Choose an entrepreneur and answer this to what extend do risk ,rewards Essay

Choose an entrepreneur and answer this to what extend do risk ,rewards and motives contribute towards an entrepreneurs goals - Essay Example Entrepreneurship exists in various forms. It may involve developing new ways of doing things and distributing products, starting a new business, as sources of information, and market middlemen. An entrepreneur is characterized by his search for opportunities that are unseen or ignored by others and taking risks on them in order to get a profit reward (Carsrud & Bra?Nnback, 2009: p35). With all the three factors seeming to play a role, the question is then raised as to the extent to which risk, reward, and motives contribute towards an entrepreneurs goals. This question was put to successful entrepreneur Sir Richard Branson. According to Branson, â€Å"The financial risks and rewards of being an entrepreneur have significant meaning in an entrepreneur’s motivation to open a business† (Personal Communication, 2013). There are several reasons for this, including the fact that over 50% of new start-ups fail in their initial four years (Roth, 2010: p67). Entrepreneurs, on av erage, he contends, will achieve less success over ten years in terms of income than they would have if they would have been employed. In addition, there does not seem to be any proof that entrepreneurs get better rewards if they start a business as compared to invest in stocks with the most likely result being that, from a risk perspective, they do not as much as they would have in the stocks market. However, Branson further says, even with these statistics, it is imperative to note that entrepreneurs account for 66% of British millionaires, despite making up only 20% of the entire labor force, while 80% of the millionaire entrepreneurs are â€Å"self-made†. From these statistics, it is possible to argue that the high risk in financial terms, coupled to the potentially high rewards, enhance the importance of intrinsic motives to an entrepreneur (Roth, 2010: p67). These intrinsic motives include purpose for entrepreneurship, for example, the ability to better the world, the f reedom, and autonomy that entrepreneurship will give an individual, and the reward of overcoming challenges and becoming a master. Branson says that, it is possible to think of the results of a hypothetical proposition, to show the enhanced role of motives over risk and reward. In order to gauge the tolerance to risk of entrepreneurs, three options are given to potential entrepreneurs. â€Å"They can earn a $10 million profit with the chance of success placed at 20%, $5 million of profit and a 50% chance they will be successful, and q $1 million profit for an 80% chance at success†, Branson posits (Personal Communication, 2013). While there is a general perception that entrepreneurs are all profit and risk seeking business people and that they would go for the first option, it is indicative that it is most likely that they will go for the 3rd choice (Casson & Buckley, 2010: p29). Entrepreneurs seek to go into business with the option of getting a higher profit but less of it. Therefore, for successful entrepreneurs like Sir Richard, reward is not as important to entrepreneurs in starting a new business. The creation of a new enterprise carries a lot of risk and uncertainty, which indicates that the entrepreneur’s motives carry more importance than financial rewards. For example, Richard contends that entrepreneurs