An entrepreneur is that person who not only sees but also creates opportunity in the market and takes financial risks to set up business(es). Of course with a hope of making profit. Most times we confuse an entrepreneur with a businessman. While the two terms may sometimes be used interchangeably, a businessperson is more acknowledged with the exercise of buying and selling. He/she therefore deals with an already tried and tested formula unlike an entrepreneur who will take the risk of venturing into a completely new invention and ‘test’ the market.
For example, whereas a businessman envisions buying tomatoes from farms, say at USD $15 per crate and selling them at a higher price of $25 in the city, an entrepreneur may think of making tomato juice that can stay longer in the shelves and can therefore be sold at constant price across the seasons.
I happen to have an acquaintance who is passionate about food sales. In the year 2014 I asked her if we can start a business of processing some local food and taking it to the city. I, however, got a response that resembled that of a classic perception of a businesswoman. She only wanted a business that she has either done or has seen it work for others.
Entrepreneurship involves good relations with people’s interest and setting up of relevant supportive systems. This can therefore not be separated with leadership. The latter is an art of influencing people towards a desired result.
- Research has shown that 9 out of 10 businesses fail within the first year. Of the remaining, 9 out of 10 barely survive to their 5th anniversary.
- But why do some businesses fail or remain in the same position over the years while at the same time other businesses blossom and thrive?
- In our example of tomato juice, where does leadership come in?
- What are Challenges of a failed leadership in organization and therefore
- Why do entrepreneurs need to be leaders
As an entrepreneur, who are you leading?
Let us first investigate the people who an entrepreneur may be leading
- Members of staff: whether managerial or support staff. Each worker is very important to an organization. For that, their role in the enterprise can never be ignored. Some of us have had an encounter with a rude boss. After my college I worked in a company where everyone was complaining about the administration. The daily talk was how everyone desired for the day they would exit the company, not for greener pastures but for peaceful pastures. No matter how good the salary is, as long as the staff don't feel trusted and valued they dream for the day they exit your company. Instead of issuing threats. Instead of "buying" their effort with salary promotions etc allow them to trust you, let them be part of your vision, involve them in realizing your great vision. That way, even when you are away, they'll not need supervision. Even when business is low and salaries are delayed, they won't strike so soon. Set a good example and your customers will be happy to be served with smiling faces.
- Clients: You have gone to a shop/ office and the customer care asks carelessly, “what do you want?”. You then happen to visit the next office and they tell you, "how are you, welcome, may I serve you?". Which office will you feel comfortable doing business with? A good entrepreneur not only puts the customer first in product development, but also takes the customer through a journey of making the right choice. Do this through educational info. Also develop tailored products/ services. Interview your customers, get feedback. Involve in social responsibilities
- Suppliers: Establish a good relationship with your suppliers. It may earn u good offers
- Other partners. These could be your financiers, co-owners or also those in related businesses. Your degree of leadership will determine whether you get the deal or not.
Leadership Roles of an entrepreneur
Let’s look at some of the leadership responsibilities and how they can be nurtured by an entrepreneur. I shall divide them into 3 categories: Personal, internal and external roles.
- Personal roles: these are roles the individual needs to work on that affect self.
- Goal setting: you as the entrepreneur, know what you want or at least desire. Now, draft goals of your company. This is basically what needs to be done to move from point A to point B within a given time. Establish SMART (Specific-Measurable-Achievable-Realistic-Time bound) goals.
- Pace setting: I recently hired some people to do a job for me. I realized when I am away they do almost half of what they did when I am there working with them. A critical role of an entrepreneur is not only to start a business but also grow it. You have a great duty to set a good example for others to follow. The Bible talks of, “knock the shepherd and the sheep will scatter”. Once the leader is composed the followers have no excuse. Create incentives for efficiency.
- Measuring results: Whereas the motivation for employees is salary, that of an entrepreneur is profits. Only you can understand the pain and struggle of the biz. Always lead with results. That is your salary. Translate your inputs to outputs.
- Internal roles: roles targeting the organization.
- Innovation:Generating new knowledge is your role if you want to remain relevant. Any meaningful business in the market needs to respond to changing preferences and technology. If you wait for other people to discover new trends on your behalf, you are not a leader. Get ideas from your staff, customers, and competitors and use the knowledge to create new products for more choices.
- Articulating vision:Your success will depend not only on your efforts but also the talents you have been able to attract in your business. However, even if you hire the best, and you have not well articulated your vision, you'll still not get the desired results. Communication can make or break your organization. In my Leadership program, (LEAD WITH IMPACT), I train how to generate a vision and also communication skills.
- Cultivating desirable culture: Continued success of an organization shall depend on the values and the behavior patterns within the working place. This you build from day 1. There are values you want to be associated with in your company. You are the one to articulate and enforce them. This is not easy if you lack leadership skills.
- Hire, promote and fire: The entrepreneur carries the vision of the organization. Therefore, if you are one, take the leadership role to attract the right talents. Promote those who give more results. Before firing consider transferring individuals to other departments where their talent might be more productive. But if they become intolerable you have no choice. Remember one spoilt tomato can spoil your brand of tomato juice.
- External roles: Those roles played between the organization and other businesses and people from outside.
- Building relationships. Start making connections with the world. That is where you interact with new knowledge. Contribute some of your energy in church and social circles. You never know who you may meet there. Of course, the majority of the population doesn't care about your success, but at the same time, your customers, referrals and partners will come from the same society. So my advice would be, as you relate, know and keep your boundaries.
An entrepreneur is inherently a leader and anyone who desires successful entrepreneurship needs to learn leadership skills.