Archive for January, 2012
Scholars widely acknowledge entrepreneurs as the engine driving innovation and creativity. In this article I want to examine what facets contribute to a successful setting for driving innovation and creativity.
A vision has to propel the entrepreneur to pursue a cause or solve a problem. The vision often comes from a gap between what consumers want and what is currently available. The entrepreneur must persevere to fill the gap. Overcoming setbacks, frustration, and ambiguity is a critical part of the entrepreneur’s mindset (Quinn, 1985).
An entrepreneur has a long-term mindset to overcome obstacles and keep costs low. This mindset takes risks and obsesses to achieve the end goal. The innovator has to have autonomy to let imagination take over and find workable solutions. Experimenting with new ideas allows the entrepreneur to see what works and what does not (Quinn, 1985).
Breaking accepted rules, challenging authority, confronting risks, and causing conflict are part of the behavior of innovators (Baucus, Norton, Baucus, & Human, 2008). These ingredients are all part of the entrepreneur’s toolbox. A founder values people who can thrive in chaotic environment (Quinn, 1985).
A setting conducive to these attributes avoids excessive rationalism, bureaucracy, and intolerance. Employee incentives should avoid control motivations. A flat organizational structure helps avoid control motivations (Quinn, 1985).
Does your work setting have these characteristics? How can your firm support a setting to foster innovation and creativity? Want to know more? Click here.
Baucus, M. S., Norton, W. I., Jr., Baucus, D. A., & Human, S. E. (2008). Fostering creativity and innovation without encouraging unethical behavior. Journal of Business Ethics, 81(1), 97-115.
Quinn, J. B. (1985). Managing innovation: Controlled chaos. Harvard Business Review, 63(3), 73-84. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=8500002474&site=ehost-live
Often people who want to start a small business immediately think of going to the bank for a loan. Unfortunately, the bank is not the best place to start. A business founder should consider informal financing sources and trade credit first. Studies have shown that informal financing improves a firms efficiency and performance because it improves return on assets. Informal sources of finance and trade credit can relieve cash flow anxiety and improve a private firm’s ability to reinvest net income (Su & Sun, 2011).
Bank financing increases cash flow tensions and takes the focus off growth and achieving efficiency. New firms also find less access to more formal sources of financing such as angel investors and venture capitalists. Su and Sun (2011) explained “informal financing and trade credit are the life-blood of private firms” (p. 398). In countries like China interest rates on informal sources of finance are not subject to regulation, and financing is not rationed by imposing higher interest rates. More relaxed relationships with informal lenders promotes competitive advantage.
Why start at the bank? Want to get started? Get $115 off on your business plan. Click here.
Su, J., & Sun, Y. (2011). Informal finance, trade credit and private firm performance. Nankai Business Review International, 2(4), 383-400. doi: 10.1108/20408741111178816
One of the first things an entrepreneur needs is a good elevator pitch. An elevator pitch helps collaborate with others and build relationships. The ultimate goal is to create a competitive advantage through developing a network or resources to draw upon. The entrepreneur should clearly and concisely say who he or she is, describe the salient details of his or her business, and breed excitement about his or her ideas (Friar & Eddleston, 2007). The entrepreneur should say how he or she will turn the world upside down and do this in the time it takes to ride an elevator! A good elevator pitch is contagious and attracts others.
An effective elevator pitch is simple and easy to understand focusing on the entrepreneur’s strategy. The idea is for the entrepreneur to show passion and engage his or her audience. The author considers his or strategy, culture, people, and practices spawning organic growth (Hess, 2007).
Self-confidence is critical to show the entrepreneur has the drive to succeed (Florin, Karri, & Rossiter, 2007). The elevator pitch should exude self-confidence. The audience wants to see the entrepreneur has the drive to overcome obstacles. The way to become a success is to associate with other successful people.
Have you worked on your elevator pitch? Let us know what you came up with. Click here!
Florin, J., Karri, R., & Rossiter, N. (2007). Fostering entrepreneurial drive in business education: An attitudinal approach, Journal of Management Education, 31(1), 17-42. Retrieved from http://search.proquest.com/docview/195717403?accountid=35812
Friar, J. H., & Eddleston, K. A. (2007). Making connections for success: A networking exercise, Journal of Management Education, 31(1), 104-127. Retrieved from http://search.proquest.com/docview/195719778?accountid=35812
Hess, E. D, (2007). The quest for organic growth, Corporate Finance Review, 12(1), 28-36. Retrieved from http://search.proquest.com/docview/198765448?accountid=35812
A recent study shows a gap exists between skills entrepreneurs have and need. The study supported the idea entrepreneurs need additional education to succeed. The study found the largest gap in areas affecting creative abilities, financing sources, financial management, and accounting skills. Entrepreneurs find these skills difficult to obtain on their own, but education in these areas improves performance. More moderate gaps also exist in supplier management, employee management, fees and interest, finding a location, pricing products and services properly, operations management, and customer service. (Rosnani, Babak, Soaib, & Suhaida Abd, 2011).
Small business owners should consider these gaps between their skills and needs. Finding additional education can help the entrepreneur succeed. An entrepreneur does not have to find this training in a formalized educational program. The savvy entrepreneur can enlist a coach or mentor with experience in these skills. This approach allows the business owner to take advantage of new opportunities while learning on the job. Consider the skills in which you could use help.
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Rosnani, J., Babak, Z., Soaib, A., & Suhaida Abd, K. (2011). Entrepreneur training needs analysis: Implications on the entrepreneurial skills needed for successful entrepreneurs. International Business & Economics Research Journal, 10(1), 143-478. Retrieved from http://search.ebscohost.com/login.aspx?direct true&db=bth&AN=57937862&site= ehost-live