ENTREPRENEURIAL MOTIVES AND CHARACTERISTICS Lesson objectives: To be able to explain what motivates an entrepreneur To be able to explain the main entrepreneurial characteristics

Deborah Meaden d52a e142ee6697f d52a e142ee6697f We are going to watch a documentary on Deborah Meaden as we are watching it I want you to think carefully about the characteristics (personality traits) she has shown throughout her career

What characteristics… What characteristics do you think Deborah showed?

Main characteristics Self-confidence Self-determination Being a self-starter Hard working Having good judgement Commitment Perseverance Initiative Resilience Risk taking What do all these mean?

Entrepreneurial characteristics Not all entrepreneurs have to have all of these skills, however the more they have the more chance they have of being successful However as well as needing to possess a number of important characteristics to be successful, they also need to use a wide range of different skills

Entrepreneurial skills It helps if entrepreneurs are capable to some extent in their chosen line of business - although it is possible to be successful by setting up in an unfamiliar field (it does make it harder to be successful) Other entrepreneurial skills include; Organising Financial management Communication Managing people Decision making Negotiating IT Skills

Entrepreneurial skills Organising They have to project manage, organise and co-ordinate resources, plan. Schedule, give instructions, prioritising, setting up systems, monitoring, time managing, meeting deadlines etc… They also need to resolve conflicts Financial management Need to ensure they have enough money at all times. They will be involved in budgeting, cash-flow forecasting, chasing debts, keeping financial records up to date, arranging loans, analysing accounts etc… Communication They will need to interact with a wide range of people (suppliers, employees, customers etc…) need to be able to write letters, reports, fill in important documents and generally communicate both face to face and remotely

Entrepreneurial skills Managing people Need to ensure all staff are doing their job correctly. Need to be able to recruit the right people at the right time. Have to show clear leadership and direction Decision making They will have to make a range of decisions, both low-level, day to day issues as well as more important strategic ones. They will also be required to problem solve and analyse and evaluate information Negotiating This will include negotiating with both customers, suppliers and employees. They need to be able to develop arguments with reasoning, knowing when to compromise

Entrepreneurial skills IT Skills They will be able to run their business more efficiently if they have good IT skills. They need to be able to; Set up filing systems Communicate with stakeholders through or conference calling Use spreadsheets to prepare budgets and cash flow forecasts Design documents such as invoices, job descriptions, newsletters etc… Set up a business website and provide a system for online purchases Use social media to raise the profile of the business Use computer software to give presentations Use specialist software (e.g. to design products)

Entrepreneurial motives People set up businesses for a range of reasons. These reasons fall into 2 categories (financial and non-financial) Financial MotivesNon-Financial Motives Profit maximisationEthical stance Profit satisficingSocial enterprise Independence Home working

Financial motives Many people set up a business because they want to make money, they often think they could earn more if they work for themselves Profit maximisation This is where entrepreneurs try to make as much money as they can. These entrepreneurs are motivated by money and their key focus is the financial return on their efforts. Entrepreneurs who want to ensure profit maximisation are likely to take bigger risks Profit satisficing This is where entrepreneurs may aim to make enough profit to maintain their interest in the business. They do not seek to maximise profits because they do not want to take on the extra responsibility of expanding the business. This type of business allows owners to spend more time pursuing other interest or spend time with family.

Non-Financial Motives For some entrepreneurs, other motives are more important than making money Ethical stance A minority of people set up a business to support a moral belief they have. Anita Rodick is a good example of this Social enterprise These are organisations that trade with the aim of improving human and environmental well-being. Generally they have a clear social and/or environmental mission and generate most of their income through trade or donations (Fairtrade is a good example)

Non-Financial Motives Independence A lot of people want to be their ‘own boss’. These entrepreneurs are driven by the desire to be independent, they like to make al the decision and often resent being told what to do by others. Being able to make your own decisions is often regarded as the main key benefit of being an entrepreneur. Home working A number of entrepreneurs set up their businesses from home. There are 2 key benefits for home workers. The time and expense spent travelling to and from work is eliminated. They also enjoy more flexibility. They can also work around the needs of their family.