MGT602 Final Term Short Notes

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

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

Q48. Who are Wantrepreneurs?

Q49. 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)

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 coentrepreneurship. 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 coentrepreneurship. One partner may be highly committed versus other. Hence, in a good entrepreneurial venture, these issues should be managed properly.

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. 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 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 %.