Page 2: Entrepreneurship
There are three important aspects of entrepreneurship risk taking, innovation and organisation. Entrepreneurship exists in many different types of business:
- Risk taking and innovation is required to start up small sole trader businesses owned by one person and partnerships involving a number of partners.
- Enterprise is also necessary in big companies like Marks & Spencer, Virgin or CMC to enable the business to grow.
Peter Cruddas was born in Hackney, London and left school at 15. To get to where he is today he has worked hard and thrived on taking risks. He started out working in a bank telex room where he learned to trade in foreign exchange markets. He saved his bonuses and by the time he was 36, he owned his own home (having paid off the mortgage). It was at this point that he began to develop as an entrepreneur by investing personal savings of £10,000 in his own business, Currency Management Consultants (CMC).
People start their own business for a variety of reasons. Some have a bright idea they want to develop; others become unemployed and start their own business to survive. Some set up to be their own bosses. Many, like Peter, spot a gap in the market where they can do something innovative that has not been done before. This requires a willingness to take a risk to introduce the new idea. In the mid-1990s Peter saw that many UK banks would not supply foreign exchange currencies to Middle East banks due to the Gulf War with Iran. Peter used his consultancy business CMC to fill this gap.
After five years he saw another opportunity when a software developer explained how he could use the internet to transform his business. Having worked in the foreign exchange markets, he understood how this superfast technology would enable traders to make financial exchanges at the touch of a computer key. Despite opposition from his finance director and company secretary, Peter invested £500,000 over two years in the technology. This allowed potential traders to buy and sell commoditiessuch as shares, oil and currencies instantly. Peter Cruddas had developed an innovative service that financial traders across the globe wanted to use.
The third element of entrepreneurship is organisation. CMC is a large organisation built on a strong organisational platform. Good organisation depends on effective planning and monitoring and involves:
- obtaining the finance to support your organisation
- creating the systems, for example, having the right software
- employing the right people to ensure the company reputation is secure. Although Peter Cruddas is the Chair of CMC, he relies on people at every level within his organisation to think for themselves to be enterprising rather than to wait to be told what to do.