types of entrepreneurs and their characteristics - series of health economics and entrepreneurship for pharmacy students part 3 Pharm Paul Malaba

1. Types of
entrepreneurs and
their characteristics

2. COVERAGE
 Identify internal entrepreneurial motivators
 Identify external entrepreneurial motivators
 Classify entrepreneurs based on characteristics
 Self assessment techniques

3. Introduction
 Additional concepts

4. Entrepreneurship
A Mindset
In broader perspective, Entrepreneurship is more of a mindset of
venturing at various levels :
1. Individual level : Innovator, Entrepreneur or Intrapreneur
Application in normal life or for a new business or at existing job
2.Organization level : Competitive Innovation, Corporate Entrepreneurship
towards constant improvement to create tomorrow's competitive advantage faster

5. Mind set cont,,
3.Country level : Innovative Culture, Entrepreneurial Activity, Global Competence,
Field Supremacy
to establish country’s supremacy in selected fields and use them as growth drivers for
growth drivers for the economy, and also, to develop newer models for social
for social development.

6. Entrepreneurship
Derived from the French word
ENTREPRENDRE meaning
Undertaker or Go Between
With time the understanding about
entrepreneurship has gone through
considerable change :

7. Entrepreneurship – Understanding
with time
3.Element of Undertaking something or Going between
People undertook to sell the goods of a passive investor through new trade routes and

8. Entrepreneurship – Understanding
with time cont…
 Notion of Innovation
Entrepreneurship is not only doing new things but also about doing existing things in a new

9. Who are Entrepreneurs?
Are people who :
 create new businesses
 in situations of risk and uncertainty
 with objective of profit and growth
 through resource mobilization and
 opportunity capitalization

10. What causes the entrepreneurial
massive or rapid success(boom)
 Entrepreneurs as heros
 Entrepreneurial education
 Economic and demographic factors
 Technological advancements
 Independent life style
 International opportunities
 Unemployment
 Government support

11. Beliefs about Entrepreneurs:
Common Myths
 They are Gamblers and Extensive Risk Takers
 They are Born, not Made
 They are Academic or Social Misfits
 They have the Money for Stakes
 They are simply Lucky
 They are Day Dreamers
 They do it for only fPower and Money
conservative Thoughts
 They are ready to break away and try their own ways
 They use failures to build their strengths
 They are ready to slog (toil) and slog to be successful
 They are prepared to fail and fail again

12. Common Myths About Entrepreneurs
 Myth 1: Entrepreneurs Are Born Not Made
 This myth is based on the mistaken belief that some people are
people are genetically predisposed to be entrepreneurs.
entrepreneurs.
 The consensus of many studies is that no one is “born” to be an
“born” to be an entrepreneur; everyone has the potential to become
potential to become one.
 Whether someone does or doesn’t become an entrepreneur, is a
entrepreneur, is a function of the environment, life experiences, and
experiences, and personal choices.

13. Common Myths About Entrepreneurs
Although no one is “born” to be an entrepreneur, there are
common traits and characteristics of successful entrepreneurs
• Achievement motivated
• Alert to opportunities
• Creative
• Decisive
• Energetic
• Has a strong work ethic
• Is a moderate risk taker
• Is a networker
• Lengthy attention span
• Optimistic disposition
• Persuasive
• Promoter
• Resource assembler/leverager
• Self-confident
• Self-starter
• Tenacious
• Tolerant of ambiguity
• Visionary

14. Common Myths About Entrepreneurs
Myth 2: Entrepreneurs Are Gamblers
 Most entrepreneurs are moderate risk takers.
 The idea that entrepreneurs are gamblers originates from
originates from two sources:
Entrepreneurs typically have jobs that are less structured, and so they face a
so they face a more uncertain set of possibilities than people in traditional jobs.
traditional jobs.
Many entrepreneurs have a strong need to achieve and set challenging goals, a
challenging goals, a behavior that is often equated with risk taking.
taking.

15. Common Myths About Entrepreneurs
 Myth 3: Entrepreneurs Are Motivated Primarily by Money.
While it is naïve to think that entrepreneurs don’t seek
don’t seek financial rewards, money is rarely the
rarely the reason entrepreneurs start new firms.
firms.
In fact, some entrepreneurs warn that the pursuit of
pursuit of money can be distracting.

16. Common Myths About Entrepreneurs
 Myth 4: Entrepreneurs Should Be Young and Energetic.
 The most active age for business ownership is 35 to 45 years old.
 While it is important to be energetic, investors often cite the strength of the entrepreneur as their
entrepreneur as their most important criteria in making investment decisions.
What makes an entrepreneur “strong” in the eyes of an investor is
investor is experience, maturity, a solid reputation, and a track record of
track record of success.
These criteria favor older rather than younger entrepreneurs.

17. CHARACTERISTICS OF ENTREPRENEURS
 Vision
 High Energy Level
 Need to achieve
 Self-confidence and Optimism
 Tolerance for Failure
 Creativity
 Tolerance for Ambiguity
 Internal Locus of Control

18. CHARACTERISTICS Cont…
 Vision
 An overall idea for how to make their business a success.
success.
 High Energy Level
 Hard work of the entrepreneur compensates for small staff
small staff and limited resources available.
 Need to achieve
 Enjoy the challenge of reaching personal goals and are
and are dedicated to personal success.
 Self-confidence and Optimism
 Believe in their own ability to succeed and instill optimism in
optimism in others.

19. CHARACTERISTICS Cont…
 Tolerance for Failure
 Try and try again when others would give up and view setbacks
view setbacks and failures as learning experiences.
 Creativity
 Typically conceive new ideas for products and services and
services and devise innovative ways to overcome difficult
difficult problems and situations.
 Tolerance for Ambiguity
 Take uncertainty in stride but not reckless gamblers.

20. a. Entrepreneurial
motivators

21. Entrepreneurial motivators
 Internal entrepreneurial motivators
 These include
 desire to succeed,
 survival,
 self-actualisation,
 adventure,
 independence,
 profit maximisation

22. External entrepreneurial
motivators
 These include;
 infrastructure,
 export/import incentive schemes,
 pricing policy,
 credit facilities,
 education,
 role models,
 technology,
 environment

23. b. Classification of
entrepreneurs and
entrepreneurial core
competencies
.

24. a) Based on Functional Characteristics.
1. Innovative entrepreneur: Is the one who introduces new goods or
new methods of production or discover new markets.
2. Imitative or adoptive entrepreneur: Does not innovate, but imitate
techniques and technology innovated by others.
3. Fabian entrepreneur: They display great caution and skepticismin
experimenting with any change in their enterprise.
4. Drone entrepreneur: Are characterized by a die-hard conservatism
and may even be prepared to suffer the loss of business.
Classification of Entrepreneurs

25. b) Based on the Development Angle.
1. Prime mover: This entrepreneur sets in motion a powerful
sequence of development, expansion and diversification of
business.
2. Manager: Does not initiate expansion and is content just staying
in business.
3. Minor innovator: Contributes to economic progress by finding
better use of existing resources.
4. Satellite: Assumes a supplier’s role and slowly moves towards a
productive enterprise.
5. Local trading: Limits his enterprise to the local market.
Classification

26. c) Based on Types of Entrepreneurial Business.
1. Manufacturing: Produces the products that can be sold using
resources and supplies. E.g. Textiles, chemical & related products,
industrial machinery etc.
2. Wholesaling: Sells products to the middle man.
3. Retailing: Sells products directly to the people who use or
consume them.
4. Service: Sells services rather than products.
Classification

27. d) Based on Nine Personality Types of entrepreneurs:
1. The Improver: Uses the company as a means to improve the world.
2. The Advisor: Provides an extremely high level of assistance and advice
to customers.
3. The superstar: Here the business is centered on the charisma and high
energy of the CEO.
4. The Artist: This personality is the reserved but a highly creative type
(e.g. web design and Ad agencies).
5. The Visionary: Business is built based on the future vision and thoughts
of the founder.
Classification

28. 6. The Analyst: Company focus is on fixing problems in a
systematic way. Often the basis for science, engineering or
computer firms.
7. The Fireball: Business is full of life, energy and optimism.
8. The Hero: Have an incredible will & ability to lead the world and
your business through any challenge.
9. The Healer: Provide nurturing and harmony to your business.
Classification

29. e) Based on Schools of thought on Entrepreneurship.
There are six schools of thought on entrepreneurship each with its own
underlying set of beliefs.
 The great person school of entrepreneurship
 The Psychological characteristics school of entrepreneurship.
 The Classical school of entrepreneurship
 The Management school of entrepreneurship
 The Leadership school of entrepreneurship
 The Intrapreneurship school of entrepreneurship
Classification

30. NO CORE
COMPETENCIES
ENTREPRENEURIAL
ACTIVITIES
1. Initiative Does things before asked for
or forced by events
2. Perceiving
opportunities
Identifies opportunities and
mobilises necessary
resources to make good an
opportunity
3. Persistence Takes repeated or different
actions to overcome
obstacles
Entrepreneurial Core
Competencies

31. 4. Information gathering Consults experts for business &
technical advice. Seeks
information on client’s or supplier’s
needs.
5. Concern for quality work States desire to produce or sell a
better quality product or service.
6. Commitment to contractual
obligations
Makes a personal sacrifice or
expends extraordinary effort to
complete a job.
7. Efficiency orientation Finds ways and means to do
things faster, better and
economically
Core competencies

32. 8. Planning Various inter-related jobs are
synchronised according to plan
9. Problem solving Conceives new ideas and finds
innovative solutions
10. Self - confidence Makes decisions on his own and
sticks to them in spite of initial
setbacks
11. Expertise Possess technical expertise in
area of business, finance,
marketing etc.
Core competencies

33. 12. Self-critical Aware of personal limitations but
tries to improve upon them by
learning from past mistakes or
experiences from others.
13. Persuasion Persuades customers and
financiers to patronise his
business.
14. Use of influence strategies Develops business contracts.
Retains influential people as
agents. Restricts dissemination of
information in his possession
Core competencies

34. 15. Assertiveness Instructs, reprimands, or disciplines
for failing to perform
16. Monitoring Develops a reporting system to
ensure that work is completed and
that it meets quality norms
17. Credibility Demonstrates honesty in dealing
with employees, suppliers and
customers even if it means a loss in
business
Core competencies

35. 18. Concern for employee welfare Expresses concern by
responding promptly to their
grievances.
19. Impersonal relationship Places long term goodwill above
short term gain in a business
relationship.
20. Expansion of capital base Reinvests a greater portion of
profit to expand capital base.
21. Building product image Does everything possible
establish a niche for his product
in the market.
Core competencies

36. Entrepreneurship – New Trends
 Part Time Activities
 Home Based Concepts
 Co-preneurs (teams of two)
 Immigrant Entrepreneurs
 Multilevel Marketing
 Web based Opportunities
 Franchise Retailing
 National / Transnational Networking
 Corporate Dropout Teaming

37. Stages of Entrepreneurship
 Propensity to Enterprise
 Idea Generation
 Venture Startup
 Business Run (Stabilization/ Growth)
 Business Expansion
 Moving Out (Harvesting/ Succession)
-Stagnation/ Failure can happen at any stage
-One stage may not necessary lead to another

38. Why small businesses fail?
 Management incompetence
 Lack of experience
 Poor financial control
 lack of capital
 tax customer credit
 Failure to develop a strategic plan
 Uncontrolled growth
 Poor location
 Improper inventory control
 Inability to make the entrepreneurial transition

39. The key DO’s
 Know your business in depth
 Develop a solid business plan
 Manage financial resources
 Understand financial statements
 Learn to manage people effectively

40. Self assessment techniques
 An entrepreneur needs to assess
him/herself in some factors deemed
important for success in business
 There are four Capital Factors
associated with success in business:
Human factors,
Psychological factors,
Sociological factors, and
Financial factors.

41. 1. Human Capital
 Human Capital refers to the set of skills, knowledge and abilities
we develop through education, training and experience.
 Important areas of Human Capital include;
 Technical skills,
 Business skills,
 Education,
 Experience, and
 Wisdom and judgment.

42. 2. Psychological factors
 This measure your entrepreneurial “mindset” or the attitudes,
traits and characteristics associated with success in
entrepreneurship.
 Some factors related to this are;
 Passion
 Faith and commitment
 Tolerance of risk and uncertainty
 Adaptability
 Drive and determination
 Energy

43. 3. Sociological factors
 An entrepreneur’s sociological capital is his or her sphere
of social connection in;
 family,
 social,
 professional and recreational networks,
 entrepreneurial role models and
 supporting networks, comprising lawyers, bankers, accountants,
suppliers, potential customers, and investors.
 Research has consistently linked strong social networks to
success in entrepreneurship.

44. 4. Financial factors
 New businesses, like most things, take money to get started.
 You’ll need start-up capital to buy office furniture, computers, and other
equipment.
 You’ll need operational capital to run the company before you make
your first sale, and you’ll need personal financial reserve capital – money
to pay your household and living expenses before your company has
started to generate cashflow.
 Most businesses don’t become profitable until the third year of
operations on average – so you must determine whether or not you can
weather the financial storm that will ensue without a secure income.

45.  As an entrepreneur you need to assess yourself in
individual areas.
 The areas in which you find yourself good can be
utilized as your strength meanwhile discovering your
weak spots and taking appropriate measures to
improve on them.