Page 161 - Introduction to Business

CHAPTER 4 Small Business and Entrepreneurship 135

(EMU), labor and trade liberalization, privatization of large firms previously owned
and operated by the government, and numerous other changes intended to reduce
barriers to competition and stimulate business growth.

reality How far from you is the nearest Small Business Development Center
CH ECK (SBDC), which is sponsored by the U.S. Small Business Administration?
What does this office offer to small businesses?

Who Is an Entrepreneur?

LEARNING OBJECTIVE 3
Describe the personal qualities and training needed to be a successful entrepreneur, including the cases
of women and minorities in small business.

Entrepreneurs are people who establish new businesses with the desire to meet
market demands for goods or services. With the exception of not-for-profit organi-
zations, profit is a major incentive that offsets the risks of starting a new enterprise.
Unlike employees of established firms, who work for a salary or commission from
their jobs and receive regular paychecks, entrepreneurs can pay themselves both a
regular salary from the proceeds of sales revenues as well as extra income from the
net profit of the firm, provided the firm makes a profit. Generally speaking, entre-
preneurs enjoy the challenge of solving business problems, making their own suc-
cesses, and reaping the rewards of those successes.

Personal Qualities

What makes someone successful as an entrepreneur? Due to the diversity of small
business firms, there is no doubt that all kinds of people can succeed. But entre-
preneurs do have some common character traits. Probably the most important per-
sonal trait is a commitment to make the business profitable despite problems that
inevitably arise. This commitment could be due to a lifelong passion for a particu-
lar product or service, or simply the stubbornness not to quit. Certainly the per-
sonal commitment or drive of an entrepreneur to make a business a success is
important in itself.
Another key trait is the desire for independence. Entrepreneurs find that work-
ing for themselves is more fulfilling than working for someone else as an employee.
By being independent, they can directly reap the rewards of their labors, build per-
sonal relationships that they want most to pursue, and undertake tasks that they
choose. Yet another personal trait common in entrepreneurs is self-confidence.
They believe that their personal talents and resources are sufficient to run the busi-
ness. In this respect, some entrepreneurs could be considered to be ambitious.
They want to run their own business in order to more rapidly accumulate wealth
from a profitable enterprise than if they worked for someone else as a salaried
employee. Finally, entrepreneurs tend to be risk takers. Most small business people
know the feeling of “taking the plunge” and starting their business. A lot of anxiety
can naturally occur about the possible failure of the business and related personal
guilt of letting down their family, employees, and themselves. Despite these fears,
small business entrepreneurs forge ahead, all the while trying not only to make
profits but also to reduce their risk of failure. The ability to control risk is an essen-
tial part of any successful business. In this context, it is appropriate to consider
entrepreneurs to be risk assessors.

Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.