What is an entrepreneur?
What is an entrepreneur?
Recently I posted a tweet (Twitter) discussing the fact that entrepreneurs have had to take a pay cut in this current economic situation. In response to this tweet I had a couple of comments that have made me question the definition of ‘entrepreneur’.
An entrepreneur is a person who has possession of an enterprise and assumes significant accountability for the inherent risks in the outcome. It is an ambitious leader who can combine labour and capital to create and market new goods. That is the definition as per wikipedia.
I have always thought that a small/medium business owner is an entrepeneur. But it would seem that some seem to believe that only people like Richard Branson are entrepeneurs i.e. owners of large complex businesses. Obviously Richard Branson is an entrepreneur but so is the small business owner operating out of his/her garage.
Based on the comments I received from the tweet, people don’t necessarily go along with my viewpoint. I feel that there are entrepreneurs around us every day. It is entrepreneurship that will lead us out of this recession. It is on the back of small and medium business that the economy will will recover. People taking accountability for risk, who are willing to bear the risk of a business venture and who because of their passion for a particular product or service will grow their businesses and employe people. This drives the economy. The government at all levels need to encourage entrepreneurship in our community. We need to encourage those who are willing to take on that risk for the outcome of delivering value and innovation to a customer. May there be more than an entrepreneurship.
This brings me back to my original tweet – there is evidence that entrepreneurs i.e. small business owners are cutting their pay to ensure their business survives rather than quit their business. These are the people we need to support. Let’s encourage risk-taking and innovation in small business. What do you think?
Have we lost the passion in small business?
Have we lost the passion in small business?
Recently I heard a comment that we have lost passion in big business. The person went on to compare the CEOs of the some of the large businesses in the US vs the founder of Sony. This comment has got me thinking and asking the question whether we have lost the passion in the small and mid-sized business community.
Maybe I should rephrase the question – has the passion for money overtaken the passion for business?
Why do people go into small business? There is a myriad of reasons but I suspect that the passion for a certain product or service does play a part for some, however I am not sure that it is the large majority. Unfortunately in this age of consumerism there have been some small business owners who are purely there for the money. But in the harder times this will be revealed. These are businesses that will not have an enthused team of people providing great customer service. That only comes with having passion for your business, for your products and services.
I am sure that unfortunately some people who go into small business with passion for their area sometimes get it beaten out of them because of inefficient systems, lack of planning, not understanding how to use the numbers in the business. These are people we need to work with because the underlying passion is still there – just covered up at the moment.
We desperately need passion in small business so that we will have inspired and innovative products and services.
Do you think we have lost the passion in small business? Do you believe that it is necessary in small business?
Why don’t small business owners communicate with their team?
It amazes me to see business owners/managers reviewing the performance of the business and complaining about some area, however if you ask them if the team knows exactly what is expected, they give an uneasy answer.
So let’s think about a couple of things here. Firstly, let’s assume they are measuring something that is important, matters and needs to be measured. (This is not always the case in business). With this assumption, the next question is: does everybody in the business know and understand what is being measured? This is the question I want to cover a little today.
If people in a business don’t know expressly what is being measured, what their individual, team or group performance is being measured, they will guess. They will make up their opinions of what is important. They will interpret the actions of the owners/managers to form an opinion of what is important. We often hear the comment “that is the way it is done around here”. These become the unwritten measures or rules.
But these rules are often not exactly what the owner or management wants or is measuring.
Behaviours are being changed by the individual’s or team’s opinion of what is important. So why wouldn’t the owner/manager of the business explicitly provide the information to the team? Now, I am not necessarily saying that the small/medium business owner has to reveal every line item of the profit and loss statement (though I am not necessarily opposed to this).
What I am saying is that the owners of a business MUST simply, concisely and consistently share with the team what is being measured, what is important. They must communicate clearly and consistently to everybody in the team.
What do you think about communication in small business? Please leave comments of either great or horror stories involving communicating with the team.
Small businesses that will survive this will do 5 things.
“An economy is governed by the will and imagination, creativity and persistence of its entrepreneurs”. George Gilder.
This statement was written in 1992 by George Gilder but it is particularly relevant at this time. Unfortunately I am not sure if the governments of the world understand this, though. The stimulus packages that have been passed in the US, UK & Australia don’t seem to believe that small business are important.
However as always, the persistence and will of the small business owner will come through.
The small businesses that come through this will be those who -
- Focus on the customer
- Understand the numbers
- Measure what matters
- Have an engaged team
- Do something different. Don’t just copy everybody else.
Small business will succeed through innovation
There has been an excellent study been released by Intuit titled “Small businesses will innovate today to succeed tomorrow”.
This study shows that Small Business is the natural innovator of the economy. Through the forces that drive small business owners to look for the development of the business and market they are inspired to innovate.
This study found that small businesses have a number of innovation advantages that enable them to more readily identify opportunities, quickly react to changing conditions and remain competitive. The six innovation enablers include :
- Personal Passion – as it is there own money on the line, small business owners are willing to try new approaches.
- Customer connection – in a small business there is a stronger connection between the business and the customers. This helps small business understand customer needs, identify new opportunities and fix problems quickly and efficiently.
- Agility and adaptation – unlike large corporations, small businesses can quickly adapt to changing market conditions and implement new business practices.
- Experimentation and improvisation – when pursuing new opportunities, many small business owners and managers aren’t afraid to experiment and improvise, accepting failure as a part of the path to success.
- Resource limitation – small businesses are adept at doing more with less. And these resource constraints lend to their innovative mindset
- Information sharing and collaboration – small businesses traditionally rely on strong social networks to share information and inspire innovative thinking.
These enablers listed above succinctly summarise the life of a small business.
It is key for the future of small business to be continually innovating. To do this it is necessary to ensure that the business is focused on the customer. The business needs to be listening to the customer and ensuring that their product or service is serving a need of the customer. It we keep doing what has always been done then the innovation will die and the business will follow.
Focus on what matters to the customer. Measure what matters – measure what is important to the customer.
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