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A family business is a commercial organization in which decision-making is influenced by multiple generations of a family, related by blood or marriage or adoption, who has both the ability to influence the vision of the business and the willingness to use this ability to pursue distinctive goals. They are closely identified with the firm through leadership or ownership. Owner-manager entrepreneurial firms are not considered to be family businesses because they lack the multi-generational dimension and family influence that create the unique dynamics and relationships of family businesses.

Family business is the oldest and most common model of economic organization. The vast majority of businesses throughout the world from corner shops to multinational publicly listed organizations with hundreds of thousands of employees can be considered family businesses.

The economic prevalence and importance of this kind of business are often underestimated. Throughout most of the 20th century, academics and economists were intrigued by a newer, “improved” model: large publicly traded companies run in an apparently rational, bureaucratic manner by well trained “organization men.” Entrepreneurial and family firms, with their specific management models and complicated psychological processes, often fell short by comparison.

Privately owned or family-controlled enterprises are not always easy to study. In many cases, they are not subject to financial reporting requirements, and little information is made public about financial performance. Ownership may be distributed through trusts or holding companies, and family members themselves may not be fully informed about the ownership structure of their enterprise. However, as the 21st-century global economic model replaces the old industrial model, government policy makers, economists, and academics turn to entrepreneurial and family enterprises as a prime source of wealth creation and employment.

In some countries, many of the largest publicly listed firms are family-owned. A firm is said to be family-owned if a person is the controlling shareholder; that is, a person (rather than a state, corporation, management trust, or mutual fund) can garner enough shares to assure at least 20% of the voting rights and the highest percentage of voting rights in comparison to other shareholders.

The three circles model

The challenge for business families is that family, ownership and business roles involve different and sometimes conflicting values, goals, and actions. For example, family members put a high priority on emotional capital the family success that unites them through consecutive generations. Executives in the business are concerned about strategy and social capital the reputation of their firm in the marketplace. Owners are interested in financial capital performance in terms of wealth creation.

A three-circle model is often used to show the three principal roles in a family-owned or controlled organization: Family, Ownership and Management. This model shows how the roles may overlap.

Everyone in the family (in all generations) obviously belongs to the Family circle, but some family members will never own shares in the family business, or ever work there. A family member is concerned with social capital (reputation within the community), dividends, and family unity.

The Ownership circle may include family members, investors and/or employee-owners. An owner is concerned with financial capital (business performance and dividends). The Management circle typically includes non-family members who are employed by the family business. Family members may also be employees. An employee is concerned with social capital (reputation), emotional capital (career opportunities, bonuses and fair performance measures).

A few people for example, the founder or a senior family member may hold all three roles: family member, owner and employee. These individuals are intensely connected to the family business, and concerned with any or all of the above sources of value creation.

Characteristics

• Members: Family business management is conducted by a group of individuals who are also the members of a single family is the owner and runs the enterprise.
• Mutual Interest: The family members who hold key positions in the business are supposed to influence the business policies as determined by the mutual interest of the firm and the family.
• Position of members: The role and position of the family members in the business enterprise depend upon the relationship between the members.
• Control: The family exercises control over the enterprise since the family is the major shareholder in the company.
• Involving Multiple Generations: The family looks after the business management and operations, and thus the ruin is passed from one generation to the next.
• Integrity and Transparency: These characteristics are built by strong moral principles and determination toward business goals and honesty in transparency in business.
• Mutual Trust: All family members must have mutual trust in every involved member since they have a mutual origin, the same values, business orientation and ethics.

Types of Family Business

• Family Owned Business: This kind of business refers to the one which controls the size of the significant and controlling ownership stake. This stake is controlled and owned by the family members.
• Family Managed and owned Business: In these businesses, a single family or an individual member of the family owns the controlling stake of the business. The major owner allows the family to create and decide upon the objectives, policies and methods.
• Family Led and Owned Business: In this kind of business, while the owner can belong to the family or a member of the family, at least another family member should be a member of the company’s board of directors. The family member can therefore influence major strategies, direction and plans.

Structure of A Family Business

The first circle refers to ‘ownership’, the second circle symbolises ‘family’, and the third circle stands for ‘businesses. The different entity definitions are as follows:

• Non-family non-manager owners: These kinds of owners are external investors who own a particular proportion of the entity but do not work.
• Family owners: These set of groups consist of family members who own a certain portion of the business yet do not participate in its operations.
• Family owner-employees: This kind of ownership involves owning and working as an employee in the company, mostly as a top managerial position-holder.
• Non-family owner’s employees: This is a group of individuals who are not family members, yet they are working employees in the firm and own a specific portion of share capital.
• Family members: This group consists of all family members who work for the company but do not have any share in the company’s capital.
• Non-family employees: These employees of the business firm work under the employment contract, and they are not members of the family and do not own shares in the firm.

Advantages

Commitment

Family firms tend to have a greater sense of commitment and accountability at their heart than non-family firms, as it is not just the needs of the business at stake, but the needs of the family too. This desire for both the family and business to stay strong fosters additional benefits, including a greater understanding of the industry, the organisation and the job; stronger customer relationships; and more effective sales and marketing.

Elsewhere, the Ford Motor Company managed to stay afloat during incredibly tough economic times, when other large businesses like Chrysler and GM were desperate for bailouts. It is likely that there are several reasons for their success, but with the Ford family’s name, reputation and financial standing on the line, it is likely that this encouraged their fighting spirit.

Stability

The leadership of a family business is normally determined by the position of each individual in the family. As a result, there is generally longevity in leadership, which ensures overall stability within a family-run business. In many family-owned companies, the business leader will stay in the position for many years, with life events such as illness, retirement or death being the trigger for change at the top.

Flexibility

Working in a family-run firm requires a lot of flexibility. While non-family businesses tend to have very clearly delineated responsibilities for every role, family members will sometimes be required to wear several different hats, taking on tasks outside of their formal remit where needed.

Long-term outlook

Non-family firms draw up their goals for the next quarter. Family firms, however, think years or even decades ahead. A longer-term perspective is a good way to foster a culture of clear strategy and decision-making throughout the business.

Decreased cost

Economic downturns and other challenging times can be a struggle for many businesses, where the board of directors needs to work out how to keep the business afloat while still paying staff. In family firms, however, it will often be the case that family members are willing to contribute financially to keeping the business afloat during times like these.

It may be that this involves taking a temporary pay cut, contributing some of their own finances, or pausing the payment of dividends while the company gets back on its feet. For the family behind the business, long-term business success is crucial to their financial survival, which gives more flexibility where finances are concerned.

Disadvantages

While it is clear that there are plenty of benefits to family-owned companies, they also have their downsides:

A lack of family interest

In a family business, there can be a great deal of pressure on future generations to keep the business going, even if they have no real interest in doing so. This can result in a workforce or worse, a management – consisting of family members who are apathetic, unenthusiastic and disengaged.

In any other business, it is likely that such an approach would see employees having their contracts terminated. In a family business, this is more of a challenge.

Conflict between family members

The dynamic between different family members, family (and business) history and a blurred boundary between family life and work life can all cause conflict within any family-run business. And the family connections can often make such issues difficult to resolve.

A lack of structure

Family businesses rely firmly on trust but trust alone may not be the best way. It is still vital to take rules seriously both internal rules, and external corporate law.

Nepotism

Some family businesses can fall into the trap of promoting family members to senior management roles, even when it may be clear that the individuals within these roles do not have enough education, experience or skills to fully embrace their responsibilities.

While it can be a challenge to balance family relationships and expectations with finding the right person for the job, a lack of competence at a senior level can have a huge impact on a company’s success, as well as on talent retention.

Succession planning

Research reveals that 62% of employees say they would be “significantly more engaged” with their role if they knew their employer had a clearly defined succession plan in place. However, many family business owners fail to create succession plans, be this whether they feel that it is not needed until further down the line, or because they refuse to admit that the time will come when someone else will need to take the reins.

The reality is that illness, death or even scandal can require a family business to appoint a successor in a very short space of time. Without the right plans in place, it can be very hard for a business to move forward in such an event.

While family-owned companies clearly have plenty of advantages, their very nature can also make sustaining them in the long-term a challenge. The goal for any family business owner should, then, to be clear about what the strengths and weaknesses of a family business can be, in order to determine how to ensure future success.

The term “Loan syndication” refers to the process of involving a group of lenders that fund various portions of a loan for a single borrower. Loan syndication most often occurs when a borrower requires an amount that is too large for a single lender or when the loan is outside the scope of a lender’s risk exposure levels. Multiple lenders pool together and form a syndicate to provide the borrower with the requested capital.

Loan syndication is often used in corporate financing. Firms seek corporate loans for a variety of reasons, including funding for mergers, acquisitions, buyouts, and other capital expenditure projects. These capital projects often require large amounts of capital that typically exceed a single lender’s resource or underwriting capacity.

There is only one loan agreement for the entire syndicate. But each lender’s liability is limited to their respective share of the loan interest. With the exception of collateral requirements, most terms are generally uniform among lenders. Collateral assignments are generally assigned to different assets of the borrower for each lender. The syndicate does allow individual lenders to provide a large loan while maintaining more prudent and manageable credit exposure because the associated risks are shared with other lenders.

The agreements between lending parties and loan recipients are often managed by a corporate risk manager. This reduces any misunderstandings and helps enforce contractual obligations. The primary lender conducts most of the due diligence, but lax oversight can increase corporate costs. A company’s legal counsel may also be engaged to enforce loan covenants and lender obligations.

The Loan Syndications and Trading Association is an established organization within the corporate loan market that seeks to provide resources on loan syndications. It helps to bring together loan market participants, provides market research, and is active in influencing compliance procedures and industry regulations.

Features of Loan Syndication

• Large amount.
• No separate agreement between an individual bank and the borrower.
• No ambiguity used to be there.
• The length of the contract is generally between 3 to 15 years.
• Low risk is found in loan syndication.
• Each bank is not necessarily to contribute an equal amount.

Types:

Underwritten deal

An underwritten deal is one for which the arrangers guarantee the entire commitment, and then syndicate the loan. If the arrangers cannot fully subscribe the loan, they are forced to absorb the difference, which they may later try to sell to investors. This is easy, of course, if market conditions, or the credit’s fundamentals, improve. If not, the arranger may be forced to sell at a discount and, potentially, even take a loss on the paper. Or the arranger may just be left above its desired hold level of the credit.

Arrangers underwrite loans for several reasons. First, offering an underwritten loan can be a competitive tool to win mandates. Second, underwritten loans usually require more lucrative fees because the agent is on the hook if potential lenders balk. Of course, with flex-language now common, underwriting a deal does not carry the same risk it once did when the pricing was set in stone prior to syndication.

Best-efforts syndication

A best-efforts syndication is one for which the arranger group commits to underwrite less than or equal to the entire amount of the loan, leaving the credit to the vicissitudes of the market. If the loan is undersubscribed, the credit may not close or may need significant adjustments to its interest rate or credit rating to clear the market. Traditionally, best-efforts syndications were used for risky borrowers or for complex transactions. However, since the late 1990s, the rapid acceptance of market-flex language has made best-efforts loans the rule even for investment-grade transactions.

Club deal

A club deal is a smaller loan usually $25‒100 million, but as high as $150 million that is premarketed to a group of relationship lenders. The arranger is generally a first among equals, and each lender gets a full cut, or nearly a full cut, of the fees.

Participants:

Lead Bank can also be called an Arrange Bank

The lead bank acts as a manager and is responsible by a borrower for organizing funding based on a specific term that the loan parties decide.

The lead bank must find other banks as lending parties willing to bear risk together to participate in this syndication.

The lead bank must discuss details of the agreement and be responsible for preparing loan documentation with participating banks.

UnderWriting Bank

The lead bank may underwrite the unsubscribed portions of the required loan, or a different bank may fund the loan.

Underwriting banks will take the risk that will likely occur.

Participating Bank

All banks that participate in loan syndication are known as participating banks.

Participating banks will charge fees for their participation.

Agent Bank

The work of the agent bank is to ensure that loan syndication is operating effectively.

The agent bank acts as a mediator between the borrower and lender and has a contractual obligation for both the parties (borrower and lender).

In some cases, the agent bank has additional duties in the agency agreement.

The basic work of agent banks is to channel the funds from all participating banks to the borrower and channel back interest and principal amount from the borrower to participating banks.

Advantages

• Financing takes less time and effort.
• The administration of the loan is extremely efficient.
• It is beneficial for borrowers to establish a good market image.
• Borrowers have flexibility in structure and pricing.
• The borrower need not go to each bank and not apply separate applications to all banks.
• The purpose and period of the loan are fixed.
• The system is simple.

Disadvantages

• Time-consuming process since negotiating with the bank can take various days. Thus, loan syndication is a time-consuming process.
• Borrowers may also be adversely affected by syndicated loan agreements.
• If the problem arises, it may be difficult for borrowers to satisfy all banks simultaneously.
• Managing the relationship between multiple parties is a difficult task.
• If profitability fails, the smallest bank withdraws its capital.

An Entrepreneur (ESTP) is someone with the Extraverted, Observant, Thinking, and Prospecting personality traits. They tend to be energetic and action-oriented, deftly navigating whatever is in front of them. They love uncovering life’s opportunities, whether socializing with others or in more personal pursuits.

Entrepreneurs are the likeliest personality type to make a lifestyle of risky behavior. They live in the moment and dive into the action they are the eye of the storm. People with the Entrepreneur personality type enjoy drama, passion, and pleasure, not for emotional thrills, but because it’s so stimulating to their logical minds. They are forced to make critical decisions based on factual, immediate reality in a process of rapid-fire rational stimulus response.

This makes school and other highly organized environments a challenge for Entrepreneurs. It certainly isn’t because they aren’t smart, and they can do well, but the regimented, lecturing approach of formal education is just so far from the hands-on learning that Entrepreneurs enjoy. It takes a great deal of maturity to see this process as a necessary means to an end, something that creates more exciting opportunities.

Also challenging is that to Entrepreneurs, it makes more sense to use their own moral compass than someone else’s. Rules were made to be broken. This is a sentiment few high school instructors or corporate supervisors are likely to share, and can earn Entrepreneur personalities a certain reputation. But if they minimize the trouble-making, harness their energy, and focus through the boring stuff, Entrepreneurs are a force to be reckoned with.

The Path Less traveled

With perhaps the most perceptive, unfiltered view of any type, Entrepreneurs have a unique skill in noticing small changes. Whether a shift in facial expression, a new clothing style, or a broken habit, people with this personality type pick up on hidden thoughts and motives where most types would be lucky to pick up anything specific at all. Entrepreneurs use these observations immediately, calling out the change and asking questions, often with little regard for sensitivity. Entrepreneurs should remember that not everyone wants their secrets and decisions broadcast.

Seeing opportunities

The first part is seeing opportunities. Everyone sees opportunities. For example, you walk past an empty building, and you fantasize about what you could start there. However, you can also observe an opportunity within an entrepreneurial venture or public organization. For example, a CEO or receptionist envisions another approach that saves the company a lot of money. However, if you don’t take action, it’s nothing more than dreaming and fantasizing.

Seizing opportunities

The second part follows the first part, which is really starting to do something with the opportunity. Or at least investigate whether it makes sense to implement the perceived probability.

Creating value

The third and last part is the creation of value. Even if you exploit the opportunity, meaning the approach that you have devised for the organization where you work actually saves money, the question remains if it is sufficient. Can you make enough money with the business you started in the vacant building? And value is of course, much more than just money.

Value can also mean freedom, to be able to do what you really like and what makes your customers happy. Or social entrepreneurship, where you help solves societies’ problems with a new business. You generate not only value for yourself (income, freedom, proactivity) but also value for others (making customers happy and working towards a better world).

The personality aspects of a true entrepreneur are someone who:

• Uses his manipulating power.
• Gives his opinion without being asked.
• Creates a vision and a novel idea for a competitive advantage.
• Is (too) critical.
• Works focused and shows conscientiousness.
• Likes to organize and manage things; call it execution power (entrepreneur vs manager).
• Keeps an open mind.
• Has a different perception and sees problems as an opportunity.
• Takes criticism personally.
• Does well around others.
• Wants to be the leader of a team.
• Knows how to make others enthusiastic.
• Is at his best when things run smoothly and orderly.
• Is a pain in the ass when things don’t run (at all).
• Thinks constantly about the goals and entrepreneurial strategies.

Characters:

Robust Work Ethic

Successful entrepreneurs know a thing or two about work ethic. Most of the time, they’ll be the first to arrive at the office and the last to leave. If there’s unfinished business, they’ll show up at the office on weekends and holidays and work until the job is complete. These are the people who always have work on their mind, even if they’re enjoying personal time.

Deep Passion

Work ethic and passion go hand in hand. It takes work ethic to keep the business strong, and it takes passion to feel motivated enough to maintain a good worth ethic.

Deep Passion

Work ethic and passion go hand in hand. It takes work ethic to keep the business strong, and it takes passion to feel motivated enough to maintain a good worth ethic.

Motivated Self-Starters

A self-starter doesn’t settle for a draining 9-to-5 job. A self-starter doesn’t give up at the first sign of struggle. A self-starter doesn’t hold things off until it’s too late.

A self-starter is someone who does what needs to be done without being asked or encouraged to do so. They take the initiative on their own projects and lead themselves. They recognize that when things get hard, it’s a challenge that helps them grow as an entrepreneur and make the business stronger.

Eager to Learn

No one knows everything. A new business doesn’t often have staff in every department due to lack of funding. It takes time and resources to build a team. That means entrepreneurs need to learn everything from accounting to marketing from the get-go.

This kind of experience is what makes accomplished entrepreneurs so well rounded. They’ve seen it, been through it and learned it all before.

Easygoing Attitude

Change of plans? Do you need to redo an entire project? A successful entrepreneur will shake off any inconveniencies and start from scratch without getting into a huge rut. In fact, many entrepreneurs will tell you that their businesses turned out much differently from what they had originally envisioned. They’ll also likely tell you that they wouldn’t want their business to have turned out any other way.

“Social innovation is the process of developing and deploying effective solutions to challenging and often systemic social and environmental issues in support of social progress Solutions often require the active collaboration of constituents across government, business, and the nonprofit world”

Social entrepreneurship involves creating new products or services to address social or environmental needs. The products and/or services are made available through existing market structures. These are enterprises with a social betterment goal that are structured to make a profit. This business model creates shared value, meaning that the organization simultaneously generates financial benefits and environmental and/or social benefits.

Social innovation is about creating new social structures that allow issues of justice, education, environmental protection, sustainability and/or community development to be reframed so that new solutions can come forward. Social innovators question the premises on which existing social structures are built and then reimagine systems and institutional relationships to bring about change. The distinction between social entrepreneurship and social innovation is fluid, and there is often overlap between the two changemaking approaches.

Social innovation and social entrepreneurship may work through a variety of organizational architectures to enable change. We can think about organizations as being on a spectrum: At one end of the spectrum are not-for-profit entities that fill vital social and environmental needs through traditional charitable approaches, relying on donations as their primary source of funding. At the other end of the spectrum are for-profit businesses that fill customer needs through market-based mechanisms: selling the product or service for what the market will bear. Many for-profit companies incorporate sustainability and socially responsible practices into their operations and culture, but they are still primarily focused on the financial bottom line. In between these two ends of the spectrum are a range of organizational architectures that innovatively address social and environmental needs by developing new products and services and/or through creative structures for the delivery of these products and services. This space between traditional not-for-profit and traditional for-profit organizations encompasses social innovators and social entrepreneurs.

The Process of Social Innovation

The Open Book of Social Innovation is a useful toolkit emerging from the collaboration between Nesta and The Young Foundation. The volume offers tools and methods used across various social innovation sectors ranging from private to public and provides insights into the process of social innovation:

• Prompts, inspirations and diagnoses: highlight the need for and inspiration behind innovation;
• Proposals and ideas: draw insights and generate ideas through creative methods;
• Prototyping and pilots: test and refine ideas;
• Sustaining: sharpen your idea by identifying ways of sustaining it in the longer term (e.g.: income streams);
• Scaling and diffusion: expand your idea (e.g.: ‘organisational growth, through licensing and franchising to federations and widespread dissemination’);
• Systemic change: the ultimate goal of social innovation the creation of new frameworks or architectures made up of many smaller innovations (e.g.: new technologies, supply chains, institutional forms, skills, and regulatory and fiscal frameworks).

From the users’ perspective, the experience was inefficient and unsatisfactory. But since the centralized computing model was the only one available, users put up with it and built the delays and inefficiencies into their workflow, resulting in an equilibrium, albeit an unsatisfactory one.

System dynamicists describe this kind of equilibrium as a “balanced feedback loop,” because there isn’t a strong force that has the likely effect of breaking the system out of its particular equilibrium. It is similar to a thermostat on an air conditioner: When the temperature rises, the air conditioner comes on and lowers the temperature, and the thermostat eventually turns the air conditioner off.

The centralized computing system that users had to endure was a particular kind of equilibrium: an unsatisfactory one. It is as if the thermostat were set five degrees too low so that everyone in the room was cold. Knowing they have a stable and predictable temperature, people simply wear extra sweaters, though of course they might wish that they didn’t have to.

Entrepreneurial Characteristics

The entrepreneur is attracted to this suboptimal equilibrium, seeing embedded in it an opportunity to provide a new solution, product, service, or process. The reason that the entrepreneur sees this condition as an opportunity to create something new, while so many others see it as an inconvenience to be tolerated, stems from the unique set of personal characteristics he or she brings to the situation inspiration, creativity, direct action, courage, and fortitude. These characteristics are fundamental to the process of innovation.

The entrepreneur is inspired to alter the unpleasant equilibrium. Entrepreneurs might be motivated to do this because they are frustrated users or because they empathize with frustrated users. Sometimes entrepreneurs are so gripped by the opportunity to change things that they possess a burning desire to demolish the status quo. In the case of eBay, the frustrated user was Omidyar’s girlfriend, who collected Pez dispensers.

The entrepreneur thinks creatively and develops a new solution that dramatically breaks with the existing one. The entrepreneur doesn’t try to optimize the current system with minor adjustments, but instead finds a wholly new way of approaching the problem. Omidyar and Skoll didn’t develop a better way to promote garage sales. Jobs and Wozniak didn’t develop algorithms to speed custom software development. And Smith didn’t invent a way to make the handoffs between courier companies and common carriers more efficient and error-free. Each found a completely new and utterly creative solution to the problem at hand.

Once inspired by the opportunity and in possession of a creative solution, the entrepreneur takes direct action. Rather than waiting for someone else to intervene or trying to convince somebody else to solve the problem, the entrepreneur takes direct action by creating a new product or service and the venture to advance it. Jobs and Wozniak didn’t campaign against mainframes or encourage users to rise up and overthrow the IT department; they invented a personal computer that allowed users to free themselves from the mainframe. Moore didn’t publish a book telling mothers how to get more done in less time; she developed the Snugli, a frameless front- or backpack that enables parents to carry their babies and still have both hands free. Of course, entrepreneurs do have to influence others: first investors, even if just friends and family; then teammates and employees, to come work with them; and finally customers, to buy into their ideas and their innovations. The point is to differentiate the entrepreneur’s engagement in direct action from other indirect and supportive actions.

Entrepreneurs demonstrate courage throughout the process of innovation, bearing the burden of risk and staring failure squarely if not repeatedly in the face. This often requires entrepreneurs to take big risks and do things that others think are unwise, or even undoable. For example, Smith had to convince himself and the world that it made sense to acquire a fleet of jets and build a gigantic airport and sorting center in Memphis, in order to provide next-day delivery without the package ever leaving FedEx’s possession. He did this at a time when all of his entrenched competitors had only fleets of trucks for local pickup and delivery they certainly didn’t run airports and maintain huge numbers of aircraft.

Social entrepreneurs often start their venture or initiative after recognizing the prevalence of a certain problem in society and creating a solution to address it using their entrepreneurial skills. Their overall goal is to make a positive societal change while creating social capital to further their objectives.

They firstly analyse the social problem/issue to be tackled. Try to find out the underlying causes and roots of the problem; this is done through thorough social entrepreneurship research, field analysis findings, surveys and observation methods. Then they study and link them in terms of the existing societal patterns and emerging social entrepreneurship trends in society. Then, ideas and strategies are developed to change the people’s mindset, bringing change in their lifestyle and attitude. They try to identify and develop change-makers from the society itself; these change-makers work as role models, motivators and leaders to bring about positive, progressive changes in the entire system.

These change makers form a team, social entrepreneurship network, and a platform for people with similar goals and objectives. This platform allows the interchange of ideas, feedbacks and development of effective strategies to resolve the problem. This platform also associates the funders who want to associate themselves with bringing about positive change in society and the change-makers. The social entrepreneurs collaborate with social innovators, funders, grass-roots leaders, social workers, and community organisations to bring about effective, long-lasting social changes in society.

Roles:

Social entrepreneurs certainly differ when it comes to individual personalities; however, they also share similar characteristics necessary for success as pragmatic individuals willing to undertake significant risks and uncertainties to achieve positive changes in areas that might be resistant to new ideas or approaches.

Social entrepreneurs firstly need to possess a strong passion that drives their desire to see their ideas and initiatives come to fruition, while also adopting a healthy impatience that ties in with their uncomfortableness with sitting back to wait for change to happen. They also need to come up with practical but innovative ideas to social issues and often use market forces and principles. It allows them to break away from constraints imposed by the traditions and customs within the fields of certain disciplines to take risks that others are afraid of taking.

Despite being hopeful of their success and ability to change the minds of others, social entrepreneurs are often able to monitor their own impact and degree of success and set high standards for themselves and their organizations in response to the communities with which they engage. They constantly review their performance using continuous feedback, both quantitative and qualitative, to guide their improvement.

Mission-driven

Social entrepreneurs often focus on generating social value and focus less on profits and revenue. When profits are generated, they are put back into supporting the social mission of the organization. While profit is an important objective of the organization, the money is used towards furthering the social cause and objective.

Ambitious

Social entrepreneurs often tackle major social issues and often strive to improve the lives of certain disadvantaged groups within society. They operate in all kinds of organizations from non-profit organizations, charities, ventures such as for-profit community development banks and organizations that mix elements of non-profit and for-profit organizations.

Strategic

Social entrepreneurs are adept at observing what others might miss. They identify opportunities to improve systems to create new solutions and approaches to create societal value and make a positive change in society. Social entrepreneurs need to be extremely determined and conscientious in order to be relentless in their pursuit of the social objective.

Results-oriented

Social entrepreneurs focus on the end results, which transform existing realities, open up new pathways for the marginalized and disadvantaged, and unlock society’s potential to effect social change.

Resourceful

Social entrepreneurs often lack the strong support offered in the business world of access to capital and market support systems due to their interest in the social context rather than profit generation for shareholders and other stakeholders. They need to be skilled at persuading others to agree with their ideas and support their ambitions through financial, political, and other means.

It focuses on gaining an understanding of how a social problem develops and how an entrepreneur, with the use of his innovative, practical ideas and business strategies, develop solutions to resolve the problem; and motivates him to utilize the available social entrepreneurship resources to overcome the problem to benefit the society as a whole. Social entrepreneurs focus on utilising the various available resources to create a better and progressive society. As social entrepreneurship does not have a concrete definition, groups focused on social entrepreneurship can be categorised into:

• Socially conscientious enterprises; these enterprises focus on sustainable development through social gains.
• Community-based enterprises; are based on societal ventures. The community as a whole utilises the capital to empower itself.
• Social service organisations and professionals; these work to expand social capital for individuals, community and organisations,
• Socio-economic enterprises focus on bringing about profits to the individuals and non-profit social change in the community.

A creative team is a team of individuals supporting a company or organization with their creative skills. Creative teams are typically filled with writers, artists, designers, and others who can look at a problem and develop creative content to help solve it.

Beyond just developing content, however, there should also be a strategic component to your creative team. While there may be others within the organization who shape the strategic direction of your content, the creative team should at the very least have input.

Not all creative approach their work with a strategic mindset some may be content to fulfil a request based on the input they receive from the team. But at some level, your creative team must be able to advise and recommend a strategic approach for how content is developed and executed.

A creative team structure refers to the hierarchy of the individual designers in the department and clarifies their roles and responsibilities. There are many positions in a creative department, and not every organization has a single employee dedicated to each task. Some examples of job titles in an organization’s creative agency may include:

Innovation is the act of developing a new process or product and introducing it to the market. It is essentially an entrepreneurial act, whether it takes place in a start-up firm, a large organization, a not-for-profit, or a public-sector agency. Innovation means change: sometimes radical change, such as the development of the computer, and sometimes incremental change, such as the modification of existing computer software. In either case, managers must develop processes to encourage and guide the changes taking place.

Sources of, and opportunities for, innovation in organizations are described below. Finally, the management principles underlying an innovative organization are identified.

Innovation is the specific function of entrepreneurship, whether in an existing business, a public service institution, or a new venture started by a lone individual in the family kitchen. It is the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth.

Today, much confusion exists about the proper definition of entrepreneurship. Some observers use the term to refer to all small businesses; others, to all new businesses. In practice, however, a great many well-established businesses engage in highly successful entrepreneurship. The term, then, refers not to an enterprise’s size or age but to a certain kind of activity. At the heart of that activity is innovation: the effort to create purposeful, focused change in an enterprise’s economic or social potential.

Sources of Innovation

There are, of course, innovations that spring from a flash of genius. Most innovations, however, especially the successful ones, result from a conscious, purposeful search for innovation opportunities, which are found only in a few situations. Four such areas of opportunity exist within a company or industry: unexpected occurrences, incongruities, process needs, and industry and market changes.

Three additional sources of opportunity exist outside a company in its social and intellectual environment: demographic changes, changes in perception, and new knowledge.

True, these sources overlap, different as they may be in the nature of their risk, difficulty, and complexity, and the potential for innovation may well lie in more than one area at a time. But together, they account for the great majority of all innovation opportunities.

Unexpected Occurrences

Consider, first, the easiest and simplest source of innovation opportunity: the unexpected. In the early 1930s, IBM developed the first modern accounting machine, which was designed for banks. But banks in 1933 did not buy new equipment. What saved the company according to a story that Thomas Watson, Sr., the company’s founder and long-term CEO, often told was its exploitation of an unexpected success: The New York Public Library wanted to buy a machine. Unlike the banks, libraries in those early New Deal days had money, and Watson sold more than a hundred of his otherwise unsalable machines to libraries.

Fifteen years later, when everyone believed that computers were designed for advanced scientific work, business unexpectedly showed an interest in a machine that could do payroll. Univac, which had the most advanced machine, spurned business applications. But IBM immediately realized it faced a possible unexpected success, redesigned what was basically Univac’s machine for such mundane applications as payroll, and within five years became a leader in the computer industry, a position it has maintained to this day.

The unexpected failure may be an equally important source of innovation opportunities. Everyone knows about the Ford Edsel as the biggest new-car failure in automotive history. What very few people seem to know, however, is that the Edsel’s failure was the foundation for much of the company’s later success. Ford planned the Edsel, the most carefully designed car to that point in American automotive history, to give the company a full product line with which to compete with General Motors. When it bombed, despite all the planning, market research, and design that had gone into it, Ford realized that something was happening in the automobile market that ran counter to the basic assumptions on which GM and everyone else had been designing and marketing cars. No longer was the market segmented primarily by income groups; the new principle of segmentation was what we now call “lifestyles.” Ford’s response was the Mustang, a car that gave the company a distinct personality and reestablished it as an industry leader.

This is a caricature, to be sure, but it illustrates the attitude managers often take to the unexpected: “It should not have happened.” Corporate reporting systems further ingrain this reaction, for they draw attention away from unanticipated possibilities. The typical monthly or quarterly report has on its first page a list of problems that is, the areas where results fall short of expectations. Such information is needed, of course, to help prevent deterioration of performance. But it also suppresses the recognition of new opportunities. The first acknowledgment of a possible opportunity usually applies to an area in which a company does better than budgeted. Thus genuinely entrepreneurial businesses have two “first pages” a problem page and an opportunity page and managers spend equal time on both.

Incongruities

Alcon Laboratories was one of the success stories of the 1960s because Bill Conner, the company’s cofounder, exploited an incongruity in medical technology. The cataract operation is the world’s third or fourth most common surgical procedure. During the past 300 years, doctors systematized it to the point that the only “old-fashioned” step left was the cutting of a ligament. Eye surgeons had learned to cut the ligament with complete success, but it was so different a procedure from the rest of the operation, and so incompatible with it, that they often dreaded it. It was incongruous.

Process Needs

Process need innovations are those which are created to support some other process or product. The development of the ATM (automatic teller machine) and now web-based and Internet banking options allow individuals to do their banking when the bank is closed and without relying on tellers being available. This has freed tellers from performing many routine functions such as cashing checks and has improved both efficiency and profit margins for banks.

Market and Industry Structure Changes

Industry structures change in response to growth and changes in the marketplace. One of the most dramatic changes can be seen in the health care industry. The rise of HMOs (health maintenance organizations) and the decline of the traditional fee-for-service plans have impacted the health-care industry as a whole. The development of the personal computer also had a far-reaching impact on the computer industry as a whole. Until the personal computer, manufacturers of large mainframe computers, terminals, and software developed for specific uses within a firm dominated the computer industry. With the adoption of the personal computer and advent of the laptop computer, the composition of computer sales and marketing changed dramatically.

Demographic Changes

Managers have known for a long time that demographics matter, but they have always believed that population statistics change slowly. In this century, however, they don’t. Indeed, the innovation opportunities made possible by changes in the numbers of people and in their age distribution, education, occupations, and geographic location are among the most rewarding and least risky of entrepreneurial pursuits.

Changes in Perception

Americans have become more health conscious and we have seen the rise in popularity of stores such as GNC which cater to the demand for vitamins and other supplements. Similarly, stores such as Whole Foods provide organic produce, meats, dairy, and fish free from additives to satisfy a growing market demand for chemical-free products.

A change in perception does not alter facts. It changes their meaning, though and very quickly. It took less than two years for the computer to change from being perceived as a threat and as something only big businesses would use to something one buys for doing income tax. Economics do not necessarily dictate such a change; in fact, they may be irrelevant. What determines whether people see a glass as half full or half empty is mood rather than fact, and a change in mood often defies quantification. But it is not exotic. It is concrete. It can be defined. It can be tested. And it can be exploited for innovation opportunity.

New Knowledge

Among history-making innovations, those that are based on new knowledge whether scientific, technical, or social rank high. They are the super-stars of entrepreneurship; they get the publicity and the money. They are what people usually mean when they talk of innovation, although not all innovations based on knowledge are important.

Knowledge-based innovations differ from all others in the time they take, in their casualty rates, and in their predictability, as well as in the challenges they pose to entrepreneurs. Like most superstars, they can be temperamental, capricious, and hard to direct. They have, for instance, the longest lead time of all innovations. There is a protracted span between the emergence of new knowledge and its distillation into usable technology. Then there is another long period before this new technology appears in the marketplace in products, processes, o r services. Overall, the lead time involved is something like 50 years, a figure that has not shortened appreciably throughout history.

Business aims refer to the business’s long-term strategy. It is a mission statement offering a clear vision of your supporting objectives and strategic goals to achieve as aim. While the business goals are a three to five-year set time frame. The business objectives determine your actions towards achieving business goals and are the targets and success measures.

Creating an aim for your business means to define the purpose, what it has to achieve, and to know why it exists. Startups must ensure to deliver excellent customer service, offer access 24/7, and sell sustainable locally-sourced products. So, if you are planning to start your own health and wellness line, it is best to work with quality suppliers in your community like your local gummy manufacturer. The setting of business goals is for a long-term defining your business statement. It should be a series such as increasing brand awareness, increasing the business size, capturing market share and improving customer service.

Setting short-term business objectives is a must for startups. It will keep them aware of their target to achieve by the financial year-end. To achieve strategic goals for entrepreneurs in the longer-term, focusing on short-term objectives is a must. Allocate individuals and teams to carry out functions and achieve the targets and milestones.

Entrepreneurial vision is:

• The ability to identify entrepreneurial opportunities that exist, those that represent untapped markets and underserved markets, and those that can be created by applying existing technologies to new fields and new markets.
• The ability to create entrepreneurial opportunities through the invention, development and exploitation of entirely new ideas, products and services, and/or the creation of new industries, infrastructures, and ways of doing business.

Organizational Objectives

Self-driven

People have many entrepreneurship objectives, and it is the act of starting a business. It means to create a job for yourself as an entrepreneur and for others. It means you must be self-driven.

Pursue self-vision

Pursuing your ideas is objective. It is different from work that demands you to do specific duties and handle responsibilities. Handling the responsibilities in your job may not be your true passion. It is the entrepreneurs who have a different destiny, and it works as a motivating factor to initiate a business. You can make decisions and start pursuing your ideas as an entrepreneur.

Own Your Time

As an entrepreneur, the aims and objectives of entrepreneurship are many that you may have to dedicate extra hours at work. It is essential at the inception, though you can choose to work extra hours as you wish. You can work from home and possibly if your family requires attention. People choose entrepreneurship to have control of their time and to own their time. As an entrepreneur, you need not request a holiday to go on vacation. Moreover, you have the liberty of eliminating the community as you can always work from home.

Financial objectives

Because a large percentage of new businesses do not survive much beyond their launch. The entrepreneur discovers that the business idea is not viable – the business cannot be run profitably or it runs out of cash. Start-ups have a high failure rate.

Survival is about the business living within its means. To survive, the business needs to have enough cash to pay the debts of the business as they arise – suppliers, wages, rent, raw materials and so on. To survive, a business needs to have:

If survival can be assured, then profit is the next most important financial objective for a new business. A profit is earned when the revenue of the business exceeds the total costs. The entrepreneur can choose to reinvest (aka “retain”) the profit in the business, or take it out as a personal payment or dividend.

For many small business owners, profit is the return for all the hard work and risks taken. Profit is thereward for taking a risk and making an investment. Ideally, the profit earned is sufficient to provide the entrepreneur with enough income to live. In many cases it will be more than sufficient, once the business has been trading successfully for a few years

However, it is important to appreciate that, to make a sustainable profit, a new business needs to be able to:

• Add value
• Sell into a large enough market

Non-financial objectives

Contrary to popular belief, starting a business is not always about financial objectives. Very often a new business is started with other, non-financial objectives in mind.

Some of the non-financial motives of the entrepreneurs:

• More control over working life; want to choose what kind of work is done. The need for greater independence is a major motivator.
• Need a more flexible and convenient work schedule, including being able to work from or close to home. This motive is an important reason behind the many home-based business start-ups
• Feel that skills are being wasted and that potential is not being fulfilled
• Want to escape an uninteresting job or career
• A desire to pursue an interest or hobby
• Fed up with being told what to do want to be the boss!
• Want the feeling of personal satisfaction from building a business
• Want a greater share of the rewards from the effort being put in compared with simply being paid by an employer
• Fed up with working in a business hierarchy or bureaucratic organisation (people with entrepreneurial characteristics often feel stifled working and having to co-exist with others.

Entrepreneurship has traditionally been defined as the process of designing, launching and running a new business, which typically begins as a small business, such as a startup company, offering a product, process or service for sale or hire. It has been defined as the “Capacity and willingness to develop, organize, and manage a business venture along with any of its risks in order to make a profit”. While definitions of entrepreneurship typically focus on the launching and running of businesses, due to the high risks involved in launching a start-up, a significant proportion of businesses have to close, due to a lack of funding, bad business decisions, an economic crisis or a combination of all of these” or due to lack of market demand. In the 2000s, the definition of “entrepreneurship” has been expanded to explain how and why individuals (or teams) identify opportunities, evaluate them as viable, and then decide to exploit them.

Evolution of Entrepreneurship

The need and the constant necessity for a good leader is one of the many factors that drive the evolution of entrepreneurship. Besides this, there are a few other factors:

• Trading: With the improvement in communication between the countries and the advancement in transportation, start the process of trading.
• Advent of stable specialization and communities: When more and more individuals start to settle in secure communities, a huge change was noticed in their lifestyles. Each group had a leader who was qualified and specialized in one task and that helped in speeding the development of leadership skills and innovation.
• Need of independent career: More and more people are looking for a career path that is totally independent. The majority started to take risks by developing their own businesses in order to achieve maximum benefits.

In the Earliest period, definition of entrepreneurship began as early as the Marco Polo who comes to the Middle East for trade. Marco Polo has signed an agreement with the capitalists to sell their products. In the contract merchant adventurer took a loan at 22.5% rate including insurance. Capitalist was the passive risk bearer and merchant adventurer took the active role in trading, bearing all physical and emotional risks. When the merchant adventurer successfully sold the goods and completed the trip, the profits were divided with the capitalist taking most of them up to 75%, while the merchant adventurer settled for the remaining 25%.

In middle ages, Entrepreneur is described as someone who is involved in the care and control of a large production projects. It is possible to control the project using the resources provided by the government. In this case, the entrepreneur does not bear any risk. Entrepreneurs in this age, is a have control and authority of construction works such as public buildings and churches. A typical entrepreneur in the middle age was the priest.

In 17th century, the evolution of entrepreneurship can be related with the relationship between risk and entrepreneurs. Entrepreneurship is the person who signed the contract agreement with the government to provide a service or supply products that have been determined. The contract price is fixed. Then, the entrepreneurs are fully responsible for the gains and losses of the business.  John law, a Frenchman was one of the entrepreneurs in that period. The founder of the royal bank of France and the Mississippi Company, which had an exclusive franchise to trade between France and the new world. Monopoly on French trade eventually led to collapse of the company.  Richard Cantillion, an economist defines entrepreneurs earlier. In his view, the entrepreneur is risk insurers. Merchants, farmers, craftsmen, and so is an entrepreneurs. They buy things at a certain price and sell it at a price that is uncertain, with the risks.

In the 18th century, the person with capital was differentiated from the one who needed capital. The entrepreneur was distinguished from the capital provider. One reason for this differentiation was the industrialization occurring throughout the world. Eli Whitney was an American inventor best known for inventing the cotton gin. This was one of the key inventions of the industrial Revolution. Thomas Edison, the inventor of many inventions. He was developing new technologies and was unable to finance his inventions himself.  Edison was a capital user or an entrepreneur, not a provider or a venture capitalist.

In 19th and 20th century, Entrepreneurs are not always associated with the management.    According to Merriam-Webster’s online dictionary, an entrepreneur is one who organizes, manages, and assumes the risk of a business or an enterprise. The entrepreneur organizes and manages an enterprise for personal gain. The materials consumed in the business, for the use of the land, for the services he employs, and for the capital he requires. Andrew Carnegie is one of the best examples of this definition.  Carnegie, who descended from a poor Scottish family, made the American Steel Industry one of the wonders of the industrial world.

In the middle of the 20th Century, the function of the entrepreneurs is to recreate or revolutionize the pattern of production by introducing an invention. Innovation, the act of introducing some new ideas, is one of the most difficult tasks for the entrepreneur. For example, Edward Harriman, who reorganized the railroad in the United States and John Morgan, who developed his large banking house by reorganizing and financing the nation’s industries. Besides, the Egyptian who designed and built great pyramids out of stone blocks weighing many tons each, to laser beams, supersonic planes and space stations.

In 21st century, Entrepreneurs are known as a hero for Free Enterprise market. Entrepreneur of the century created many products and services and is willing to face a lot of risks in the business. According to Kuratko & Hodgetts, most people say entrepreneurs are pioneers in creating new businesses. In the year 2005 Hisrich, Peter and Shepherd regarded entrepreneur as an organizer who controls, systematize, purchases raw materials, arranges infrastructure, throw in his own inventiveness, expertise, plans and administers the venture.

The Future of entrepreneurship will be growth with development of technologies. The modern technologies and internet have improved the ways of conduct business. Entrepreneurs now have the luxury of putting their business idea into action through the click of button.

John Kao has developed a conceptual model of entrepreneurship in his article: Entrepreneurship, creativity and organisation in 1989.

This model has four main aspects:

1. Entrepreneurial Personality: The overall success of a new venture largely depends upon the skill, qualities, traits and determination of the entrepreneur.
2. Entrepreneurial Task: It is a role played by entrepreneur in an enterprise. The major task of the entrepreneur is to recognize and exploit opportunities.
3. Entrepreneurial Environment: It involves the availability of resources, infrastructure, competitive pressures, social values, rules and regulations, stage of technology etc.
4. Organisational Context: It is the immediate setting in which creative and entrepreneurial work takes place. It involves the structure, rules, policies, culture, human resource system, communication system.