Entrepreneurship is an important subject, because it focuses on starting new businesses founded by entrepreneurs. Entrepreneurs can be defined as those who create innovations in various fields of business and consequently leading innovators to form new ventures. The term comes from the French word for entrepreneurship, entreprendre , which means “to undertake”. Entrepreneurship is a complex and multi-dimensional process involving both individual and environmental factors. Entrepreneurial skills are defined as the knowledge, attitudes, perceptions and personality traits that influence how an entrepreneur responds to specific situations, including ability or motivation approaches, action orientation, entrepreneurial cognition and social interaction in entrepreneurial settings.
To date there have been many definitions of entrepreneurial skills. According to Mavropoulos (2008) Entrepreneurial Skills is the competence that people have in making decisions about starting a business, successfully operating that business and realizing it as an ongoing activity, while paying attention to issues of finance, regulation, operational efficiency and interpersonal relationships
According to Fagerberg & Karlsson (2007), entrepreneurial skills is the competencies, knowledge and know-how that an individual needs to make his/her ideas into a business. It also includes being able to find markets for products or services, and then successfully running the business.
According to Sorensson (2007) Entrepreneurial Skills are the abilities needed by individuals to start, manage and develop new businesses.
According to Hagedoorn (2000) Entrepreneurial Skills is the knowledge, skills, abilities, and personality characteristics required to implement innovations in an organizational context. These can be used as a guide for developing standards of performance that would help the organization succeed in today’s marketplace while preparing it for future changes.
According to Walden (1998) Entrepreneurial Skills is the ability to solve problems, make decisions, operate effectively in an organization and take actions that are consistent with entrepreneurial behavior.
DEFINITION OF ENTREPRENEURIAL SKILLS:
Entrepreneurship is a process by which new ventures are created and new wealth is created and shared among a growing number of people. Entrepreneurship builds on what already exists, and as such is inherently incremental. The practice of entrepreneurship always requires the presence of an entrepreneur. An entrepreneurial action can be taken by either an individual or a group of individuals. However, there must always be at least one who ultimately assumes responsibility for the consequences of this act.
Entrepreneurship is a phenomenon that occurs in societies, and as such it is always contextual; that is, it takes place within a certain physical setting and in relation to others who are also present at some point or another. In addition, entrepreneurship involves uncertainty and risk (Bartlett & Ghoshal, 1998; Carter & Gumpert, 2002; Fichman et al., 2000; Gartner, Wernerfelt & Goodhue, 1994). The presence of uncertainty and risk implies that an entrepreneurial action will be uncertain in its outcome. Although the entrepreneur may make a calculated decision to take a particular action, she or he will never know for sure whether the action taken will have the desired results.
The process of entrepreneurship thus involves an element of risk taking coupled with rational analysis, as illustrated in Figure 1. Risks and uncertainties are confronted and managed by the entrepreneur using measures such as those shown at the bottom of the figure. This is a fundamental feature of any entrepreneurial action. The same applies to what Gartner et al (1994) call “knowledge action.” When entrepreneurs take an entrepreneurial action, they do so within a given social context. In other words, there is always an existing network of relationships and interdependencies that the entrepreneur must take into account in order to ensure the success of his or her venture.
The process of entrepreneurship can be defined as follows:
Entrepreneurship is the process through which individuals or groups of individuals recognize an opportunity to create a new business venture that is different from any existing businesses. Entrepreneurs take risks by starting and operating a new business, and strive for collective prosperity as well as personal wealth.
According to Bannister (1995) entrepreneurship as a human resource is the capability to develop a business or try new ideas.
According to Nickels (1996) Entrepreneurial skills is an ability that can be developed and through which it is possible for one person or group of persons in a society to perform entrepreneurial activity.
Entrepreneurship as human resource development (HRD) involves the following activities:
The identification and assessment of the need for entrepreneurship education in order to develop entrepreneurial skills.
Selection and development of a curriculum, learning materials and faculty that could meet the identified needs.
Identify how much money it takes – this includes finding out exactly what is needed to start up with your business idea, then working out whether you have access to that money in some form.
Do your research – find out about similar businesses. Talk to people who will know how you are likely to get on, and make sure it is information based on experience rather than the opinions of friends or relatives. Make sure you ask them what they like and dislike about their jobs too!
Work on your business plan – you will need one if you are planning to apply for funding in order to start-up your business. Make sure it is thorough and covers every aspect of your proposed business from the finances through to marketing and staff training needs. A good way to do this is to give yourself a reality check by approaching someone who has been successful in a similar business to yours and asking them what they would do differently if they were starting again.
Get your application together – make sure you know exactly how much funding you need, where it will come from, why you want it and when you will start up if the funding is granted. You can often get help on this from the other organisations that you are going to be applying to and your local enterprise network.
Attend seminars, workshops and conferences – these will help update your knowledge base, enable you to meet people who can provide helpful pointers and give you the opportunity to get a better understanding of how things really work. Don’t forget any voluntary training or evening classes you can get – these are worth their weight in gold.
Get advice – this is a crucial part of any start-up, particularly if it involves taking out loans or using your house as security for the loan and the project may be a bit overwhelming at times so try to find support from friends, family or even complete strangers who seem to be where you want to be. Try and find someone who has been in a similar situation to improve your chances of getting the support you need.
Find a reliable business partner – it can sometimes help if you have someone else working alongside you, particularly in smaller businesses but make sure that they are reliable as well as committed so that when things get tough they are there for you.
Think about where you want to be in five years’ time – put together a business plan and use that as your guide. Sit down with a colleague or business partner if necessary and make sure it is more than just wishful thinking. If you can’t come up with realistic plans, don’t start up the business!
Take a look at financial set-up fees – If you are setting up a limited company then make sure you find out exactly what it costs to register and be legally able to trade as part of that company. Then, when the time comes to pay for your own tax return, VAT etc it will give you an idea of the cost of running a company and will help you do your homework on the business idea.
Put money aside – to cover overheads such as telephone bills, equipment and advertising costs. Even if you are only planning to be self-employed for 6 months before going back to work at something different it is important that you build up enough money to cover at least six months’ worth of bills so that your business idea doesn’t start with you owing money. It is also important to put something aside for any rainy days – if you have a good income one month then it might be tempting to dip into the funds but this can often lead to businesses running into problems later on down the line.
Even if you have managed to get some funding or loans, don’t forget that the money has to be paid back and this means monthly repayments. It is important to start thinking about how you are going to do this from the very beginning so that you can build them into your business plan at the outset.
Be prepared for things not to go according to plan – things will go wrong, it is important in the early stages of starting a business that you take everyone’s advice as gold but at some point you will have to stand on your own two feet. You may need to make changes to your business plan or cut back on certain areas for a short while until the business starts making more money. Always keep your goals in sight and work from there.
Another important part of the planning process is to make sure that you are applying for loans, grants or any other funding well before you need it so that if necessary the money is available when required – this can take a lot of pressure off a business!
Even if you have never run a business before, you may have done plenty of research on other businesses in your chosen field – so make sure that you apply for any funding available.
Don’t simply rely on friends and family to help out with the start-up costs – it is important at every stage to keep a very close eye on the money as well as be aware of the fact that you cannot expect everyone to offer an unlimited amount of help.
It is very rare for a business to make money from the word go – it is important when setting up your office or workspace to ensure that you have enough room for the employees, including yourself if you are considering this, as well as having some space set aside for any equipment that you may need to buy.
Keep an eye on the competition – it is important to keep a close eye on how your competitors are running their business as well as keeping abreast of any new legislation, particularly if you are working in an area where there is some kind of regulation. This will help you ensure that your business is running as efficiently as possible.
Lastly, don’t feel like you have to plough all of your money into the business straight away – it is important to spend some time on yourself so if you can get someone else to cover things for a bit when you need some time off then do so. A bit of R&R never hurt anyone – if you are burned out then your business will suffer.
There is a whole world of information available to help you prepare for the first year or so of setting up a small business; take advantage of this as soon as possible before committing any time or money to anything. Remember, though, that it is better to make mistakes now than later when there is more to lose – you will probably have to learn as you go along, but it is important not to be afraid of making mistakes.
Businesses that are run well and with a solid plan behind them tend to do very well, whatever kind of business they may be in. If you can develop an open mind and accept that there will always be the unexpected you will be able to overcome most problems that come up during the first year of your business.
If you have a bright idea, start small and raise your capital before you formally launch. If you don’t need to get rich quick, remember you can usually do well by doing good or simply because people love what you’re offering. Nowadays it’s easier than ever to break into business with relatively low startup costs and a lot of free or low cost tools.
So, if you’re looking for a better lifestyle or to pursue your passion, why not take the plunge into entrepreneurship? Just remember that it’s not going to be easy and requires hard work and immense sacrifice in the beginning. But once you get started, it’ll become even more exciting than what you can imagine.