Reverend Jan Scholtz
The vast majority of businesses initiated by entrepreneurs originate as micro or small businesses. These businesses are usually started and entrepreneurially managed by one person.
They can grow and become larger small businesses or even medium and large businesses if the entrepreneur has a distinctly different mindset from that of the manager or bureaucrat, but the entrepreneur often becomes complacent with a specific level of achievement in his or her business.
The entrepreneur then becomes the contented manager of a small business, who is averse to risk, change and innovation. The entrepreneurial business is then replaced by a managerially-focused small business.
The people behind good ideas might be competent, but they often do not know how to manage a business and have no underlying appreciation of business fundamentals.
The business then fails, due to a lack of management skills, behaviour and the necessary knowledge of the different functions of a business. Businesses that have been successfully established often fail at a later stage in the business life cycle, due to the entrepreneur’s inability to adapt to the changing needs of the business, which often includes the need for a more managerial and functional approach.
The true entrepreneur is a leader and is adaptive, innovative and willing to take risks. The success of an entrepreneur is determined by their ability to not only establish businesses but also to adapt their managerial and leadership styles to changes required in the growth phases of the business.
However, entrepreneurial differences occur in that some entrepreneurs are satisfied to establish a business and then continue to manage it, while others are interested in the growth and extension of their businesses to become medium or large businesses, and continually seek new areas for development and growth.
The growth-orientated entrepreneurs are vital to wealth and job creation and contribute to the economic growth of a country. It would certainly be advantageous to Namibia if entrepreneurs with growth intentions and the ability to adapt to change and develop their businesses were to be identified.
Entrepreneurship can be seen as both the intention to grow and the managerial capability to manage actual growth, as well as the actual activity of establishing a business.
The propensity to introduce changes is strongly related to growth intentions – this being one of the main defining features of the entrepreneur (Gray, 2002: 69). Thus, although small, medium and micro enterprises (SMMEs) contribute to wealth creation and adding value – not all are necessarily entrepreneurial.
Management and leadership skills are equally important in determining the growth rate of SMMEs. Fernand, Solomon and Tarabishy (2005:7) identified eight common characteristics between and entrepreneurs, namely:
• Visionary: A good vision is realistic and feasible, and implies a capability construct.
• Risk-taking: Understanding that no one can predict the future with certainty.
• Achievement-orientated: Refers to a person’s need to do things better, faster and more efficiently, and set challenging achievable goals.
• Able to motivate others: Showing talent to inspire others to do their best to achieve the objective of the business.
• Creative: Meaning, they can involve the adjustment or refinement of existing procedures or products.
• Flexible: Indicating that they can adapt to changing circumstances.
• Patience: The ability to exercise patience until a task has been completed and a goal has been reached.
• Persistence: To have confidence in themselves and their businesses, and to continue despite setbacks and problems.
Gray confirmed strong positive links between growth orientation, setting of financial objectives, a propensity to introduce non-financial objectives, a propensity to introduce changes and actual growth (2002: 61).
SMME owners generally set non-financial objectives for their businesses, and those entrepreneurial businesses set more classic financial strategic objectives in the minority.
Entrepreneurial businesses facing the growth challenge play an important role as change agents for economic change and innovation.
Unfortunately, most small business owners are reluctant to accept this challenging role, resist change and become non-entrepreneurial once they have established a business.
Few small companies are seriously interested in growth; their primary motives are autonomy and independence. In line with Schumpeter’s (1934: 69) observation, most firms settle for non-entrepreneurial stability. Gray confirms low intention to grow in most small businesses (2002: 67).
Although there is some general belief that the entrepreneur or entrepreneurial leader should be replaced by a professional manager after the successful establishment of a business, studies have found no evidence that professional managers performed better in high-growth firms than the original entrepreneur did.
In their study, Willard, Kruger and Feeser (1992) found that many entrepreneurs learn how to manage growth effectively.
Therefore, the entrepreneurial leadership model defines the characteristics of the business in formative growth as spontaneous and free-spirited, with informal communication and centralised decision-making.
The second phase of institutional growth is characterised by the efficient operation of tasks, formal communication during scheduled meetings, as well as policies and procedures (Swiercz & Lyndon, 2002: 383).
Small businesses as well as growth-orientated entrepreneurs in the business industry make an important contribution to the country in their unique ways.
Competent management of these businesses is essential to ensure their continued success and growth to provide much-needed attractions, offerings, amenities and value towards a sustainable business industry in Namibia.
Important entrepreneurial, managerial and other functional business skills should be developed and applied, as these skills are essential to ensure the continued success of SMMEs in Namibia.
*Reverend Jan. A. Scholtz is the former Chairperson of //Kharas regional and the former !Nami#nus Constituency regional councillor. He holds of Diploma in Theology, B-Theo (SA), a Diploma in Youth Work and Development from the University of Zambia and a Diploma in Education III (KOK) BA (HED) from UNISA.