The Entrepreneur as a Manager
An entrepreneur will also be required to play the normal management roles:
- Planning, organization, financial management, human resource management, leadership and control.
The most common educational approach for entrepreneurship distinguishes six types of skills:
- Operational management, personnel and organization, financial administration, marketing, financial management, and making a business plan.
The main difference between Entrepreneur and Manager is their role in the organization. An entrepreneur is the owner of the company whereas a Manager is the employee of the company.
Types of Entrepreneurs
- Innovative Entrepreneurs: Assemble diverse information to experimentally produce new possibilities in terms, techniques, or products. Example: Steve Jobs, co-founder of Apple Inc., introduced innovative products like the iPhone, revolutionizing the technology market.
- Imitative (Adoptive) Entrepreneurs: Copy and paste other people’s technology and techniques, using existing ideas in the market. Example: Generic pharmaceutical companies that replicate existing drugs with expired patents.
- Push (Forced or Necessity) Entrepreneurs: Forced into business due to circumstances beyond their control, like job retirement or single parenthood. Example: An individual starting a small business after job loss due to company downsizing.
- Pull (Motivated) Entrepreneurs: Lured by the attractiveness of a business idea and its personal implications. Example: Entrepreneurs motivated to start eco-friendly businesses due to a personal commitment to environmental sustainability.
- Induced Entrepreneur: Induced by government policy measures, assistance, incentives, and concessions to start a venture. Example: A renewable energy entrepreneur encouraged by government subsidies and incentives.
- Visionary Entrepreneurs: Concentrate on making one line of business the biggest, focusing on expansion. Example: Elon Musk, CEO of Tesla, who envisions a sustainable future and concentrates on electric vehicles and renewable energy.
- Opportunistic Entrepreneurs: Constantly seek and exploit opportunities due to wide skills and knowledge. Example: Entrepreneurs in the tech industry who quickly adopt emerging technologies for business growth.
- Portfolio Entrepreneurs: Run multiple businesses and have stakes in various other ventures. Example: Richard Branson, founder of the Virgin Group, involved in diverse industries like music, airlines, and telecommunications.
- Professional Entrepreneurs: Interested in establishing a business but not in managing or operating it once established. Example: A doctor who establishes a healthcare clinic, then hires administrators to manage daily operations.
- Lifestyle (Craftsman) Entrepreneurs: Restrict business to areas of skill and experience, with limited growth ambitions. Example: Artisans like carpenters or potters who operate small, skill-focused businesses.
- Technical Entrepreneurs: Develop improved quality goods due to craftsmanship. Example: Craft breweries that focus on the technical aspects of brewing to produce unique and high-quality beer.
- Non-technical Entrepreneurs: Focus on marketing and distribution strategies, not concerned with technical aspects. Example: Entrepreneurs in the fashion industry who emphasize marketing and branding rather than production techniques.
- Pure Entrepreneur: Motivated by psychological and economic rewards, undertaking entrepreneurial activity for personal satisfaction. Example: An individual starting a social enterprise focused on community development, driven by a desire for social impact.
- Habitual Entrepreneur: Individuals with ownership stakes in multiple businesses, having experience in establishing or purchasing them. Example: An entrepreneur who has owned shares in various businesses, involving both successes and failures.
- Spontaneous Entrepreneur: Persons with initiative, boldness, and confidence, activating them to undertake entrepreneurial activities. Example: Someone inspired to start a small business after identifying a sudden market demand for a unique product.
- Business Entrepreneurs: Conceive an idea for a new product or service and create a business to materialize the idea. Example: Entrepreneurs in the tech industry who develop innovative software solutions and establish startups to bring them to market.
- Trading Entrepreneur: Undertakes trading activities without involvement in manufacturing work. Example: Import-export entrepreneurs involved in the trading of goods between different countries.
- Industrial Entrepreneur: A manufacturer identifying customer needs and tailoring products or services to meet market demands. Example: Henry Ford, founder of Ford Motor Company, revolutionized industrial entrepreneurship with the assembly line.
- Corporate Entrepreneur: Demonstrates innovative skills in organizing and managing a corporate undertaking. Example: Google’s development of new products and services within its corporate structure, fostering innovation and growth.
- Agricultural Entrepreneur (Agripreneur): Undertakes agricultural activities, including raising and marketing crops, fertilizers, and other agricultural inputs. Example: A farmer who not only cultivates crops but also sells agricultural products directly to consumers.
- Drone Entrepreneurs: Entrepreneurs resistant to change, who may close their business rather than adapt to new circumstances. Example: Traditional bookstores resistant to embracing e-commerce and digital platforms, leading to business closure.
- Fabian Entrepreneurs: Reluctant to change, but circumstances may force them to adapt slowly. Example: Traditional brick-and-mortar retailers slowly transitioning to online sales due to changing consumer preferences.
- Individual and Institutional Entrepreneurs: Start-ups often initiated by individual entrepreneurs but may evolve into more complex ventures led by a corporate body. Example: A tech startup founded by individuals that later receives institutional funding and evolves into a larger corporate structure.
- Copreneurs: Entrepreneurial couples working together as co-owners of an enterprise. Example: A husband-and-wife team starting and managing a family-owned restaurant.
- Part-time Entrepreneurs: Entrepreneurs engaging in business irregularly or on a part-time basis. Example: A professional consultant who runs a small online business during weekends.
- Serial Entrepreneurs: Continuously generate new ideas and start multiple businesses. Example: Elon Musk, who founded multiple successful companies, including SpaceX, Tesla, and Neuralink.
- Corporate Entrepreneurs: Develop new ideas and opportunities within large or established businesses, contributing to organizational profitability. Example: An employee within a large pharmaceutical company spearheading a successful internal startup division.
- Women Entrepreneur: Women with entrepreneurship skills engaging in business activities. Example: Amina, owner of Kingston Hardware and Oasis Mall, showcasing women entrepreneurs’ diverse roles.
- Social Entrepreneur: Engages in business to empower disadvantaged people, with a focus on social impact rather than profit. Example: Prudence, owner of Bella Wine Company, who supports social causes through the proceeds of her business.
- Intrapreneurs: Individuals within an organization who take responsibility for creating products and generating ideas. Intrapreneurs apply entrepreneurial skills, vision, and forward-thinking to their roles within the company. Example: An employee at a technology company who proposes and leads a project to develop a new software solution, bringing innovation to the organization’s product offerings.
Differences between an Entrepreneur and an Intrapreneur
Important Roles and Functions of an Entrepreneur in an Enterprise
An entrepreneur plays a crucial role in the success and sustainability of an enterprise. From the initial planning stages to the final marketing of products or services, entrepreneurs fulfill various functions that contribute to the overall efficiency and effectiveness of the business. Here are some of the key roles and functions of an entrepreneur:
- Planning: Entrepreneurs initiate the process of establishing and organizing an enterprise. They formulate a comprehensive plan that outlines the methods of production, the size of output, the location of the industry, and the nature of the commodities to be produced. This plan serves as a roadmap for the successful operation of the business.
- Starting of Production: Entrepreneurs make critical decisions regarding the commencement of production. They take necessary steps to ensure the smooth and uninterrupted functioning of the production process, addressing any challenges or obstacles that may arise.
- Mobilization of Capital: Entrepreneurs play a vital role in securing the necessary capital to fund their business ventures. They explore various sources of financing, such as bank loans, investments from friends and family, issuing shares and debentures, or leveraging their own personal assets.
- Innovation: Entrepreneurs are often driven by a spirit of innovation. They continuously seek new methods of production, explore new market areas, and initiate steps to improve the technology and efficiency of their industry.
- Coordination: Entrepreneurs act as coordinators, bringing together and managing the various factors of production. They hire and allocate labor, procure raw materials and equipment, and ensure the smooth integration of all resources to achieve optimal productivity.
- Organization of Labor Force: Entrepreneurs recruit and place the right people in the right positions within the enterprise. They introduce division of labor, assigning tasks based on merit, ability, and the specific needs of the business. They also supervise and motivate employees to maximize their performance.
- Supply of Tools and Machines: Entrepreneurs provide the necessary tools, machinery, and equipment to enable employees to perform their tasks efficiently. They invest in up-to-date technology to enhance productivity and reduce costs.
- Marketing Mechanism: Entrepreneurs develop and implement marketing strategies to promote their products or services and generate demand in the market. They utilize various channels, including advertising, public relations, and social media, to reach their target audience and influence consumer behavior.
- Anticipation of Market Changes: Entrepreneurs closely monitor market trends, consumer preferences, and changing fashions. They adapt their products or services accordingly to meet the evolving needs and desires of their customers.
- Division of Labor: Entrepreneurs introduce division of labor within the enterprise to increase efficiency and productivity. They assign specific tasks to employees based on their skills and expertise, leading to improved output quality and reduced costs.
- Risk Taking: Entrepreneurs embrace risk as an inherent part of starting and running a business. They make calculated decisions, assess potential risks, and take proactive measures to mitigate uncertainties. They are willing to bear the financial and emotional risks associated with entrepreneurship.
- Uncertainty Bearing: Entrepreneurs navigate the inherent uncertainties of production and marketing. They understand that profits can fluctuate and losses may occur. They possess the resilience and adaptability to withstand market fluctuations and unexpected challenges.
- Distribution of Profits: Entrepreneurs allocate profits to various stakeholders, including employees, investors, and themselves. They determine the appropriate distribution of profits to ensure the sustainability and growth of the enterprise.
- Creation of Value: Entrepreneurs play a crucial role in creating value for society. By establishing new businesses and industries, they generate employment opportunities, contribute to economic growth, and introduce innovative products or services that enhance consumer welfare.
- Least-Cost of Production: Entrepreneurs strive to produce output at the lowest possible cost. They analyze the marginal productivity of different factors of production and make adjustments to optimize resource allocation. This focus on cost efficiency contributes to the profitability and competitiveness of the enterprise.
Differences between an Entrepreneur and a Manager
STAGES OF ENTREPRENEURIAL PROCESS
There is a myth about entrepreneurship by most people. They think that it is a get rich quick scheme. However, the truth is that entrepreneurship is a lengthy process that requires patience and hard work. It goes through a series of steps and each step in the process has its own demands. Some of the key steps include;
- Self entrepreneurial identification: The entrepreneurial process begins by identifying yourself if you can start any business activity. This stage is the starting one because if someone cannot identify himself or herself as a potential entrepreneur, then one can never be one.
- Generation of ideas: When one decides to become an entrepreneur, the next step is to generate ideas and start to search for business opportunities.
- Evaluating the idea/ Idea Assessment: After generating several ideas and or identifying many opportunities, one starts to evaluate each of them in order to choose the best of the ideas. This is because it is difficult to implement all the ideas since the resources and expertise are limited.
- Business Planning: After you have well assessed the different ideas or opportunities, you should have concluded on one of them which looks to be more feasible and profitable. Then this step requires you to plan on how you will be marketing the business, how you will satisfy the customer’s needs, what new tactics you will use to be very competitive than your competitors. You have to plan on the production processes, staffing, financing options and when to start the business among other things.
- Resource mobilization and allocation: At this stage, after planning everything how it will be handled, you begin mobilizing all resources like finances, recruiting employees and search for marketing agents and suppliers. This stage also requires you to go for registration of business and launch of business.
- Managing the enterprise: This stage requires the entrepreneur to fully establish the business functions and ensure full scale operation of the business. At this point, the business has started to brand its name into the market. This requires skilled management and at times the entrepreneurs will become a director to supervise business management.
- Business growth, expansion and exit or closure: Some businesses are seasonal and so may reach its maturity stage where it will require closure of the enterprise. However many businesses are ongoing concerns and are not affected by seasonality and so after business has grown to full scale, the possible options are opening up sister businesses, branches and outlets in different countries. This is a stage that may require entrepreneurs to go global and make groups of companies. It is at this stage that we see the Madhvani group, Mukwano Group and many other groups of companies.
Success and Failure of Businesses in Uganda
Building Success in a Business in Uganda
- Possession of entrepreneurial skills: These include creativity, risk-taking, endurance, and flexibility, among others.
- Command of business and technical skills: These skills, such as marketing, finance, and management, help entrepreneurs effectively exploit the full potential of their businesses.
- Mobility and exposure: This allows entrepreneurs to develop new ideas that shape creativity and save entrepreneurship.
- Presence of role models in the community: Successful entrepreneurs in the community can inspire and motivate aspiring entrepreneurs.
- Presence of resources: Access to raw materials, labor, and other necessary resources is crucial for business success.
- Government support: Favorable government policies and support can create a conducive environment for businesses to thrive.
- Availability of transport networks: Good transport infrastructure enables businesses to transport their goods and services to markets and customers.
- Political stability and presence of security: A stable political environment and adequate security measures create a favorable climate for businesses to operate.
- Availability of customers and consumers: A strong customer base is essential for business success.
- Presence of markets: Access to markets where businesses can sell their products and services is crucial.
- Rewarding of entrepreneurial effort: Recognition and rewards for successful entrepreneurs promote the enterprising spirit.
How Businesses Fail in Uganda
- Seasonality of markets: Some products have a seasonal demand, which can lead to fluctuations in sales and revenue.
- Absence of copyright laws: The lack of copyright protection allows for the duplication of products and ideas, which can harm original creators.
- Political instability and insecurity: Political instability and insecurity in certain areas can disrupt business operations and discourage investment.
- Natural disasters: Natural disasters such as fire, drought, and earthquakes can cause significant damage to businesses and lead to financial losses.
- Limited funds for expansion: Access to financing for business expansion can be limited, especially for small businesses that lack collateral.
- High-interest rates on loans: High-interest rates on loans can increase the cost of borrowing and reduce profitability.
- Intense competition: Intense competition in the Ugandan market can lead to price wars and reduced profit margins.
- Poor government policies: Inadequate government policies to liberalize the economy can leave infant businesses vulnerable to competition from stronger foreign businesses.
- Unreliable and expensive electricity: The unreliability and high cost of electricity in Uganda can hinder business operations and increase production costs.
- Poor transport infrastructure: The underdeveloped state of Uganda’s rail and air transport systems, as well as poor roads in rural areas, can limit market access and increase transportation costs.
- Heavy taxation: High tax rates can burden businesses and reduce their profitability.
How to Prevent Businesses from Failing
- Strategic management: Aligning business objectives with considerations of the internal and external environment can help businesses adapt to changing conditions.
- Customer retention and acquisition: Maintaining existing customers and attracting new ones is crucial for business growth and sustainability.
- High-quality products and services: Offering high-quality products and services can help businesses build a strong customer base and reputation.
- Skilled workforce: Employing a skilled and motivated workforce can improve productivity and efficiency.
- Training and development: Providing training and development opportunities for employees can enhance their skills and knowledge, leading to improved performance.
- Corporate social responsibility (CSR): Engaging in CSR activities can enhance a business’s reputation and foster goodwill among customers and the community.
- Advertising and promotion: Effective advertising and promotion can increase brand awareness and attract new customers.
- Compliance with legal requirements: Ensuring compliance with legal authorities and government regulations can avoid legal penalties and reputational damage.
- Supplier relationships: Maintaining healthy relationships with suppliers can ensure a steady supply of raw materials and other essential resources.
- Succession planning: Proper succession planning can ensure a smooth transition of ownership and management, preventing disruptions to the business.
- Separation of business and family: Maintaining a clear separation between business and family can prevent conflicts of interest and ensure professional decision-making.