Chapter One

The Concepts of Entrepreneurship and Entrepreneur

1.1 Entrepreneurship: Definitions and Historical Development
Entrepreneurship is the symbol of business strength and achievement. Entrepreneurs are the
founder of today's business success. Their sense of opportunity, their drive to innovate and their
capacity for accomplishment have become the standard by which free enterprise is measured.
Entrepreneurs will continue to become critical contributors to the economic growth through their
innovation, research and development, effectiveness, job creation, competitiveness, productivity,
and formation of new industry.

The words entrepreneur and entrepreneurship have acquired special significance in the context of
economic growth in rapidly changing socio-economic and socio-cultural climates both in
developed and in developing countries. The concept of entrepreneurship varies from country to
country as well as from period to period and the level of economic development thoughts and
perceptions. A concise and universally accepted definition has not yet emerged.

Definition 1 (In the Earliest period)

An entrepreneur was viewed as a go-between, who attempted to establish trade routes and
signed contracts with a money person (forerunners of today's venture capitalist) to sell his/her
goods. While the capitalist was a passive risk bearer, the merchant-adventure took the active role
in trading, bearing all the physical and emotional risks. When the merchant-adventurer
successfully sold the goods and completed the trip, the profits were divided with the capitalist
taking most of them (up to 75 percent), while the merchant-adventure settled for the remaining
25 percent.
Definition 2 (In the Middle Ages)
The term entrepreneur was used to describe both an actor a person who managed large
production projects. In such large production projects, this individual did not take any risks but
merely managed the project using the resource provided, usually by the government of the
country.
Definition 3 (17th century conception)
The term given was attached to a person who entered in to a contractual arrangement with the
government to perform a service or to supply stipulated products. Since the contract price was
fixed, any resulting profits or losses reflected that the entrepreneur was risk taker.

Definition 4 (18th century, Notably, Cantillon’s contribution)

The Irishman named Richard cantillon, who was living in France, is credited to being the first to
use the term entrepreneur in the business context. He viewed the entrepreneur as a risk taker,
observing the merchants, farmers, crafts men, and other sole proprietors “buy products at certain
price, therefore, operating at a risk condition.” He defined entrepreneur as “the agent who buys
means of production at certain prices in order to combine them into a product that he is going to
sell at prices that are uncertain at the moment at which he commits himself to his costs.”
In the 18th century, the person with capital was differentiated from the one who needed capital.
In other words, the entrepreneur was distinguished from the capital provider (the present-day
venture capitalist).
Definition 5 (19th, 20th and 21st centuries)
Jean Baptiste Say, 1803
Say described entrepreneurs as “economic agent who unities all means of production –labor,
capital, and land; finds value of all products; pays wages for labor, interest for capital and rent
for land and seeks profit belonging to himself.”
Joseph Schumpeter, 1934
Entrepreneurship is a force of “creative destruction” where by established ways of doing things
are destroyed by the creation of new and better ways to get things done.
o Creative Destruction: the process by which existing products, processes, ideas and
businesses are replaced with better ones. Entrepreneurs are driving forces behind the
process of creative destruction.
o Entrepreneurship involves innovation and untried technologies.
o According to him, not all businesspeople are entrepreneurs but all entrepreneurs are
innovative businesspeople.
o Schumpeter’s views on entrepreneurship are relevant to developed nations.
Kirzner, 1973
He described entrepreneurs as a decision maker whose entire role arises out of his alertness to
hitherto unnoticed opportunities
Karl Vesper, 1980
Karl Vesper has researched entrepreneurship and explained that its nature is a matter of
individual perception.
o To an economist, an entrepreneur is one who brings resources, labor, materials, and other
assets into combinations that make their value greater than before, and one who
introduces changes, innovations, and a new order.
o To a psychologist, such a person is typically driven by behavioral forces like need to
obtain, to experiment, to accomplish something, or perhaps to escape the authority of
others.
o To capitalist philosophers, an entrepreneur is the one who creates wealth for others as
well, who finds better ways to utilize resources and reduce waste and who creates job that
others are glad to get.
Peter Drucker, 1985
Entrepreneur is someone who always searches for change, responds to it, and exploits it as an
opportunity. Drucker stresses systematic innovation as a necessary instrument for
entrepreneurship.
Robert Hisrich, 1986
“Entrepreneurship is a process of creating something different with value by devoting the
necessary time and effort, assuming the accompanying financial, psychic, and social risks, and
receiving the resulting rewards of monetary and personal satisfaction and independence.”
This definition stresses four basic aspects of being an entrepreneur regardless of the field.
1. Entrepreneurship involves the creation process-creating something new of value
2. Entrepreneurship requires the devotion of the necessary time and effort.
3. Assuming the necessary risks is the third aspect of entrepreneurship. These risks take a
variety of forms, depending on the field of effort of the entrepreneur, but usually center
around financial, psychological and social areas.
4. The final part of the definition involves the rewards of being an entrepreneur. The most
important of these is independence, followed by personal satisfaction. For profit
entrepreneurs, the monetary reward also comes into play.
Mary Coulter, 2003
“Entrepreneurship is the process whereby an individual or a group of individuals use organized
efforts to pursue opportunities to create value and grow by fulfilling wants and needs through
innovation and uniqueness, no matter what resources the entrepreneur currently has.”
Common Themes
In almost all of the recent definitions, there is an agreement that we are talking about a kind of
behavior that includes certain common themes. Let us look closer at these common themes so we
can begin to better understand what entrepreneurship is.
1. The entrepreneur
Entrepreneur is an individual that initiates and actively operates an entrepreneurial venture.
There is no doubt that without a person who is willing to do what an entrepreneur does,
there would be no entrepreneurship!
2. Innovation
It involves changing, revolutionizing, and introducing new approaches. Entrepreneurship
involves innovation.
3. Organization creation
Entrepreneurship involves organized effort and actions as an individual or as a team of
individuals. It demands initiative to do, take action to get the entrepreneurial venture and
running.
4. Creating Value
o Through entrepreneurship, new products, services, transactions, approaches,
resources, technologies and markets are created that contribute something valuable
to a community or a marketplace.
o We can also value created when, through entrepreneurship, resources are
transformed in to products and services. During this transformation process, value is
created because the entrepreneur is fashioning something worthwhile and useful.
5. Profit or Non- Profit organizations
Entrepreneurship can take place in both profit and non- profit environments. Although we
tend to assume that entrepreneurial activity is geared at making a profit (and we agree that
much of it is), entrepreneurship also occurs in social service agencies, in community arts
organizations, or in other types of not-for-profit settings.
 6. Growth
Entrepreneurship is about growing a business and pursuing opportunities as they arise. It is
not about standing still or being content to stay in one market or with one product.
Entrepreneurship implies growth.
7. Uniqueness
Through entrepreneurship, unique products are created and unique approaches are tried.
Entrepreneurship is not merely imitating what others have done. It is doing something new,
something untested and untried-something unique.
8. Process
A process, very simple, is a set of ongoing decisions and actions. Entrepreneurship is not a
one-time phenomenon; it occurs overtime. It involves a series of decisions and actions from
initial start-up to managing venture to even, at some point, exiting it. Later, in this chapter,
we will look at the specific steps involved in the entrepreneurial process.

Misconceptions about Entrepreneurship

1. Successful entrepreneurship needs only a great idea
Having a great idea is only part of the equation for successful entrepreneurship.
Understanding of the different phases of the entrepreneurial process, taking an organized
approach to developing the entrepreneurial venture, and copying with the challenges of
managing the entrepreneurial venture are also key ingredients to successful entrepreneurship.
2. Entrepreneurship is easy
Be warned that entrepreneurship is not easy! It takes commitment, determination, and hard
work. And even if you have these qualities, it still is not effortless!
3. Entrepreneurship is a risky gamble
Although entrepreneurs are not afraid to take risks, entrepreneurship involves calculated
risks, not unnecessary ones. In fact, there are times when successful entrepreneurship means
avoiding or minimizing risks.
4. Entrepreneurship is found only in small businesses reality
Entrepreneurship can be found in any size organization. Because an organization is small
does not automatically make it entrepreneurial.
5. Entrepreneurial ventures and small businesses are the same thing
Entrepreneurial ventures: An organization that is pursuing opportunities; is characterized by
innovative practices, and has profitability and growth as its main goals. Many small
businesses lack these features.

1.2 Benefits and Limitation of Entrepreneurship

People start their own business for a variety of reasons. Some have a bright idea that they think
will make them rich; others find themselves unemployed and start their own business to survive;
some only themselves when they are their own boss; others want to make a particular
contribution to their community and can see no other way of doing it except by setting upon their
own. The owners of small businesses believe they work harder, earn more money, and are
happier than if they worked for a large company. Generally, as stated above, even though people
start business for various reasons, the following considered as the benefits of entrepreneurship.
Benefits of Entrepreneurship
o Opportunity of gain control over your own destiny: owning a business provides
entrepreneurs the independence and the opportunity to achieve what is important to them.
Entrepreneurs want to "call the shots" in their live, and they use their business to bring this
desire to life. They reap the intrinsic rewards of knowing they are driving forces behind their
business.
o Opportunity to reach your full potential: Too many people find their work boring,
unchallenging, and unexciting. Nevertheless, to most entrepreneurs there is little difference
between work and play; the two are synonymous. Entrepreneurial business becomes the
instrument for self-expression and self-actualization. That is his/her talent, energy, limits
entrepreneurs growth and that means entrepreneurial situations.
o Opportunity to reap impressive profits: The profits their business can earn are an important
motivating factor in the entrepreneur's decisions to launch companies. One venture capitalist
that has financed many small companies says, "Starting your own company has always been
the best way to create wealth. And even if you do not get rich doing it, you will still have
more fun.”
o Opportunity to contribute to society and recognized for your effort: Often, business owners
are among the most respected and most trusted members of their communities. Business
deals on trust and mutual respect are the hallmark of many established companies. These
 owners enjoy the trust and recognition they receive from the customer whom they have
served faithfully over the years.
o Opportunity to do what you enjoy Doing: A common sentiment among small business
owners is that their work really is no work. Most successful entrepreneurs choose to enter
their particular business fields because they have an interest in them and enjoy those lines of
work. They have made their avocations (hobbies) their vocations (work) and are glad they
did! These entrepreneurs are living the advice Harvey McKay offers: "Find a job doing what
you love, and you will never have to work a day in your life."
The potential Drawbacks of entrepreneurship
Although owning a business has many benefits and provides many opportunities, anyone
planning to enter the world of entrepreneurship should aware of its potential drawbacks.
o Uncertainty of income: Opening and running a business provides no guarantees that an
entrepreneur will earn enough money to survive. Some small businesses barely earn enough
to provide the owner-manager with an adequate income. In the early days of a start-up, a
business often has trouble meeting financial obligations and may have to live on savings for a
time. The regularity of income that comes with working for someone else is absent because
the owner is always the last one to be paid.
o Risk: Starting or buying a new business involves risk, and the higher rewards, the greater the
risk entrepreneurs usually face. This is why entrepreneurs tend to have evaluated risk
carefully. It should be noted that people who successfully innovate and start businesses come
in all shapes and sizes but they do have a few things others do not. In the deepest sense, they
are willing to accept risk for what they believe in. They have the ability to cope with a
professional life riddled by ambiguity, a consistent lack of clarity. Most have a drive to put
their imprint on whatever they are creating. And while unbridled ego can be a destructive
thing, try to find an entrepreneur whose ego is not wrapped up in the enterprises.
Entrepreneurs face a number of different types of risk. These can be grouped in to four basic
areas.
A. Financial Risk: In most new ventures, the individual puts a significant portion of his or
her saving or other resources at stake. This money or resources will, in all likelihood, be
lost if the venture fails. The entrepreneur also may be required to sign personally on
 company obligations that far exceed his or her personal bankruptcy. Many people are
unwilling to risk their savings, house, property and salary to start a new business.
B. Career Risk: a question frequently raised by would-be entrepreneurs is whether they
will be able to find a job and go back to old job if their ventures fail. This is a major
concern to managers who have a secure organizational job with a high salary and a good
benefit package. To reduce such risk, starting a part time business is popular gateway to
entrepreneurship. Part-time entrepreneurs have the best of best worlds; they can ease in
to business for themselves without scarifying the security of a steady paycheck and
benefits. A major advantage of going in to part-time business is the lower risk in case the
venture flops. Many par tamers are "testing the entrepreneurial waters" to see whether
their business ideas will work and whether they enjoy being self-employed. As they
grow, many part-time enterprises absorb more of the entrepreneurs time until they
become full-time business.
C. Family and Social Risk: Starting anew venture uses much of the entrepreneur's energy
and time. Consequently, his or her other commitments may suffer. Entrepreneurs, who
are married, and especially those with children, expose their families to risk of an
incomplete family experience and the possibility of permanent emotional scars. In
addition, old friends may vanish slowly because of missed-get together.
D. Psychic Risk: The greatest risk may to the well being of the entrepreneur. Money can
replaced, a new house can built, children, and friends can be adapted. However, some
entrepreneurs who have suffered financial catastrophes have been unable to bounce
back, at least immediately. The psychological impact has proven to be too severe for
them.

o Long hours and hard work: In many start-ups, 10-to 12- hour days and six -or -seven-day
workweeks with no paid vacations are that norm. When the business closes, the revenue
 stops coming in and the customers go elsewhere. Even when you own your own business,
you still always are working for someone else-your customer and clients.
o Lower quality of life until the business gets established : The long hour and hard work
needed to launch a business can take their toll on the rest of the entrepreneur’s life. Business
owners often find that their roles as husband or wives and fathers and mothers take a back
seat to their roles as a business founders. Part of the problem is that most entrepreneurs
launch their business between the age of 25 and 34, just when they start their families. It is
very tough to give the amount of work that is required to build a company without slighting
your family. As a result, marriages and friendships are too often casualties of small business
ownership.
o High level of stress: starting and managing a business can be an incredibly rewarding
experience, but it also can be a highly stressful one. Entrepreneurs often have made
significant investments in their companies, have left behind the safety and security of a
steady paycheck and have mortgaged everything they own to get in to businesses. Failure
often means total financial ruin, and that creates intense levels of stress and anxiety.
o Complete Responsibility: owning a business is highly rewarding, but many entrepreneurs
find that they must make decisions on issues about which they are not knowledgeable. When
there is no one to ask, pressure can build quickly. The realization that the decisions they
make are the cause of success or failure has a devastating effect on some people. Small
business owners discover quickly that they are the business.
1.5 Entrepreneurs: Definitions and Classifications
Like entrepreneurship (the process), entrepreneur (the actor) has no universally accepted
definitions. Thus, the definitions of entrepreneurs given below are selected assuming that their
texts will attract you.
Definition 1 (Adam Smith)
Adam Smith described entrepreneur as a person who only provides capital without taking part in
the leading role of an enterprise.
Definition 2 (J.B. Say)
Say defined entrepreneur as a person who is endowed with the qualities of judgment,
perseverance, and knowledge of the world as well as of business. In other words, he defined an
entrepreneur as an economic agent who unites all means of production-land, labor and capital.
Definition 3 (R.D. Hisrich)
He defines entrepreneur as a person who establishes a new venture with gut and vision.
Definition 4 (Hill Meredith)
Hill Meredith defines entrepreneur as a person who has the ability to see and evaluate business
opportunities, to gather the necessary resources to take advantage of them and to initiate
appropriate action to ensure success.
Definition 5 (Niesbud)
Niesbud describes entrepreneur as a person who organizes, manages and runs an enterprise
assuming the risk of a business.
Definition 6 (Edil)
Edil defines entrepreneur as a person who takes risk of setting up his own venture for perceived
reward. He is the one who initiates the idea, formulates a plan, organizes resources and puts the
plan into action to achieve his goals.
Definition 7 (American Heritage Dictionary)
The American Heritage Dictionary defines entrepreneur as a person who organizes, operates and
assumes the risk for a business venture “as did two pioneers of the computers world, Sandra
Kurtzing and Bill Gates.”
Definition 8: other definitions
Entrepreneur is an innovative person, who
o instigates new opportunities to create a business venture;
o transforms resources into useful goods and services;
o aspires for wealth;
o gathers resources, organizes talent and provides leadership to make a commercial
success;
o brings change in his individual, family as well as national economy;
o takes risk, creates and operates his/her business;
o is a self-starting individual to create his/her business venture;
o is highly achievement-oriented, enthusiastic and energetic;
o is action-oriented, highly motivated to take risks to achieve individual goals;
 o is one with unwavering determination and commitment and result-oriented creativity to
work hard for personal and financial rewards.
o Responsible, enthusiastic and full of endurance;
o is thinker and doer, planner and implementer;
o is power to foresee the future for his/her individual visions and purposes

Classification of Entrepreneurs
The entrepreneurs have been broadly classified according to the type of business, use of personal
skills, motivation, growth, and stages of development and gender.
Entrepreneurs According to the Type of Business
According to the type of business, entrepreneurs are classified as follows:
1) Business entrepreneurs are individuals who conceive an idea for a new product or
service and then create a business to materialize their idea in to reality.
2) Trading entrepreneur is one who undertakes trading activities and is not concerned with
the manufacturing. She or he identifies potential markets, stimulates demand for his product
line and creates a desire and interest among buyers to go into his/her product.
3) Industrial entrepreneur is essentially a manufacturer who identifies the potential needs
of the customers and tailors a product or service to meet the marketing needs. She or he is a
product-oriented man who starts an industrial unit because of the possibility of making new
product.
4) Corporate entrepreneur is a person who demonstrates his innovative skill in organizing
and managing corporate undertaking. A corporate undertaking is a form of business organization,
which is registered under some statute or act, and which gives it a separate entity. A corporate
entrepreneur is, thus, an individual who plans, develops, and manages a corporate body.
5) Agricultural entrepreneur is the entrepreneur who undertakes agricultural activities such as
raising and marketing of crops, fertilizers and other inputs of agriculture through mechanization,
irrigation and application of technologies for dry land agricultural products.
Entrepreneurs based on technology
The application of new technology in various sectors of the national economy is essential for the
future growth of business. From this perspective, entrepreneurs are classified as follows:
 1. Technical entrepreneur is a "Crafts man" with skill in production techniques.
2. Non-technical entrepreneur is a person who is concerned with developing alternative
marketing and distribution strategies to promote his/her business.
3. Professional entrepreneur is a person who is interested in establishing a business but does
not have interest in managerial or operating it once it is established.

Entrepreneurs based on motivation:

Motivation is the force that influences an entrepreneur to achieve his or her objectives.
1. Pure entrepreneur is an individual who is motivated by psychological and economic
rewards. She or he undertakes an entrepreneurial activity for his or her personal
satisfaction.
2. Induced entrepreneur is one who induced to take up an entrepreneurial task due to the
policy measures of the government that provides assistance, incentives, concessions and
necessary overhead facilities to start a venture (business).
3. Motivated entrepreneur is new entrepreneur motivated by the desire for self-
fulfillment. Such entrepreneurs come into being because of the possibility of making and
marketing some new product for the use of consumers.
4. Spontaneous entrepreneur is person with initiative, boldness, natural talents and
confidences in his/her ability, which motivates him/her to undertake entrepreneurial
activity.
Entrepreneurs based on stage of development:
Based on stage of development, entrepreneurs can be classified as follows:
1. First-generation entrepreneur starts an industrial unit by innovative skill. He/She is
essentially an innovator, combining different technologies to produce a marketable
product or service.
 2. Modern entrepreneur is a person who undertakes ventures that go well along with the
changing demand in the market. She or he undertakes those ventures, which suit the
current marketing need.
3. Classical entrepreneur is a person concerned with customers and marketing needs
through the development of a self-supporting venture. She or he is a stereotype
entrepreneur whose main aim is to maximize his/her economic returns at a level
consistent with the survival of the firm with or without an element of growth.
Entrepreneurs based on Idea generation:
Based on criteria, there are three types of entrepreneurs.
1. Technological entrepreneur is one who invents a new technology to produce new
products or new process for producing old product.
2. A geographical entrepreneur is one who moves technology, products, and processes
that go with it from one place to another. It is common to introduce new products or
services from more advanced nation to developing nation.

3. A sociological entrepreneur- is one who finds a new situation in which to sell an old
product (existing products). Simple example could be in cafeteria to render service while
the customers are being in their car. This is usually associated with changing mode of
delivering the service or product.
Based on source of capital
Based on source of capital entrepreneurs can be classified as;
1. Private entrepreneurs- is when an individual on the basis of his or her own property
start up a new venture, where as
2. Collective entrepreneurs- when a venture is created in a grouped based on collective
property or contribution.
Entrepreneurs based on the reason to start-up
Based on the reason to start-up, entrepreneurs can be classified as follows:
1. Opportunity-driven entrepreneurs- they start a company because they see clear market
opportunities to exploit. For instance, the Ethiopian millennium is found to be a best
opportunity to start up a lot of business.
 2. Necessity-driven entrepreneur- goes in to business to create self-employment and to
win a living. For instance, now a day to come up with one’s own business unlike the past
for most youngsters it become not only a question of choice but also it become a question
of survival.
1. 6: Entrepreneurial Motivation
Several research studies have shown that entrepreneurs are convicted that they can command
their own destiny. Behavioral scientists express this view by saying that
entrepreneurs perceive the" locus of control" to be themselves. It is this-belief, which stimulates
the entrepreneur to the endeavor. The reasons /factors for small firm formation can be divided
between "Pull" and" Push" influences.
Pull Influence
Some individuals are attracted towards small business ownership by positive motive such as a
specific
Desire for independence: In several research studies, this future is prominently taken as the
key motivator. The bolon report singled out the need to gain and keep independence as a
distinguished feature of small business owner managers. A study of female entrepreneurs in
Britain found that women were motivated particularly by the need for autonomy, which had
been frustrated by the individual’s prior training and background.
Desire to exploit an opportunity: The identification of a perceived gap in the market place
through personal observation or experience is also a common reason for starting a business.
Entrepreneurs may seek to exploit this opportunity through special knowledge, product
development or they may hire the appropriate technology and skills.
Financial incentive: The promise of long-term financial independence can clearly be a motive
in starting a new firm, although it is usually not quoted as frequently as other factors.
Push influence
Many people are pushed into finding a new enterprise by variety of factors including;
1. Redundancy (Being without a job, idleness) : This has proved a considerable push in to
entrepreneurship particularly when accompanied by a generous handshake in a locality where
other employment possibilities are low.
2. Unemployment: job insecurity and unemployment varies in significance by region, and by
prevailing economic climate. The latest researches shows that at least 50% of entrepreneurs
pushed in this way to the entrepreneurial ventures.
3. Disagreement with previous employer: Uncomfortable relation at work has also pushed new
entrants into small business.
The dividing line between those "pulled and those pushed is often blurred. Many people,
considering an opportunity or having a desire for independence, still need some form of push to
help them make their decision. What is clear is that the diversity of motivations for starting a
business will influence the owner manager once they have set up. For example, the desire for
independence may inhibit growth if it can be seen as a threat to autonomy; once a firm becomes
less than small, it might take on some of the characteristics of large organizations from, which
the owner manager is trying to escape. The entrepreneur's tendencies to developed the business
through new opportunities may, conflict with an owner manager motivation.
1.7 Personal Entrepreneurial Competencies (Traits/Characteristics)
In the 1980s, the research and analysis made by management System International (MSI)
identified three major clusters (30 qualities overall) or groups of competencies that entrepreneurs
own commonly in all countries. The 3 clusters include:
1. Achievement motivation cluster (composed of 5 competencies)
2. Planning cluster (composed of 3 competencies)
3. Implementing cluster (composed of 2 competencies)

A common stereotype of the entrepreneur emphasizes such characteristics as a high need for
achievement, willingness to take moderate risk, and strong self-confidence. Go through the
following listed characteristics and compare them with what you have identified.
A) Need for Achievement:
David C.Mclelland, a Harvard psychologist, discovered a positive correlation between the need
for achievement and entrepreneurial activity. According to McClelland, those who become
entrepreneurs have, on the average, a higher need for achievement than do members of the
general population. Entrepreneurs are driven by a need to achieve.
B) Willingness to take risk:
The risks that the entrepreneur takes in starting and/or operating their own business are varied.
By investing their own money, they assume a financial risk. If they leave secured jobs, they risk
their careers. The stress and time required in starting and running a business may place their
families at risk. In addition, entrepreneurs who identify closely with particular business venture
assume psychic risk as they face the possibility of business failure.
David C.McClelland discovered in his studies that individuals with a high need for achievement
also have moderate risk taking propensities. Running your own firm is risky. All too many go out
of business quickly. To succeed, you need to take measured risks. Often the successful
entrepreneur exhibits an incremental approach to risk taking at each stage exposing him to only a
limited.
C) Self-Confidence:
Studies show that successful entrepreneurs tend to be reliant individuals who see the problem in
launching a new venture but believe in their own ability to overcome these problems. Some
studies of entrepreneurs have measured the extent to which they are confident of their own
abilities. According to J.B Rotter, psychologists, those who believe that their success depends
upon their own efforts have an internal locus of control. In contrast, those who feel that their
lives are controlled largely by luck or chance or fate have an external locus of control. External
locus of control believing that one’s life is controlled more by luck or chance than one’s own
efforts. Based on research to date, it appears that entrepreneurs have a higher internal locus of
control than is true of the population in general.

D) Innovation:
Innovative activity is a hallmark of entrepreneurship. The entrepreneurial manager is constantly
looking for innovations, not by waiting for a flash of inspirations, but through an organized and
continuous search for new ideas. Entrepreneurship is not so much an art that either you have, or
you do not, but rather a practice, which you constantly follow or you choice to ignore. It thus can
be developed and learned; its core activity is innovation and a continuous, purposeful search for
new ideas, and their practical applications. Doing things differently is part of entrepreneur's
nature.
It is how they create a market opportunity and differentiate themselves from others. Innovation
can be based upon many factors from marketing to technology.
E) Total commitment
Hard work, energy, and single mindedness are all essential elements in the entrepreneurial
profile.
F) All rounded
At least in the early stages of the business, entrepreneurs need to be able to make the product,
market it and count money.
G) A need to seek refuge:
Although most people go in to business to obtain the rewards of entrepreneurship (benefits of
entrepreneurship), there are some who become entrepreneurs to escape from environmental
factors.
H) Self-determination
They probably have a great faith in their ability to control their personal environment rejecting
too high an influence of chance or fate.
I) Desire for Independency
They wish for autonomy believing that independency of action is the only sure way to get what
they need.
Note that whilst entrepreneurs may share some of these characteristics, no one single trait can be
said to be secret of entrepreneurial success.