An entrepreneur is an individual who creates a business and runs it while taking all the financial risk. It is imperative that an entrepreneur have leadership skills for his or her venture to be successful. Leadership must be implemented by the founder with employees and others involved in the startup and life of the business. Entrepreneurial Leadership (EL) is a redundant term because to be a successful entrepreneur, you must be a leader, but a leader is not an entrepreneur. In this discussion I will explain EL, discuss my own experience in EL, and explain why effective leadership is one of the most important factors for entrepreneurial success.
Why is the topic of entrepreneurship important? It’s important to me because I’ve started my own business and I run it myself. I am an entrepreneur. But more importantly, “Almost half of the working population in the United States will try to become an entrepreneur during their working career” (Lidow, 2014, pg. 5). To some, “Entrepreneurship is the New American Dream, and millennials are hearing its call loud and clear” (Dennis, 2015, Abstract). The “United States, are more likely to have a thriving entrepreneurial culture, where individuals are willing to take risks and make quick business decisions (Northouse, 2016, pg. 432). There are many risks involved in a business startup, but if the business proves successful, many rewards.
It is easy to understand why entrepreneurs are leaders when you consider the leader/follower relationship. Followers, by definition, follow. In the work world, followers have a boss or supervisor. Entrepreneurs are the boss, and a boss is a leader. This is not to say that followers are any less important to the business because, “from their joint participation emerges the success or failure of their enterprise” (Heller, 1983, pg. 406). And to run a successful business, an entrepreneur needs the help of others. “Others (a group) are required for leadership to occur” (Northouse, 2016, pg. 6). In short, an entrepreneur has a business mission, needs help to build the business, and must have the ability to lead to be successful. “Entrepreneurial leaders have visions that require innovation and creativity. Their visions could change the rules of the game forever” (Clark, 2002, pg. 14). But innovation and creativity are not enough—there must be a group working toward the common goal to implement those ideas. The term “EL” simply emphasizes the importance of leadership for the entrepreneur.
Leading an enterprise all the way from conception to the point where it is producing value and is self-sustaining— which means you are succeeding as an EL— is much more challenging than starting a company. If you want to see your idea reach its full potential, if you want to enjoy the fulfillment that comes from having made a tangible difference in the world, if you want to achieve financial success, then you must aspire to be an entrepreneurial leader. –Lidow, 2014, pg.6
For example, I will briefly offer my own experience in running a business. When I was 16 years old I started a business of buying and selling cars. I worked alone and there was only so much I could do without assistance. Buying one lemon (a mechanically defected vehicle) would take me months to recover from financially. There was no EL because there was no leadership. I was an entrepreneur but not successful. The business lost money. Today, as an adult, I have employees. I have a mechanic who inspects vehicles before purchase, I have a detailer, a porter, an accountant. I employ followers who specialize in certain tasks. The business is profitable. My vision and leadership (including employing the right followers) are what I attribute to this financial success. From experience I feel confident insisting that entrepreneurship requires leadership. I make this claim because when my EL falters in leadership, it follows that my business falters correspondingly.
In conclusion, according to the Bureau of Labor Statistics, only 50.2% of private sector businesses survive past 5 years (BLS Gov., 2017, table). Why do so many businesses fail? Again, it is my assertion that they fail due to inept leadership. Of course, some of these tasks may be delegated to managers; nonetheless, juggling these responsibilities correctly is crucial to the survival of the business. The entrepreneur has many responsibilities: business design, financial obligations, competition, hiring the right followers, and human resources, etc. This takes a leader. It is not enough to simply be an entrepreneur or business starter. Success requires the next level of entrepreneurship. Success requires EL. Leadership is crucial.
Bureau of Labor Staistics. 2017, March. U.S. Government [table]. Retrieved from https://www.bls.gov/bdm/us_age_naics_00_table7.txt
Clark, G. (2002, Apr 01). So just what is an entrepreneur?: And why it actually matters. Profit, 21, 14. Retrieved from http://ezaccess.libraries.psu.edu/login?url=https://search-proquest-com.ezaccess.libraries.psu.edu/docview/219310255?accountid=13158
Dennis, D. (2015). If the new american dream is entrepreneurship, why are so many black millennials Missing Out? [abstract] Techcrunch
Heller, T., & Van Til, J. (1983). Leadership and followership: Some summary propositions. Journal of Applied Behavioral Science, 18, 405–414.
Lidow, Derek. Startup Leadership : How Savvy Entrepreneurs Turn Their Ideas into Successful Enterprises, John Wiley & Sons, Incorporated, 2014. ProQuest Ebook Central. Retrieved from http://ebookcentral.proquest.com/lib/pensu/detail.action?docID=1637066.
Northouse, Peter. (2016). Leadership: Theory and Practice. Los Angeles: Sage Publications.