Definition of Entrepreneur, Process Stages, and Failure Factors

Definition of Entrepreneurship – Currently, the government is campaigning for an invitation to start a profession as an entrepreneur. Besides being able to boost the country’s economy, being an entrepreneur can also play a major role in reducing unemployment in Indonesia.

Many people understand that the concept of entrepreneurship is an attempt to start their own business. That’s true, but not everyone can become a successful entrepreneur just like that. There are many things that must be understood about entrepreneurship, especially for Sinaumed’s who wants to start his own business, whether in the culinary, animal husbandry, or commercial shop sector.

So, what is the meaning of entrepreneurship? What are the processes that must be passed for entrepreneurship? What are the factors that cause failure that entrepreneurs must avoid? So, so that Sinaumed’s understands these things, let’s immediately see the following review!

Overall Entrepreneurial Definition

Definition of Entrepreneur According to Experts

In fact, the concept of entrepreneurship has emerged since the 17th century and its meaning has also evolved with the times. Both entrepreneurship and entrepreneurship have almost the same concept. If entrepreneurship is a process of running a mature business, then entrepreneurship is the process of establishing and developing a business so that it can be run in a mature manner.

The definition of entrepreneurship will basically develop according to each person’s perspective on how the actions of an entrepreneur are. Well, here are some definitions of entrepreneurship from several experts.

Suryana (2006)

Entrepreneur is someone who has creative and innovative capabilities to be used as a basis, tips, and resources in an effort to find opportunities for success.

Zimmerer (2008)

Entrepreneur is someone who is able to create a new business by daring to take risks and uncertainties in order to achieve profits. The method used must be related to efforts to identify significant opportunities and combine the necessary resources so that they can be capitalized.

Joseph Schumpeter

“…entrepreneur as the person who destroys the existing economic order by introducing new products and services, by creating new forms of organization, or by exploiting new raw materials.” (A person who is able to break down the existing economic system by introducing new goods and services, and creating organizational forms while processing new raw materials)

Meredith (2011)

Entrepreneurs are people who have the ability to see and assess business opportunities by gathering the necessary resources and taking appropriate actions for profit.

Steinhoff and Burgess

Entrepreneurs are people who are able to organize, manage, and dare to take risks to create new businesses and opportunities in business ventures (in Suryana and Bayu, 2011)

Well, based on several definitions of entrepreneurship that have been put forward by these experts it can be concluded that,

“Entrepreneurs are individuals or groups of individuals who have creative, innovative abilities and full courage to take risks to open new business opportunities in order to achieve profits.”

So, who is an entrepreneur?

Generally, an entrepreneur is an actor or someone who runs his entrepreneurial business for profit. According to Schumpeter (1934), describes that entrepreneur is someone who successfully implements new combinations with the ability to see as well as evaluate existing business opportunities. In this case, an entrepreneur can certainly obtain the resources that are needed and take appropriate action to achieve success.

14 Characteristics of an Entrepreneur

An entrepreneur, aka someone who runs an entrepreneur, will always have innovative ideas in his efforts to develop his business.

If the business is not developed, it is not surprising that it will be competed by other entrepreneurs who are more dynamic in adapting to the times. So, here are some characteristics that are so attached to an entrepreneur.

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1. Desire For Responsibility

An excellent entrepreneur will definitely feel personally responsible for everything he does, especially when it comes to his business opportunity. Yep, they will be more able to control resources to achieve profits.

2. Tolerance For Ambiguity

Given that humans are social creatures, so does an entrepreneur who will definitely relate to other people, be it employees, customers, suppliers of materials, suppliers of goods, distributors, the community, and formal legal regulations. For this reason, a good entrepreneur must be able to maintain good relations with parties related to his business.

3.Vision _

Basically, every human being has ideals, as well as an entrepreneur who must have clear goals and objectives for future business steps.

Vision , aka this vision, becomes the philosophy, ideals, and motivation for why the company or business must survive. Then, an entrepreneur will translate that vision into clear goals, policies, budgets, and work procedures.

4. Tolerance For Failure

Everyone in this world will always fail, including entrepreneurs. No matter how innovative creativity is, it is not uncommon to fail and that is normal.

To achieve success, you have to go through a long process and even along the way you can develop your personality to be tolerant of business failures.

5. Internal Focus of Control

A superior entrepreneur will definitely have more ability to control himself and focus on internal things.

6. Continuous Improvement

In line with the characteristics of Tolerance For Failure , a superior entrepreneur is certain that when he fails, he will not just stop, but will take it as experience and make continuous improvements.

7. Preference For Moderate Risk

Almost the same as the characteristics of Tolerance For Failure , a superior entrepreneur will always be faced with risk intensity. There are 3 kinds of traits possessed by an entrepreneur when facing risks, namely 1) Those who really like high risks; 2) Those who like to take moderate risks; and 3) Avoiding risks.

8. Confidence In Their Ability To Success

In this case, an entrepreneur will be considered successful if he has high confidence to succeed in his own abilities.

9. Desire For Immediate Feedback

A successful entrepreneur will always be happy to get a response or feedback from other people, especially when experiencing a problem. Feedback, responses, and criticism should still be used as a guide going forward because it’s all delivered from another person’s point of view.

10.High Energy Level

A successful entrepreneur will always have a higher spirit than most people. Even when facing risks, he is also enthusiastic because he believes all his business endeavors will achieve success.

11. Future Orientation

A successful entrepreneur will always be able to see business opportunities and be oriented towards the future.

12. Skill At Organizing

It should be understood that to build a business, definitely requires the ability to organize existing resources, both tangible and intangible.

13. High Commitment

When you want to develop a new business opportunity, of course, it must be accompanied by high full commitment in order to be successful. Discipline is key in this characteristic.

14. Flexibility

Does Sinaumed’s realize that everything in this world is changing so fast? So, from the point of view of an entrepreneur, this should be used as a guideline that he must also be able to adapt to changes, especially in his business.

6 Indicators of Personality Traits of an Entrepreneur

Reporting from Module 1: Entrepreneurial Concepts and Processes , according to Meredith et al (1996, argues that there are at least 6 indicators of personality traits that an entrepreneur must possess so that his business has the opportunity to succeed.

No. Personality Traits Indicator Form of Character
1. Self-confident
  1. Sure it will work.
  2. Don’t rely too much on the help of others.
  3. Optimistic.
  4. Individualism (but still as a social being).
2. Task and Results Oriented
  1. Need for achievement.
  2. Profit oriented.
  3. Perseverance and steadfastness.
  4. Hard work determination.
  5. Have a strong drive, energetic, and initiative.
3. Risk Taker
  1. The ability to take any risks.
  2. Loves challenges.
4. Leadership
  1. Behave as a good leader.
  2. Can get along with other people.
  3. Responding to suggestions and criticism.
5. Originality
  1. Innovative and creative.
  2. Flexible.
  3. Have many sources.
  4. Multi talented.
  5. Knowing many things.
6. Future Oriented
  1. The view is always to the future.
  2. perspective

8 Stages of Entrepreneurship Process in General

Reporting from Module 1: Entrepreneurial Concepts and Processes , there are several stages of the process when setting up a business, namely:

1. There is an idea to do a business venture

Actually, the opportunity and the idea to do a business venture is not easy and not everyone has it. Some people have to fight for these business opportunities and ideas, some people can easily acquire and then develop them. There are several conditions that allow these opportunities and ideas to arise in the minds of individuals, namely:

  1. There are changes in the surrounding environment.
  2. Foresight of an entrepreneur to see business opportunities.
  3. There is an urgent situation.
  4. Because of a hobby.
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2. There are Constraints

All entrepreneurial processes that are in the stage of establishing their business will definitely face obstacles, including:

  1. The idea that is owned turns out to be unworkable or not practical enough.
  2. Still tied to the previous company (especially employees who want to switch careers to become entrepreneurs)
  3. Not having the will to stand alone.
  4. Lack of knowledge of the market.
  5. Lack of technical ability.
  6. There are certain government regulations.
  7. Viewed as having a low social status.

3. Develop a Business Plan

Today, all business activities cannot only rely on feelings or even reckless capital, you know… but must also be accompanied by careful business planning. Through this business plan, it is alleged that it will reduce the risk of failure to bankruptcy which is likely to arise in the business venture.

This business plan includes production planning, capital planning, resource planning, and marketing planning. All of these elements must be managed properly so that it can run as expected.

4. Get Help From the Environment

As previously explained that entrepreneurs are also human beings who are social beings. Thus will always need the help of others. Yep, the shortcomings that exist in us need to be covered with the advantages of others. There are several opportunities from the surrounding environment that can be utilized in this entrepreneurial process, namely:

  1. Market contact.
  2. Work partners.
  3. Capable workforce (employees).
  4. Technical education and support.
  5. Help from suppliers.
  6. Credit assistance.
  7. Business advisor.
  8. Successful role models.

5. Preparing a Strategy to Enter the Market

Strategy is of course very much needed, especially for a novice entrepreneur regarding how to carry out his business activities. Even the question of “is it better to buy an existing company or carry out franchising activities” is also a strategy.

6. Determine the form of business organization

The next stage in carrying out an entrepreneurial activity is to determine the form of business organization, which can be in the form of:

  1. Company
  2. Individual business
  3. Firm or Partnership

The determination of the form of the organization must look at several indicators. Starting from the goals to be achieved, access to capital, mastery of production science and technology, quality of human resources owned, business scale, network and marketing capabilities.

7. Identifying Factors Influencing Business Success

In the process, there are several factors that are claimed to be influential factors in supporting the success of a business venture, namely:

  1. Sufficient capital.
  2. Using the latest equipment and methods, aka flexible.
  3. Stay guided by the business plan.
  4. Understand knowledge of business.
  5. Want to work hard.
  6. Have the ability to maintain good relations with many related parties.

8. Continue to Maintain the Entrepreneurial Spirit

What is no less important is the entrepreneurial spirit that every entrepreneur must have. Through this spirit, a tenacious and unyielding spirit will develop when facing various problems and dynamics when running a business.

Factors Causing Failure

In general, the success and failure of the entrepreneur is determined more by the ability of the individual entrepreneur himself. Zimmerer (1996) also stated that many entrepreneurs fail because of the following things.

  1. Incompetent in managerial terms. This is evidenced by the low ability and performance in managing the business.
  2. Lack of ability and experience. Starting from technical skills, ability to visualize business, ability to coordinate, skills in managing human resources, to the ability to synergize company operations.
  3. Inability to control finances. In a business, finance plays an important role so that liquidity must also be maintained properly.
  4. There was a failure in the business plan. Remember that business planning is the starting point of all entrepreneurial activities. If the plan fails, it will have a major impact on future business operations.
  5. The location or place of business is less strategic. Choosing the wrong place of business can also be fatal, you know in an effort to grow a business.
  6. Lack of supervision on equipment. Supervision will always be closely related to the efficiency and effectiveness of business operations.
  7. Lack of seriousness. If when implementing entrepreneurship and do not have some personality indicators as previously described, of course it will hamper the running of business ventures.
  8. Inability in the entrepreneurial transition. In this case, with regard to an entrepreneur, he must dynamically keep up with the times, if he does not want his business to go bankrupt. Business success can only be obtained if entrepreneurs have the courage to make changes and are adaptive to changing times.

Source:

Musyadar, Achmad, and Iwang Gumilar. Module 1: Entrepreneurship. 

https://repository.uksw.edu/bitstream/123456789/19513/2/T1_522013021_BAB%20II.pdf

https://dewey.petra.ac.id/repository/jiunkpe/jiunkpe/s1/mbis/2013/jiunkpe-is-s1-2013-31410189-31036-informal-chapter2.pdf