Robert Heller of www.thinkingmanagers.com reflects on the entrepreneurial age.
The entrepreneur continues to rise. Across the globe and throughout business, thousands show they have what it takes to be an entrepreneur: enterprise and enterprise.
The first is a reference to the necessary attitude towards risk that will get the venture off the ground – ie, starting an enterprise, in the second sense.
Most of the time you need a prime mover to get the venture going, even if it is more a partnership than a hierarchy. However, there could be trouble in the future if the prime mover takes more power and self-assurance from success, and the situation won’t work in the long term.
According to David Jones, the British retail maestro, there are three types of entrepreneur. Which one of these describes you?
Type A: Someone who creates new concepts.
Type B: Someone who can find new concepts and can take them further with good management.
Type C: Someone who can create new concepts and also take them further.
Jones, who labelled himself a Type B, is famous for his work at Next, the fashion outlet started by George Davis, whose flamboyant and dynamic nature clashed with Jones’s more down-to-earth style. Davies went on to big things with Asda, now under the Wal-Mart umbrella, who parted with a fortune for him to come up with a new clothing range, and then Marks & Spencer, who bought him out for $125 million.
For these other ventures, Davies stuck to his Type A traits. ‘Know yourself as you really are’ is good advice for any entrepreneur.
The Type B entrepreneur, however, is able to ‘execute’, ie make things happen and get the job done by finding out the facts and getting good people to work hard, while working the hardest themselves. The Type B is thus invaluable but less common than the Type A.
The amazing 120-fold rise of Next shares from a mere 7p shows both Jones’s entrepreneurial skills and also the condition of the company that was inherited from Davies.
Jones wishes the company could have gone private and thus gained much more personal wealth. Take Philip Green, the stores tycoon – it was revealed in October that he received a bonus of £1.2 billion. That was even more than Lakshmi Mittal’s £1.1 billion dividend the previous year.
Opportunity is the watchword. The entrepreneur needn’t be more talented than his less successful counterparts but he should be adept at spotting and seizing the opportunities.
You have to be adventurous and opportunist but also balance this with sound financial sense and develop a trading formula that will take your sales profit to the maximum.
Take Jones’s formula for Next:
1. Look for consistent, continued growth in earnings per share.
2. Never compromise on quality.
3. Give customers a wide choice of quality services and goods.
4. Pass on all reductions in cost through cutting prices and improving quality, thus maximising customer value.
5. Only expand on the basis of sound financial criteria.
Of course, there is much more to management than these five points, but they can act as a guide for the would-be entrepreneur who wants to aim high.
There is one more type of entrepreneur. Type D cannot create a concept or take one further. You have to prove you are not one of them.
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