“Often when people think of entrepreneurialism, they think of someone who launches and runs an early stage business,” says Bill Schumacher, senior vice president and market leader at Westfield Bank. “But an entrepreneur could be the leader of an established company, or anyone within a company who’s responsible for finding ways to enhance and improve existing products, or to create new products in order to stay ahead of the competition through continuous innovation.”
Entrepreneurialism doesn’t just happen organically in an organization, he says. It’s encouraged by leadership and needs continued support to survive.
“Leadership can empower a group or department to be open minded and share their thoughts and ideas openly without fear of criticism,” he says.
Smart Business spoke with Schumacher about entrepreneurship in business: what it looks like, how it’s nurtured and what role banks play in helping entrepreneurial companies get their financial footing.
Why is entrepreneurship in business important?
Entrepreneurship in business helps, in broad terms, identify new products and services and adapt to a changing world. It’s the strategic practice of creativity. It’s collaborative and is undertaken throughout an organization with the aim of doing things better or doing them in a way that hasn’t been done before.
Companies survive by trying to do things differently. There’s always a competitor lurking, so there are always improvements that can be made to stay competitive not just locally, but nationally and even globally.
Entrepreneurship is a way of being proactive, testing the way a company thinks and behaves in order to gain an edge, rather than be reactive. It helps companies think outside the box.
What does entrepreneurship in business look like in practice?
Entrepreneurship in business is top-down and intentional. It is embedded in a company’s culture.
Clear priorities should be established, and processes should be put in place to get feedback and measure the results to evaluate whether what’s being done to move the needle is effective relative to the goals that have been set. There should be regular meetings and communication to discuss progress. A Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis is a concise and proven process to evaluate the progress made.
It’s great to think big and shoot for the stars, but too often companies do little to no planning regarding their capital needs and how they’ll finance their ideas. An idea on its own won’t gain traction without financial backing. So many initiatives fail not because the idea was bad, but because it was undercapitalized.
How does entrepreneurship in business relate to banking and lending?
Banks play a key role as companies look to take their entrepreneurial ideas to market. Companies need banks to provide the financing to fund innovations but also need a banking partner that can properly structure that financing.
Bankers also act as advisers to companies and deal with many types of businesses in a variety of industries and of various sizes. That gives bankers a lot of experience, wisdom and knowledge about what businesses do right and what they do wrong.
There is a lot of nonlending advice and counseling that comes from a good banking relationship. Bankers can help identify what investments should be made or when it’s better to pass, whether a company is making the right decision or paying a fair price. Those conversations require trust between a business and its banking partner.
Entrepreneurial companies are innovative in their thinking and bold in their decision making. But to survive, companies also need strong financial oversight and a trusted partner to guide them through their financial decision-making. Boldness is good, but it has to be tempered by wisdom.
Entrepreneurialism is alive in local businesses, but well-thought-out plans are critical to success. Companies should hire entrepreneurially minded employees and work with knowledgeable advisers to enhance the chances that the ideas employees generate will succeed.
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