Characteristics of an Entrepreneur - Day 4

I've so far described the first 12 characteristics in the past 3 days; here are the last 4:

      13. Optimism

Flexibility is to open-mindedness as Optimism is to Confidence. Optimism is descriptive. Hence, when delegating work, the strategies you describe must be optimistic i.e. they must at least sound achievable. Presenting it with confidence bolsters that notion. People tend to ask questions for clarification. These are the easy ones. Others ask "what if" questions. If you involved them in the planning process, they would've asked them then; and contingency plans would've been drafted to cover them.

Optimism reminds me of positive thinking - if you think positively, positive things would happen. However, experience has shown that even if you do think positive, there's still a chance to fail. That's why a proverb was coined to warn about this: "if at first you don't succeed, try and try again". This implies that you have to know when to stop "flogging a dead horse", and pick another one.

      14. Perceptiveness

Under communications we said you not only need to ensure that your audience understand what you're presenting but also that you understand their feedback. To do this, you need to be perceptive so that you can accurately perceive body language as well as words which would enhance your understanding.

I don't relish reading but from articles about communications that talk about non-word methods people tend to concentrate on these methods that they don't listen to what's being said. If you accidentally cross your arms, for instance, your counterpart will take offence because that's how people have been taught communications. Some unscrupulous negotiators use this to great effect i.e. they give the other side the impression that they'll get what they want even if it isn't in the contract.

So, perceptiveness goes beyond understanding what's being said or the body language but also the implications of these nuances. Also, you need to perceive future events so that your forward planning can deal with such events by creating appropriate contingency plans.

      15. Persistence

Although Drive is the energy to see things through to completion; the will and the discipline to see them through, usually in the face of adversity, is persistence. Under optimism, we discussed a few proverbs such as "if at first you don't succeed, ..." and that you have to know when to stop "flogging a dead horse". You need to be optimistic if you want to continue doing something persistently.

It's said that if you think negatively, you'll fail 100% because you won't even try. However, if you think positively and optimistically, there's no guarantee you won't fail. For example, James Caan, the entrepreneur, bought a chain of sandwich shops that were losing £100,000 per week. 6 months later he cut his losses and used the savings for other projects. In this example, it's fatal to persist with the undertaking. Napoleon Hill said "a quitter never wins; and a winner never quits". It should read "a quitter doesn't always lose and a winner knows when to quit".

      16. Risk Taking

This is what defines an entrepreneur. Some entrepreneurs say that you don't have to take any risks. For example, an East End entrepreneur started with only £200 capital and used it to run a business from his bedroom. His business model was to double his capital every so often. That way he doesn't become dependent on lenders. Richard Branson sold Virgin Music for £1bn to pay off Virgin Atlantic's debts so that he doesn't become dependent on lenders.

You only need to take a calculated risk when you face obstacles that stop you from launching a new business or expanding an existing one. You also take risks when an obstacle threatens the viability of your business. Some entrepreneurs think that the higher the risk, the greater the reward will be and take high risks on that basis.

The big banks of America and Europe took unacceptable risks and became bankrupt as a result. But, with the exception of Lehman Brothers, they were rescued by their Governments. However, the minnows were allowed to go bust - a great injustice. We had warnings that this can happen - remember Nick Leeson, the Rouge Trader? He bankrupted Barings Bank with illicit derivative trading - the same mechanism that bankrupted American and European banks.

You'd think that derivative trading would be made illegal in return for bailing out the failures. But no; these bankers are having their cake AND eating it too. When Goldman Sachs say they made a profit, they don't mean they made an economic profit; they mean they made a profit on derivative trading. What's worse is that the tax authorities didn't receive a penny from those "profits" because derivative profits are not taxable. However, the tax payers pay for their losses.

If you want to make profits tax free, become a banker. What's more, your losses are covered by the taxpayers. Not really, ordinary derivative traders go bankrupt when they lose - look at what happened to the small banks. Talk about false profits. Doesn't that remind you of false "prophets"?

Tomorrow, I'll start describing how these characteristics affect FullEmploy. Some characteristics are so vital that they'll be one article.