1.

Passion & Motivation

The one word that describes the basic requirement for an entrepreneurship venture is
Passion.
o Is there something that you can work on over and over again, without getting
bored?
o Is there something that keeps you awake because you have not finished it yet?
o Is there something that you have built and want to continue to improve upon,
again and again?
o Is there something that you enjoy the most and want to continue doing for the rest
of your life?
Your demonstration of passion and motivation will determine your success in any
entrepreneurial venture. From building and implementing a prototype, to pitching your
idea to venture capitalists, success is a function of passion and determination. (For
more, see: Turn Your Passion into a Profitable Side Business.)
2. Risk Taking
Entrepreneurs are risk takers ready to dive deep into a future of uncertainty. But not all
risk takers are successful entrepreneurs. What differentiates a successful entrepreneur
from the rest in terms of risk? Successful entrepreneurs are will to risk time and money
on unknowns, but they also keep resources, plans and bandwidth for dealing with
"unknown unknowns" in reserve. When evaluating risk, a successful entrepreneur will
ask herself, is this risk worth the cost of my career, time and money? And, what will I do
if this venture doesn't pay off?
3. Self-belief, Hard work & Disciplined Dedication
Entrepreneurs enjoy what they do. They believe in themselves and are confident and
dedicated to their project. Occasionally, they may show stubbornness in their intense
focus on and faith in their idea. But the flip side is their demonstrated discipline and
dedication.
4. Adaptability & Flexibility
Its good to be passionate or even stubborn about what you do. But being inflexible about
client or market needs will lead to failure. Remember, an entrepreneurial venture is not
simply about doing what you believe is good, but also making successful business out of

it. Market needs are dynamic: changes are a recurring phenomenon. Successful
entrepreneurs welcome all suggestions for optimization or customization that enhances
their offering and satisfies client and market needs. A product you develop for yourself
alone may qualify as a hobby, but a product for the market should satisfy market needs.
5. Understand Your Offering And Its Market
Entrepreneurs know their product offering inside and out. They also know the
marketplace and its dynamics inside and out. Remaining unaware of changing market
needs, competitor moves and other external factors can bring even great products to
failure (for example, Blockbuster).
6. Money Management
It takes time to get to profitability for any entrepreneurial venture. Till then, capital is
limited and needs to be utilized wisely. Successful entrepreneurs realize this mandatory
money management requirement and plan for present and future financial obligations
(with some additional buffer). Even after securing funding or going fully operational, a
successful businessman keeps a complete handle on cash flows, as it is the most
important aspect of any business.
7. Planning (But not Over-planning)
Entrepreneurship is about building a business from scratch while managing limited
resources (including time, money and personal relationships). It is a long-term
commitment, and attempting to plan as much as possible at the beginning is a noble
impulse. In reality, however, planning for everything and having a ready solution for all
possible risks may prevent you from even taking the first step. Successful entrepreneurs
do keep some dry powder in reserve, but more importantly they maintain a mindset and
temperament to capable of dealing with unforeseen possibilities.
Do a feasibility analysis; identify time and capital thresholds; take the deep dive with your
limited resources. If your thresholds are crossed, look for alternatives and be prepared to
take the next exit.
8. Networking Abilities
How do you tap your network for solutions? Many people seek comfort in commiseration:
friends, colleagues and neighbors are happy to complain with you about "the global
slowdown, poor demand, or unfair competition; but that won't improve the bottom line.
What do successful entrepreneurs do? They reach out to mentors with more experience
and extensive networks to seek valuable advice.

Having such networking abilities, including more experienced mentors, is a key

characteristics of successful entrepreneurs.
9. Being Prepared to Take the Exit
Not every attempt will result in success. The failure rate of entrepreneurial ventures is
very high. At times, it is absolutely fine to take the practical exit route and try something
new, instead of continuing to make sunk cost investments in the same venture. Many
famous entrepreneurs weren't successful the first time around. But they had the serenity
and foresight to know when to cut their losses.
10. Entrepreneurs Doubt Themselves But Not Too Much
You may ask yourself, am I an entrepreneur? And the very question may put you in
doubt about the answer. Even if you don't have the flair of Steve Jobs or the hair of Elon
Musk, if you have the courage to ask yourself intimidating questions Can I do this? Do
I want to do this? you have the stuff to be an entrepreneur.
Instead of worrying about fitting the image of the perfect entrepreneur, check in with your
gut. Is it on board?

PERSONALITY & TRAITS

There are many things that go into making for a successful entrepreneur.
Here are the top five that you must have in order to be successful:
1. Have a vision. Most people think that to be a successful
entrepreneur, you need to have a two-inch thick business plan.
Nonsense. What you need is a vision, which you can get the general
details of down on one sheet of paper. Include where you would like
to be 90 days from now and a year from now, and you are all set. On
a daily basis, keep track of the things like your cash flow, prospects,
etc. Knowing where you want to go is far more important than
producing a big paper report you will likely never look at again.
2. Be lifestyle flexible. Businesses usually dont start out making a
profit right away. You need to be aware of this and be able to

realistically live with it as well. It means that you will need to be

comfortable tightening your belt until your business starts making a
profit. Know this going in, so you can accommodate and not quickly
run in the other direction.
3. Believe yourself. What others think about you doesnt matter nearly
as much what you think of yourself. It is essential that you believe
that you have what it takes to succeed. Your self belief will take you a
lot further than anyone elses belief in you!
4. Tout yourself. When it comes to your business, you have to put your
inhibitions aside. You have to be able to sell yourself and your
company and let as many people know about your business as
possible. Even if you are an introvert, you will have to be able to do
this.
5. Be a doer. There are basically two kinds of people in this world.
There are those who talk about starting a business, and there are
those who actually do it. In order to be a successful entrepreneur,
you must fall into the latter category. If you want to be successful in
business, you have to, at some point, stop thinking and talking about
what you want to do and actually take the leap to get it done.
Starting a business is a lot of work. Anyone who tells you it's not is either lying or has never actually
started one themselves. The hours are long, sacrifices are great and you are assulted with new
problems and challenges every day with seemingly no end. If you don't have the constitution to
weather these things, your business could implode on you faster than it started.
Clearly, entrepreneurship is not for everyone. But how do you know whether its for you? You should
start by asking yourself what it takes to be a leader because, for the most part, you'll be doing a lot of
the work up front by yourself. If you can't lead yourself through startup, chances are you won't likely be
able to lead your business and future employees through growth and on to success.
If you enjoy only a few actual hours of real work per day, the rest of the time spent either looking busy
or hanging out at the water cooler to catch up on TV talk, a modest but steady paycheck and benefits
and are okay with routine day-in and day-out, stop reading here and go back to your cushy desk job.
If you seek a challenge wrought with risk but with tremendous potential reward both financially and
morally, read on friend, for you have something of what it takes to be a successful entrepreneur.

Successful entrepreneurs, from Henry Ford to Steve Jobs, share similar qualities with one another. To
see how you rank against these distinguished entrepreneurs, do you share at least half of these
qualities?
1. Strong leadership qualities
Leaders are born, not made. Do you find yourself being the go-to person most of the time? Do you find
people asking your opinion or to help guide or make decisions for them? Have you been in
management roles throughout your career? A leader is someone who values the goal over any
unpleasantness the work it takes to get there may bring. But a leader is more than just tenacious. A
leader has strong communication skills and the ability to amass a team of people toward a common
goal in a way that the entire team is motivated and works effectively to get there as a team. A leader
earns the trust and respect of his team by demonstrating postive work qualities and confidence, then
fostering an environment that proliferates these values throught the team. A leader who nobody will
follow is not a leader of anything at all.
2. Highly self-motivated
You probably know from knowing even a little bit about some of the most famous business
entrepreneurs in history that leaders are typically pretty intense personalities. Nobody makes progress
by sitting back and waiting for it to find them. Successful people go out into the world and invoke
change throught their actions. Typically, leaders enjoy challenges and will work tirelessly to solve
problems that confront them. They adapt well to changing situations without unraveling and are
typically expert of helping their teams change with them by motivating them toward new goals and
opportunities. Often you will learn that successful entrepreneurs are driven by a more complete vision
or goal than simply the task at hand and able to think on a more universal level in that regard. They are
also often very passionate about their ideas that drive toward these ultimate goals and are notoriously
difficult to steer off the course.
3. Strong sense of basic ethics and integrity
Business is sustainable because there is a common, understood code of ethics universally that
underpins the very fabric upon which commerce is conducted. While cheaters and thieves may win in
the short term, they invariably lose out in the long run. You will find that successful, sustainable
business people maintain the highest standards of integrity becauase, at the end of the day, if you
cannot prove yourself a credible business person and nobody will do business with you, you are out of
business. With importance in working with clients or leading a team, effective leaders admit to any error
made and offer solutions to correct rather than lie about, blame others for, or dwell on the problem
itself.
4. Willingness to fail
Successful entrepreneurs are risk takers who have all gotten over one very significant hurdle: they are
not afraid of failure. That's not to say that they rush in with reckless abandon. In fact, entrepreneurs
are often successful because they are calculating and able to make the best decisions in even the
worst of cases. However, they also accept that, even if they make the best decision possible, things
don't always go according to plan and may fail anyhow. If you've heard the old adage, "nothing
ventured, nothing gained," that's exactly what it's saying: do not be afraid to fail, put it out there and
give it your best shot. Again, there's not one successful entrepreneur out there sitting on his couch
asking, "what if?"
5. Serial innovators
Entrepreneurs are almost defined by their drive to constantly develop new ideas and improve on
existing processes. In fact, that's how most of them got into business in the first place. Successful
people welcome change and often depend on it to improve their effectiveness as leaders and ultimately

the success of their businesses as many business concepts rely on improving products, services and
processes in order to win business.
6. Know what you don't know
While successful entrepreneurs are typically strong personalities overall, the best have learned that
there's always a lesson to be learned. They are rarely afraid to ask questions when it means the
answers will provide them insight they can then leverage to effect. Successful entrepreneurs are
confident, but not egotistical to the point that their bull-headedness is a weakness that continually
prohibits them from seeing a bigger picture and ultimately making the best decisions for the business.
7. Competitive spirit
Entrepreneurs enjoy a challenge and they like to win. They would have to since starting a business is
pretty much one of the biggest challenges a person can take on in their lifetime. In business it's a
constant war with competition to win business and grow market share. It's also a personal challenge to
use all of this to focus inward and grow a business from nothing into a powerhouse that either makes a
lot of money or is so effective that it is sold or acquired for a profit as well.
8. Understand the value of a strong peer network
In almost every case, entrepreneurs never get to success alone. The best understand it takes a network
of contacts, business partners, financial partners, peers and resources to succeed. Effective people
nurture these relationships and surround themselves with people who can help make them more
effective. Any good leader is only as good as those who support him.

1. Sincerity
First things first: If you come off like a snake-oil salesman desperate
to get his hands on capital, youll immediately turn investors away.
These are wealthy, involved people, and theyve already been
approached by some of the best swindlers and smooth-talkers in the
business. If they feel that theyre being misled, or that you are
presenting yourself as someone that youre not, your reputation could
be instantly ruined.
Its far better to honestly admit some of your shortfalls and concerns
than to try to cover them up, and its far better to act like your true self
than to adopt a fake personality. To put it bluntly, investors have a
great BS detector, so stay sincere and honest throughout all your
interactions.

2. Charisma

Charisma is an intangible quality with multiple definitions, but

essentially, its a level of likability or charm that attracts other people.
Initially, you might not consider likability as a key trait for running a
business -- after all, a business owner needs to make objective,
emotionless decisions for the benefit of the business before any
human interest considerations. But at the same time, entrepreneurs
are leaders.
Entrepreneurs are responsible for building and maintaining the team
of employees who will drive the business forward, and responsible for
attracting a first round of initial clients. To do this, they need some
level of charisma, and investors look for this quality in potential
investments.

3. Passionate
If you come to an investor meeting and simply run down the numbers
in a monotone voice, your investors wont be impressed. However, if
you come in visibly excited about your idea, to the point where you
almost cant calm yourself down, they cant help but contagiously
catch some of your enthusiasm.
Passion makes people work harder and more satisfied in the process
of pursuing their goals. Without passion, entrepreneurs are far more
likely to give up when trouble hits, and are far less willing to take
essential risks to keep the business moving forward. Never be afraid
to demonstrate your enthusiasm.
Related: Pitching Investors With Customer Motivations Won't
Work

4. Humility

While charisma and passion can sometimes be associated with

obnoxiousness or even arrogance, a level of humility is important to
investors as well. Entrepreneurs need to be grounded with humility for
several reasons.
First, they need to be willing to listen to outside opinions. As an
entrepreneur, you arent going to know everything, and youre going to
make mistakes. Being humble enough to listen to outside insights is
imperative to improve the business.
Second, they need to understand that not everything is going to be
perfect. Humble entrepreneurs understand that mistakes and pitfalls
will occur, and their ideas wont become successful overnight. This
humility leads to greater long-term thinking, and more rational
responses in a crisis.

5. Ambitious
Finally, in the eyes of investors, entrepreneurs need to be ambitious
-- hungry for success. Investors look for opportunities to make more
money, so they need to see that the business owners they invest
in are equally eager to make money.
Ambitious people are far more likely to create goals, and are far more
tenacious when it comes to facing problems. Theyre also futurefocused, allowing them to make wiser long-term decisions than if they
were merely concerned with day-to-day operations. You have to want
success to earn success.
Obviously, its hard to change your personality on a dime, and you
dont want to pretend that youre someone youre not. But you can,
through careful considerations and putting your best foot forward,

showcase the personality traits you have that make you a best fit for
the business.
Dont be afraid to acknowledge this directly in conversation, and tell
stories about your past experiences that prove your worth as an
entrepreneur as potential investors engage you and try to get a better
feel for you as a person.

Tenacity
Starting a business is an ultramarathon. You have to be able to live
with uncertainty and push through a crucible of obstacles for years on
end. Entrepreneurs who can avoid saying uncle have a better chance
of finding their market and outlasting their inevitable mistakes. This
trait is known by many names--perseverance, persistence,
determination, commitment, resilience--but it's really just oldfashioned stick-to-it-iveness.
"Tenacity is No. 1," says Mike Colwell, who runs Plains Angels, an
Iowa angel investor forum, and the accelerator Business Innovation
Zone for the Greater Des Moines Partnership. "So much of
entrepreneurship is dealing with repeated failure. It happens many
times each week."
When failure happens, you have to start all over again. Jett
McCandless was a partner in a fast-growing freight logistics operation.
But the rapid expansion triggered mistakes, including an invoicing
glitch that left the company without enough cash reserves. The
business had to be sold for a fraction of its value. McCandless didn't
agree to the terms and was fired. He lost the company house and car
and wound up moving into his girlfriend's apartment. "It was a very
tough time," he recalls. "I came very close to going bankrupt."

He went on 25 job interviews and got offers for logistics positions

paying $200,000 and up. But McCandless, who grew up in Section 8
public housing, wondered, Should I take a comfortable, secure job, or
could I build something better? "I was afraid that failure could define
the rest of my life, and I wasn't going to let that happen," he says.
So rather than accept one of those big offers, he started over,
founding a new company, CarrierDirect, in Chicago. Hamstrung by the
noncompete contract with his previous firm, he created a wholly new
space in the logistics field. Instead of matching shippers with truckers,
he switched to consulting, providing marketing and sales for logistics
companies. In two years CarrierDirect grew to $35 million in revenue.
"I'm glad I didn't take one of those corporate jobs," he says now.

Passion
It's commonly assumed that successful entrepreneurs are driven by
money. But most will tell you they are fueled by a passion for their
product or service, by the opportunity to solve a problem and make
life easier, better, cheaper.
"Most entrepreneurs I know believe they will change the world," says
Jay Friedlander, a professor of sustainable business who works with
entrepreneurs at the College of the Atlantic and at Babson College.
"There's an excitement and belief in what they're doing that gets them
through the hard times."
Passion based on your company's specific mission is an intrinsic drive
that provides the internal reward that can sustain you between
paydays. John Roulac is passionate about hemp, which has a host of
industrial and food uses and can be grown without herbicide, making

it a keystone crop for sustainable agriculture. With a mission of

providing a new market for Canadian hemp farmers, Roulac launched
his company, Nutiva, in 1999 with a hemp food bar. But he quickly ran
into interference from U.S. Customs officials who associated hemp,
part of the cannabis family, with marijuana.
"Initially, they tried to harass us," Roulac recalls. "They would say our
products couldn't leave the warehouse; then they could. It was very
hard to stay in business." Two years later the Justice Department
published a rule that put hemp products in the same illegal category
as heroin. "It was either go out of business, keep going or go to jail,"
he says. "It could be bankruptcy or humiliation."
Roulac had more than $100,000 invested in the business by this
point. A lot of people told him to quit. Instead, he decided to go on the
offensive and sued the Drug Enforcement Administration. With
support from the natural-products industry, particularly soap company
Dr. Bronner's, he won the suit two years later. Roulac's belief in the
power of his mission had prevailed.
"I believed that I was on the side of truth and that there was a
government agency trying to prevent something good happening for
the country," he explains. "I feel at a core level that this is my destiny
to help create a better food system."
Today Nutiva sells a variety of organic products, from hemp protein
shakes to virgin coconut oil. Roulac's advice when things get tough:
"Dig deeper."

Tolerance of ambiguity

This classic trait is the definition of risk-taking--the ability to withstand

the fear of uncertainty and potential failure. "It all boils down to being
able to successfully manage fear," notes Michael Sherrod,
entrepreneur-in-residence at the Neeley School of Business at Texas
Christian University.
He sees the ability to control fear as the most important trait of all.
"Fear of humiliation, fear of missing payroll, running out of cash,
bankruptcy, the list goes on."
Jill Blashack Strahan knows the fear factor. The founder and CEO of
Tastefully Simple, a direct-sales company for gifts and easy-to-make
meals, remembers the calls to her bank when she was three months
overdue on her mortgage. "That fear that I would lose my house
almost controlled me," says Blashack Strahan, who also had to
overcome the deaths of her brother and then her husband shortly
afterward. "The night after the funeral of my husband, I thought maybe
I should give up, get a job and be a mom."
This is where the ultimate entrepreneurial test takes place, on the
mental battlefield. You can go with the fear and quit, or push through
it. "I said no; this idea is going to work," Blashack Strahan says. "We
have the power to control our thoughts. When we commit mentally,
our action follows." She made a conscious decision to push through
the fear. Her company had sales in 2012 of $98 million.
While many would feel powerless in the face of such adversity, "the
entrepreneur looks at the situation and knows he has some control
over the outcome," says Jonathan Alpert, a psychotherapist and
author of Be Fearless: Change Your Life in 28 Days.

Vision
One of the defining traits of entrepreneurship is the ability to spot an
opportunity and imagine something where others haven't.
Entrepreneurs have a curiosity that identifies overlooked niches and
puts them at the forefront of innovation and emerging fields. They
imagine another world and have the ability to communicate that vision
effectively to investors, customers and staff.
Many people would be satisfied with a couple of successful
businesses, but Eldad Matityahu saw beyond his two thriving frozenyogurt stores. He'd been reading about the fiber-optic space and
decided he wanted in on the technology sector that surrounded him in
Silicon Valley. So he sold his yogurt shops and his Harley and got into
a field he knew nothing about. He took a job with a fiber-optic
company to learn the business and discovered his niche there.
Customers told him they were frustrated that they couldn't have
access to see who was on their networks--important for security. "I
realized there was no solution on the market addressing this pain
point," Matityahu says. "I took the time to figure out why."
The products Matityahu created made activity on the network easily
visible and also protected the system. He bootstrapped his company,
Net Optics, with $100,000--the proceeds from his two yogurt stores
and Harley (along with a small investment from family members)-turning down venture capitalists along the way. In October 2013 he
sold the company for $190 million.
"Entrepreneurs often face naysayers, because we see the future
before the future plays out," Matityahu says. "You have to be several
steps ahead of the market."

Self-belief
Self-confidence is a key entrepreneurial trait. You have to be crazysure your product is something the world needs and that you can
deliver it to overcome the naysayers, who will always deride what the
majority has yet to validate.
Researchers define this trait as task-specific confidence. It's a belief
that turns the risk proposition around--you've conducted enough
research and have enough confidence that you can get the job done
that you ameliorate the risk.
"You have to have a lot of self-confidence. Be willing to take a risk, but
be conservative," says Jason Apfel, founder of FragranceNet.com, an
e-commerce site for beauty products. Apfel didn't know anything about
the beauty world when he started the company, but he believed he
could create a solid website to sell such products. "I thought selling a
commodity online at the most competitive price would work," he says.
His company has outlasted well-funded competitors and sees $145
million in annual sales.

Flexibility
Business survival, like that of the species, depends on adaptation.
Your final product or service likely won't look anything like what you
started with. Flexibility that allows you to respond to changing tastes
and market conditions is essential. "You have to have a willingness to
be honest with yourself and say, 'This isn't working.' You have to be
able to pivot," says Colwell of Plains Angels.

While still a student at Babson College, Matt Lauzon wanted to

digitize the process of designing personalized jewelry. After raising
$500,000 from Highland Capital Partners, he launched a custom
jewelry design platform for retailers in 2008; however, a year later
there was no payoff in sight.
"In theory, it was a perfect match, but in practice we found that we
simply couldn't change the jewelers' focus on selling the expensive
inventory they had sitting in their display cases," Lauzon recalls.
He reached out to his jeweler customers to solicit feedback. "One of
them actually said, 'You have built something so amazing, with so
much potential, you should let people use it directly,'" he says.
Lauzon decided to do exactly that, and with additional rounds of
financing, relaunched the Boston-based company as Gemvara.com,
selling the custom jewelry experience directly to consumers. He won't
disclose sales, but he has raised $51 million to date, including
additional millions from Highland Capital, which backed his initial
concept. He has even hired away executives from the jewelry world's
biggest retail force, Tiffany & Co.

Rule-breaking
Entrepreneurs exist to defy conventional wisdom. A survey last year
by Ross Levine of the University of California, Berkeley, and Yona
Rubinstein of the London School of Economics found that among
incorporated entrepreneurs, a combination of "smarts" and
"aggressive, illicit, risk-taking activities" is a characteristic mix. This
often shows up in youth as rebellious behavior, such as pot-smoking.

That description would certainly hold true for some of the most
famous entrepreneurs of recent years.
In fact, simply starting a business breaks the rules, as only about 13
percent of Americans are engaged in entrepreneurship, according to a
Babson College report. Doing what the majority isn't doing is the
nature of entrepreneurship, which is where the supply of inner
resources comes in.

First: Corrupt and unsupportive business environment

Lack of supportive and market-augmenting governmental regulations serve as a
barrier to entrepreneurship. Russia leads all other large nations in having an
unsupportive business environment because they lack rule of law, have poorly
defined contract and property laws, enforce regulations inconsistently, allow rampant
corruption and bribing, allow regulatory authorities and inspectors to act in a
predatory nature which therefore requires friendly ties with government officials and
bureaucrats to smooth the way for businesses to operate. China has similar issues.
See the accompanying list where pictured is Russian dissident-businessman, Boris
Berezhovsky, now exiled in London, England. Berezhovsky was one of the Russian
oligarchs who acquired massive wealth by taking control of state assets after the fall
of communism. He also has links to the poisoned Russian spy Alexander Litvinenko.
Tied for second: Employee related difficulties
Building an employee asset base for the enterprise is one of the more daunting and
sometimes overlooked tasks. Entrepreneurs must find and select the best-qualified
employees who are motivated and willing to grow with the venture. Then they must
ensure the employees do not leave. The professors say this task becomes a barrier
when employees expectations increases, governmental regulations related to labor
employment is hardened, and employee costs grow. Employee cost is more than
pay. It includes healthcare, workers compensation, social security tax, and health
and safety regulations.
Just ask Charles Chip Starnes, who was recently held hostage by his own
employees in a plant in China. It has been widely reported that Starnes was held
hostage by current employees who did not receive severance pay that 30 workers
received because they were being laid off. Starnes was moving a plastic-injectionmolding division to Mumbai, India, where production costs are lower. After being
barricaded in the plant for almost a week, Starnes reached an agreement after
nearly a week to pay two months wages, totaling almost $300,000, to the remaining
97 employees.

Tied for second: Severe market entry regulations

Governmental rules, taxation, environmental regulations, lending requirements and
licensing are all barriers to entrepreneurship. Most countries, the United States
included, proscribe or license market entry and the creation of new firms to protect
incumbents in certain industries and professions. Entry procedures, or red tape,
vary such that entrepreneurs need one day to register an enterprise in one country
and up to 20 weeks in another. Other barriers to entrepreneurship are predatory tax
behavior of authorities, lack of property rights and tax disadvantages.
Tied for second: Shortage of funds and resources
Finding the money to start up an enterprise is a leading barrier to entrepreneurship.
Without funds, any person cannot begin to organize, train, develop and sell product.
Fifth: Lack of Entrepreneurship Opportunities
Venture creation requires existing marketplace opportunities with possibilities known
to the entrepreneur and favorable odds for success for entrepreneurial spirit to
succeed.
Sixth: Lack of Entrepreneurial Capacity
Opportunities go untried until someone comes along with an eye for possibility and a
can-do attitude. Some cultures may discourage entrepreneurial capacity resulting in
a low rate of new firm entrance. It is like having an oil well field without
knowledgeable people to mine the wells. Entrepreneurial capacity is the existence of
people with entrepreneurship qualities, willingness and motivation to initiate new
ventures.
Seventh: Lack of Adequate Entrepreneurship Training
Training and education can be a robust incubator for new ventures. This includes
training in technical skills, managerial skills, entrepreneurial skills and
entrepreneurship.
Tied for eighth: Lack of Appropriate Technical and Practical Skills
People tend to use the skills they have acquired to pursue entrepreneurial initiative.
Lacking the appropriate skills and knowledge inhibits economic development.
Tied for eighth: Lack of Market Experience
The essence of leadership is first learning and doing before leading. Therefore, the
capability to start a business is propelled by previous education and work
experience. Rushing into a new market because it looks attractive and rewarding
without having some experience and background in it can be fatal. Experience in a
related business before start-up is positively correlated to the probability of success.
Tenth: Fear of Failure

Entrepreneurs have to decide whether to take action so they dont miss the boat,
while knowing that hasty action may cause them to sink the boat.
Eleventh: Aversion to Risk
A psychological barrier closely related to the fear of failure is aversion to risk.
Entrepreneurs must take initiative, create structure with a social-economic
mechanism and accept risk of failure. Entrepreneurs have to be risk takers while
those who are risk averse will seek the security if an existing establishment.

1. Finance: National experts considered problems with finance to be one of the principal factors
hindering entrepreneurship in their country and the relationship between finance and levels of
entrepreneurship activity was confirmed in the data. The availability of early-stage finance, either
from informal sources such as individuals or formal sources such as venture capital funds, is
greater among countries that have higher levels of entrepreneurial activity.
2. Education: Education plays a vital role in entrepreneurship. The study identified that if the level
of participation in post-secondary were the only factor used to predict entrepreneurial activity, it
would account for 40 percent of the difference between the study countries. Providing individuals
with quality entrepreneurship education was one of the top priorities identified by national
experts.
3. Fundamentals: The study also argued that policies geared toward boosting entrepreneurial
activity should not be confined to the entrepreneurship sector per se but also extended to the
macro-economic fundamentals of the country like markets, competition and regulation. In
particular, the most entrepreneurially active countries had a greater ease of doing business with
the government, more flexible labor markets and lower levels of non-wage labor costs.
4. Social Legitimacy: The perceived social legitimacy of entrepreneurship was also argued to
make a difference. It was found that measures such as
(a) the extent to which fear of failure acts as a deterrent to starting a new firm and
(b) respect for those starting new businesses were associated with differences in levels of
entrepreneurial activity.

Caring too much for the product than the customers

A startup is a baby of an entrepreneur and it is his duty to ensure that the product has great
quality to satisfy the needs of the consumers. In India, entrepreneurs are very attached to their
business which makes them focus too much on the startup and the product avoiding the most
important factor - 'consumers'. Indian entrepreneurs must have a balanced chart to ensure that
their focus is on the startup and the customers because customers and consumers determine the

future of an entrepreneur and his startup.

Indian entrepreneurs fear failure
It might be a bold statement that Indian entrepreneurs fear failure but the fact never changes.
Entrepreneurs around the world have a fear on guiding their startup to the right direction but in
India the scenario changes quite a bit making it more difficult for these men as they are not let to
take up risk bearing responsibilities. Indian families do not encourage their youth to run their own
business as it might bring in loss and such thoughts are induced into these men at a very early
stage.
Too much interference in everything
An entrepreneur is an all rounder but that does not mean he gets into every activity of the
business with too much concern. It would in fact be his own company but an entrepreneur must
be smart enough to choose his responsibilities and priorities within an organization.
Decisions must be bold
While most entrepreneurs have the ability to make and take quick decisions Indian entrepreneurs
find it a little difficult to master this skill due to various external reasons. An entrepreneur must
have the courage to take bold decisions and march forward but in our country things turn out to
be a little different as entrepreneurs are emotionally attached and are answerable to various
emotional questions that put them in the state of dilemma.
Few Indian entrepreneurs do not have the passion
Passion is a key factor that determines an entrepreneurial journey and without this zeal an
entrepreneur cannot reach his goal.

What are factors influencing Entrepreneurial development in India?

Ans: 1.

Economic Factors

Capital, labour, raw materials and market are the main economic factors.
(a)

Capital:

Capital is one of the most important prerequisites to establish an enterprise. Availability of

capital helps an entrepreneur to bring together the land of one, machine of another and raw
material of yet another to combine them to produce goods. Therefore, capital is regarded as
lubricant to the production process. Basically, capital is the life blood of any activity. If capital is
available, people who have innovative ideas would like to put them into reality. Without having
any obstacles, if capital is available, it will act as a lifeline to entrepreneurs. So, if capital is
available, entrepreneurial activities will increase.
(b)

Labour:

The quality and quantity of labour is another factor which influences the emergence of
entrepreneurship. Availability of labour makes entrepreneurship attractive. More than
abundantly available labour, the presence of skilled labour force is very important because such
a workforce is generally less mobile than other resources. If entrepreneurial activities are
initiated near areas where labour is available, then it is easy to carry out the business more
comfortably and profitably at low cost. This is why one finds textile units and machine tools
manufacturing industries concentrated in certain cities like Coimbatore, Tiruppur, Ludhiana,
Rajkot, Baroda, etc. just because of availability of skilled labour force required for such units.
(c)

Raw Materials:

Raw materials are required for establishing any industrial activity and therefore has an influence
in the emergence of entrepreneurship. In the absence of raw materials, neither any enterprise
can be established nor an entrepreneur can emerge. In some cases technological innovations
can compensate for raw material inadequacies. The supply of raw materials is not influenced by
themselves but becomes influential depending upon other opportunity conditions. The more
favourable these conditions are, the more likely is the raw material to have its influence on
entrepreneurial emergence.
(d)

Market :

It is not only the availability of capital, labour and raw materials but a readily available market
that attracts entrepreneurial activities. Ultimately, it is the market that fetches revenue for any
business. If sufficient market is not there, people will naturally hesitate to do business in a sector
where there is no market. In addition to market opportunities, it is equally important to ensure
future market opportunities for the emergence of entrepreneurial activities.
2.

Social Factors :

Development of entrepreneurship in a society may take place not just because of better
economic factors but because of the presence of positive social factors. The following social
factors influence the development of entrepreneurship in a society.
(a)

Social norms and values:

A society sets certain norms and values for the behaviour of people who are part of that society.
If people violate or overstep these norms and values, certain restrictions are likely to be imposed
on them. As a result, many people are forced to accept certain types of jobs and tasks that
reflect the social environment. If the society has an open and flexible approach towards various
types of jobs and works, then people will feel free to do whatever they like and even go in for
innovation and creativity. When there is more openness and flexibility, entrepreneurship will not
only emerge but also thrive.
(b)

Role models:

Societies that celebrate entrepreneurship and felicitate successful entrepreneurs in a way

encourage many future generations to take up entrepreneurial activities. This is because
successful businessmen prove to be role models for the society at large. For instance, states like
Gujarat, Maharashtra and to some extent Tamil Nadu and Haryana have experienced better

industrial development as a result of higher concentration of entrepreneurs compared to lesser

industrialised states such as Orissa, Chattisgarh, Madhya Pradesh and other Northeastern
states.
(c)

Social pressure:

At times, entrepreneurship can emerge in a society due to social restriction too. If a society is
orthodox, close and imposes a lot of restrictions, then it is likely to backfire. People who are at
the receiving end are likely to react strongly and go in for change. In other words, because of
negative pressure, more number of people would like to become entrepreneurs as a means of
improving their status. It has been noticed that where people were marginalised, they became
entrepreneurs just to prove their abilities and establish an identity in the society.

(d)

Respect and Status:

If societies accord recognition and respect to people who dare to do something different and
creative, it proves to be an encouragement for others to do something enterprising. Therein lies
the emergence of entrepreneurship. In the traditional societies, people were looked down upon
rather than encouraged for deviating from the set norms or regular occupation. This means
there was no respect for change. Thus, societies where there is respect and recognition for
people to do something different are more likely to see the development of entrepreneurial
activities.
(e)

Security:

The view regarding role of social security in encouraging entrepreneurship development is

rather divided. One school of thought is of the view that people are more prone to take
entrepreneurial risks in secure social environments. On the other hand, there are others who
argue that entrepreneurship will more likely emerge if there are turbulent conditions. In both
cases, there is scope for entrepreneurship development.
3.

Psychological Factors

(a)

Need Achievement:

According to David McClellands theory of need achievement, a constellation of personality

characteristics which are indicative of high need achievement is the major determinant of
entrepreneurship development. Therefore, if the average level of need achievement in a society
is relatively high, one would expect a relatively high amount of entrepreneurship development in
that society. McClelland gives the psychological concept of achievement motivation to account
for the differences in response to similar conditions. Referring to the encouraging impact of
achievement motivation training programmes organised by the Small Industries Extension
Training Institute (SIET), Hyderabad McClelland argues that the need achievement can be
developed through the intensive training programmes.
(b)

Withdrawal of Status Respect:

E.E. Hagen attributed the withdrawal of status respect of a group to the genesis of
entrepreneurship. Giving a brief sketch of history of Japan, he concludes that she developed
sooner than other non-Western society except Russia due to two historical differences. First,
Japan had been free from colonial disruption and secondly, the repeated long continued
withdrawal of expected status from important groups (Samurai) in her society drove them to
retreatism which caused them to emerge alienated from traditional values with increased
creativity. This very fact led them to the technological progress entrepreneurial roles.
Hagen believes that the initial condition leading to eventual entrepreneurial behaviour is the loss
Of status by a group. He postulates four types of events can produce status withdrawal
(a)

The group may be displaced by force;

(b)

It may have its value symbols integrated;

(c)

It may drift into a situation of status inconsistency; and

(d)

It may not be accepted the expected status on migration in a new society.

He further postulates that withdrawal of status respect would give rise to four possible reactions
and create four different personality types
(a) Retreatist: He who continues to work in a society but remains different to his work and
position.
(b) Ritualist: He who adopts a kind of defensive behaviour and acts in the way accepted and
approved in his society but no hopes of improving his position.
(c) Reformist: He is a person who forements a rebellion and attempts to establish a new
society; and
(d)

Innovator: He is a creative individual and is likely to be an entrepreneur.

Hagen maintains that once status withdrawal has occured, the sequence of change in
personality formation is set in motion. He refers that status withdrawal takes a long period of
time as much as five or more generations to result in the emergence of entrepreneurship.
4.

Government Actions

The government by its actions or failure to act also does influence both the economic and noneconomic factors for entrepreneurship. Any interested Government in economic development
can help, through its clearly expressed industrial policy, promote entrepreneurship in one way or
other. By creating basic facilities, services and utilities and by providing incentives and
concessions, the Government can provide the prospective entrepreneurs a facilitative socioeconomic setting. Such conducive setting minimises the risks which the entrepreneurs are to
face. Thus, the supportive actions of the Government appear as the most conducive to the
entrepreneurial growth. This is true of the Indian entrepreneurs also.