1-5-1-role-of-an-entrepreneur

Entrepreneurs create and set up businesses

• Businesses are usually started by an entrepreneur

• An entrepreneur is a person who is willing and able to create a new business idea or invention and takes risks in pursuing success

  • Successful entrepreneurs can identify and pursue opportunities, create value for customers and build thriving businesses

What do entrepreneurs do?

Entrepreneurs run and develop existing businesses

• There are many examples of successful entrepreneurs who have been brought in to run or expand an existing business

• These individuals bring a unique entrepreneurial spirit into the business, which helps to drive it forward and expand

Examples of entrepreneurial CEOs

• Howard Schultz

  • In 1982, Schultz was hired by Starbucks as Director of Retail Operations and Marketing

  • He later left to start his own coffee company but returned to Starbucks in 1987 as CEO

  • Under his leadership, Starbucks expanded globally and became one of the most recognised brands in the world

• Marissa Mayer was brought in to lead Yahoo! in 2012 as CEO

  • She implemented several initiatives to revitalise the struggling company, including acquisitions, product improvements and a renewed focus on mobile applications

Employees demonstrate entrepreneurship within a business

• Intrapreneurship refers to the practice of promoting entrepreneurial thinking and behaviour within an existing business

  • It involves empowering employees to think and act like entrepreneurs

  • The business encourages them to take risks, innovate and develop new ideas and projects that may benefit the business

• Intrapreneurship allows businesses to tap into the creative potential of their employees and generate new products, services or processes that can drive growth and competitive advantage

• This helps to create a culture that generates a sense of ownership and engagement among employees, which increases motivation and helps to retain top talent

• To promote intrapreneurship, businesses may provide resources to employees or offer incentives/rewards for successful projects

Examples of intrapreneurship

Barriers to entrepreneurship

• Entrepreneurship can be a challenging journey, and many barriers can prevent individuals from starting or growing a successful business

Significant barriers to entrepreneurship

Entrepreneurial capacity

• Entrepreneurial capacity refers to an individual’s ability to think creatively, take risks and identify and seize business opportunities

Access to finance

• Many aspiring entrepreneurs struggle to secure the funding necessary to start or grow their businesses

• Lack of access to finance is a major barrier to entrepreneurship, especially for those from disadvantaged backgrounds

Lack of training/know-how

• Starting and growing a successful business requires a range of skills, including marketing, finance, management and leadership

• Aspiring entrepreneurs may struggle to develop a viable business plan, attract customers or manage their finances effectively

Fear of failure / lack of confidence

• Entrepreneurship is inherently risky

• Entrepreneurs may hold back for fear of failure or a lack of confidence

• They may worry about the financial risks involved in starting a business or fear the stigma of failure

Entrepreneurs anticipate risk and uncertainty

• Risk is something an entrepreneur can plan for

  • The probabilities of outcomes are known or at least understood and considered

  • Risk-taking is a conscious decision, and often in business, the greater the risk, the greater the reward

Risk vs. uncertainty

• Uncertainty is caused by factors outside of the entrepreneur’s control

• Factors that typically cause uncertainty include:

  • Environmental factors, such as the Japanese Tsunami in March 2011

  • Economic changes, such as Covid lockdowns, Brexit or collapses in the banking system

  • The entry of new competitors

  • Changes in local and national legislation (laws)

  • Changes in the political party governing the country

• Successful entrepreneurs can manage risk and quickly respond to uncertainty in the business environment

Example: responding to uncertainty