Can Accountants and Finance Specialists Be Entrepreneurs?

Can Accountants and Finance Specialists Be Entrepreneurs?

Introduction

Accountants and finance specialists are commonly considered as service providers to customers who require advices and supports in financial management and investment. Ranging from individual business man and woman to large enterprises that have hundreds of thousands employees, accountants and finance specialists are indispensable and crucial for keeping the business heathy in momentary terms. Nonetheless, it is rarely considered as intuitive that accountants and finance specialists can be entrepreneurs. This is perhaps a stereotype in which an entrepreneur is always considered to be a leader while accountants and finance specialists are mostly considered to be the essential assistants to that leader.

A question naturally raises from this stereotype: can accountants and finance specialists themselves be entrepreneurs? A quick answer to this question is always YES according to Kirzner’s (1973) definition of entrepreneurship in which he believes that anyone can potentially become an entrepreneur regardless of the background. Hence, there is no reason why accountants and finance specialists cannot be entrepreneurs. This report aims at investigating further into the issues related to developing entrepreneurship as an accountant or finance specialist.

The report will start by analyzing the traits and skills required to be a successful entrepreneur based on review of theoretical literatures and empirical experiences. Then, by summarizing the skills possessed by accountants and finance specialists, a one-to-one comparison will immediately illustrate what accountants and finance specialists already have and the existing gaps need to be closed in order for them to become entrepreneurs. Having these facts stated, the report will further discuss the various advantages and disadvantages of becoming an entrepreneur as an accountant and finance specialist in managing and leading the firm. Finally, incorporating the discoveries into different industries, the report will continue with discussions on what are the industries that are more suited for accountants and finance specialists to become entrepreneurs. Recommendations will be provided based on the findings in the conclusion.

Traits and Skills of Entrepreneurs

The three main roles of an entrepreneur can be summarized as to identify opportunities, to attract and manage resources, and to lead the organization (Wickham, 2006). The identification of opportunity happens at earlier start-up stage of an entrepreneurship. The ability of recognizing opportunities that others misses, as explained in Kirzner’s (1973) term, is called alertness; and alertness is the most important trait an entrepreneur must possess. However, foreseeing the potential profits in an opportunity does not guarantee success. Rather, the success of an entrepreneurship is determined based on how well the entrepreneur seize and develop the opportunity. This includes the strategic management and leadership which are the other two necessary skills that an entrepreneur needs.  

Management skill does not only play an essential role during the development phase of the business, but comes in to the entrepreneurship as early as the opportunity identification phase. Theorists (Ardichvili, Cardozo, and Ray, 2003) suggest that management skills are crucial in testing whether an opportunity is valid and promising. For instance, one particular ‘fit’ test to the identified opportunity is if the internal and external resources owned by the entrepreneur will be sufficient to develop the opportunity into profitable business (Hills 1995). This test would require the decision maker to be able to accurately evaluate available resources, estimate resources needed, and quantify risks. Many knows that renewable, efficient and clean energy would be a good opportunity in the energy market due to the shortfall of petrol, but not everyone can develop this into business simply due to the lack of the resources required, e.g. research and development cost. Evidently, the evaluation and management of the resources is continuously performed as the business develops due to resources expenditure and accumulation.

Once an idea is founded, developing it into the business and maintaining the business is timely and challenging task. As the leader of the business, an entrepreneur must therefore possess effective and excellent leadership skills.

Leadership has been studied academically for several decades. The development of leadership theories can be traced back to mid-19th century with the Great Man Theory (Carlyle, Sorensen and Kinser, 2013). Various theories from different perspectives have been developed since then: Trait Theory that focuses on the personal qualities, born or made, as traits of leadership (Stogdill, 1974); Behavioral Theories that offers a different perspective in which the behaviors of the leader is the emphasis (Derue, et al. 2011); Contingency Theories that focus on leadership styles such as autocratic style and free-region style (Fielder, 2005); Transactional and Transformational Leadership Theories that focus on  the relationships and the interactions between leaders and others (Judge and Piccolo, 2004).

Although there is no definitive criterion in assessing how well one is qualified as leader, there are several characteristics and functionalities that distinguish leaders from followers. In the content of entrepreneurship, these identities and roles of a leader (director) can be simply explained with the comparison to manager (Hollingsworth, 1999).

Based on the earlier discussion, the role of manager can be broken down to administrate the firm, to maintain resource, to carry out daily operation, and to control process. One the other hand, the role of a leader is to innovate new ideas, to develop the ideas, and to inspire employees. According to Hollingsworth (1999), manager is the one to do things right whiles the leader is the one to the right things. From a time perspective, one can think of manager always focus on the current time while the leader needs to look into the future. Hence, for a qualified leader, he or she, as a bottom line, needs to able to see the ‘correct’ direction and guide the company into this direction. Although, no one can accurately predict what will happen in the future, an excellent leader should be able to analyze current situation and use the analysis and available information to make the correct decision.

The above comparison has illustrated what a leader in a firm must possess for a successful entrepreneurship. However, these demonstration does not mean that a manager cannot be a leader or a leader cannot be a manager. In fact, in the extremely competitive world today, an excellent entrepreneur requires the skills set of both a manager and a leader.

The idea of performing analyses and use them to make decision lead to strategic leadership which belongs to the study of leadership style (Yukl, 2006). As leadership is not just about a role, but  more about action taken. The basis of the action is hence extremely important. Proposing strategies to support leadership is a key skill for an entrepreneur. Such strategies include both qualitatively and quantitatively determining objectives, performing SWOT/PEST analyses, evaluating and predict outcomes of strategy (Yukl, 2006). These results then become essential for how leader would take actions in relation to the company and the employees within.

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