement and success, integrity, responsibility, and focused (Elnaugh, 2008). Johnson et al (2003, p. 4) indicated that all entrepreneurs’ attributes are categorized as psychology attributes in literatures. Further, kamineni (2002), as quoted in Johnson et al. (2003, p.3) argue that, “research within entrepreneurship literatures has concentrated on need for achievement, risk takers and bearers, and the locus of control”. All the entrepreneurs in Elnaugh book are risk takers, driven by independency and locus of control.
Empirical research studies have indicated a positive relationship between the need to achievement and entrepreneurship adventurous. In the book by Elnaugh, (2008 p.37-105), business nightmares, all individuals included provide good examples of a relationship between their intended business activities, business growth and the need for achievement and success. Similarly, Steward et al. (1999, p.147) and Rauch and Frese, (nd, 49) established that businesspersons who are entrepreneurs, have higher need for success and achievement compared to their managers or other non-entrepreneur business owners.
Locus of control and independence in entrepreneurship provide businesspersons with motivation and stimulation to control and influence economic and business events in their lives. The attribute of entrepreneur control and independency is distinct to risk taking and need for success and achievement. Risk taking involves taking chances when making entrepreneur decisions. Elnaugh, (2008) stories indicate that entrepreneurs usually apply their creativity and other psychological traits to make risky decisions in uncertain business environments. In this respect, entrepreneur desire to achievement and success, compel them towards creativity and innovativeness on risky decisions in uncertain environment, persevere enough to influence, control internal and external events, and eventually succeed.
Studies support Elnaugh, (2008) in that entrepreneurs are highly ambitious, achievers, reliable, responsible, competent in business, aggressive, creative and innovative, and work hand and optimistic to achieve and succeed in life. Conversely, entrepreneurs possess traits that are not related to personality but are driven by the opportunities that the entrepreneur encounters (Nimalathasan, 2005, p.350). These other traits are resourcefulness, opportunistic, brainstorms, inventors and business organization builders. Supported by the above entrepreneur’s characteristics in literatures and Elnaugh, (2008) stories have observed that entrepreneurs are risk takers, independent, innovators, inventors, initiators, responsible, tolerance to ambiguity and uncertainty, driven by internal locus of control towards desire for achievement and success (Nimalathasan, 2005, p. 354).
Origin of business ideas
According to Mohanty, (2005, p. 35) the concept of entrepreneurship involves identification of business opportunities, evaluating opportunity viability, and engage into commercial venture on the opportunity. Elnaugh identified her opportunity since her childhood ages where the early life experiences and the training in the international arena, meeting people of different calibers stimulated her entrepreneurship capacity. It usually requires organizing commercial activities and developing selling product or services.
Therefore, as argued in Elnaugh stories, entrepreneurs not only seek and perceive business opportunities but also organize resources such as money, work force, machines, methods and materials. Michelle and Doug Richard are examples of entrepreneurs who support need to organize resources and in particular cash. Idea generation is possible through familiarity, training and exposure, insight, dreams, observations and education system by an entrepreneur (Talloo, 2007, p. 20). Most businesses and individuals generate ideas through market surveys and researches. In essence, entrepreneurs generate many ideas from which he or she chooses the best and viable business venture. Origin of business ideas primarily depend on individuals’ creativity and innovativeness.
Typically, ideas develop or originate from unsatisfied demand, new invention, substitute of an existing inferior product, or due to recognition of unexploited resources or opportunities. As noted by Talloo, (2007, p. 20) besides idea generation or origin, entrepreneurs utilize other elements to mobilize and activate new idea or opportunity into profit making ventures. As Elnaugh, (2008) brings forth, these elements include the past life experience/ observation, technical and theoretical knowledge, professional abilities and the availability of different required resources. Life experience and socialization of an entrepreneur plays significant role in influencing idea generation as exhibited by Elnaugh early life and as a traveler. In fact, most of entrepreneur abilities or attributes are either inborn or acquired through life experience and in the process of socialization.
Life Experience, Socialization and Business Idea Generation
Elnaugh early life experience, socialization and traveling life brought about dream, which she was assisted by creative writer, Scott, by sharing the idea. The concept of entrepreneurship is believed to be an evolving concept. Mohanty (2005, p.33) argue that advancement in technology has made entrepreneurship concept to undergo metamorphosis and emerged as vital contribution for social-economic development and growth. In this case, concept of entrepreneurship is shown by many research as to be contributed by inborn traits or qualities acquired through socialization or life experience.
Ivan and Michele stories bring forth elements that make individual increase, develop creativity, and provide passion towards entrepreneurship. As in the story of Nick Wheeler, Elnaugh perceives passion of entrepreneurship as expensive by devoting ones life and commitment of cash. In addition, as supported by Elnaugh and wheeler stories, problems crop up forcing individuals in the social context to develop ideas to solve problems that translates to business opportunities. These stories hold that individuals act as creative problem shooter, bringing about viable business opportunity, which is mingled with social dynamics (Mohanty, 2005, p. 35).
Innovation and creativity
Lack of knowledge, resources, creativity and innovation, and motivation contribute to failures of an entrepreneur. As stated by Blichfeldti (2009, p. 416), it is undoubtedly that innovation and creativity stand to comprise the primary mantras in entrepreneurship or in any business undertaking. Elnaugh, lord Jeffery, and Ivan Innovation and creativity unlocked business ideas and brought up growth and development in their businesses. Entrepreneur are described and known to be persons who engage in new things that create something of value and growth.
In fact, as Elnaugh describes, innovation and creativity enhances entrepreneurs to struggle in realizing the generated business ideas. Accordingly, innovation and creativity are regarded as central part of entrepreneurship and for realizing business ideas (Blichfeldti, 2009, p. 416). Elnaugh, (2008) book stories concur with Peter Drucker suggestions on the correlation between creativity and entrepreneurship. Actually, Ducker’s theory applies all stories where individuals promote and expand businesses based on need to achievement and creativity. Peter Drucker perceived innovation as radical and systematic thought, tool or instrument applied by businesspersons and especially entrepreneurs to exploit business opportunities (Drucker, 2007, p.121).
Further, he suggested innovation as a disciplined learned and practiced for development. Likewise, Elnaugh, (2008) have brought forward innovation and creativity notion as contributed by early life experience and social process rather than being process driven. This is because innovation cannot be planned and depend largely on the level of individuals creativity. Generally, in the world of increasing globalised economy, entrepreneurship idea becomes vitally important towards growth of development of organizations and small enterprises. Brian Souter story support that there are dangers of going international. In fact, entrepreneur lacking leveraging innovation and creativity present a danger to business in the international market environment.
Creative thinking usually brings up new ideas and opportunities to excel business venture. Idea generation through creativity is extremely important aspect of life and a feature of daily activities (Elnaugh, 2008). Generating ideas can occur from multitude of situations in individual’s life raging from experience from early life, work situations, and technology advancement that make individuals act or live in an entrepreneur manner. According to most of Elnaugh’s stories, featured individuals think were born with creative thinking qualities or abilities. Nevertheless, most of individual’s creativity is acquired along the path of early life experiences and socialization process. Talloo, (2007, p 21) argue that creativity is the process of coming up with new ideas and viewing opportunities.
He point out that creativity is continuous, logical and analytical systematic process of generating ideas. In order to facilitate these ideas generation, it requires an investigation of the environment, culture and sociological aspects through interaction especially in the early life experiences. Thus, interaction between individuals and early life experiences are some of prerequisites of creativity and innovations as pointed in Elnaugh, (2008). In addition, according to Drucker (2007, p 27) idea generation or entrepreneurial life is much influenced by the intrinsic motivation of an individual. Drucker (2007, p 170) conclude that the primary objective of an entrepreneur is to bring into being a business venture, reviving old business and rejuvenation organizations resources and capabilities to facilitate growth.
Resources
Entrepreneurs seek to maximize profits and enhance business ideas progress. This is not possible without resources organized to fulfill the objectives. Business resources include financial resources, human resources, physical resources and the non-physical/ intangible resources. Entrepreneurs direct and organize these resources within the challenging business arena, to achieve markets wants and accomplish their objectives. Ideas generated through creativity and innovation should be matched with the business resources and capabilities on all opportunities that arise in business external environment. Environments are dynamic and the main objective of businesses is to gain maximum profitability levels, take control of most useful resource cash and increase business competitive advantage (Elnaugh, 2008).
In general, internal business resources and capabilities provide a more secure base in challenging environments and a long-term progress. Business premises failure is attributed to mismanagement of business resources and less commitment to capabilities. Richard and Michelle stories supports that businesses fail due to lack of control on cash and not recognizing cash as primary business resource. The challenge to an entrepreneur remains the source of finance and the involvement of key personnel to provide support and in return capability for a competitive advantage.
Sources of finance
The entrepreneurship notion revolves around generating business ideas on innovative and creative manner. Elnaugh, (2008) stories portray that, financial decisions in business disregard the role of innovativeness in business. Commonly, researches indicate that the availability of accurate and quality ideas financial information affects largely business demand and supply of financial resources (Daniels, 1976, p. 29). It is important for entrepreneur to know that both the suppliers of financial resources and entrepreneur themselves learn about each other and that innovative ideas become important regarding financing start ups or exiting business entities. Therefore, entrepreneurs need to take control of all the available resources. There are various sources of finance for an entrepreneur. These include internal and external sources of finance.
For start up business, the only options to generate funds are the external sources. As Michele story, Source of finances generally depend on the amount of capital required (Elnaugh, 2008). Internal funds refer to amount of money that is generated from within the business for a specified financial period. This type of finance is regarded by Michelle and Richard as most sensitive and fragile source of business strength and capability. External source is type of finance obtained from outside the business. For example, bank loans, cash from venture capital, hire purchase and lease, debentures or issue of shares. External finance sources depend on the period the entrepreneur need such fund. Finance sources are categorized as short-term loans, medium term loans or long-term loans. Funds are therefore pillars of business operations and entrepreneur need to take maximum care and control (Elnaugh, 2008).
Human resources
Human resource refers to the people who facilitate coordination of business activities. This resource is regarded as a vital to growth and prosperity of any business undertaking. Usually, human resource support and act as organizational function that deal with people or the workforce. Involvement of key human resource personnel to provide support on business growth and development is very important. Elnaugh stories entrepreneurship rest upon organizations’ ability to enhance and develop learning processes by exploring new ideas, innovativeness and creativity, and exploiting the existing human resources (Morris et al. 2008, p. 170).
Ideally, the effectiveness of business enterprises is determined by the coordination, commitment and the quality of human resources. Staffs ensure that all processes in the business are effectively managed and attained. Flören (2008, p. 7) suggests that entrepreneurs’ decisions on employees are critical processes that ensure business enterprise gets and retain the right employees and at all time. Furthermore, employees depend on the influence of organization management and staffs influences the functioning of organizations. Morris et al. (2008, p. 170) supports Elnaugh, that entrepreneurial activities necessitate all staffs to think and act in an entrepreneurial manner.
Personal and business failure
Failure is defined to portray different meanings by scholars. To economists the term refers to a situation where the required rate of return cannot cover the opportunity costs. From business perspective, it refers to the situation of business becoming insolvent and consequently closing down. According to Peacock, (2000, p. 2) entrepreneur failure in life causes business failure. Alternatively, exit of entrepreneurs from business sector can be termed as personal and business failure. Elnaugh business prospered exorbitantly not until when her marriage with first husband deteriorated. This eventually contributed to business behavior but eventually the experience resulted to independent control.
Peacock, ( 2000, p. 3) quotes that “ the termination of business is deemed to be a failure if the firm ceases operating under its existing owners and structures because it is unable to function profitably, or does so because of existing or impending failure, insolvency or financial difficulties”. This quote is well presented and supported by Brian, Dame Anita, Richard and Michelle’s stories (Elnaugh, 2OO8). There are many instances when the business or persons are deemed failures in business arena. Usually, most instances are caused by environment dynamics, lack of proper planning or lack of control on business resources such as finance or human resource knowledge.
Instances and causes of personal and business failure
Elnaugh stories support that small business failure is closely connected to failure of persons managing or controlling business activities. When enterprises are managed by owners, problems of owners are directly transferred to business causing failure. Problem of Dame Anita and Richard are some of instances where root causes of failure are traced from lack of finance or poor/crisis management. Symptoms of problems in organizations are distinct to failures. For example, poor planning or mismanagement, loosing control of cash and lack of enough stocks can be symptoms of problems in organization and solving these problems do not necessarily counteract failures. Other symptoms may not be proprietors translated problems or because of a lack of business knowhow or managers/entrepreneurs getting wrong market environment information (Peacock, 2000, p. 8).
Lord Jeffrey personal problems contributed to business failure due to lack of time, pressure, lack of adequate and quality information. Business failure is caused by high business risks and uncertainties, products failure in the market, and external environment changes that makes business exit from an industry. In General, Elnaugh stories conclude that causes of business failure remain to be the management inefficiency, external environment factors and the behaviors of managers/employees. To respond to these causes and instances, organizations particularly entrepreneur need to change organizations to be learning organizations, take control of cash and control the idea generated to environment challenges (Elnaugh, 2008).
Conclusion
As evidenced by Elnaugh stories entrepreneur refer to an individual who undertake a commercial activity, organize activities, find resources, and major in taking risk when venturing in the commercial setups. Entrepreneurs must understand the process of entrepreneurial and business strategic management and especially controlling cash resources. Entrepreneurship must hold true the adage that “persons do not plan to fail but fail to plan”. Similarly, organizations do not plan to fail, managers or entrepreneur fail to strategically plan from idea generation, resource acquiring to business operations.
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