An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The process of setting up a business is known as entrepreneurship. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.
Entrepreneurs play a key role in any economy, using the skills and initiative necessary to anticipate needs and bring good new ideas to market. Entrepreneurship that proves to be successful in taking on the risks of creating a startup is rewarded with profits, fame, and continued growth opportunities. Entrepreneurship that fails results in losses and less prevalence in the markets for those involved.
How Entrepreneurship Works
Entrepreneurship is one of the resources economists categorize as integral to production, the other three being land/natural resources, labor, and capital. An entrepreneur combines the first three of these to manufacture goods or provide services. They typically create a business plan, hire labor, acquire resources and financing, and provide leadership and management for the business.
Entrepreneurs commonly face many obstacles when building their companies. The three that many of them cite as the most challenging are as follows:
Overcoming bureaucracy,
Hiring talent,
Obtaining financing.
Economists have never had a consistent definition of “entrepreneur” or “entrepreneurship” (the word “entrepreneur” comes from the French verb entreprendre, meaning “to undertake”). Though the concept of an entrepreneur existed and was known for centuries, the classical and neoclassical economists left entrepreneurs out of their formal models: They assumed that perfect information would be known to fully rational actors, leaving no room for risk-taking or discovery. It wasn’t until the middle of the 20th century that economists seriously attempted to incorporate entrepreneurship into their models.
Three thinkers were central to the inclusion of entrepreneurs: Joseph Schumpeter, Frank Knight, and Israel Kirzner.
Schumpeter suggested that entrepreneurs—not just companies—were responsible for the creation of new things in the search for profit. Knight focused on entrepreneurs as the bearers of uncertainty and believed they were responsible for risk premiums in financial markets. Kirzner thought of entrepreneurship as a process that led to the discovery.
Types of Entrepreneur
Not every entrepreneur is the same and not all have the same goals. Here are a few types of entrepreneurs:
Builder
Builders seek to create scalable businesses within a short time frame. Builders typically pass $5 million in revenue in the first two to four years and continue to build up until $100 million or beyond. These individuals seek to build out a strong infrastructure by hiring the best talent and seeking the best investors. They have temperamental personalities that are suited to the fast growth they desire but can make personal and business relationships difficult.
Opportunist
Opportunistic entrepreneurs are optimistic individuals with the ability to pick out financial opportunities, get in at the right time, stay on board during the time of growth, and exit when a business hits its peak.
These types of entrepreneurs are concerned with profits and the wealth they will build, so they are attracted to ideas where they can create residual or renewal income. Because they are looking to find well-timed opportunities, opportunistic entrepreneurs can be impulsive.
Innovator
Innovators are those rare individuals that come up with a great idea or product that no one has thought of before. Think of Thomas Edison, Steve Jobs, and Mark Zuckerberg. These individuals worked on what they loved and found business opportunities through that.
Rather than focusing on money, innovators care more about the impact that their products and services have on society. These individuals are not the best at running a business as they are idea-generating individuals, so often they leave the day-to-day operations to those more capable in that respect.
Specialist
These individuals are analytical and risk-averse. They have a strong skill set in a specific area obtained through education or apprenticeship. A specialist entrepreneur will build out their business through networking and referrals, resulting in slower growth than a builder entrepreneur.
Types of Entrepreneurship
As there are different types of entrepreneurs, there are also different types of businesses they create. Below are the main different types of entrepreneurship.
Small-Business
Small business
entrepreneurship is the idea of opening a business without turning it into a large conglomerate or opening many chains. A single-location restaurant, one grocery shop, or a retail shop to sell your handmade goods would all be an example of small business entrepreneurship.
These individuals usually invest their own money and succeed if their business turns a profit, which they live off of. They don’t have outside investors and will only take a loan if it helps continue the business.
Scalable Startup
These are companies that start with a unique idea. The hopes are to innovate with a unique product or service and continue growing the company, continuously scaling up as time moves on. These types of companies often require investors and large amounts of capital to grow their idea and reach multiple markets.
Large-Company
Large company entrepreneurship is a new business division created within an existing company. The existing company may be well placed to branch out into other sectors or it may be well placed to become involved in new technology.
CEOs of these companies either foresee a new market for the company or individuals within the company generate ideas that they bring to senior management to start the process.
Social Entrepreneurship
The goal of social entrepreneurship is to create a benefit to society and humankind. They focus on helping communities or the environment through their products and services. They are not driven by profits but rather by helping the world around them.
How to Become an Entrepreneur
Following an ice cream making correspondence course, two entrepreneurs, Jerry and Ben paired $8,000 in savings with a $4,000 loan, leased a gas station, what we call filling station in our local parlance and purchased equipment to create uniquely flavored ice cream for the local market.
Today, Ben & Jerry make millions in annual revenue.
Although the self-made person has always been a popular figure in society, entrepreneurship has gotten greatly romanticized in the last few decades. In the 21st century, the example of Internet companies like Alphabet, formerly Google (GOOG), and Meta (META), formerly Facebook, both of which have made their founders wildly wealthy, have made people enamored with the idea of becoming entrepreneurs.
Unlike traditional professions, where there is often a defined path to follow, the road to entrepreneurship is mystifying to most. What works for one entrepreneur might not work for the next and vice versa. That said, there are seven general steps that most, if not all, successful entrepreneurs have followed:
Ensure Financial Stability
This first step is not a strict requirement but is definitely recommended. While entrepreneurs have built successful businesses while being less than financially flush (think of Facebook, now Meta, founder Mark Zuckerberg as a college student), starting out with an adequate cash supply and ensuring ongoing funding can only help an aspiring entrepreneur, increasing their personal runway and giving them more time to work on building a successful business, rather than worrying about making quick money.
Build a Diverse Skill Set
Once a person has strong finances, it is important to build a diverse set of skills and then apply those skills in the real world. The beauty of step two is it can be done concurrently with step one.
Building a skill set can be achieved through learning and trying new tasks in real-world settings. For example, if an aspiring entrepreneur has a background in finance, they can move into a sales role at their existing company to learn the soft skills necessary to be successful. Once a diverse skill set is built, it gives an entrepreneur a toolkit that they can rely on when they are faced with the inevitability of tough situations.
Much has been discussed about whether going to college is necessary to become a successful entrepreneur. Many famous entrepreneurs are famous for having dropped out of college: Steve Jobs, Mark Zuckerberg, and Larry Ellison, to name a few.
Though going to college isn’t necessary to build a successful business, it can teach young individuals a lot about the world in many other ways. And these famous college dropouts are the exception rather than the norm. College may not be for everyone and the choice is personal, but it is something to think about, especially with the high price tag of a college education in Africa and elsewhere.
It is not true that majoring in entrepreneurship is necessary to start a business. People that have built successful businesses have majored in many different subjects and doing so can open your eyes to a different way of thinking that can help you in establishing your business.
Consume Content Across Multiple Channels
As important as building a diverse skill set is, the need to consume a diverse array of content is equally so. This content can be in the form of podcasts, books, articles, or lectures. The important thing is that the content, no matter the channel, should be varied in what it covers. An aspiring entrepreneur should always familiarize themself with the world around them so they can look at industries with a fresh perspective, giving them the ability to build a business around a specific sector.
Identify a Problem to Solve
Through the consumption of content across multiple channels, an aspiring entrepreneur is able to identify various problems to solve. One business adage dictates that a company’s product or service needs to solve a specific pain point; either for another business or for a consumer group. Through the identification of a problem, an aspiring entrepreneur is able to build a business around solving that problem.
It is important to combine steps three and four so it is possible to identify a problem to solve by looking at various industries as an outsider. This often provides an aspiring entrepreneur with the ability to see a problem others might not.
Solve That Problem
Successful startups solve a specific pain point for other companies or for the public. This is known as “adding value within the problem.” Only through adding value to a specific problem or pain point does an entrepreneur become successful.
Say, for example, you identify the process for making a dentist appointment is complicated for patients, and dentists are losing customers as a result. The value could be to build an online appointment system that makes it easier to book appointments.
Network Like Crazy
In last week’s article, we focused on networking. Entrepreneurs can’t do it alone. The business world is a cutthroat one and getting any help you can will always help and reduce the time it takes to achieve a successful business. Networking is critical for any new entrepreneur. Meeting the right people that can introduce you to contacts in your industry, such as the right suppliers, financiers, and even mentors can be the difference between success and failure.
Attending conferences, emailing and calling people in the industry, speaking to your cousin’s friend’s brother who is in a similar business, will help you get out into the world and discover people that can guide you. Once you have your foot in the door with the right people, conducting a business becomes a lot easier.
Lead by Example
Every entrepreneur needs to be a leader within their company. Simply doing the day-to-day requirements will not lead to success. A leader needs to work hard, motivate, and inspire their employees to reach their best potential, which will lead to the success of the company.
Look at some of the greatest and most successful companies; all of them have had great leaders. Apple and Steve Jobs, Bill Gates and Microsoft, Bob Iger and Disney, and so on. Study these people and read their books to see how to be a great leader and become the leader that your employees can follow by the example you set.
Enjoy your week
Market Highlights
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💵Bloomberg USDGHS Cross Rate – *14.5000* (YTD -🔺️134.47%)
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🔼GSE DAILY GAINERS ➖ PRICE ➖ %CHANGE
No gainers for today
🔻GSE DAILY LOSERS ➖ PRICE ➖ %CHANGE
No losers for today
〽Inflation rate in Ghana ➡ 40.40% (🔺️+8.60%)
🏦Ghana Reference Rate ➡ 30.56% (🔺️+11.37%)
✳Policy Rate in Ghana ➡ 24.50% (🔺️+11.36%)
¶ TREASURY RATES💸
91 – Day Discount Rate 32.6422% Interest Rate 35.5427%
182 – Day Discount Rate 30.7788% Interest Rate 36.3770%
364 – Day Discount Rate 26.4145% Interest Rate 35.8963%
📈STANDARD CHARTERED BANK – FIXED INCOME RUNS 🕓
Government of Ghana Bonds – YTM
1 Year Note – Bid 40.00% Ask 37.50%
2 Year Bond – Bid 40.00% Ask 37.50%
3 Year Bond – Bid 42.50% Ask 39.50%
5 Year Bond – Bid 42.50% Ask 39.50%
7 Year Bond – Bid 42.50% Ask 39.00%
10 Year Bond – Bid 42.50% Ask 39.00%
17 Year Bond – Bid 42.50% Ask 39.00%
ESLA Bonds – YTM
2 Year Bond – Bid 40.00% Ask 35.00%
5 Year Bond – Bid 40.00% Ask 35.00%
7 Year Bond – Bid 40.00% Ask 35.00%
9 Year Bond – Bid 40.00% Ask 35.00%
11 Year Bond – Bid 40.50% Ask 35.50%
Ghana Cocoa Bills – YTM
56 DTM – Bid 37.00% Ask 32.00%
75 DTM – Bid 37.50% Ask 32.50%
112 DTM – Bid 38.00% Ask 33.00%
*DTM – Days to Maturity
*YTM – Yield to Maturity
🛢Petroleum Products – Average Price
🏗Petrol – Gh¢16.88/ltr (YTD-🔺️+150.07%)
🛢Diesel – Gh¢20.05/ltr (YTD-🔺️+197.04%)
⛽LPG – Gh¢12.10/kg (YTD-🔺️+49.01%)
🏧MARKET INDEXES
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*Shanghai Shenzhen 300 3,775.78 +18.97 +0.50%
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*Bloomsberg EU 500 287.07 +0.12 +0.04%
*France CAC All-Tradable 5,046.38 +3.57 +0.07%
*Dubai DFM General Index 3,305.27 -20.06 -0.60%
*MOEX Russia Index 2,195.17 -15.78 -0.71%
*FTSE/JSE South Africa 66,753.50 -11.37 -0.02%
*Nairobi SE 20 Share 1,643.03 -0.92 -0.06%
*Nigeria SE Main 47,554.34 +949.40 +2.04%
*BBG EMEA World Index 141.57 -0.11 -0.08%
*GSE Composite Index 2,463.27 0.00 0.00%
*GSE Financial Index 2,076.84 0.00 0.00%
GSE INDEXES ⏸ 2022 YTD RETURNS%
*GSE Composite Index 2,463.27 🔻-11.69%
*GSE Financial Index 2,076.84 🔻-3.49%
🔼GSE 2022 GAINERS ➖ PRICE ➖ YTD%
SIC ➡Gh¢0.31 🔼+287.50%
TBL ➡Gh¢0.76 🔼+123.53%
ACCESS ➡Gh¢4.01 🔼+27.30%
EGL ➡Gh¢3.20 🔼+14.70%
GGBL ➡Gh¢2.05 🔼+13.89%
🔻GSE 2022 LOSERS ➖ PRICE ➖ YTD%
PBC ➡Gh¢0.02 🔻-33.33%
FML ➡Gh¢3.00 🔻-25.00%
GCB ➡Gh¢3.95 🔻-24.62%
MTNGH ➡Gh¢0.88 🔻-20.72%
TOTAL ➡Gh¢4.00 🔻-20.32%
IIL ➡Gh¢0.04 🔻-20.00%
💧MUTUAL FUNDS IN GHANA♣️
📈EQUITY FUNDS ➰YTD%
Databank EPAcK 🔼+21.65%
Republic Equity Trust 🔼+3.94%
Heritage Fund 🔻-5.09%
SAS Fortune Fund 🔼+6.40%
⚖BALANCED FUNDS ⏸ YTD%
EDC Balanced 🔼+8.47%
Databank Bfund 🔼+10.59%
Fidelity Balanced Trust 🔼+9.81%
Enhanced Equity Beta Fund 🔼+77.40%
CCMF 🔼+40.55%
CM Fund 🔼+13.58%
Dalex Vision Fund 🔼+7.89%
Plus Balanced Fund 🔼+37.34%
Elite Mutual Fund 🔼+12.41%
Republic Future Plan Trust 🔼+6.24%
Databank EdiFund Tier 2 🔼+12.03%
UMB Balanced Fund 🔼+12.23%
⚙FIXED INCOME FUNDS 🛡YTD%
EDC Fixed Income 🔼+12.14%
Databank Mfund 🔼+8.89%
Fidelity Fixed Income Trust 🔻-12.58%
Financial Independence Fund 🔼+15.01%
Fixed Income Alpha Plus 🔼+52.61%
Nimed Fixed Income Fund Tier 1 🔼+17.92%
Nimed Fixed Income Fund Tier 2 🔼+14.36%
OctaneDC Bond Fund 🔼+14.94%
Plus Income Fund 🔼+14.28%
Stanlib Income Fund Trust 🔼+14.75%
Databank EdiFund T1 🔼+15.83%
MONEY MARKET FUNDS ⏱YTD%
SAS Midas Fund 🔼+13.04%
First Fund 🔼+15.14%
Stanlib Cash Trust 🔼+16.20%
EDC Money Market Fund 🔼+18.46%
OctaneDC Money Market Fund 🔼+15.07%
Republic Unit Trust 🔼+11.21%
Sirius Opportunity Fund 🔼+12.25%
COMMODITIES MARKET
*Brent Crude $/barrel⛽ $83.63 -1.71 -2.00%
*Natural Gas 🏭 $/million BTUS $7.02 -0.28 -3.89%
*Gold 👑 $/troy ounce $1,768.80 +8.40 +0.48%
*Silver 💍 $/troy ounce $21.61 +0.08 +0.39%
*Corn 🌽 $/bushel $671.25 +5.00 +0.75%
*Cocoa 🍫 $/metric ton $2,484.00 +40.00 +1.64%
*Coffee ☕ $/pound $165.05 +2.30 +1.41%
*Sugar🎂 $/pound $19.33 -0.22 -1.13%
*Lumber $/1000 board feet $422.30 -9.70 -2.25%
Rubber USd/100kg $127.40 -0.10 -0.08%
Sources: Bank of Ghana, Bloomberg, GSE, Reuters investopedia, Doobia, BBC, Graphic Business, B&FT
Mark G. Darko, Accra
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