Week # 3

 Is there an exact entrepreneurial profile in

terms of characteristics and background?

 This chapter addresses this question by

looking at an individuals feelings about
Control, Independence & Willingness
to take risks; ones family, education
& occupational backgrounds;
motivation; skills; male versus female
entrepreneurs; entrepreneurs VS
inventors & general entrepreneurial
profiles
 Locus of Control
A quality indicating the sense of control that
a person has over his life.
◦ Internal Locus of Control
Believing that one’s success depends on one’s own
efforts.
◦ External Locus of Control
Believing that one’s life is controlled more by luck
or fate than one’s own efforts.
Checklist for Feelings about Control
When things go right and are terrific for you, Yes No
do you think, “Its mostly luck!”?
Do you think that if you decide to do Yes No
something, you’ll do it and nothing can stop
you?
If you want something, do you ask for it rather Yes No
than wait for someone to notice you and “just
give it to you”?
Even though it’s scary to try something new, Yes No
are you the kind who tries it?
Even though people tell you “it can’t be done,” Yes No
do you have to find out for yourself?
 Feelings of Independence and Need for
Achievement
◦ Need for Independence signifies the feeling of
being one’s own boss and is one of the strongest
needs of an entrepreneur.
◦ Need for Achievement is derived from Mcelland’s
Need Theory, which states that a person with a high
need for achievement is driven by the desire to
succeed and measures that success against a
personal standard of excellence.
Checklist for Feelings about Independence
I want to be financially independent. Yes No
I often need to ask other people’s opinions before I Yes No
decide on important things.
If my friends wont go to a movie I want to see, I will go Yes No
by myself
I want the approval of others. Yes No
I hate to go shopping for clothes alone Yes No
 Risk Taking
◦ Starting a new venture involves putting at stake
money, hard work and lots of time.
◦ This involves a certain amount of risk as success is
not guaranteed and all efforts and resources could
go wasted.
◦ Only a person willing to risk it all can succeed.
Checklist for Willingness to Take Risks
Do you like trying new foods, new places, and Yes No
totally new experiences?
Can you walk up to a total stranger and strike Yes No
up a conversation?
Do you need to know the answer before you’ll Yes No
ask the question?
Do you need to know that it’s already been Yes No
done before you are willing to try it?
Can you take risks with money, that is, invest, Yes No
and not know the outcome?
 Childhood Family
Background
◦ A child’s future occupation is
shaped by what kind of Birth Order
environment he or she has at
home.
◦ Being the first born is also
believed to have some effect
Parents Occupation
on the self-confidence of the
person and ability to start a
new venture.
◦ If a parent is an entrepreneur
then its natural that the child Social Status
will find it easy to become
one as well.
◦ Their support is also a
deciding factor in the success Relationship with parents
of the entrepreneur. (Fathers for female E)
My father was so consumed by the venture
he started and provided such a strong
example, it never occurred to me to go to
work for anyone else
 Education
◦ There are numerous success stories of
entrepreneurs who were high school dropouts.
◦ But most of the entrepreneurs have some kind of
higher education to their credit.
◦ It is not necessarily business related education but
is enough for the entrepreneur to better
understand his business and define new ways to
grow it.

Technical Vs MBA degree

 Personal Values
◦ An entrepreneur has a very distinct set of values
that make him break off from conventional
practices and start his own venture.
◦ Values like: superior product quality; quality service
to the consumers; flexibility to adapt to change in
the market; high caliber management; and honesty
and ethics in business practices, define an
entrepreneur’s mind frame.

Leadership traits- creativity- opportunism- intution

When is it permissible to tell a lie?

 Age
◦ It is necessary that an entrepreneur begins the new
venture at a time when he has the maximum
amount of energy – experience- financial support
◦ The optimal age for such activity would be
somewhere from the age of 22 to the age of 45.
◦ At this time a person has the right amount of
stamina and experience.
 Work History
◦ The work history of a person is one of the major
factors in prompting a person to start a new
business.
◦ If the person was not satisfied with his past
experience, then he might find it easier to come up
with good business practices that suit his taste and
yield the kind of results that he wants.
◦ And what he has learnt from his experience may
also help him in growing the business.

Lack of opportunities- frustration & boredom->

Motivation launching new venture

Managerial experience/skills
 Every entrepreneur is motivated by one thing
or the other when starting a new venture.
 The motivational force helps the person

overcome all the problems associated with

the business and guides him towards the
achievement of his goals.
 This motivation could be making money or

being independent of others and being one’s

own boss.
 Differences in terms of motivation, business
skills, occupational background, support
systems and sources of funding
 Men- drive to control their own destinies, to

make things happen

 Women- need of achievement arising – job

frustration- promotional opportunities

Forming 70 % of new businesses

8.5 M small businesses employing over 17 M
people
45% increase since 90’s
Characteristics Male Entrepreneurs Female Entrepreneurs
Motivation Achievement, Personal Achievement, Independence
Independence, Job Satisfaction
Departure Points Dissatisfaction with current job, Job Frustration, Change in
Layoff, Opportunity for Personal Circumstances,
Acquisition, Sidelined Recognition of Opportunity
Sources of Funds Personal Assets and Savings, Bank Personal Assets and Savings,
Financing, Investors, Loans from Personal Loans
Friends and Family
Occupational Experience in Line of Work, Experience in Area of
Background Recognized Specialist, Competent Business, Service-related
in a Variety of Business Functions Background, Middle
Management Experience
Personality Opinionated and Persuasive, Goal Flexible and Tolerant, Goal
Characteristics Oriented, Innovative, Idealistic, Oriented, Creative , Realistic,
High Level of Self Confidence, Medium Level of Self
Enthusiastic and Energetic, Must Confidence, Enthusiastic,
be Own Boss Energetic

Support Groups Friends, Professional Close Friends, Spouse, Family,

Acquaintances, Business Women’s Professional Groups,
Associates, Spouse Trade Associations
 Assignment
Entrepreneurs versus inventors