In what extent do risk, rewards, and motives contribute towards entrepreneurs goals?

Henry Ford
Entrepreneurship is no easy task for many have invested all their savings in businesses
only to fail miserably after a short period. The fact that so many people find it hard to start and
maintain successful business ventures indicate that entrepreneurship is a reserve of the few. The
path towards successful entrepreneurship has many curves and hills, not forgetting the detours
and dead ends. The challenging path towards successful entrepreneurship can be clearly
illustrated by analysing the famous business of all time Henry Ford succeeded in his automobile
venture. Fords success in entrepreneurship began with a dream to make an affordable car that
would benefit a multitude of Americans. However, the road towards making this dream a reality
was mulled in numerous challenges and discouragement as he was quoted saying No man of
money even thought of it as a commercial possibility,. This meant that even financiers were not
willing to support his idea. Despite the challenges, Ford is today renowned as the founder of the
Ford Motor Company earning him the title of the greatest entrepreneur of all the time. The
question many want to be entrepreneurs ask themselves is what made Henry Ford successful in
the automobile venture while everyone else thought he was headed to failure? Against the
backdrop of Henry Fords success story in entrepreneurship, this essay highlights the extent to
which risk, reward and motive contribute towards achieving entrepreneurship goals.
Risk
Right from the onset of the journey towards the actualization of his dream, Ford knew
that success was not automatic and that there was a higher possibility of failure than success.
However, Ford did not let this negative mindset to discourage him from his dream. His vision
was clear and he successfully managed to convince various businesspersons to finance his risky

business of making horseless carriages. The first company failed and so did the second. Many
novice entrepreneurs usually take off at the first instance of failure, but Ford was not discouraged
by the consecutive failures. Seeing that he had already invested heavily in these two previous
ventures, he had to find a way to revive the sinking fortunes and his solutions was to take even
biggest risks by building racing cars. Fortunately, this venture proved to be a good gamble and he
managed to attract additional financial backup from previously sceptic investors. Subsequently,
the extra financial support enabled him to establish his third venture, the Ford Motor Company.
However, Ford was determined to fulfil his initial dream of penetrating the American
automobile market, and he went on undertaking further daring risks with his now Ford Motor
Company. For instance, he could slice the price of the ModelT so steeply that he risky taking
irreversible losses. Ford wrote, Our policy is to reduce the price, extend the operations, and
improve the article, and that You will notice the reduction of price comes first. The idea was
that the huge price cut would increase sales, and indeed the plan worked because after reducing
the price of ModelT from $850 to $600 the sales increased from 18,000 to 168,000 between
1908-1913. it is obvious that Henry Ford undertook great risks before his business could become
a success. However, it is worth noting that he undertook calculated risks rather than blind risks.
Therefore, it would be worthwhile to conclude that risk undertaking plays a huge role in
achieving entrepreneur goals. The dilemma is how to distinguish a risk that is likely to increase
the value of the business because many would be entrepreneurs have undertaken blind risks that
led to failure of their ventures. Damodaran explains that many entrepreneurs fail because they
expose their business to risks that it should not be exposed and end up failing miserably (356).
Reward

The ability to take risks in entrepreneurship is closely linked to an entrepreneurs vision

about the end results either in form of financial rewards of otherwise. The innovator he is, Henry
Ford saw an opportunity for a new product that would go a long way in solving a persisting
transport problem among the American citizen. Although it was big gamble to venture into a
little known terrain, he knew that if he vision could be actualized he stood to gain great monetary
and other rewards. (239) explains that the vision about possible reward after successful business
undertaking is what keeps most entrepreneurs focused in their ventures even when failure is
eminent. Ford could have chosen any other business to venture into, however, the auto industry
looked promising since it was just emerging, and thus any successful venture meant huge profits
to the entrepreneur. The end rewards kept Ford focused on his goal even when financiers turned
him award. It is said that Ford was rejected in so many offices in Detroit when he went seeking
funds to undertake his venture. Moreover, while his vision could be achieved using the minimal
of resources, the entrepreneur knew that quality cars would fetch more profits than cheaply
assembled cars. He subsequently sourced for steel from France and went ahead to bring in an
expatriate to ensure that the company only produced quality cars. To a larger extent the
possibility of a reward is what motivated Ford to undertake the various risks. For instance, the
move to slash the prices of ModelT was motivated by a promise of huge profits. The idea was to
reduce the price to a level that would guarantee more sales. Ford wrote, Every time I reduce the
charge for our car by one dollar, I get a thousand new buyers, Ford rejoiced. Alongside the
lower prices, he pushed the designers to improve on product quality and this further soared the
demand for ModelT, and obvious profits were huge. Therefore, reward contributes largely in
achieving entrepreneur goals.
Motive

A business idea begins with a motive. More often, an entrepreneur identifies a problem
and comes up with innovative ways to solve that problem and make profits in the process. Henry
Ford vision was born by observing a horse-drawn carriage whereby he thought of what would
become if he built a horseless carriage in form of a car. The motive was to make affordable cars
that would solve the problem of many Americans. While many scoffed at the idea, Ford
persisted, persevere the numerous instances of failure, and stayed focused until his motive could
be achieved. Three companies later, the Ford Motor Company was born and Fords dream was
finally realized. While many entrepreneurs tend to compromise on quality when their products
become successful, Ford did not lose his focus on quality cars and kept on improving every time.
In conclusion, entrepreneurship is seemingly becoming extremely important as the world
is seeking innovative entrepreneurs to solve the 21st century financial crisis. The story of Henry
Ford may seem old but it has very significant lessons that are still relevant to present day
entrepreneurs. It is evident that to achieve entrepreneur goals, an individual need to have a
motive. Moreover, such a person should not be afraid of taking calculated risks so as to achieve
the expected rewards. The three variables, risk, reward and motive works simultaneously to
enable an entrepreneur actualize his/her business dreams.

Reference List

Casey, J.B., and Dodge, H., From the Curators Henry Ford and Innovation,
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2014).
Damodaran, A., Strategic Risk Taking: A Framework for Risk Management, Upper Saddle River,
N.J., Wharton School Pub, 2008.
Hyrsky, K. and Tuunanen, M., Innovativeness and Risk-taking Propensity: A Cross-Cultural
Study of Finnish and U.S. Entrepreneurs and Small Business Owner, LTA, vol. 3, no.
9,2001, pp.238-256.
thehenryford, Ford Motor Company Chronology, thehenryford.org/exhibits/fmc/chrono.asp
,2013 (accessed 15 March 2014)