Technical Articles Theme 05

Title: Routes to Entrepreneurship: Characteristics of Successful

Entrepreneurs
Videos: 42-55

Topics Covered
42. Co-entrepreneurship
43. Young entrepreneurs
44. Minority and Senior entrepreneurs
45. Part-time and home based entrepreneurs
46. Social entrepreneurs
47. Women entrepreneurs
48. Who are Wantrepreneurs?
49. The pitfalls in the journey of entrepreneurship and how to avoid pitfalls?
50. Characteristics of successful entrepreneurs (part a)
51. Characteristics of successful entrepreneurs (part b)
52. Characteristics of successful entrepreneurs (part c)
53. Some Key skills of successful entrepreneurs (Part a)
54. Some Key skills of successful entrepreneurs (Part b)
55. Some Key skills of successful entrepreneurs (Part c)

Author: Umar Shahzad, Lecturer Business Administration, Virtual University of Pakistan

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 Co-Entrepreneurship
Co means “two” people working together. Similarly, in co-entrepreneurship, two people work
together on an entrepreneurial project. There is no restriction of age, gender, cost etc. in co-
entrepreneurship. Sometimes, idea of business is developed together and everything is also shared
in the business. They work in a team to establish a venture. Co-founder is also a term used for such
entrepreneurs who create a business together. Serial entrepreneurs are those people who have a lot
of experience of creating new ventures. They are very skilled people. They often establish a
venture for selling it and then create another venture to sell that as well. Co-entrepreneurs are often
those who have good skills of establishing a business or they can be good advisers of establishing
a business. Third method to become a co-entrepreneur is to be an investor in an entrepreneurial
venture. For an entrepreneurial venture, one has to manage a team and it is not easy to work in a
team. Same applies to co-entrepreneurship. First challenge of co-entrepreneurship is “personality
conflict”. Second is “risk taking behavior”. Third is “personal life and commitments”. “Team
conflicts” may also be there. “Financial matters” may also be a cause of concern. “Profit sharing”
and “partnership dissolution” may be the other issues. If partnership deed was not there then more
issues can arise while business dissolution if it was not registered business. Scale up issues may
also arise if business gets flourished. These may differ in different types of the co-
entrepreneurship. One partner may be highly committed versus other. Hence, in a good
entrepreneurial venture, these issues should be managed properly.

Minority and Senior Entrepreneurs

Minority means a group of people who are less in number compared to a social group in any social
environment. They usually face some disadvantage in the society. In the flag of Pakistan, while
color is for minorities. Minority can be gender based, ethnicity, race, religion, linguistic and
disability based. There may be certain basis upon which we declare a group as minority. For
example, based on religion, Hindus, Christians, Sikhs, Parsis and Buddhist among many other are
the minorities in Pakistan. These minorities can also become entrepreneurs but they also have to
face competition in the entrepreneurial as well as in the job market. So, they often start business.
Even in US, minorities are closely watched as they often do their own business. Main issue of
minorities is that they often have to face discrimination in their country from dominant groups.
For informal sources of finance through loan, they also face discrimination as they are often unable
to provide collateral to banks for gaining loan. Senior entrepreneurs are those people who start
their business after the age of 50 years. This is usually the age of retirement or early retirement.
They often feel they can start small ventures. Corporate layoffs are also a reason. Personal
fulfillment and self-actualization are other reasons for senior entrepreneurship. It may be for the
need of additional income as well. Sometimes, people do it for spending quality time as well.

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 Part-time and Home-Based Entrepreneurs
There are two approaches of entrepreneurship. Full-time or part-time entrepreneurship. Full-time
entrepreneur has to bear time, cost and all the associated risk of the business only for a single
business commitment. Part-time entrepreneurship is the one which is not the main source of
income for an entrepreneur. An example of part time entrepreneurship might be of a person who
is doing a job and is also doing a business in the additional time after office hours. Important
considerations for part-time entrepreneurs are;

1. The role of financial or non-financial motives: Financial motive may be a lesser income
in the job. Non-financial motive might be that the entrepreneur is developing the idea and
once the business would develop, he would leave the job and will join the entrepreneurship
as a full-time activity.
2. Social pressure: This is the second issue for which you want additional income to enhance
living status. The problem is that due to extra efforts, an entrepreneur may get burnout in
which stress increases and he may leave the business venture altogether.
3. Over commitment: Employment and business both demand time and social life and those
may get effected simultaneously. You will have to manage both the risks with a good
balance.

Home based entrepreneurship is more common in rural areas and it is also called micro or nano
business. It is often a skill-based business at home. Mostly females are engaged in home-based
business. Access to finance remains an issue as financial institutions don’t see it as a mature
business. Increased production / scale up becomes an issue for home businesses. Work life balance
also becomes an issue.

Social Entrepreneurs
Social entrepreneurs solve community issues through novel business ideas. They are willing to
take risk for positive change in society through their initiatives. So, they don’t do their business
only for profit. There are so many issues around us such as unemployment, poverty, minority
association and disability etc. Then, why not that one should create a business that solves these
problems and the one who solves these issues is a social entrepreneur. A social entrepreneur does
business for social a cause. Often NGOs take such initiatives. But, business model of NGO stays
only on donations or funds from local and international donors. To break that model which is not
sustainable, a model of business and NGO was merged for social entrepreneurship.

Social entrepreneurship is actually a socio-economic business model. Whole profit gets re-invested
in the same business. They often work with government and NGOs. Grameen bank is the best
example of social entrepreneurship that was made for ultra-poor people who had no collateral.
Grameen bank provided loans to such communities. Its recovery rate was highest and was 99 %.

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In Pakistan, Akhuwat Foundation is also an example of social entrepreneurship like Grameen bank.
It does not charge interest as it offers “Qarz-e-Hasna”. In 2010, a restaurant was started where
waiters were blind just to make the people realize about their disability and to give jobs to
disadvantaged. Three major issues of social entrepreneurship are there. First is financial
sustainability. Therefore, Akhuwat also takes donations. Operation self-sufficiency and business
sustainability are the other two issues.

Who are Wantrepreneurs?

Wantrepreneurs are those potential entrepreneurs who make unrealistic desires for starting a new
business. They are also often confused about business idea and rely on so many other people and
hence get confused. They also find it difficult to make timely decisions. They are often
complaining and not willing to fail. They are day dreamer and risk-averse persons. The main
difference between entrepreneur and wantrepreneur is that entrepreneur converts idea into a startup
while wantrepreneur keeps on planning for the business idea. You have to decide whether to
become and entrepreneur or a wantrepreneur. It is always better to use your energies for becoming
entrepreneur rather than entrepreneur.

Pitfalls in the Journey of Entrepreneurship

How to avoid pitfalls?
Pitfall means an area of uncertainty. Pitfalls in the entrepreneurial journey happen due to the
mistakes of entrepreneurs. One of those mistakes is “lack of managerial skills”. For example, if
you can design a good product but cannot manage the people then it is an issue. Second is the lack
of experience. So, never over rely on lack of experience in new business. Poor financial control is
another issue that can cause a pitfall. It is mainly because entrepreneur starts spending on personal
financing as well. There are often poor controls as well that might be a source of entrepreneurial
pitfall. “Weak marketing effort” is another issue. “Failure to develop a strategic plan” is another
issue. You need to have plan B as well being an entrepreneur. One should know which competition
to avoid initially. “Uncontrollable growth issues” are also a problem. Unplanned diversification in
business creates problems as well. Selection of poor location is also an issue. For example,
transportation may become an issue for poor location. Similarly, “incorrect pricing” is also a big
issue that can lead towards an entrepreneurial pitfall. One should avoid over pricing as well as
underpricing. One should avoid inability to make transition in the entrepreneurial journey. Self-
awareness and awareness of business is the key. Networking also helps in the industry. An
entrepreneur must tune himself for new and better qualities as an entrepreneur.

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 Characteristics of Successful Entrepreneurs (part a)
Learning about the characteristics of a successful entrepreneur can help a lot to the entrepreneurs
for a better entrepreneurial experience. It also helps us in understanding the reasons that contribute
to the success of entrepreneurs. Some of the major characteristics of a successful entrepreneur
include;
 Passion for the business
 Tenacity despite failure
 Execution intelligence
 Discipline

If we study the autobiography of successful entrepreneurs of the world, then we would realize that
all the successful entrepreneurs had a passion for doing their own business even from the start
of their career. Without passion, a person can neither excel in the job nor in the business. So many
aspects are associated with an entrepreneur when he starts a business. For example, financial risk
gets attached to him. He has to manage a team for business. Time, energy and other resources are
also utilized by an entrepreneur. Even while spending all these financial and non-financial
resources, one cannot make an organization if the passion is not there. Many people realize that
these are the non-commercial businesses such as NGOs that require passion. However, it is not
true. All the big businesses in the world were established by passionate and visionary people.

Second aspect of a successful entrepreneur is tenacity despite failure. As an entrepreneur, one

should not stop efforts even after failure. We often see the successful entrepreneurs while they
enjoy their success stories in the final phase when their business is well established. Behind that,
there happens to be a lot of struggles in their past and every entrepreneur has to face a lot of
setbacks at the start of a business. Therefore, as an entrepreneur, one should remain prepared to
face setbacks at the start of entrepreneurial journey.

Execution intelligence is also very important. People may have many other characteristics but an
entrepreneur needs to have many characteristics. All the successful entrepreneurs have execution
intelligence. They know when to use which resource and how to operate the business. They also
know how to get the work done from their team. They should also know how to timely bring the
idea in the market and to deal with the competitors. Hence, execution intelligence is an extremely
important characteristic for an entrepreneur.

Discipline of entrepreneur is also very important for entrepreneur. There is this myth that
entrepreneur does not have to follow the time like a job. But discipline is even more important in
the business as well. You have to set priorities, be punctual and be better manager for being a role
model of employees working in that venture.

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 Characteristics of Successful Entrepreneurs (part b)
Some of the other characteristics of a successful entrepreneur include;

 Being self-starter
 Strong work ethics
 Open mindedness
 Self-assurance

Many people can guide an entrepreneur by providing self-motivation and talks but for success as
an entrepreneur, being self-starter is a pre-requisite. There is a new term that is getting popularity
and that is “motivational garbage”. It means that even after listening so much motivational
speakers, sometimes we cannot start a business. That means we are not motivated from the inside
because we were not self-starters. A person has to adopt his own path.

Strong work ethics are also very important. Some people are of the view that everything in
business is fair. But that is not true. All the successful businesses in the world have strong work
ethics values. There is a viewpoint that corporate social responsibility is the responsibility of only
the big businesses. But, irrespective of the size of the business, people prefer those values even in
the small businesses that they see in the business owner.

Open mindedness is also very important. We listen to the people and can often get judgmental.
People often lack tolerance as well in business affairs. However, tolerance for ambiguity is very
important for successful entrepreneurs. It’s important to keep personal biases aside.

Self-assurance means confidence on one’s own personality. If entrepreneur does not have the
confidence on his own product, then his product would not sell to others in the market. One also
has to be ready to face the opinion of other for which being self-assured is important.

Characteristics of Successful Entrepreneurs (part c)

Empathy and tolerance are important factors. Being empathetic means listening people from their
point of view. Entrepreneur has to listen the consumers. One has to be empathetic with the end
users. Then, vision is also very important. Successful entrepreneur definitely has a vision. He
should have foresightedness. Can you assess the future market demand? Such factors are key for
a visionary leader. Self-investment is also important as entrepreneurs need to learn. They need to
have trainings for business excellence. Export business owners often go abroad for such trainings
and for meeting with the potential and actual clients. One has to be optimistic being an
entrepreneur. Entrepreneur also has to be creative. Your approach must not be traditional and you
should not use the same formula used by the whole market. Successful entrepreneurs are always
creative.

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 Some Key Skills of Successful Entrepreneurs (Part a)
An entrepreneur should have some good personal characteristics for the business success. There
are many such characteristics that can be discussed; however, few are more important. First, “goal
setting” is an important characteristic and a key skill. Entrepreneur must know the business goal
as he / she is to invest the resources in a business for a specific time and purpose. Entrepreneur
should know where the business would be after a year. In which market he wants to access and
how much he wants to expand the business in coming time. Goals should be specific, measureable,
accurate, and realistic and time bound (SMART).

Then, “information seeking” is a power and an ability for an entrepreneur. Everyone has digital
existence. You should have customers’ data for your business. This information helps in making
the decisions. Industry information is also very important. It is a skill to access right information
for your business. “Opportunity seeking” is also another skill for entrepreneur which is very
important. Everyone has the opportunity but it is important to properly assess an opportunity and
avail it in a right manner. It is also a skill that can be learnt. “Learning” is also another ability for
which unlearning the existing mindset, business patterns and behaviors is sometime important, so
that one can absorb the knowledge with open mind and open heart for improvement. “Persistence”
is also another skill based upon which one quits or keeps on going for a business.

Some Key Skills of Successful Entrepreneurs (Part b)

“Planning and monitoring” is a characteristic of a successful entrepreneur. It is very important to
plan and monitor your business. Software can also help an entrepreneur in planning and monitoring
measures. For example, for accounting purpose in business, many software can help an
entrepreneur. Availability of finances is also very critical. Financial strength is the lifeline of every
business. Hence, “financial intelligence” is very important. Financial management is a key for a
business. Entrepreneur should know about financial statements, balance sheets, ledgers and
financial ratios etc. “Market intelligence” means market research for your business. You need to
keep an eye on your competitors. “Persuasion and influence” is a very important skill as well.
Some people are introvert and many people in the extrovert category think that they are good in
marketing and sales as well. In fact, it’s all about persuasion and convincing the consumers. As an
entrepreneur, even you have to convince employees of your organization to keep doing the good
work and this also requires persuasion. There are many trainings that are conducted that can help
an entrepreneur in this regard for learning about the art of persuasion, convincing others and
communication skills.

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 Some Key Skills of Successful Entrepreneurs (Part c)
Quality assurance is an important business characteristic in the sense that an entrepreneur would
want to convince customers on the basis of quality of his products and services. You should make
sure that there should not be any defect in the products or services. “Efficiency” of resource is
another skill for proper business. You have to use the resources smartly. “Reading financial
statement” is also very essential for the entrepreneurs. Understanding balance sheets, cash flows
etc., is necessary for an entrepreneur. Understanding different ratios such as liquidity ratio is also
important to know the net worth of the business. Marketing skill is also important for an
entrepreneur. One should know about the proper execution of marketing mix. “Place” for selling
the product is also a critical decision. You should be able to design the supply chain of your
product. In services industry “physical evidence” is also very important. Team of good individuals,
communication skills, networking etc., all are important. There is a saying that your networking is
your net worth. For example, you should have people who can help you in supplies, legal advice,
financial advice and digital marketing etc. These characterizes are key for a sustainable business
relationship but they would not like to spoil franchisee’s business and instead the business growth
of franchiser also depends upon the business growth of franchisee.

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