The Entrepreneurial Craft:
Thinking and Acting Like an
Entrepreneur
by Louis Jacques FILION
Working paper no . 1997-10
November 1997
Copyright © 1997 -- École des Hautes Études Commerciales (HEC), Montréal.
Tous droits réservés pour tous pays. Toute traduction ou toute reproduction sous quelque forme que ce soit est
interdite.
Les textes publiés dans la série des cahiers de recherche de la Chaire d’entrepreneurship Maclean Hunter
n’engagent que la responsabilité de leurs auteurs.
The Entrepreneurial Craft:
Thinking and Acting Like an Entrepreneur
Louis Jacques Filion
HEC, The University of Montreal Business School
Abstract
The goal of this text is to introduce the entrepreneurial craft. It is divided into three
sections. The first is concerned with the components of the entrepreneurial craft, the
second with the steps in the entrepreneurial process, and the third briefly explains some
of the different forms of entrepreneurship. In the first part, ten key entrepreneurial
activities are introduced, and at least one characteristic, skill and element of learning is
proposed for each. These activities are: 1. Detecting business opportunities; 2.
Conceiving visions; 3. Making decisions; 4. Implementing visions; 5. Operating
equipment; 6. Purchasing; 7. Marketing; 8. Selling; 9. Gaining support; 10. Contracting
out. The entrepreneurial craft consists in combining all these activities, and not just
performing one of them in isolation. In the second part, nine steps are suggested to help
tackle the entrepreneurial process. Finally, seven different forms of entrepreneurship are
presented: 1. Intrapreneurship; 2. Entrepreneurship; 3. Small business ownership and
management; 4. Family business; 5. Micro-enterprise; 6. Self-employment; 7.
Technopreneurship. Elements of learning are suggested for each form.
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Introduction
This text is designed to provide at least partial answers to some of the questions most
frequently asked about the requirements for being an entrepreneur. They include "What
are the main features of the entrepreneurial craft?" "What should I expect if I decide to
start a business?" "What do I have to know?" "What do I need to learn now in order to
prepare for my future role as an entrepreneur?" "How does an effective entrepreneur
think and act?" To answer these questions, we will look first at the activities of
entrepreneurs, then at the stages of the entrepreneurial process, and lastly at the various
forms of entrepreneurship.
There is no clear-cut definition of what an entrepreneur is and what he or she does.
Currently, the number of categories and types of entrepreneurs is growing. They include
small business owners, who target growth; self-employed workers, who target a balanced
lifestyle; cooperative entrepreneurs, who want to make a contribution to their
community; and technological entrepreneurs, who target the international market and
form alliances. This paper is designed with all these categories in mind, and addresses
issues common to them all. It is based on field research that, over the past ten years, has
brought us into contact with scores of entrepreneurs in each of the above categories. It is
intended as an introduction to the basic concepts, allowing the reader to comprehend the
essential aspects of the entrepreneurial craft.
Activities
What kind of activities does a person who starts a new business, or operates an existing
business, normally engage in? There are many possibilities. However, we have reduced
them to a set of ten that we consider to be the main activities of an entrepreneur (see
Table 1). In the following sections, we will comment briefly on each activity, and suggest
at least one characteristic, skill and element of learning for its successful performance
(see Table 1).
Identifying business opportunities
Being an entrepreneur and playing an entrepreneurial role involves, first and foremost,
detecting business opportunities. Entrepreneurs must keep up with events in the
marketplace, identifying potential opportunities and promising niches for business
activities. This is their primary activity. Interestingly, market niches, which used to
consist essentially of space to be occupied within the marketplace, today consist of both
space and time. Time, in other words the speed at which goods are produced and services
provided, has become a major element in defining opportunities.
Conceiving visions
One of the main activities that distinguish entrepreneurs from employees in organizations
is their ability to define projects - in other words, to conceive visions of what is needed,
and then to take action to put the visions into practice. Whereas most individuals function
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in a system designed by somebody else, entrepreneurs define the market niche or space
they wish to occupy, and the type of organization they need to achieve their goal.
Making decisions
Entrepreneurs make decisions, the first of which is the initial decision to start a business.
It is useful to establish a system to distinguish the various categories of decisions that
will have to be made. These include a large number of operational decisions that usually
require immediate attention, and strategic decisions that require more preparation and
reflection, since they may affect the survival of the business. In a micro-enterprise or
small business, such decisions include those relating to the introduction of new products
or services and the opening up of new markets. In addition, the decisions made regarding
the hiring of certain key employees will be of key importance, since they will place
implicit limits on what it will or will not be possible in the future.
Making decisions means being able to calculate. "Calculate" is used here in its broader
sense, to mean the ability to estimate, analyze, forecast, and assess probabilities.
Continued business activities will only be viable if a profit is made. Every action in the
business field implies a reference to the concept of cost-effectiveness. The more
experience entrepreneurs acquire in a given sector of business activity, the better able
they will be to operate using a minimum of resources, since they will be able to identify
what is essential, therefore cost-effective and profitable. However, calculation is not
limited to monetary aspects and cost-price analysis. It also includes the matching of
elements (products and markets, for example), not to mention matching initial desires
with intentions and final choices. Hiring, the matching of employee characteristics with
job tasks, is also an area in which calculation is required.
Implementing visions
Entrepreneurs define what they want to achieve and how they want to go about it, and
then they put their visions into practice. They are dreamers who implement their dreams.
They are dreamers of concrete dreams, who consider the means to achieve their end. It
sometimes seems almost as if their actions precede their thoughts. They know how to
organize themselves in order to implement their ideas and put their visions into practice.
They enjoy action.
Operating equipment
Almost all entrepreneurs must use some type of equipment. Living as we do in a
technological era, it has become almost impossible to envisage any form of business
activity that does not involve the use of technology, if only a fax machine or computer. In
many businesses, unless work is contracted out, it will be an advantage or even a
necessity to know how to operate the relevant equipment. Once a business begins to
grow, the entrepreneur will devote more time to marketing and administration, and
somebody else will be trained to operate the equipment. As technologies evolve, the
original equipment will be replaced and the entrepreneur will lose touch to some extent
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with the technology. In the early stages, however, it is important to understand and know
how to operate the equipment.
Purchasing
Entrepreneurs purchase at a known price, and sell at a price that is not always known in
advance. In the case of manufacturing, the entrepreneur must procure raw materials; in
the case of retailing, finished products; and in the case of services, equipment. All will
need banking and insurance services. In many cases, success will depend initially on
what is purchased, and on what terms, since this conditions and determines what will be
sold, and at what price. It is an aspect that cannot be neglected.
Marketing
Marketing constitutes the test that will confirm whether or not the entrepreneur's vision
matches a market niche with sufficient potential. It is one of the activities at the heart of
the entrepreneur's task. Entrepreneurs must be able to see things from the client's
perspective: what the client wants to buy, at what price, in what form, at what location,
and through what outlet. Marketing is as much a science as an art. Whether or not an
entrepreneur will succeed is dependent, in many cases, on the question of marketing.
Selling
Selling is one of the activities that young entrepreneurs find the most difficult to master.
It is nonetheless vital. Generally speaking, in the early stages following the launching of
the business, selling is the responsibility of the entrepreneur. It is not only the product or
service that must be sold. Entrepreneurs must be able to “sell” their business and their
own expertise every day, to investors, potential customers, employees, banks, suppliers,
and family members. They cannot expect others to believe more strongly in their project
or vision than they do themselves!
Gaining support
Entrepreneurs know how to seek support from competent individuals who can provide
advice. There is never a single proper way of doing things, and nothing can ever be
decided once and for all. Entrepreneurs seek advice from those around them; they can
only be really understood by other entrepreneurs, especially in the early stages. It is often
a good idea to establish an advisory committee or quasi-board, made up of competent and
complementary individuals. After start-up, the hiring of staff constitutes the single most
important strategic decision to be made. It will require a certain amount of time: stringent
selection criteria must be established, the induction of new workers in their jobs must be
carefully prepared, and the required level of complementarity between workers must be
decided methodically. The same principles apply to the relationships established with
sub-contractors.
Contracting out
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Another decision that must be made concerns what the entrepreneurs can do themselves,
and what can be done by others, either sub-contractors or part-time or full-time
employees. Entrepreneurs must remember that their own role consists first and foremost
in developing and implementing visions, as when they started their business. They must
leave themselves enough time to pursue the development of their business, and not get
bogged down in day-to-day operations and administration.
In short, the main activities of an entrepreneur involve identifying business opportunities,
in other words available market niches, and defining a vision composed of a set of
activities structured to enable them to occupy that niche in a profitable fashion. In many
cases, the implementation of the vision will mean that the entrepreneur must perform
management-related activities.
The following section describes the characteristics, skills and training required to perform
these ten key entrepreneurial tasks.
Characteristics
Many characteristics have been ascribed to. They can seem disparate and even
contradictory, since they are taken from research on a wide range of different
entrepreneurs: those who had recently started a business, those who had been operating
for some time, those operating micro-enterprises or small businesses, and those who had
built major businesses. No absolute set of characteristics exists, since they can vary over
time depending on dominant activities and the stage of business growth. We believe that
characteristics should be linked to specific activities, since the two are dependent to a
certain extent. The function arises from the need; in other words, the practice of certain
activities leads to the development of certain characteristics. For example, it is often said
that entrepreneurs are creative; they become even more creative once they have started a
business, since without creativity they will be unlikely to succeed.
A person who has already developed one or more of the characteristics discussed below,
or who has the potential to do so, will be at an advantage. In other cases, hard work will
be needed to develop or compensate for a particular characteristic. It is important for
prospective entrepreneurs to understand what characteristics are required in a given field
and to assess their own situation as regards those characteristics.
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Insight/Intuition
Entrepreneurs need insight. They must be able to sense what is happening around them.
They excel in defining latent needs. They recognize potential. They are on the lookout for
new developments. Insight is developed using the networks of relations and information
built up by each entrepreneur. In a course prepared by the author on the subject of
intuition, participants were asked to give examples of situations in which they had used
their intuition. All the cases described involved areas or situations with which the person
concerned was already familiar. For example, one participant said, “I rent out
apartments. I know which people will be good tenants, and which will not. Over the
years I have developed a certain form of intuition.” With practice, the person had learned
to identify problem-free tenants, and thus had acquired an important tool in the field of
activity concerned. In the field of entrepreneurship, a similar kind of intuition is found.
Entrepreneurs get to know a sector because of their interest in it. When something occurs
in the sector, the entrepreneur intuitively knows that something is going on. Perhaps
consumer trends are changing, or perhaps a technological breakthrough is opening up
new possibilities. Intuition is not normally a chance occurrence, nor does it arise out of
the unfamiliar. It is an attitude that involves thinking actively and directly about a
subject that is of interest. It can be developed.
Imagination/Independence/Passion
Since one of the main activities of entrepreneurs is conceiving visions, in other words
defining something that does not yet exist, they must use a form of imagination that
reflects a spirit of independence, originality and a certain amount of passion for what
they are doing. Individuals who are creative, innovative, or independent, who decide
what they want to do on their own terms, are at an advantage. Imagination can be
developed. Necessity is the mother of invention. Once a business has been launched,
entrepreneurs will be faced with situations that will force them to develop their
imagination in order to remain in business or out-manoeuvre their competitors. One of
the characteristics of entrepreneurs often cited by researchers is their high need for
autonomy and independence. People will be more motivated to identify business
opportunities and start businesses if they have such a need. Those with a high need for
affiliation generally feel better if they work with others, or at least in an organization with
which they can identify. Passion not only helps maintain motivation, it also acts as a
stimulus for achieving great things. It is one of the key elements supporting the
entrepreneur’s dynamic, dynamism, enthusiasm and vivacity.
Good judgment/Prudence
Besides using their imagination, entrepreneurs must assess, calculate, evaluate the
consequences of actions before they are taken, and establish their sequence in time, rather
like a chess player. This requires flexibility, clear-sightedness and common sense.
Entrepreneurs must learn how to think and analyze situations. Good decisions are based
on sound judgment. All the elements must be fully understood. Successful entrepreneurs
are those who are prudent and try to minimize risk as far as possible when making
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decisions, which is how they manage to remain in business. They use cost-effectiveness
as a criterion and take a long-term view. Prudence and clear-sightedness can be
cultivated
Resourcefulness/Constancy/Tenacity
Once the project has been defined, it must be translated into action. This is a form of
leadership, and also involves initiative and resourcefulness. To achieve the frequently
ambitious objectives they set for themselves, entrepreneurs must invest their energy,
remain optimistic at all times, learn how to surpass themselves, have developed their selfconfidence, and learn how to direct their business in situations in which ambiguity and
uncertainty are the rule. They must be resourceful, and not avoid certain actions because
they are afraid in advance that they will not know what to do. They must be creative and
willing to push forward. Too many entrepreneurs have excellent ideas but are unable to
concentrate and work continuously towards a goal. It is only by working methodically in
a given direction that they will finally achieve results.
Dexterity
Whatever the sector involved, a person having acquired a certain dexterity in the field
will have a definite advantage. Many entrepreneurs have previously worked in a craft or
trade, or operated a micro-enterprise. They feel the need to master a technique, often a
manual one. Other entrepreneurs will, at the very least, have to learn how to use a
computer.
Perspicacity
Purchasing, like many other management activities in small businesses, demands a
working method that enables entrepreneurs to think clearly, accurately and with
perspicacity about future scenarios, and to plan accordingly. This is particularly vital in
purchasing, which is often a key strategic activity for the future success of the business,
especially in the retail sector.
Differentiation/Originality
Marketing a product or service involves being able to express originality by
differentiating oneself from the group, first by designing an attractive product or service
adapted to consumer tastes, and then by setting up an adequate distribution system,
selecting an appropriate price, and publicizing the product or service at the right time,
sometimes using a range of means to reach previously-identified market segments.
Know-how is built on and derived from self-awareness. Differentiation and originality
begin with a mental attitude, or a way of seeing the self and expressing it through a
professional activity.
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Flexibility
Entrepreneurs buy at a known price, but sell at an unknown price. In many cases, they are
directly responsible for sales, but in all cases they should reserve at least a few hours per
week to make contacts with customers. This is of vital importance in remaining in touch
with the market. Selling a product or service requires flexibility and the ability to adjust
to different individuals and circumstances. Entrepreneurs must remain aware of and
attentive to their environment, and be able to adjust accordingly.
Foresight
One of the most complex activities carried out by entrepreneurs from the time they start
up their business consists in attracting and selecting the people they work with. The
clearer the vision, the clearer the long-term view, and the easier it will be to bring the
elements of the vision into use as criteria for attracting and hiring employees.
Entrepreneurs must be able to project over the long term, make forecasts, use their
judgment, and look beyond their immediate concerns.
Communication
The work of an entrepreneur consists, essentially, in conceiving a vision and organizing it
into a feasible project. This demands a great deal of communication - listening as well as
expression. Communication involves two parties: an emitter and a receiver. Some
things can only be accomplished by the entrepreneur himself or herself, but others can be
delegated, leaving the entrepreneur free to concentrate on the essential. Entrepreneurs
must possess and develop the ability to get organized, contract out as much work as
possible, select a team of trustworthy employees, and implement their trust by delegating.
Employees must be made accountable for their tasks, a step that is made easier by
making sure that they understand the overall process of which their tasks are a part. All
these activities require communication skills, which must be developed. Entrepreneurs
are the focus of a set of networks, and their ability to communicate is an important factor
in their success. This ability can be cultivated in a number of ways, including through
conception of visions.
In short, entrepreneurs must cultivate their insight, imagination, judgment and
resourcefulness, remaining vigilant and aware of their surroundings. These characteristics
will develop with practice, provided the entrepreneur remains flexible and engages in an
on-going self-assessment and self-improvement process. Entrepreneurs must be able to
identify their own strengths and weaknesses, in order to reinforce the former and
compensate for the latter. They must develop a personal learning culture. This will be
discussed in the next section, as we examine the question of skills and then, more
directly, learning.
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Skills
Having a skill means being able to do something. A skill can be acquired, developed, and
improved. As in the discussion of characteristics in the preceding section, we will not
attempt to draw up an exhaustive list of the skills needed to perform a given activity, but
rather to establish which key skill is needed to facilitate the ten activities retained in our
research. Our objective is, once again, to show how best to prepare for a career as an
entrepreneur.
Pragmatism
One striking feature of successful entrepreneurs is their common sense. They have
practical minds and a remarkable ability to identify things that will be useful and bring
results. In fact, they seem to have developed what we might describe as a form of
pragmatism. They question everything around them before selecting a formula or
making a decision. They have learned to question what exists, and then look at other
ways of doing the same thing.
Conception/Systemic Thinking
Conception means imagining and defining a unit and its components. This can be
practised. People who, in everyday life, continually wonder what they would have done
if they were in the shoes of a public figure are in fact practising this type of mental
construction exercise. Conceiving visions also involves explicitly or implicitly defining
criteria for what is relevant or interesting. For example, a person’s career will lead him
or her to launch a small business in a given sector, according to a given model. Even if
everything is not yet precisely defined in the person’s mind, he or she nevertheless has
references on which to build the project. Conception requires an organized, structured
approach to imagination, together with method and energy.
The essential elements of systemic thinking can be described as the ability to create a
framework within which the set of activities will be organized. The entrepreneur must be
able to think about what is to be achieved, and the ways in which to go about it. Mental
flexibility will be a key ingredient. Systemic thinking involves an inter-relation between
right-side and left-side brain functions; in other words, the right side of the brain will
concentrate on developing a vision which, because it emerges from a rigorous analysis of
the sector carried out by left-side functions, will be well-articulated.
Vision
Conceiving and implementing visions are activities. However, for entrepreneurs,
conceiving visions is also a core skill that can be learned. A central element of their
work consists in defining new contexts - first the place they want to occupy in the
marketplace, and then the organization they need to achieve that objective. Mastery of
the visionary process begins by acquiring as good an image or knowledge as possible of
what is already done in the sector. This is followed by development of alternative
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scenarios for what could be done. Once developed, the vision provides a focus that
becomes one of the basic criteria for continuity, even though it is a process in constant
evolution.
Action
Entrepreneurs like action. They like things to happen. They are human dynamos who
know how to instill enthusiasm through action, by transmitting their own passion. Their
status as entrepreneurs shows that they have remained in touch with their own desires and
goals and moulded their activities around them. In many cases, an entrepreneur's passion
for a particular subject is the driving force behind the business. Entrepreneurs are
motivated by what is concrete, and are confident enough in their own ability to turn their
dreams into action.
Versatility
The operation of equipment requires entrepreneurs to be versatile and able to adapt to
various forms of technology. Research has shown that individuals who start a business
spend much of their time operating equipment, especially during their first years. In fact,
versatility is also necessary at other levels. For example, when the business is first
launched entrepreneurs must be able to do almost everything themselves, including
accounting, marketing, sales, administration and even the cleaning.
Negotiation
Negotiation means defining objectives, limits and scenarios to mark the boundaries of
action. It requires a thorough knowledge of the elements concerned and a high degree of
flexibility. Entrepreneurs must be able to convince others. They must also be creative,
and have flexible minds, to be able to offer immediate alternatives that will enable
discussions to progress. Everyone must win - or at least have the impression of winning.
Coordination
The marketing of a product or service, like the development of a visionary process,
demands mental skills and also the coordination of a large number of related elements:
consumer patterns in the target market, advertising and promotional activities,
adjustments to products or services, and so on. Entrepreneurs must be capable of creating
interrelations between many different elements to form a unified whole.
Adaptability
The ability to adapt to people and circumstances is a basic requirement. For instance, a
slight change to the way in which a product is presented can make it more attractive for a
new group of potential customers. Research has shown the importance of flexibility in
sales. This includes being able to question customers to find out what they need, what
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they want, and on what criteria they will base their purchase, and then adjusting
accordingly.
Human relations/Team work
Support from experienced people is an ideal way to improve judgment and minimize risk,
and a strong network of business relations can help to increase the availability of
information about changes in the business environment. Growth is assisted by the
establishment, around the entrepreneur, of a committed team of people.
Delegation
The clearer the entrepreneur's vision of what is to be achieved, the more work can be
delegated both inside and outside the business, since the entrepreneur has a clear idea of
what needs to be done. Growth is impossible without delegation. Experience of the
sector is obviously useful, since the entrepreneur will know exactly what needs to be
done. On the other hand, growing numbers of people are starting businesses in new
fields where there are few reference points. The ability to conceive visions,
communicate, monitor, learn and adjust become of vital importance in such a context.
The skills listed here can all be learned and developed. They will facilitate the
performance of the corresponding activities.
Learning
The successful performance of the entrepreneur's ten key activities requires a certain
amount of learning, mainly about elements of management. As in the preceding sections,
the learning suggestions are based on our research into entrepreneurial activity systems.
One of the most striking facts about the behaviour of entrepreneurs is that they never stop
learning, probably because their activities keep changing constantly. Once they stop
learning, they also stop being successful. All the elements listed above can be learned.
So why this particular category, entitled “learning”? First, the development of
characteristics and the acquisition of knowledge both require learning at a more
fundamental level, but not necessarily continuously. For example, a person may
concentrate intensively on learning a specific negotiation technique during a course or
training activity, and then continue to learn subsequently as the technique is practised.
However, another type of learning - that addressed in this section of the paper - is
required for other subjects that often develop quickly, and that require more sustained
attention. Each element of learning will be presented briefly in the following sections,
together with comments and explanations.
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Sector Analysis
In order to learn how to identify business opportunities, it is necessary to understand the
characteristics of the business sector in which the business is to operate. Working
methods will include, obviously, an analysis of statistical data in the sector concerned,
but also analysis of two other elements: customers and market leaders. It is important,
first, to have a clear idea of the customers: who they are, and why they are consumers of
the product. It is a good idea to contact at least twenty or thirty customers or potential
customers and ask them between five and ten well-designed questions in order to
understand their purchasing behaviour - for example, “Would you buy this product?”,
“How much would you be ready to pay?”, and so on. Successful entrepreneurs set aside
a certain amount of time each week in order to learn as much as possible from their
customers. This is, in fact, a golden rule of entrepreneurship. At the same time, it is
important to get to know the characteristics of the sector and to keep that knowledge up
to date. A good approach is to begin with the market leader in the sector concerned,
getting to know its products, distribution methods and entire marketing approach, and
then by comparing them to those of its main competitors. This is the first step towards
discovering gaps in the market and niches that need to be filled.
Evaluation of Resources
Conceiving a vision involves considering available resources and assessing the human,
material, technical, technological and financial resources required to implement it. The
more experience entrepreneurs have in the sector, the easier it will be for them to assess
resource requirements accurately. Entrepreneurs who have not worked for at least a few
years in the sector should ask experienced people for advice as the visionary process
progresses. Some entrepreneurs are able to put their resources, and in particular their
human resources, to good use, including their friends, relatives and business
acquaintances. Others are skilled in creating added value from very limited resources.
Information/Risk
If entrepreneurs are to be able to make decisions, they must have information.
Consequently, they need a method for gathering and processing information, and also for
establishing basic criteria for improving the coherence and consistency of the information
gathered. A distinction must be drawn between circulating information and structuring
information. The clearer the vision, the easier it will be to distinguish and identify
relevant information. To stay in business, entrepreneurs must minimize risk in decisionmaking. Obviously, they will have to take some risks. It is an inevitable part of their
role. However, they must be careful. It is up to each individual to establish the level of
risk with which he or she is comfortable.
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Feedback
Implementing a vision does not just mean following a rigid plan. A vision is a focus
developed by an entrepreneur to improve performance. Its implementation demands
constant adjustment. Earlier in the paper, we mentioned the importance of information.
It is important for entrepreneurs to establish a good feedback system that will enable
them to make any adjustments needed as a result of the information received. It is not
simply a matter of accumulating information. The information must be used for
something, and have an effect on what is done or about to be done.
Technique
In addition to mastering the essential technical information in the sector concerned,
entrepreneurs must keep up with new developments in technical equipment and
technologies in the field of their operation. In many cases, business competitiveness will
depend on this vital strategic element.
Diagnosis
To make purchases, entrepreneurs need intuition, but they must also be able to diagnose
general situations as well as individual cases. What they buy, and the price they pay for
it, will determine their future profits. What they buy, provided it is linked to what they
want to achieve, will determine their future success. Research has shown that contact
with suppliers is one of the best ways of keeping up-to-date with sector development.
Sales representatives who visit businesses have information about what is going on: who
has bought new equipment, who has developed a new product, who has changed
employers, who is developing a new market, and so on. Entrepreneurs should be able to
diagnose the sector, the business and every single purchasing activity.
Marketing/Management
Marketing is not just another management activity, but the central activity around which
all other management activities revolve. Deficient marketing will cause problems in other
areas. A coherent approach to the "four Ps" (product, price, place, promotion) is essential,
as is the ability to organize all other management activities around the marketing
element.
Customer Knowledge
A business is a customer satisfaction system. Entrepreneurs learn constantly, especially
in the selling relationship, even if they are not the ones to sell directly to the customers.
Learning begins by listening to the client. This is one of the cornerstones on which
decisions are based and actions taken. Whether direct or indirect, selling requires
thorough knowledge and understanding of customer expectations. Time must be set
aside every week to question and listen to customers, and to look at the business and its
products or services from the customer’s point of view.
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Human Resource Management/ Sharing
Entrepreneurs who want their businesses to grow must form a team of competent,
trustworthy employees who also complement one another. A basic understanding of
human resource management techniques is a necessity, especially as regards employee
selection and induction. A sound psychological contract should be established with
employees; it is important to remember that motivation depends on several factors,
including equitable treatment for all. When good results are achieved, credit must be
given where it is due through performance rewards and profit-sharing based on the effort
and contribution of each employee.
Entrepreneurs will also be required to manage personnel. Good personnel management
begins by setting an example. Everyone must be responsible for their own actions. Their
personal space must be recognized, and their contributions appreciated and rewarded.
Many successful entrepreneurs attribute their success to their employees and their
motivation. They say employees should be treated like members of the family. Their
attitude towards their personnel and the work they do generates a culture of commitment
and performance.
Operations management
Whether work is performed by the entrepreneurs themselves or by others, a minimum of
operations management will be required. The more entrepreneurial the approach, the
more time will be devoted to development and the more work will be done by others,
either through delegation or through outside contracts. The management of subcontractors is another element that must be mastered. Sub-contracting is a way of
minimizing risk, since less investment in equipment will be needed. It also allows greater
flexibility, making it easier to work in related sectors or change direction, since less
money will have been invested in the equipment needed to do the work in-house. It will
also be possible to spend more time on marketing.
Table 1 presents all the elements described above in diagram form. It should be noted
that in many cases the characteristics, skills and learning can relate to other activities
besides the one shown in the table. In recent years, interest in the notion of craft has
grown. Craft means know-how. In fact, a craft demands technical and conceptual skills,
and sometimes manual, human and managerial skills too. In entrepreneurship, knowhow forms part of and is built on self-awareness, hence the importance for entrepreneurs
to develop an attitude and characteristics that prepare them to acquire the skills and
know-how they need to exercise their craft. It should also be remembered that the
entrepreneurial act rarely exists in its pure state. It generally takes place in a context
where the entrepreneur must learn to play different roles, including those of leader and
manager.
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Table 1
Components of the Entrepreneurial Craft
ACTIVITIES
Identifying business
opportunities
Conceiving visions
CHARACTERISTICS
Insight/Intuition
SKILLS
Pragmatism
LEARNING
Sector Analysis
Conception/Systemic
Thinking
Vision
Evaluation of resources
Action
Feedback
Versatility
Negotiation
Coordination
Technique
Diagnosis
Marketing/Management
Selling
Gaining support
Imagination/Independence/Passion
Good Judgment/
Prudence
Resourcefulness/
Constancy/Tenacity
Dexterity
Perspicacity
Differentiation/
Originality
Flexibility
Foresight
Contracting out
Communication
Adaptability
Human Relations/ Team
Work
Delegation
Customer knowledge
Human Resources
Manageent/Sharing
Operations management
Making decisions
Implementing visions
Operating equipment
Purchasing
Marketing
Information/Risk
In conclusion, it is clear that the entrepreneurial craft can be learned. It is a matter of
dissecting the activities, then defining what needs to be learned in order to perform them.
Many people think they can become entrepreneurs overnight. They are wrong;
entrepreneurship is a craft like any other. To be an entrepreneur, you must learn the
basics. Nobody would think of calling themselves a plumber, electrician or dentist if
they had not learned the craft first. The same applies to entrepreneurship. Entrepreneurs
who do not learn the craft beforehand will pay the price once the business is launched.
Stages in the entrepreneurial process
The activities of an entrepreneur vary greatly over time, since in addition to managing the
business, he or she must define and supervise projects of many different types. Despite
differences between the projects, however, from the systemic thinking point of view there
is a high level of similarity in the ways in which they are defined, structured, and
implemented. To facilitate learning of the entrepreneurial craft, we have divided the
entrepreneurial process into nine stages. When the entrepreneurial process is combined
with the creation of a business, the various stages are as shown in Table 2.
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Table 2
Stages in the Entrepreneurial Process
1.
2.
3.
4.
5.
6.
7.
8.
9.
Differentiated self-image
Proactivity and learning
Interest for the sector
Visualization
Action
Organization
Positioning - Development
Relations with the business world
Transferability
Kadji Youaleu, Filion (1996)
Each stage involves several activities. For example, Stage 5 (action) can contain up to ten
different activities, as shown in Table 3.
Table 3
Action Stages
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Product design
Selection of business name
Preparation of business plan
Search for bank financing
Finding partners
Renting building space for the business
Developing production tools
Manufacturing products
Recruiting and training first employees
Devoting time to management activities
Kadji Youaleu, Filion (1996)
In preparing for a career as an entrepreneur, it is useful and interesting to examine the
various stages and, for each stage, to identify the activities to be performed, together with
the characteristics, skills and learning needed to become a successful entrepreneur.
Entrepreneurial Paths
There are many ways to act as an entrepreneur. Prospective entrepreneurs should try to
identify them and, as far as possible, exercise their creative talents and positive thinking
in order to learn how to move things along rather than slow them down. Mental lethargy
will result in lethargic results, whereas a creative attitude will lead to new possibilities.
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By developing an entrepreneurial mental attitude, prospective entrepreneurs will find
ways to get things done and, as a consequence, achieve their goals. There are several
entrepreneurial paths. In the past, entrepreneurship was largely confined to small,
medium-sized and large businesses. Today, family businesses, micro-enterprises, selfemployment, ecopreneurship, technical entrepreneurship and other new types of
entrepreneurship are taking their place, as we will see in the following sections.
Intrapreneurship
Everybody has opportunities to act as an intrapreneur. Intrapreneurs are agents of change,
working entrepreneurially in organizations that they do not own. They are creative
personalities who design and implement new processes and make innovations.
Intrapreneurs need support, which is why, before implementing a project, they must
establish a sound network of relations to provide help. Intrapreneurs also need to learn
how to define their visions, articulate their projects, and establish frameworks to improve
the coherence of their approach. They take risks often without any hope of reward. On
the other hand, they are the ones who push the organization forward, thus teaching
themselves about leadership and entrepreneurship. Intrapreneurs become business, social,
and political leaders, or start a business in order to pursue an entrepreneurial career fulltime. If they start a business in the same field as the organization that employed them,
they are sometimes said to move from intrapreneurship to extrapreneurship.
Entrepreneurship
Entrepreneurs are people who target innovation and growth. They are people who create
businesses or develop something new in businesses that they have acquired - for
example, a new product, a new market or a new method. They have a clear vision, good
judgment and grow gradually with the organization. They have a lot to learn, since their
role is a complex one, its many facets in constant evolution (see Table 1 above). Their
learning process centres on conceiving and designing projects and visions. They also
have to develop effective ways of supervising and monitoring the projects they
implement or wish to achieve. They have to choose the sector in which they wish to
operate: industrial, commercial or retail. Good previous experience in the sector in
which they launch the business is an advantage, and increases their chances of success
Small business ownership and management
To operate effectively as owner-managers of small businesses, entrepreneurs must have a
stable, multi-talented and broad-based personality and must be able to solve problems
and make decisions quickly. Basic management techniques must be mastered, and
effective management practices must be integrated into day-to-day activities. For
example, entrepreneurs sometimes have to define marketing parameters and use them to
define selection criteria to enable them to hire the employees needed to achieve the goals
set.
Family business
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Over half the businesses existing in a given society are family businesses. Even
somebody not working in a family business has a high chance of doing business with
one. Management practices are strongly influenced by family members, both during
working hours and at other times. They are part-owners of the business, or related to the
main owner, and therefore control its management. In terms of learning, some
knowledge of ownership and management is required. However, the question of
continuity, and therefore succession, must always be kept in mind. Thus, long-term as
well as short-term planning skills are needed. A succession often provides the incoming
management with an opportunity to demonstrate their entrepreneurial skills. It is useful
to assess the question of instrumentality - in other words, whether the family serves the
business, or the business serves the family. Knowledge of the operation of social and
organizational systems will also be beneficial, since it will help management to
understand how information flows, how decisions are made and how power is exercised
within the business.
Micro-enterprises
The operators of micro-enterprises must have a thorough knowledge of their basic trade.
They must, in fact, master two trades: their technical specialty and micro-enterprise
management. They must learn to keep a close watch on their costs, and to orient their
activities according to customer needs. Their work is rather like that of the small
business owner-manager, on a smaller scale. They are short of resources. In many cases,
the best way of reducing risk is to grow slightly, so as not to be at the mercy of market
fluctuations.
Self-employment
Self-employment is similar to the operation of a micro-enterprise, except that it concerns
individuals who prefer to work alone. Some people are voluntarily self-employed,
because they have chosen and prepared for this type of work. Others are involuntarily
self-employed, since it is the only way they can earn a living. The learning required will
thus differ, but in all cases self-employed workers must learn to manage the own work,
renew their skills and manage their time. Our research shows that the most successful
self-employed workers are flexible. As in the operation of a micro-enterprise, the selfemployed worker must learn to respond to customer needs. Motivation and productivity
will depend to a large extent on a balanced lifestyle and questions of personal ecology.
Technopreneurship
An increasing number of technological entrepreneurs and inventors choose to market
their own products. In many cases, partnerships are formed, or teams are brought together
to handle management issues. The activities involved are similar to those of a traditional
growth-oriented entrepreneur, but are generally more complex as regards the
development, manufacturing, financing and marketing of products. In many cases, the
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product must be marketed world-wide from its introduction, since it targets specific
customers in many different countries.
These elements are brought together in Table 4.
Table 4
Entrepreneurial Paths
PATHS
Intrapreneurship
ACTIVITIES
Innovation
Entrepreneurship
Innovation
Growth
Small business ownership
and management
Management
Family business
Management
Succession
Management
Management
Micro-enterprise
Self-employment
Technopreneurship
Invention
Innovation
LEARNING
Support systems
Relations systems
Vision
Vision
Conception
Design
Management, especially
marketing, human
resources, financing and
operations
Instrumentality
Social systems
Operations management
Management of self,
marketing, operations
Personal ecology
Vision
Management
Team work
Networking
Globalization
Conclusion
Before concluding, we will say a few words on ethics and the social responsibility of
entrepreneurs. As regards ethics, successful entrepreneurs concentrate on what they do,
and do not rely on cheating. They reap what they sow. They obtain results if they invest
the energy required to produce them. If they cheat, they cheat themselves. If they want
to build a sound and profitable operation, they must be willing to invest both time and
energy.
In recent years, society as a whole has become aware of the limits of natural and
government resources. The abuses of the past are no longer possible. Not only that, but
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generations have invested their energy to create a society that can provide the means and
the support needed to start businesses. If the same opportunities are to be available to
future generations, entrepreneurs will have to play a driving role in their respective
communities, by becoming involved and contributing to community development on a
much larger scale than in the past. We are in an era when everything is possible for
communities that have enough people who are willing to take charge of their own destiny
- in other words, entrepreneurs who are ready to commit themselves for the collective
good. This is particularly true of isolated regions. You, in your role as a prospective
entrepreneur, are expected to be available when it is your turn to contribute. You have a
major role to play in the development of the society of the future.
A person's craft is their main occupation, the means by which they earn a living. A
reference to someone who is proficient in their craft means someone who is competent,
knows what they are doing, and has developed appropriate skills. Crafts are often divided
into manual trades and liberal professions. In most trades and professions, specialized
training programmes and approaches are available, and this is beginning to be the case in
the field of entrepreneurship, where they were clearly lacking. Many haphazard
approaches will thus be eliminated. One of the major differences between entrepreneurs
and other people is that entrepreneurs define what they want to do and the means by
which they intend to do it. It is a craft that requires an inner vision of what one does, and
what one hopes to achieve. Before becoming an entrepreneur, a person is simply a
worker. Once that person has become an entrepreneur, his or her work and life become
two facets of the same object - in other words, the person and their work are one. We
have presented here the basic elements needed to learn the entrepreneurial craft, in order
to provide a structured framework that can be used to learn how to prepare for
entrepreneurial action. The rest is up to you!
Reference
Kadji Youaleu, C. and Filion, L.J. (1996). “Neuf étapes du processus entrepreneurial”.
13th Annual Conference of the Canadian Council for Small Business and
Entrepreneurship. Published in: Filion, L.J. and Lavoie, D. (Eds.), Support
Systems for Entrepreneurial Societies. Proceedings, Vol. 1, p. 307-322.
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