Chapter 25- Moving from Entrepreneur to Leader

Question 1

Moving from entrepreneur to leader

Answer 1

• Need for formality – small businesses can be run on an informal
basis – this means that communication takes place without the
need for regular structured meetings, detailed documentation
or official communication channels

• Need for shared ownership – When businesses grow, they
need capital to fund expansion – to obtain funding it is
sometimes necessary to invite new owners to contribute capital

• Greater responsibility to others – An entrepreneur running a
small business is only likely to have responsibility for a small
number of employees – yet when a business grows into a
corporation the number of people employed could be tens of
thousands or more – the livelihoods of these people will often
rest on the decisions made by the leader

• Need for motivation – as the size of the business grows there is
a need to focus more on the workforce – this is because there
are a lot more people to manage – as entrepreneurs develop
into leaders, there is a greater need for motivational skills –
some people are self-motivated but most people need
encouragement and well defined goals.

Question 2

Difficulties moving to a leader

Answer 2

• Adapting the mindset – Entrepreneurs usually have a desire for
greater control over their life, career and destiny – they want more
autonomy and to do things in their own way – however, a different
mindset is needed when the business expands – leaders have to
relinquish some control and learn to delegate and focus on different
things

• Stress – running a business is stressful – there is a constant worry
that the business will not survive and what will happen if the
business collapses

• Sharing the ownership – some entrepreneurs may also find it
difficult to share control and resent other influencing the shape and
direction of a business that they set up from scratch – they may feel
that their leadership is undermined which may cause conflict

• Trust – As the business grows there is a need to delegate and
employ specialists – some leaders find it difficult to delegate and
employ specialists – some leaders find it difficult to delegate and
may become suspicious of new senior staff

Question 3

Overcoming Difficulties

Answer 3

• Delegation – A successful business leader must be comfortable with delegation – delegation of tasks to specialists and experts will improve the performance of the business

• Maturity -
• Earn respect – many difficulties can be overcome when they earn respect from the stakeholders
• Education – attending specialist courses