“Entrepreneurs are people who have the ability to see and evaluate business opportunities,together with the necessary resources to take advantage of them and to intimate appropriate action to ensure success.”
-International Labor Organization
Entrepreneur searches for change,responds to it and exploits opportunities.Innovation is the specific tool of an entrepreneur.
-Peter F. Drucker
Entrepreneur is the one who is endowed with more than average capacities in the task of organizing and coordinating the various factors of production.He is pioneer and captain of industry.
a) Based on Functional Characteristics
Classification Given by Danhof
1. Innovative Entrepreneur
An innovative entrepreneur is one who launches new products, discovers new markets, establishes new methods of production and restructures the enterprise. They focus on revolutionalisation and development.Such entrepreneurs can do well only when certain level of development has already been achieved;they look forward to improving upon the past.
2. Imitative or adoptive entrepreneur
Imitative Entrepreneurs adopt victorious innovations launched by the innovative entrepreneurs. They duplicate the technology and techniques innovated by others and they are suitable for underdeveloped countries. Imitative entrepreneurs are characterized by readiness to adopt successful innovations inaugurated by successful innovating entrepreneurs. Imitative entrepreneurs do not imitate the changes themselves, they only imitate techniques and technologies innovated by others. However, the talent of imitative entrepreneurs should not be under-estimated. Even imitative entrepreneurs are revolutionary and agents of change. They have ability to do things which have not been done before even though, unknown to them, the problem may have been solved in the same way by others. Innovative entrepreneur is creative, while imitative entrepreneur is adoptive.
3. Fabian Entrepreneurs
Fabian entrepreneurs are exemplified by great caution and skepticism in experimenting any change in the organization. They imitate only in situations where it becomes necessary to do so. Such entrepreneurs are shy, lazy and lethargic. They are imitative by nature but are not determined and also lack power. They imitate only when it becomes perfectly clear that failure to do so would result in a loss of the relative position of the enterprise.
4. Drone Entrepreneurs
Drone Entrepreneurs suffer losses, as they refuse to make any modifications in the existing production methods. Drone entrepreneurs are characterized by a refusal to adopt opportunities to make changes in production formulae even at the cost of severely reduced returns. When competition increases, they are pushed out of the market as it becomes uneconomical for them to exist and operate in a competitive market.
b) Based on developmental angle
1. Prime mover: This entrepreneur sets in motion a powerful sequence of development,expansion and diversification of business.
2. Manager: Such an entrepreneur does not initiate expansion and is content just staying in business.
3. Minor innovator: This entrepreneur contributes to economic progress by finding better use for existing resources.
4. Satellite: This entrepreneur assumes a supplier’s role and slowly moves towards a productive enterprise.
5. Local trading: Such an entrepreneur limits his enterprise limits his enterprise to the local market.
c) Based on Types of Entrepreneurial Business
An entrepreneur who runs such a business actually produces the products that can be sold using resources and supplies.For example,apparel and other textile products,chemical and related products,electronics and other electrical equipment,fabricated metal products,industrial machinery and equipment,printing and publishing,rubber and miscellaneous plastic products,stone,clay etc.
An entrepreneur with such a business sells products to the middle Man.
An entrepreneur with such a business sells products directly to the people who or consume them.
An entrepreneur in this business sells services rather than products.
d) Based on the Nine Personality types of Entrepreneurs
Your business personality type is the traits and characteristics of your personality that blend with needs of the business.If you better understand your business personality,then you can give your company the best part of you.There are 9 key types of personality and understanding.
If you operate your business predominately in the improver mode,you are focused on using your company as a means to improve the world.Your overarching motto is : morally correct companies will be re-warded working on a noble cause. Improvers have an unwavering ability to run their business with high integrity and ethics.
Personality Alert: Be aware of your tendency to be a perfectionist and over-critical of employees and customers.
Entrepreneur example: Anita Roddick,Founder of the Body Shop.
2. The Advisor
This business personality type will provide an extremely high level of assistance and advice to customers. The advisor’s motto is : the customer is right and we must do everything to please them.Companies built by advisors become customer focused.
Personality Alert: Advisors can become totally focused on the needs of their business and customers that they may ignore their own needs and ultimately burn out.
Entrepreneur example: John W. Nordstrom,Founder Nordstrom.
3. The Superstar
Here the business is centered on the charisma and high energy of the Superstar CEO.This personality often will cause you to build your business around your own personal brand.
Personality Alert: Superstars can be too competitive and workaholics.
Entrepreneur example: Donald trump,CEO of Trump Hotels and Casino Resorts.
This business personality is the reserved but a highly creative type. Often found in businesses demanding creativity such as web design and ad agencies.As an artist type you’ll tend to build you business around the unique talents and creativities that you have.
Personality Alert: You may be overly sensitive to your customer’s responses even if the feedback is constructive.Let go the negative self image.
Entrepreneur example: Scott Adams,Creator of Dilbert.
5. The Visionary
A business built by a Visionary will often be based on the future vision and thoughts of the founder.You will have a high degree of curiosity to understand the world around you and will set up plan to avoid the land mines.
Personality Alert: Visionaries can be too focused on the dream with little focus on reality.Action must proceed vision.
Entrepreneurial example: Bill Gates,Founder of Microsoft Inc.
6. The Analyst
If you run a business as an analyst,your company focus is on fixing problems in a systematic way.Often the basis for science,engineering or computer firms,Analyst companies excel at problem solving.
Personality Alert: Be aware of analysis paralysis.Work on trusting others.
Entrepreneurial example: Intel Founder,Gorden Moore.
7. The Fireball
A business owned and operated by a Fireball is full of life, energy and optimism. Your company is life-energizing and makes customers feel the company has a get it done attitude in a fun playful manner.
Personality Alert: You may over commit your teams and act to impulsively. Balance your impulsiveness with business planning.
Entrepreneurial example: Malcolm Forbes, Publisher, Forbes Magazine.
You have an incredible will and ability to lead the world and your business through any challenge. You are the essence of entrepreneurship and can assemble great companies.
Personality Alert: Over promising and using force full tactics to get your way will not work long term. To be successful, trust your leadership skills to help others find their way.
Entrepreneurial example: Jack Welch, CEO GE.
9. The Healer
If you are a Healer, you provide nurturing and harmony to your business. You have an uncanny ability to survive and persist with an inner calm.
Personality Alert: Because of your caring, healing attitude toward your business, you may avoid outside realities and use wishful thinking. Use scenario planning to prepare for turmoil.
Entrepreneurial example: Ben Cohen, Co-Founder Of Ben & Jerry’s Ice Cream.
Role of an Entrepreneur in Economic Development
The entrepreneur who is a business leader looks for ideas and puts them into effect in fostering economic growth and development. Entrepreneurship is one of the most important inputs in the economic development of a country. The entrepreneur acts as a trigger head to give spark to economic activities by his entrepreneurial decisions. He plays a pivotal role not only in the development of industrial sector of a country but also in the development of farm and service sector. The major roles played by an entrepreneur in the economic development of an economy is discussed in a systematic and orderly manner as follows.
(1) Promotes Capital Formation
Entrepreneurs promote capital formation by mobilizing the idle savings of public. They employ their own as well as borrowed resources for setting up their enterprises. Such type of entrepreneurial activities lead to value addition and creation of wealth, which is very essential for the industrial and economic development of the country.
(2) Creates Large-Scale Employment Opportunities
Entrepreneurs provide immediate large-scale employment to the unemployed which is a chronic problem of underdeveloped nations. With the setting up of more and more units by entrepreneurs, both on small and large-scale numerous job opportunities are created for others. As time passes, these enterprises grow, providing direct and indirect employment opportunities to many more. In this way, entrepreneurs play an effective role in reducing the problem of unemployment in the country which in turn clears the path towards economic development of the nation.
(3) Promotes Balanced Regional Development
Entrepreneurs help to remove regional disparities through setting up of industries in less developed and backward areas. The growth of industries and business in these areas lead to a large number of public benefits like road transport, health, education, entertainment, etc. Setting up of more industries lead to more development of backward regions and thereby promotes balanced regional development.
(4) Reduces Concentration of Economic Power
Economic power is the natural outcome of industrial and business activity. Industrial development normally leads to concentration of economic power in the hands of a few individuals, which results in the growth of monopolies. In order to redress this problem a large number of entrepreneurs need to be developed, which will help reduce the concentration of economic power amongst the population.
(5) Wealth Creation and Distribution
It stimulates equitable redistribution of wealth and income in the interest of the country to more people and geographic areas, thus giving benefit to larger sections of the society. Entrepreneurial activities also generate more activities and give a multiplier effect in the economy.
(6) Increasing Gross National Product and Per Capita Income
Entrepreneurs are always on the look out for opportunities. They explore and exploit opportunities,, encourage effective resource mobilization of capital and skill, bring in new products and services and develops markets for growth of the economy. In this way, they help increasing gross national product as well as per capita income of the people in a country. Increase in gross national product and per capita income of the people in a country, is a sign of economic growth.
(6) Improvement in the Standard of Living
Increase in the standard of living of the people is a characteristic feature of economic development of the country. Entrepreneurs play a key role in increasing the standard of living of the people by adopting latest innovations in the production of wide variety of goods and services in large scale that too at a lower cost. This enables the people to avail better quality goods at lower prices, which results in the improvement of their standard of living.
(7) Promotes Country’s Export Trade
Entrepreneurs help in promoting a country’s export-trade, which is an important ingredient of economic development. They produce goods and services in large scale for the purpose earning huge amount of foreign exchange from export in order to combat the import dues requirement. Hence import substitution and export promotion ensure economic independence and development.
(8) Induces Backward and Forward Linkages
Entrepreneurs like to work in an environment of change and try to maximize profits by innovation. When an enterprise is established in accordance with the changing technology, it induces backward and forward linkages, which stimulate the process of economic development in the country.
(9) Facilitates Overall Development
Entrepreneurs act as catalytic agent for change, which results in chain reaction. Once an enterprise is established, the process of industrialization is set in motion. This unit will generate demand for various types of units required by it and there will be so many other units which require the output of this unit. This leads to overall development of an area due to increase in demand and setting up of more and more units. In this way, the entrepreneurs multiply their entrepreneurial activities, thus creating an environment of enthusiasm and conveying an impetus for overall development of the area.