INTRODUCTION TO ENTREPRENEURSHIP

Often, we tend to witness vividly these situations where for example, we look at a person or a group of people spending their money to purchase items or goods and have them displayed inside every corner of their stores, or someone who procure raw materials and process them into finished goods until they are distributed to various places, or perhaps a certain number of individuals who have been running their business services and waiting for potential customers who may inquire some information regarding the types of services that they offer. Then, in a certain period of working hours (for example, let say in the afternoon), they begin to count the amount of their earnings and expenses incurred to point where they attempt to calculate their amount of profitability and loss. Assuming that if the money generated appears to be greater than it is spent, it is referred to earning the business profitability. However, if it is in the opposite side, it is called having the business loss.

Generally speaking, we can notice that the above activities are very common to take place in any business transactions. However, if we get to explore and examine them carefully, those activities in fact implement certain particular skills such as time-management, selecting raw materials, and rendering goods to consumers. Thus, it is clear that business activities run are expected to be well carried out in processing, packaging, and creating a product which is demanded by societies. Needless to say, it is referred to the way of how capable of a business entrepreneur in reading the desires, the needs, and the preferences of potential customers.

Moreover, when we look at business owners in a broader scale, we may notice that they also appear to be having a knack for discharging duties and giving orders to their employees by outlining tasks and responsibilities. With that being said, the employees in that case must be obliged to run the command rendered by their owners. Such an expertise in carrying out activities without feeling awkward, terrified, or even ashamed are considered to be an everyday menu to entrepreneurs. In performing entrepreneurial activities, for instance, they do not require to wait for orders, but rather than instructing their subordinates to execute a business transaction. And they do this merely on the basis of either from their own experience, or learning from the experience of others.

So from there, it is obvious enough that an entrepreneur is practically a risk-taker or a person who dares to take risks through the creation of a certain business activity in various occasions. In other words, to have a certain degree of courage to be a risk taker means that being autonomous in terms of mind-set and the person must be capable of initiating his or her business without being overwhelmed by fear, anxiety, and the conditions of uncertainty.

Finally, the typical examples of entrepreneurial activities can either be done alone or in groups, where the aim is to attempt seeking, leveraging, and creating business opportunities which can provide greater benefits. The risk of incurring loss is not uncommon in a business world because it holds the principle of fundamental entrepreneurship, in which there must be a loss factor in order to generate revenues. Regardless of this given circumstance, there is not a single term that seems to be fit to alternatively describe a loss factor, notably the minute when a person runs a business with courage and thorough considerations. After all, it is all the above facets which are literally viewed as the spirit of being an entrepreneur.

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KEY BENEFITS OF ENTREPRENEURSHIP

So far, there have been multiple studies which demonstrate several indications that the small-medium entrepreneurs possess a tendency to work harder and are far more satisfied than those working in large corporations. Prior to the establishment of one's business venture, for instance, every aspiring individual who is keen to become an entrepreneur must consider what could be the key benefits of having a sole business proprietorship. Hence, the following list will address some of the key benefits pertaining to entrepreneurial aspects.

 

1. Gaining the sheer opportunity and complete freedom to control one's destiny. When we run our own business, it will provide us the freedom and opportunities to reach the goal of our lives. Being as a businessman, we will try to triumph our lives and enable ourselves to take an advantage of our own welfare.

 

2. Providing the opportunities of possible changes. Many entrepreneurs who start a business are normally driven by a certain ambition that they can seize any opportunities to make any possible changes that they think are very crucial. Besides, such changes can be simply as providing a decent life to our family, or setting up a recycling waste program to conserve scarce natural resources. In today’s era, for instance, many businessmen have now discovered an instrument to combine the manifestation of their particular concern over the social and economic problems; hoping that they will have a better life in the next several years ahead.

 

3. Having the opportunity to attain the maximum of social benefits. Although money is probably not the main attraction for most entrepreneurs at an early stage, however, the key benefits of entrepreneurship is very important as part of the determining factor in order to establish one’s business. In some cases, there are entrepreneurs who do not want to become wealthy, but rather than aiming to become successful. For example, nearly 75% of business pioneers whose names listed among the world’s wealthiest people according to Forbes magazine are the first generation of entrepreneurs. To some extent, the results from a study conducted by Thomas Stanley and William Danko stating that most of the entrepreneurs in United States are the two thirds of the millionaires which in this case, "the people who work or having their own companies are likely to be wealthier than those who work for others".

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GENERAL TRAITS OF BEING AN ENTREPRENEUR

If we are keen to be the true employer for ourselves and do our own business activities entirely, we must have at least some qualifications to be eligibly called an entrepreneur. The term so-called an entrepreneur, in theory, is essentially referred to someone or an individual who possesses the ability to organize and direct a series of business endeavours. Surprisingly, there are those individuals who were born and gifted naturally with entrepreneurial aptitudes; be it when they were still in their secondary high schools or in universities.

Actually, our first-hand experience (first attempt to run a business) is significantly important to polish our managerial skills because it helps us train our tenacity. In fact, we can either learn from a handful number of entrepreneurs who have been successful and look up to them as our role-models. Similarly, we can also follow the pattern of their successful footprints which they have achieved through their business ups and downs. In any case, when it comes to the characteristics of being an entrepreneur, we can delve into the qualities or personal traits owned by any successful entrepreneurs by looking at the below descriptions:

1. A person who excels higher. Being an entrepreneur demands high achievement, as it is necessary to work closely with professionals and partnering with a certain number of particular experts, especially when solving or tackling the problems. For each step, being as an entrepreneur must be able to stipulate a business vision and mission.

 

2. A Risk Taker. Being an entrepreneur should not be afraid of any risks. If possible, we should consider confronting medium risks and avoid the kind of high ones. If we want to become an entrepreneur, such a high level of achievement could possibly be accomplished as long as if we are willing enough to take risks toward the pursuit of our own goals and future ambitions.

3. Trouble Shooter. An entrepreneur must be good at identifying and resolving any dilemmas, both effectively and efficiently.

4. Highly energetic. As an entrepreneur, a person must be healthy both physically and mentally. Besides, working excessively more than normal working hours and can do some ad-hock tasks sufficiently in a long span of period is regarded as being full of beans (highly energetic). Hence, this is something necessary because it is an entrepreneur the one who deals with time management alone.

5. Highly Confident and Less Emotional Attachment. Confidence and beliefs which most of the entrepreneurs have are the emotional skills, willingness, and ability that can handle life without heavily relying on others. Additionally, being an entrepreneur should be able to avoid things which can lead to the development of poor relationships (e.g. disharmony) with business partners, relatives, friends, and anyone else who may turn out to be an obstacle when running a business.

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SEVERAL ATTRIBUTES OF A SUCCESSFUL AND FAILED ENTREPRENEUR

The success and failure of being an entrepreneur in managing a business are not generally influenced merely by the amount of capital owned or the proximity of discretion, but also can be impacted by the nature of a business itself which can be managed by people who have specific entrepreneurial prowess as long as they know precisely what, why, and how the business should be run and executed in a profitable manner.

The amount of excessive capital and the proximity of discretion of facilities owned by an entrepreneur (particularly, if we look at from the standpoint of sole proprietorship), there is no guarantee to ensure a certain range of figures in which an entrepreneur’s efforts will always turn out to be successfully worked out in a long term. Given the fact that in most developing countries whose many businesses seem to be in a larger scale because of their networking and the facility provisions which are thoroughly supported by the helm of their home country, those entrepreneurs who possess their businesses managed professionally by the running principles of modern managerial philosophies in contrast can be passed down from generation to generation. Owing to this fact, we can also argue that there is no solid reassurance for an entrepreneur to succeed at driving a business who simply relies solely on the pre-existing entrepreneurial traits.

Furthermore, speaking of what causes an entrepreneur to fail is often experienced and arguably occurred due to having an inability to sustain a business either in the short and long term. Failure, by virtue of life experiences, often stems from the result of having incompetency to anticipate uncertainty. Unfortunately, too many of us generally focus on questioning why some entrepreneurs end up being successful, instead of asking what are the mistakes they have committed and learnt hard from their failure.

Below here are several reasons behind why an entrepreneur seems to likely have failed in managing or thriving a business:

1. Lack of knowledge and managerial experience.

2. Poor financial management in a company where the owner is unable to separate between corporate and personal expenses.

3. Inadequate control of a business.

4. Terrible planning business expansion, for example, opening a new business venture outside one's competency or core businesses.

5. Not having the ability to draw up a specific business plan.

6. Lack of business management.

7. Limited access to banking facilities.

8. Limitations on the market aspects.

9. Lack of expertise in technology and information.

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GENERAL PRINCIPLES OF ENTREPRENEURSHIP

Perhaps, aspiring to become an entrepreneur may be a longing dream for most ordinary humans like us. And of course, we definitely prefer not to or would rather not to work as an employee for the rest of our lives. We certainly dream to have our own source of passive income where we can open and run our business venture so that we can obtain a sheer level of financial freedom. And, through the establishment of our own sole entrepreneurship, we can be absolutely liberated from the typical permanent schedule of working hours at office along with our regular duties charged (especially, without being constantly pressured by a series of unrelenting orders from our superiors).

Actually, many people think that being an entrepreneur is the key answer to achieving success, particularly against the wave of economic crisis that hits almost every inch of our world; inflicting the economic downturn in many developing states. Perhaps, one of the best solutions to overcome the unforeseen economic crisis is none other than through the encouragement of establishing a sole business venture. Having owned self-motivation to unlock a myriad of business opportunities through entrepreneurship is actually the starting point because everyone will have a chance to demonstrate their own entrepreneurial spirits. Therefore, in order to be able to capture business opportunities, an entrepreneur must understand a certain number of entrepreneurial principles such as:

1. Need to be optimistic.

2. Must be ambitious.

3. Able to read market opportunities.

4. Able to stay patient.

5. Never give up.

6. Never be afraid to experience failure.

Apart from that, there are also other business principles such as:

1. Not being fearful to experience failure. Many people argue that entrepreneurship is analogous or similar to the theory of a person tries to learn how to swim. Although this theory appears to be quite cliché, however, it is true that there is no point if a person fears of jumping into the water directly. With that being said, there is also a proverb which goes along with the theory saying, “Failure is the success which is delayed”.

2. Must be creative and innovative. Creativity and innovation are the main capital for entrepreneurs. Therefore, being an entrepreneur should never stop creating innovations in all aspects.

3. Thorough calculation in embracing potential risks. Risks are always and will always be there no matter what. Often, we tend to avoid such unprecedented risks, yet, we end up facing the other ones. However, any potential risks should be properly anticipated beforehand prior to deciding to do anything; especially in a business pattern which has a high degree of uncertainty.

4. Patience and perseverance. This could be more or less important in business, even in the face of dealing with various problems, trials obstacles. With patience, it will help us to understand well on how to solve unpleasant conflicts, so as to deal with them.

5. Always being optimistic. Having a sense of optimism is essential for entrepreneurs because the word optimism itself is a core principle which can motivate and drive their consciousness to do whatever task that can be done whatever issues they may confront.

6. Never surrender. Another unyielding principle is whenever we see our efforts go wasted as a consequence of failure; we should not be in despair easily.

7. Doing business with ethical standards. This is another key principle that every entrepreneur must uphold and apply universally. However, the issue in regards to this matter is whether the ethical standards put into practice in each country can be well recognized and adapted to the culture of a nation addressed. For example, in Indonesia, the country has the Consumer Protection Act which can be used as one of the handling tools to exercise the country’s business ethics.

8. Must be independent. The principle of self-reliance should be an absolute guidance in entrepreneurship. Self-sufficient in many ways, in fact, is the key aspect which we can avoid our dependency from other parties in connection to demonstrating our best efforts.

9. Act honestly. Honesty is the value which cannot be earned easily. Being truthful to suppliers, customers, and all the company's stakeholders is the basic principle and the most fundamental aspect that must be aligned holistically.

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PREPARING THE ENTREPRENEURIAL KNOWLEDGE AND KEY COMPETENCY

In theory, an entrepreneur is basically defined as someone who has a soul and the ability to create something creatively. In other words, being an entrepreneur possesses the ability to create something new and different through a product creation and innovation. It is simply the ability which is reflected when starting a business by doing something new; the will to seek opportunities, courageous or dare enough to take a risk, as well as being able to develop ideas and utilize other resources. Therefore, the willingness and the ability entailed pertaining to the preparatory entrepreneurial knowledge and key competency mainly covers several technical aspects, such as:

1. Generating a new product or service.

2. Creating a new added value on a new product or service.

3. Pioneering a new business venture.

4. Implementing an entrepreneurial adaptness.

5. Developing a newly organizational structure.

Aside from the above essential knowledge and key competency covered, the function of an entrepreneur when executing a business plan also has a certain number of particular roles, which are:

a. Designing the structure of a company’s organization.

b. Setting a company's strategy.

c. Pioneering the ideas.

d. Having a clearer vision to lead a company.

In addition, Bramstreet Business Credit Service in 1993 further elaborated that there were some significant miscellaneous aspects in which an entrepreneur must possess, such as:

1. Knowing our business model. We must equip ourselves with all the necessary knowledge related to what business we intend to execute and run. For example, to someone who decides to engage in the area of hospitality industry such as hotel, travel agency, tourism, and so forth – there is no doubt one should possess the specific knowledge, skills, and mechanism required in that field.

2. Knowing the basic management. Apparently, it is essential to know the core basics of managerial functions such as planning, organizing, and controlling which incorporates predicting, administering, as well as keeping business activities on track. Hence, knowing the basic functions of management means that we completely understand how to processes and oversee all the corporate resources both effectively and efficiently.

3. Having the proper attitudes. This is literally referred to having the right mind-set towards what a business does. Simply put, an entrepreneur should act as a trader, an industrialist, a businessman, or an executive who earnestly runs an organisation.

4. Having an adequate capital. Having a sufficient amount of capital does not only lie in terms of the tangible materials, but also in terms of moral aspects. In other words, trust and perseverance are the pivotal equity needed in a business because they are the key forces to effective implementation which covers time management, self-energy, and our mentality as an entrepreneur.

5. Managing a source of finance effectively and efficiently. To organise and manage corporate financial sources effectively and efficiently can be embodied through the searching of any available funding sources, so as to exploit them appropriately with solid control and accuracy.

6. Managing time efficiently. This can be done by being able to manage time as efficiently as possible through a series of activities such as organizing, calculating, and allocating the amount of unoccupied schedules as needed.

7. Managing human resources. This is simply referred to the ability of planning, organizing, directing, moving, and controlling our people who work for us.

8. Satisfying customers’ needs and wants through a high quality product. This is the ability to provide and deliver a customer’s satisfaction through the creation of high quality products.

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LIST OF ENTREPRENEURIAL CHALLENGES

1^st CHALLENGE: E-COMMERCE

The phenomenon of utilizing internet in today’s era is very common for businesses in order to seek for the essential trading information, promotion, relations, or business contact globally. Although at an initial stage putting an investment is arguably risky (especially, when attempting to gain an access over those pivotal information needed), however, a company’s business process will eventually turn faster and also will be much easier to extract more relevant data. After all, businesses that apply the utilization of e-commerce through an internet is a business that appears to be technologically unique because it paves more ways for a company to be connected in liaising with other businesses effortlessly such as B2B (Business to Business), B2C (Business to Consumers), and so on.

2^nd CHALLENGE: B2B (BUSINESS TO BUSINESS)

In theory, B2B refers to a business activity carried out between vendor to vendor such as manufacturers to suppliers, producers to wholesalers, traders to agents. In this case, they can execute their business processes or commercial activities in the area of promotions, supply and demand of their products, questions and answers from their customers, for which all of these can be done regularly via internet.

Perhaps, when talking about one of the greatest inventions in the history of technological discoveries such as Google, we have to acknowledge that it is considered a ground-breaking online phenomenon for its services provided in extracting a myriad of information which has become part of our primary tool that we frequently use to explore whatever information we need. In fact, Google is not only viewed as being revolutionized in the area of information technology, but also it changes the order of doing businesses in many sectors ranging from media (e.g. Google News, YouTube, Google Video) to libraries (e.g. Google Books, Google Scholar).

Overall, everyone now has the same opportunity to be connected, informed, and in touch thanks to the development of an internet. Due to the fact that the internet and mobile communication technologies are changing so rapidly in the last couple of decades, hence, every employer is required to take an advantage of capturing business opportunities more openly, transparently, and quickly so that it will help them stay updated and efficient at performing their organisational activities.

3^RD CHALLENGE: B2C (BUSINESS TO CONSUMERS)

Aside from B2B, B2C (Business to Consumers) is also part of an e-commerce business activity, which is usually leveraged as the means of transactions to carry out buying and selling online; determining numbers of products in a market and streamlining the process of purchasing and selling goods. It is one of the B2C e-commerce models that appear to assist some businesses and consumers in the most convenient way; rendering any form of transactions electronically at anytime and anywhere. With that being said, B2C on an e-commerce basis has substantially altered a conventional method or the process of buying and selling goods. In any case, the following are some of the key services of B2C which are regularly put into practice:

a. Providing samples of a product to be sold along with other important information over an internet.

b. Facilitating goods transactions to be done via online.

c. Instant convenient payment that can be done electronically (e.g. debit card, credit card).

d. Faster delivery of shipping items.

e. Providing a variety of information about the latest products or services.

f. Wider information of sellers’ location and so forth.

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STRATEGY OF CAPTURING BUSINESS OPPORTUNITIES

Perhaps, we often hear there is a saying that goes “This world is full of opportunities and not brimmed with problems”. Well, even God himself has reminded us that in any problematic situations we encounter, there must be a way out and an opportunity given to help us dealing with our life issues. It is this matter actually that we should keep in mind, unless if we tend to look at the situation as a problem rather than as an opportunity. And of course, when trying to establish and run a business, it is something risky and uncertain, particularly if we do not have the proper knowledge of it.

Talking about the law of nature, we have to convince ourselves to believe that everything is possible and will happen no matter what. Just like in a business world when there are times for an entrepreneur to earn his profits and incur losses. There is no guarantee at all that any business venture will always remain profitable due to the fact that risks will always involve in everywhere or everything we do. If we intend to avoid them, let say, then chances are we will be very likely to trigger other potential dilemmas. For this reason, the following explanations could provide some logical answers to the questions of how we deal with a business strategy, which often entails unprecedented consequences when it comes to money earning opportunities as well as bearing the potential loss of income.

1. When a business opportunity experiences profitability, some of the revenue earned must be re-invested accordingly in order to generate the next profit or source of additional revenue. In other words, part of the income generated should be at least allocated as the means of generating more money. Additionally, it is necessary to avoid debt as much as possible and do not simply take any gimmicks for granted because it could end up on the contrary situation where the business would experience fiasco instead.

2. At the time of experiencing the likely loss of business revenue, we tend to have despair in our motivation. This is something very crucial to note down that a failure should be regarded as a teacher or valuable experience so that firstly, we can learn from a variety of errors, trials, temptations, weaknesses and secondly, we can at least avoid factors that may cause the same potential failure or mistake. Therefore, when a business is not progressing as what it is expected, it is suggested that we as business owners should remain composed, strong, resilient, patient, and keep pushing ourselves to work even harder.

Meanwhile, several main causes of failure when capturing business opportunities can be due to as follows:

a. In attempts to seize a business opportunity, a person often behaves like a dropping warm chicken (feeling incredibly motivated at an early stage but in a long period, a person decides to quit and surrender due to a fierce business competition).

b. Often following what has been a business trend around us, or merely following what our close friends do in running their businesses.

c. Lack of dedication and contribution to a businesses that has been established.

d. Lack of planning and poor financial management in which a person is unable to separate financial statement between companies and personal expenses.

e. Poor and lack of disciplines (unable to plan carefully and not applying the knowledge properly).

f. Choosing a wrong business location where there is no access for people to visit.

g. Poor quality of a product sold in a market, lack of endurance, and so on.

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BUILDING AND SCALING A SOLE PROPRIETORSHIP

Prior to a commencing stage of your self-employment scheme, first of all, it is imperative that you need to figure out beforehand how the business operation and the scale of entrepreneurship of yours will take place. This is because without a proper business plan, there is a higher risk of business debacle you will encounter, since you are not prepared enough to go into a battle field and you do not have a solid business plan to prevail over your future competitors. For this purpose, below here are some of the little guidelines which I hope they can help you make any firm decisions of what you should consider before embarking onto your keen business venture:

a. Set your preferable business industry

You have to decide in advance what sort of business area you are keen to engage yourself in. By principle, several industrialized areas can be categorised as follows:

1. The business sectors which are rarely preyed by competitors. Perhaps, you may start looking for an industry which does not engage a fierce competition where a business has probably not existed yet, or is still regarded as something rare.

2. The business sectors which have long existed in a market. In case if you seem incapable of executing the above first option, you may also identify and look for a business which has already been established by others despite the fact that there are still many people who are reluctant to do so. For example, many women hesitate to open their own boutique stores merely because they fear of competing with others in the fashion industry. Well, it might not be a major issue if you have stood up firmly in selling clothes which possess some unique and distinctive features against your competitors.

b. Specify your business location

You need to ask yourself where will be the location of your business headquarter. Will you plan to run it at home, operating in a small rented office space, or renting a shop? For your reference, location does play a significant role for businesses to succeed. Therefore, this is something which must be taken into account carefully and you must decide what would be the right location for your future planned business.

c. Analyse your target customers

Once you have successfully determined your business spot, then here comes another vital aspect which is how you will attract some future customers. As in if your business is focusing on a service delivery, how will you invite your very first potential clients? Do you intend to promote your business through word of mouth? Or hiring a few advertising agencies? As you can see, there are so many roads to run a preliminary introduction of your chosen business. Since you are the captain of your ship, you have full discretion and absolute authorities to encompass your promotional activities over your business product.

d. Stipulate the total number of your manpower

How many people will you employ? Is it just you on your own or do you intend to hire a handful number of people to help you execute your business? Well, you may begin with a sufficient number of workers for a start. As your business thrives in progress, then, you may consider recruiting additional manpower if necessary.

e. Draft your planned financial statement

It is not uncommon that many businesses were unable to survive or even face severe bankruptcy due to a massive amount of debts. Therefore, it is imperative to reserve a significant amount of capital required to help you fuel your business operation forward so that your business will be unlikely to experience a shortage of liquidity level. In this case, you have to estimate your cash flow figure by drafting a constructive report of your financial statement either monthly or annually so that you can monitor the progress and make any cost reductions whenever necessary.

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CREATIVE Vs. INNOVATIVE

Being an entrepreneur does not always associate with extravagant things such as investing a large amount of capital, exhibiting a grand showroom inside a shopping mall, utilizing sophisticated and cutting-edge business equipment, and so forth. This is because for the record, there are plenty of self-relying efforts which can be demonstrated in a variety of ways such as working from home, owning an e-commerce website, or whatever. Subsequently, the main recipe to stand out distinctively from others with respect to a business survival is actually simple – a person must have creative ideas to create products which are unique and affordable.

Home industrialized products such as towels, cartoon dolls, traditional clothing, a type of cereals, and other fast moving consumer goods, for instance, have proven to attract the major proportion of consumer market shares through the specified product clusters. To be creative and possess innovative ideas in business are becoming more important forces when it comes to dealing with a product creation. However, there is a slight fundamental difference between being creative and innovative, which is:

a. Being creative means able to create something different from others, while innovative is capable of producing something that does not even exist yet.

b. A creative mind empowers an individual to connect and process diverse ideas or things, while an innovative mind challenges a person to be capable of producing something entirely different or unique in a sense.

When an entrepreneur gets stuck to creatively figure out or become clueless wanting to innovate something, the consequence of it will be of their business is unlikely to flourish or even survive in the near term. Thus, one of the greatest challenges of being an entrepreneur is a person must endlessly upgrade and polish themselves regularly towards important business elements, notably when dealing with a product creation, marketing strategies, and customer service optimization.

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