Chapter 10: Characteristics and Skills of an Entrepreneur Entrepreneurial Characteristics Not everyone wants to be an entrepreneur and run their own business. Being an entrepreneur requires specific characteristics and skills that are often achieved through education, hard work, and planning. Risk Taker Businesses face risk. Entrepreneurs minimize risk through research, planning, and skill development. Perceptive Entrepreneurs view problems as opportunities and challenges. Curious Entrepreneurs like to know how things work. They take the time and initiative to pursue the unknown. ENTREPRENEURIAL CHARACTERISTICS Risk Taker Entrepreneurs often take on a high degree of risk and stress. Many entrepreneurs face bankruptcy, that can leave them with not business and no personal assets. Perceptive The owner of Cott Corp. was perceptive, he saw the opportunity to offer a private-label beverage to the grocery industry. Private label or private brand is a product that is manufactured by another company but is sold with a store’s brand name; also called a store brand or private brand. Curious Ray Kroc, a leader in the development of the modern franchise system, recognized the potential of the McDonalds brothers’ restaurant and its formula for producing good and inexpensive food and capitalized on it.

Chapter 10: Characteristics and Skills of an Entrepreneur Entrepreneurial Characteristics Imaginative Entrepreneurs are creative. They imagine solutions to problems that encourage them to create new products and generate ideas. Persistent True entrepreneurs face bureaucracy, make mistakes, receive criticism, and deal with money, family, or stress problems. But they still stick to their dreams of seeing the venture succeed. Goal-setting Entrepreneurs are motivated by the excitement of staring a new business. Once achieved, they seek out new goals or ventures to try. Hardworking Entrepreneurs need a great deal of energy to see a venture start and succeed. Yet they are not deterred by the long hours to achieve their goal. ENTREPRENEURIAL CHARACTERISTICS Imaginative The founder of Canadian Railway Newspaper Company (Cara Operations Ltd.), T.P. Phelan took his newspaper service to the next step by providing food service in many sectors. Persistent The story about The Little Engine That Could is a children’s storybook tale of persistence. Goal-setting Some entrepreneurs have local success and then take on new challenges by going international with their business. Hardworking J.M. Schneider worked days for a button factory and in the evenings and at night he worked to provide his own customers with sausages.

Chapter 10: Characteristics and Skills of an Entrepreneur Entrepreneurial Characteristics Self-confident Entrepreneurs believe in themselves. Their self-confidence takes care of any doubts they may have. Flexible Entrepreneurs must be flexible in order to adapt to changing trends, markets, technologies, rules, and economic environments. Independent An entrepreneur’s desire for control and the ability to make decisions often makes it difficult for them to work in a controlled environment. ENTREPRENEURIAL CHARACTERISTICS Self-confident Sir Richard Branson, the founder of Virgin Records, went out of his comfort zone and started Virgin Airlines. Flexible Video rental businesses demonstrated flexibility buy quickly adapting to the change from video format to DVD format. Independent Each venture is a reflection of the independent entrepreneur who started it. See

Chapter 10: Characteristics and Skills of an Entrepreneur Entrepreneurial Skills A skill is the ability to do something specific or to translate knowledge into action. Research Skills Entrepreneurs need to identify what they need to know and use research techniques to obtain it. Gathering Information Reliable and relevant sources of information may include INTERPRETING FINANCIAL STATEMENTS It is easier to learn a skill than to develop a characteristic. Research Skills The first step in knowledge acquisition is asking a good question, such as “Why is that?” or “How does that work?”. The second step is to gather information that will help you to answer the questions. You may reformulate your question or ask new ones, all perhaps leading to the start of a new venture. Books: Municipal libraries, educational institution libraries (such as universities), bookstores, government resource centres, book stores, etc. are places to access information written about business and business ownership. Periodicals: Magazines, newspapers, newsletters, and trade journals and publications are excellent sources of current and industry specific information and secondary research. Indexes and Databases: A periodical index is a list of all articles published about specific topics over a period of time that gives the title, a brief description, and the name and date of the periodical in which the article appears. A data base is a list of information organized by category, that are usually very specific (kite manufacturers) or very broad (Canadian businesses that export to the U.S.). Some databases charge a fee, others are free. Schools and libraries often provide access to some databases. The Internet: See Table 10.1, “Using the Internet”, on page 319. Consultants: Consultants are knowledgeable experts who charge for their services or work for organization such as universities, government departments and financial institutions that provide services for free to their clients. Professionals: Experts such as accountants, lawyers, sales agents, and individuals who work for advertising agencies can assist entrepreneurs in the start-up stages of a business and on an on-going basis. Schools: Entrepreneurs can access part-time and full-time programs at universities and colleges for a variety of business related subjects. books periodicals indexes and databases the Internet consultants professionals schools

Chapter 10: Characteristics and Skills of an Entrepreneur Entrepreneurial Skills Using Information After information is acquired, it needs to be sorted into relevant data that answers the entrepreneur’s initial questions. These questions may lead the entrepreneur to look at new ventures. Management Skills Management skills for entrepreneurs involve planning, organizing, directing, and controlling. These are then applied towards their personal, financial, and material goals. Planning Entrepreneurs develop financial, production, and marketing plans that comprise the overall business plan. Using Information As a business develops questions, the answers should become more fine tuned to the specific aspects of the venture. MANAGEMENT SKILLS Recall Chapter 7, where in we learned that the role of management in business is to achieve the goals of an organization by directing the allocation and use of the human, financial, and material resources. Planning Entrepreneurs need to avoid over planning, it may be overwhelming.

Chapter 10: Characteristics and Skills of an Entrepreneur Entrepreneurial Skills Organizing Organizing the venture is vital. The key to this is time-management. Directing Entrepreneurs learn how to motivate their staff by encouraging initiative and self-direction. This inspires a sense of shared responsibilities to grow the business. Controlling Entrepreneurs need to develop budgets and keep accurate bookkeeping and accounting records. INTERPRETING FINANCIAL STATEMENTS Organizing To organize their time entrepreneurs use detailed schedules, “to do” lists, reminder files, and use personal planners. Entrepreneurs need to develop job descriptions and they must develop lines of communication and an organizational structure. Directing Entrepreneurs should share goals and the big picture with staff. Controlling Entrepreneurs should have accounting knowledge and skills or hire someone who does.

Chapter 10: Characteristics and Skills of an Entrepreneur Entrepreneurial Skills Relationship Skills Running a business means building good relationships with staff, suppliers, and customers. Staff Relationships Employees need to feel that they are treated fairly, are rewarded for their efforts, and have their needs met. Supplier Relationships Communication is the most important relationship skill required to deal with suppliers. They act as sources of information for the new business. Suppliers also require feedback to know how to improve their service. Customer Relationships In an entrepreneurial business, the customer is the “boss” and the key to the business’ success. Therefore, the entrepreneur and his or her staff must develop a positive relationship with the customer. RELATIONSHIP SKILLS Staff Relationships Motivation relies on the matching of rewards to an employees needs and personality. Empathy is the ability to understand what other people think and feel. Supplier Relationships Suppliers such the government, service providers, merchandise suppliers, or material and equipment sellers are all sourced of information about new products, processes, and materials. Paying bills when due help to maintain good relations with suppliers and if financial problems arise be sure to communicate in an effort to meet mutual needs. Customer Relationships Entrepreneurs should strive to make customers feel important.

Chapter 10: Characteristics and Skills of an Entrepreneurs Canadian Entrepreneurs Jimmy Pattison Pattison used his entrepreneurial skills as a child selling garden seeds, magazines, and papers door-to-door. In university, he washed used cars and bought and fixed them to sell to students and later managed a car dealership. Today, as a billionaire, Pattison is past chair of Vancouver’s World Fair, Expo 86, and owner of Ripley’s Believe it or Not. Vickie Kerr In 1986, Kerr used some potatoes growing on her family’s potato farm to create a healthy snack for kids. Her persistence resulted in a unique potato chip called Miss Vickie’s that sold locally and nationally. In 1993, Kerr sold her brand to the US-owned Hostess Frito-Lay Co David Tuccaro A Mikisew Cree, Tuccaro owns Neegan Development Corp. and Tuc’s Contracting in Fort McMurray, Alberta. He is a business ally of Syncrude Canada, a major developer in the Northern Alberta’s Athabasca oil sands. Tuccaro uses his business success and cultural knowledge to improve the lives of Aboriginals in Canada and abroad. Images: ? Read about entrepreneur's stories on pages 325 to 329. JIMMY PATTISON See Figure 10.1, “Pattison’s Timeline”, on page 326. When he took on the management of a car dealership he was still in university. VICKIE KERR DAVID TUCCARO See

Chapter 10: Characteristics and Skills of an Entrepreneur Venture Evaluation Criteria An entrepreneur must develop a good business plan that is feasible, marketable, and profitable. Key points are below. Feasibility Finances ― list the amount required in a budget including the source of capital (bank, credit union, and so on) Location ― explain the location outlining the details (address, rent, taxes, and so on) Licences and permits ― list the licences or permits and state how to obtain them Suppliers ― make a list of everything required including the name of the suppliers and their prices and terms Staff ― describe staffing needs and ways to meet them

Chapter 10: Characteristics and Skills of an Entrepreneur Entrepreneurial Characteristics Marketability Entrepreneurs need to ask themselves the following questions about their product, service, or charity: Does your target market want this product? Prove it. What is you competition? How much of the market do they own already? How will you take it away from them? Are you competitively priced? Is this a short-term venture? How long will it last? What do you offer that no other product, service, or charity offers? Why would a customer pay money for what you provide? Profitability To expect a profit, an entrepreneur must ensure that revenue exceeds all costs. Listing expected revenue and expenses can help to achieve this. PROFITABILITY Prepare an income statement that projects revenue and expenses and ensure that net income is enough.