Measures of an Entrepreneur’s Success

Measures of an entrepreneur’s success

Small businesses play an important role in today’s society and there are many different perspectives about an entrepreneur’s success. Small businesses exist in large number and have many benefits such as developing local economies by accelerating innovation and creating jobs. For example, there are more than ten millions small businesses in China who contribute to about 60% of GDP and 50% tax. In addition, 80% of job opportunities are created by small business. These small businesses are characterized by few employees (no more than 50 employees), low turnover or net profits (between 2 and 10 million Euro), little formal structure and usually operated by one person.

There are five stages contributing to business growth and people can see growth as one of the seven stages of business. Small firm growth means that there are economic development and the option for further success in small firms which can promote a small firm becomes a larger and stable business. It is related to a business performance in the marketplace and focus on that small firms can enlarge its market shares and firm’s size, increase its employment and sales, contribute to the growth of profitability and so on (Bridge & O’Neill 2013 p259).

Different measures to business success

Precisely because of the common view that the purpose of a business is to make money, for most people, financial worth such as the small firm growth will be the most desirable method to measure entrepreneur’s success and the more the business are worth and growth, the more successful the entrepreneurs are considered to be. Therefore, the traditional concept considers that small firm growth is the only measure of an entrepreneur’s success. However, it can be a misunderstanding of what is actually taking place because of the overlook to owners’ perspectives. With a further understanding about models of business success , people can know that the different perspectives about business success depending on whether people are focusing mainly on the business or on the personal behind. Therefore, the measures to business success is diverse (Bridge & O’Neill 2013 p.182).

Entrepreneur’s success can be seen as the business success

As for the entrepreneur’s success, sometimes it can be considered as a business success and they are the same concept for the following reasons. First of all, people can see a small firm as an entrepreneur who is the owner-manager of this firm and it is necessary to look at their owners to understand small businesses. A small firm is the one that has relatively small market share and managed by its owner in a personalised way. What’s more, the owners of small firms are the managers who are free from outside control. It means that these small firms will “embody the value system of the owner-manager reflecting his own personal objectives and those of his family” (Bridge & O’Neill 2013 pp.209-212). As a result, there are usually many owner-managers of small firms are the entrepreneurs which indicates that sometimes a small firm can be seen as an individual entrepreneur and their success can be evaluated with the same standards. So people can measure an entrepreneur’s success with models of business success and its standard is not the only one.

Based on the business professionals’ model

In terms of the business professionals’ model, small firm growth can be the measure of entrepreneur’s success. Firstly, many business professionals are the professional managers of larger businesses, business commentators, advisers, institutional shareholders and academics who consider that entrepreneurship is a sub-set of business. Secondly, in this situation, entrepreneurs will be seen as a business man who is constructed from business-thinking components and in the eyes of most people, firm’s owners should make decisions for business logic. Thus, entrepreneur’s success is related to business development which can be assessed in terms of growth, market share, productivity, profitability and related business performances. Therefore, for many business professionals, small firm growth is the only measure of an entrepreneur’s success. However, this model can be default and fail to see the alternative key point. It makes a business only judged by the standards of a perfect business which is inappropriate to have an alternative assessment for an entrepreneur’s success.

For example, Rodio, the owner of Tropicana Entertainment, has achieved more profits, enlarged more business scale and made company grow a lot a year. Rostybc whose firm’s net profits only occupied one quarter of TE’s profits, it appears that the performance of Rodio is much better. However, TE became bankrupt after few years and the other firm whose owner is Rostybc performed relatively not good in the same market but always operates in a stable situation until now. According to the tradition concept which following the business professionals’ model, the first entrepreneur is more successful. But from another perspective, the second entrepreneur is success because of is successful operating result and realized objectives (Todrin 2012).

Therefore, from the case people can know that when an entrepreneur is considered as a business man, small firm growth do become a measure. However, its success is only measured by the criteria of financial profits and the owners’ perspectives which can reflect firms’ success are ignored. It means the first model, as the one just described, is not comprehensive.

Based on the small business proprietors’ model

Comparing to the fist model, the small business proprietors’ model can be more better and considerate for the following reasons. Firstly, enterprise is a sub-set of life rather than a sub-set of business and people should consider both an entrepreneur and a small firm as a human being at the same time. As a human being, an entrepreneur can make a progress by seeking opportunities rather than problems and they are working for themselves with passion, interest, freedom or other something. In addition, they choose to work for many reasons such as creating art, raising a family or making a fortune. These business owners will make business decisions for their own personal reasons rather than business logic (Bridge & O’Neill 2013 pp.195-215).

Secondly, when considering an entrepreneur as a human being, entrepreneur’s success is more about the realizing of owners’ motivations and objectives. It means that most owners of small businesses primarily care about whether they can obtain these benefits they want from their companies such as the income levels which can maintain their ideal lifestyles without risks.

As this paper pointed out earlier, a small firm can be seen as an entrepreneur and an entrepreneur’s success also can be considered as the success of a small firm, thus owners’ perspectives and feelings are important for measuring an entrepreneur’s success. Obviously, the small business proprietors’ model has considered the elements of owners’ perspectives and can be more suitable for judging the measures of an entrepreneur’s success. As a result, based on this appropriate model for small business, the details about other measures to an entrepreneur’s success can be concluded as the following.