Types Entrepreneurs

Understandings of the different avenues in which an

entrepreneur may adopt provide insight into the possible
opportunities that entrepreneurs can invest in.
Entrepreneurs have been classified in various forms:

(i) Soloist
This involves a self-employed person operating alone. For
example, most shop retailers are referred to as soloist
entrepreneurs.
(ii) Key partner
This is one stage from the soloist as an autonomous
individual but with a partner in the background, sometimes
as a financial backer only.

Types Entrepreneurs
(iii) Grouper
These are entrepreneurs who prefer working in small
groups and share the decision-making. E.g.
Carpenters working in their own firm as partners.
(iv) Professional
These
are
self-employed
experts.
Some
entrepreneurs work as lawyers experts, financial
consultants or business consultants.
(v) Inventor-researcher
These consist of creative inventors who may or may
not have the practical skills to turn creativity into
innovation.

Types Entrepreneurs
(vi) High Tech
New
technological development has created
opportunities for those with the technical expertise
e.g. in electronics or computers.
(vii) Workforce builder
This constitutes the delegator who manages the
labour and expertise of others in an effective way.
(viii) Inveterate initiator
This is an entrepreneur who only really enjoys the
challenge of initiating new enterprises then loses
interest, often selling the business in order to start
another.

Types Entrepreneurs
(ix) Concept multiplier
This includes someone who identifies a successful
concept that can be duplicated by others. E.g.
through franchising or licensing arrangement.
(x) Acquirer
This is an entrepreneur who prefers to take over a
business that already exists, rather than start from
scratch.
(xi) Speculator
These are the property-based opportunities to buy
and sell at a profit as well as collectables such as art,
stamps and antique furniture.

Types Entrepreneurs
(xii) Turn about artists
This consists of an entrepreneur who buys a small
business with problems but potential for profit.
(xiii) Value manipulator
These constitute the entrepreneur who acquirer asset
at low price and who then through manipulation of the
financial structure is able to sell at a higher price. E.gused cars
(xiv) Life style entrepreneur
Small business is a means to the end of making possible the
good life. However, this is defined consistent cash flow is the
primary business requirement rather than high growth, which
might involve too much time commitment.

Types Entrepreneurs
(xv) Committed manager
In this category the small business is regarded as
a life times work, something to be built carefully.
Personal satisfaction comes from the process of
nurturing the fledging firm through all its various
stages of growth.
(xvi) Conglomerator

This consists of the entrepreneur who builds up a portfolio

of ownership in small businesses or companies.
Sometimes he/she uses shares or assets of one company
to provide the financial base to acquire another.

Types Entrepreneurs
(xvii) Capital aggregator
This is a business owner with the necessary financial
leverage to acquire other substantial attractive
businesses.
(xviii) Matriarch or patriarch business
This constitutes the head of a family that own
business, often employs several members of the
family.
(xix) Going public

These are entrepreneurs who start up in business with the clear

aim of achieving a quotation on the stock exchange, usually via
an unlisted securities market in the 1 st instance.

Types Entrepreneurs
(xx) The alternative entrepreneur
This consists of alternative new age belief in a
return to more environmentally sound life
styles expressed in a wish to avoid
conventional employment.
Commercial activities have developed in areas
such as health foods, alternative healing and
medicines, alternative beauty products etc.

Types Entrepreneurs
(xxi) Fabian entrepreneurs
These
are very cautious and sceptical while
practicing any change.
They do not have the will to introduce new changes.

They do not have a desire to adopt new methods

innovated by the most enterprising entrepreneurs.
Such entrepreneurs are shy and lazy.
They are not interested in taking risk and they try to
follow the footsteps of their predecessors.

Types Entrepreneurs
(xxii) Drone entrepreneurs
These are characterised by refusal to adopt and
use opportunities to make changes in production.
Such entrepreneurs may even suffer losses but
do not make changes in production methods.
They are laggards as they continue to operate in
their traditional way and resist changes.
Entrepreneurs may exhibit any one of the
above mentioned forms of entrepreneurship.
The
motives to do so results from the
payoff of entrepreneurship.

The Payoff of Entrepreneurship

2.2 The Payoff of Entrepreneurship

The payoff of entrepreneurship

This part discusses the payoff (benefits) associated
to entrepreneurship.
(i) Make Money
Entrepreneurship
provides for ones financial
needs. Launching ones own business venture is a
way of earning more money/profit.
In several cases, entrepreneurial ventures earn
much higher than salaried employment.
Thus, research has shown that in many cases
entrepreneurs earn much money compared to
employed people.

The payoff of entrepreneurship

(ii) Be Your Own Boss
Freedom to operate independently is another
reward or benefit of entrepreneurship.
Many people have a strong desire to make their
own decisions, take their own risks and at the end
reap the rewards.

The payoff of entrepreneurship

(iii) Personal fulfilment
Entrepreneurs frequently speak of the satisfaction
they derive from their own businesses.
Some of the entrepreneurs even refer to their work as
constituting fun.
Part
of their enjoyment is derived from their
independence, but some reflects an owners
fulfilment in working with the firms products and
services.
The role of the entrepreneur even in a one-person
business can often bring an individual a sense of
dignity or significance that makes life worth living.

The payoff of entrepreneurship

(iv) Establishment of your Own office
Many people dream of having their own firms or enterprises in
their lives.
It is only through entrepreneurship that they can fulfill that
aspiration in their lives.
When an entrepreneur establishes his/her own enterprises,
thus it becomes possible to become a boss of the enterprise
or business venture.
(v)Employment creation
Among many recognitions and legacies entrepreneurs enjoy in
their lives is the ability to employ other people in their
business ventures or firms and hence be able to sustain the
lives of other people. For example, in Tanzania
entrepreneurs have created more than 60% employment
opportunities in the country.

The payoff of entrepreneurship

(vi)Contribution to the economic development of
a nation
It has been reported that entrepreneurs contribute a lot
to economic growth of the country. This contribution
can be observed through:
_Revenue collection through taxes
-Employment creation
-Construction of premises
-Sales of product and services,
-etc
-It
has
been
observed
that
entrepreneurship
contributes more than 40% of the GDP in the country.

The payoff of entrepreneurship

(vii) Reduction of crimes
The more many people engage in entrepreneurship,
the more crimes are being reduced in the country.
Crimes are reduced as many people get employed
by owners of entrepreneurial ventures. This is true
as employment from the government are declining
year after year.
(viii) Source of an individual happiness
Entrepreneurship is a source happiness as the
dream of many people to become self-employed
become fulfilled, especially for those who were
longing for long time to become self-employed.

The payoff of entrepreneurship

(viii)Source of Pride and Recognition
When people start engaging in entrepreneurship
and successed to establish their own business
firms or ventures which are doing well, owners
get recognition, dignity and pride from families,
relatives, friends, society, and the general public.
This is a very good reward which many
entrepreneurs are struggling to obtain in their
lives.
For example, owners of ASAS, Ivory, IPP Media, etc,
have good reputation in the eyes of the general
public through the success of their business
firms.

The payoff of entrepreneurship

(ix) promote 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 of 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

The payoff of entrepreneurship

(x) Wealth creation and distribution
It stimulates equitable redistribution of wealth
and income in the interest of the country to
more people and geographical areas, thus
giving benefit to larger sections of the society.
Entrepreneurial activities also generate more
activities and give a multiplier effect in the
economy.

The Dark side of Entrepreneurship

2.3 The Dark side of

Entrepreneurship

The Dark side of Entrepreneurship

These are destructive sources that exist within energetic

drives of successful entrepreneurs.
Certain negative factors envelop entrepreneurs and
dominate their behaviour.
Experience in Tanzania shows that many people fear risk,
career disruption and being too busy.
These factors may cause some people to fear joining the
entrepreneurial career or when they do they may fear
failing to be effective in their entrepreneurial pursuit.
These negative factors are specifically classified in terms of the risks,
stress and egocentric nature of entrepreneurs.

The Dark side of Entrepreneurship

(i) Risks

It is an established fact that entrepreneurship exists under

conditions of risk and uncertainty.

Risks refer to variability of outcomes (or returns).

It exists when there are uncertain outcomes but those

outcomes can be predicted with a certain degree of probability.

If there is no risk, returns are certain.

Starting or buying a new business involves risks, and the higher the
rewards, the greater the risk entrepreneurs usually face.
As a matter of fact, entrepreneurs confront at least financial, career, social
and psychic risks:

The Dark side of Entrepreneurship

(ii) Financial risk
An entrepreneur risks to lose his or her entire
invested capital if the venture fails.
The
financial risks involved include lost
savings and temporary reduction in salary.

It has been reported that 24% of new

businesses fail within two years and 51% shut
down within four years. In some cases, the
probability of failure reaches 75%.

The Dark side of Entrepreneurship

As a result, many people are reluctant to risk

their savings, house property, salary or a
reduction in their standard of living or in their
financial security in order to start a new
business venture.
These are generally not entrepreneurs at heart
because successful entrepreneurs must be
prepared to make financial sacrifices.

The Dark side of Entrepreneurship

(iii) Career development risk
This is a risk that having stepped outside ones
profession for a few years re-entry becomes
difficult.
A
question frequently raised by would-be
entrepreneurs is whether they will be able to find
a job or return to their old job should their
business venture fail.
This is often a great concern for managers who
have a secure organisational job with a high
salary and a good benefit package.

The Dark side of Entrepreneurship

In fact certain professions are structured to

permit interruptions, while others are not
easily turned off and on at will.
E.g., medicine is unlikely to tolerate
interruptions in medical practice.

The Dark side of Entrepreneurship

(iv) Risk in social relations
The commitment of ones leisure time and
energies is all but inescapable in starting a
new business venture.
Starting
a
new
venture
consumes
entrepreneurs energy and time.
Consequently, his or her other commitments
may suffer.
E.g., old friends may varnish slowly because of
limited interaction.

The Dark side of Entrepreneurship

Many marriages fail to survive the long

absences of one partner from home.
Vacations, weekend outings, social invitations
vanish from the calendar.
Nevertheless, despite such strain the asset
side also exists in that your absence from
home may create the opportunity for a wife or
husband to go back to work full or part time or
doing some work around the house.

The Dark side of Entrepreneurship

(v) Psychological and health risk
The greatest risk faced by entrepreneurs concerns
his/her well being.
Losses caused by many other types of risks are
recoverable.
A new house, for example, can be built; spouse,
children and friends can usually adapt to the changes.
But
some entrepreneurs who suffer financial
catastrophes
tend
to
be
severely
affected
psychologically and drained emotionally, putting
strain on their health.

The Dark side of Entrepreneurship

(vi) The stress
Most
entrepreneurs have made significant
investments in entrepreneurial ventures, but
have also left behind the safety and security of
a steady employment and payment and have
gauged everything they own to get into
business.
Thus,
failure means a total financial and
psychological blow that creates a high level of
stress and anxiety.

The Dark side of Entrepreneurship

(vii) The Entrepreneurial Ego
Another aspect of the dark-side of entrepreneurship
lies in an egocentric nature of entrepreneurship.
It is an excellent thing to be a boss but many
entrepreneurs realise that they must make decisions
on issues on which they are not really
knowledgeable.
When there is no one to ask, the pressure builds up
quickly.

When individual entrepreneurs have to make sole-decisions on

virtually everything concerning their businesses, they may
experience the negative effects of the inflated ego.