The Successful Growth of a Small Business Requires the Skills of a Successful Entrepreneur

Contents

Introduction 1

Entrepreneurs and HRM 1.1

Entrepreneurs and leadership 1.2

Personal Skill 2

Do what you enjoy 2.1

Take what you do seriously 2.2

Invest in yourself ..............................................................................2.3

Technical............................................................................................... 3

Manage money wisely ......................................................................3.1

Focus. ................................................................................................ 3.2

Vision. ................................................................................................ 3.3

Passion. .................................................................................................4

Ability to change............................................................................... 4.1

Entrepreneurs and small enterprise growth................................4.2

Entrepreneurs and Psychology..........................................................5

The Five Traits ..................................................................................5.1

Innovative .........................................................................................5.2

Willing to take risks .........................................................................5.3

Strong friendships/family groups .................................................5.4

Jack-of-all-trades. .............................................................................5.5

Motivation .........................................................................................5.6

Conclusion ............................................................................................6

Bibliography ........................................................................................7

1 Introduction

In this literature review I am required to discuss how an entrepreneur uses his/her skills to successfully grow a small business in a logical and critical manner using various different sources and references and then to evaluate the issues with a conclusion.

1.1 Entrepreneurs and HRM skills

For a small business or any business for that matter to be successful it needs highly motivated and highly qualified manpower. It is imperative that the entrepreneur makes his/her work place an attractive environment for potential employee's or current employee's so that they produce the best standard service or product. Secondary research states:

"Small- and medium-sized tourism enterprises (SMTEs) often face strong gaps of qualification as their owners have to manage every functional part of the business on their own. Furthermore, due to seasonality, small-sized company structures and the large amount of family businesses, the tourism industry can only provide insufficient conditions to attract labour, particularly in terms of fast career paths and promotion ladders. Hence, employee turnover rates tend to be very high and market entry barriers for non-tourism trained employees are low." - (Tschurtschenthaler, 2004; Weiermair et al., 1999).

This shows that in the tourism industry particularly that it is difficult for entrepreneurs running a SME to find highly qualified and highly motivated manpower that wish to stay in their current position in the organisational structure without prospects of promotion which leads to high employee turnover.

Secondary research states:

Very few contributions have focused on the perceptions of employees regarding entrepreneurial leaders' skills to effectively manage human resources of his/her enterprise. However, the entrepreneurial leader has a strong influence on the way employees evaluate job attractiveness as finally only they are responsible to motivate employees and to introduce young tourism trainees into their working life including the internal communication and working atmosphere of the companies. Recent research could underline a positive relationship between the quality of the leaders' human resource management skills as perceived by the employee and the employees' overall evaluation of job attractiveness (Peters et al., 2004).

This shows that in the tourism industry or in any industry that the entrepreneur must have good HRM skills that attract highly motivated and highly qualified manpower as well as the job role itself.

1.2 Entrepreneurs and Leadership

It's as important a realization that any entrepreneur must have that their leadership skills are critical to the success of the company, since it is a rare occasion that an entrepreneur can make a company succeed alone, similar to team sports where having a great athlete on the team doesn't ensure that their team will win if all the other players cannot perform up to standards needed for success. The leadership skill sets include the entrepreneur's ability to both identify critical staffing needs, and the expertise to fill them accordingly, in addition to the skills required to lead the team to success.

For a small business to be successful and for it to grow the owner or the entrepreneur needs to have effective leadership skills which will motivate the workforce which in turn will motivate the workforce to provide a high quality product or service.

Fig 1

"In a first step, trainees were asked to evaluate entrepreneurial leaders in their enterprise - seven attributes could be evaluated on a four-point Liker scale (1 ¼ absolutely no, 4 ¼ absolutely yes). Employing a k-means cluster analysis enabled us to cluster the leaders into two groups (see Figure 1) - the first cluster can be interpreted