Before starting a business, an entrepreneur should know about the ethics, principles and rules of entrepreneurship. Prof. Somnath Dutta, Strategic Management Specialist has made it easy for new generation entrepreneurs. He has shared the five principles of effectuation. These five principles are very useful and practical for a non-entrepreneur. If a non-entrepreneur will practice these principles and techniques he will be able to think like an entrepreneur.
- The Bird in Hand:-
An entrepreneur always tries to use the most what he/she has, who they are and what they know. A perfect entrepreneur will never wait for the right resources to come. What resource he already has, he will always try to utilize the most of it. This principle helps an entrepreneur to innovate new ideas, it lets him start get going and not wait for the world to help him out.
“An entrepreneur will first look at what he has and not what he has to get”- Prof. Somnath Dutta.
- Affordable loss:-
There is always a certain amount of risk involved, no matter what you do. Similarly, an entrepreneur too takes a risk. He looks at the worst case scenario and tries to find out what would be the maximum loss that can be incurred and then he thinks whether he can afford it or not. “We the non-entrepreneurs look at the projected profit while an entrepreneur looks at the loss. If he can afford it, he will take the risk.” Says Prof. Somnath Dutta.
Whenever there is chaos we find disaster in it, we fail to identify the opportunity hidden behind it. An entrepreneur always sees a problem as an opportunity and tries to convert that into a potential business.
- Crazy Quilt:-
Non-entrepreneurs have a fixed set of stakeholders in their mind and they approach the same people to get some resource. An expert entrepreneur takes his idea to different set of people and sees how or in what way they can contribute to his business. So that the business will be looked upon not just by a single stakeholder, but there will be multiple people who look at the solution from their perspective. This helps him to not restrict his idea within defined boundaries. In this way a product becomes more innovative and something new and different comes up. An entrepreneur has a huge network with not just a preconceived group of people but all possible stakeholders.
- Pilot in the Plane:-
An entrepreneur needs to be proactive and do not reactive. An entrepreneur tries to control change and does not try to predict the future. He will try to guide the industry, lead the industry, break the norms and not wait for the market to change.
“An entrepreneur does not love to be the passenger of the plane, but he wants to be the pilot of the plane” – Prof. Somnath Dutta.
A non- entrepreneur can practice these principles to think like an entrepreneur. He/she can get in to the mind set of an entrepreneur if he thinks in line with these 5 principles of effectuation.