Entrepreneurship Development

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 What is “entrepreneurship”?
 Why be an entrepreneur? Why not?
 Are you interested to learn
entrepreneurship? Why?

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 COURSE OBJECTIVE

To increase students’ understanding of

entrepreneurships and small business;
To prepare engineering students with the required
entrepreneurship tools and inspirations they need to
start and grow a successful business.
To develop students’ ability to integrate the various
functional activities involved in managing a small
business venture

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 OUTLINE
 Introduction
 Advantages of Entrepreneurship
 Entrepreneurial Process
 Factors Favoring Entrepreneurship
 Characteristics of an Entrepreneur
 Entrepreneurial Decision Process
 Current Entrepreneurial Trends

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 Introduction

WHO IS AN ENTREPRENEUR?
 What are the profiles of Entrepreneurs?

 Are Entrepreneurs Born or Made?

 What is the distinction between Entrepreneurship

and Entrepreneurs?

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 WHO IS AN ENTREPRENEUR?
Entrepreneur is a person who owns, organizes,
manages and runs an enterprise assuming the risk of a
business or enterprise or, Entrepreneurs are action-
oriented, highly motivated individuals who take risks
to achieve goals.
Entrepreneur is a person who has the ability to see
and evaluate business opportunities to gather the
necessary resources to take advantage of them, and to
initiate appropriate action to ensure success.

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 Cont…

 Entrepreneur is someone who is specialized in taking

judgmental decisions about the coordination of
scarce resources
Entrepreneur is an individual who:
 Has the ability to identify and pursue a business
opportunity
 Undertake a business venture
 Raises the capital to finance it
 Gathers the necessary resources
 Set goals for himself/herself and others
 Assumes major portion of the risk
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 Cont…

 Entrepreneur is a person who creates a new

business in the face of risk and uncertainty for the
purpose of achieving profit and growth by
identifying opportunities and assembling the
necessary resources to capitalize on those
opportunities.

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CONT…
 Definition: Entrepreneur
 An individual who bears the risk of operating business in the face
of uncertainty about the future conditions

Definition:Entrepreneurship
It is a philosophy or process through which an entrepreneur seeks
innovation and employment.

Standard definition
Entrepreneurship is the process of creating something different
with value by devoting the necessary time and effort, assuming the
accompanying financial, social risks and receiving the resulting
rewards of monetary and personal satisfaction and independence.
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 Cont…

Entrepreneur Entrepreneurship Enterprise

The person The process The outcome

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Forms of Entrepreneurship
 Entrepreneurship can take three different forms

1. The individual entrepreneur

2. Intrapreneur: a person who does entrepreneurial work
within large organization
3. Social Entrepreneur: People who drive social innovation
and transformation in various fields including education,
health, environment and enterprise development

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 ENTREPRENEURS VS. INTRAPRENEURS
 Entrepreneurs are people that notice
opportunities and take the initiative to mobilize
resources to make new goods and services.

 Intrapreneurs also notice opportunities and take

initiative to mobilize resources, however they
work in large companies and contribute to the
innovation of the firm.

Intrapreneurs often become entrepreneurs.

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ENTREPRENEURIAL SKILLS

The following are foundational skills entrepreneurs need to

run and operate a successful business:

Communication Skills
Writing, Speaking & Listening
Human Relations Skills
Math Skills
Problem Solving & Decision Making Skills
Technical Skills
Basic Business Skills
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ADVANTAGES OF ENTREPRENEURSHIP

 To an Individual
(a) Provides Self Employment for the entrepreneur
(b) Entrepreneur can provide employment for near &
dear one
(c) Entrepreneurship often provides an employment
and livelihood for next generations
(d) Freedom to use own ideas – Innovation and
creativity
(e) Unlimited income / higher retained income
(f) Independence
(g) Satisfaction 14
 CONT…
 To the nation
(a) Provides larger employment
(b) Results in wider distribution of wealth
(c) Mobilizes local resources, skills and savings
(d) Accelerates the speed of economic development
(e) Stimulates innovation & efficiency

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 WAGE EMPLOYMENT [Link]
 Wage Employment Entrepreneurship
 Work for Others  Own Boss
 Follow Instructions  Make own plans
 Routine Job  Creative activity
 Earning is fixed, never  Can be negative sometimes,
negative generally surplus
 Does not create wealth  Creates Wealth, contributes
 Can choose from- to GDP
 Government service  Can choose from-
 Public Sector  Industry
 Private Sector  Trade or Service Enterprise

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 ENTREPRENEURIAL PROCESS

Income generation is the initial stage in the entrepreneurial process

in which one tries to generate surplus or profit. They are often
taken on part- time or casual/informal
Self-employment is the 2nd stage in the entrepreneurial process and
refers to an individual’s fulltime involvement in his own
occupation.
Entrepreneurship is the terminal stage of the entrepreneurial
process wherein after setting up a venture one looks for
diversification and growth

Income Generation Self Employment Entrepreneurship

Initial stage Middle stage Final stage

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 ENTREPRENEURIAL CHARACTERISTICS

Commitment
Commitmentandand
Determination
Determination

Motivation
Motivationto
to
Excel Leadership
Leadership
Excel
Attitudes
Attitudesand
and
Behaviors
Behaviorsofof
Entrepreneurs
Entrepreneurs
Creativity,
Creativity,Self-
Self- Opportunity
Opportunity
Reliance,
Reliance,and
and Obsession
Obsession
Adaptability
Adaptability
Tolerance
Toleranceof
ofRisk,
Risk,
Ambiguity, and
Ambiguity, and
Uncertainty
Uncertainty

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 ENTREPRENEURIAL COMPETENCES
A competence refers to the underlying characterstics
of a person which results in effective/superior
performances in a job.

Entrepreneurs have some competences which

distinguish them from the general population and
even from hired professional manager.

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Entrepreneurial Competencies
(Werotaw B., 2010)
 Opportunity Seeking and Initiative: successful
entrepreneurs have the following characteristics
 They do things before asked or forced to by
events
• They act to extend the business into new areas,
products or services
• They seize unusual opportunities to start a new
business, obtain financing, equipment, land work
space or assistance

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CONT…

 Calculated Risk Taking: The behavioral

indicators are:
• Deliberately calculates risks and evaluates
alternatives
• Taking action to reduce risks or control
outcomes
• Placing self in situations involving a challenge or
moderate risk

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CONT…

 Persistence: The behavioral indicators are:

• Taking action in the face of a significant obstacle
• Taking repeated actions or switches to an
alternative strategy to meet a challenge or
overcome an obstacle
• Taking personal responsibility for the performance
necessary to achieve goals and objectives

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CONT…

 Commitment to the Work Contract:

The behavioral indicators are:
• Making a personal sacrifice or
expending extraordinary effort to
complete a job
• Striving to keep customers satisfied and
working with employees to make things
for customers ready
• Placing long term good will over short
term gain
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CONT…

 Demand for Efficiency and Quality; The behavioral

indicators are:
• Finds ways to do things better, faster, or cheaper
• Acts to do things that meet or exceed standards of
excellence
• Develops or uses procedures to ensure work is
completed on time or that work meets agreed upon
standards of quality

Effectiveness+Efficiency+Quality+good
time management = Success 24
 CONT…

 Goal setting: The behavioral indicators are:

• Sets goals and objectives that are personally
meaningful and challenging
• Articulates clear and specific long range goals
• Sets measurable short term objectives

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 CONT…

 Information Seeking: The behavioral indicators are:

• Personally seeks information from clients, suppliers
or competitors
• Does personal research on how to provide a product
or service
• Consults experts for business or technical advice

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 CONT…

 Systematic Planning and Monitoring: The

behavioral indicators are:
• Plans by breaking large tasks down into time-
constrained sub-tasks
• Revises plans in light of feedback on performance
or changing circumstances
• Keeps financial records and uses them to make
business decisions

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 Cont…
 Persuasion and Networking: The behavioral
indicators are:
• Uses deliberate strategies to influence or persuade
others
• Uses key people as agents to accomplish own
objectives
• Acts to develop and maintain business contracts

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 CONT…

 Independence and self-confidence: The behavioral

indicators are:
• Seeking autonomy from the rules or control of
others
• Sticking with own judgment in the face of
opposition or early lack of success
• Expressing confidence in own ability to complete a
difficult task or meet a challenge

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ENTREPRENEURIAL DECISION PROCESS

Pull Factors- the factor which attract a person to

become entrepreneur
 Perception of Advantages- If a person feels that he can
earn better or overall gains in terms of money.
 Spotting an Opportunity
 Government Policies
 Motivation
 Influenced by Culture, Community, Family
Background, Teachers, Peers, etc.

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 CONT…
Push Factors- the factors that force him
 Job Dissatisfaction
 Relocation
 Joblessness
 Lay off
 Retirement
 Boredom- This is applicable to many ladies from well to do
families. With their army of servants to take care of home,
they find an opportunity to keep the boredom away and
start ventures

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OUTCOMES OF ENTREPRENEURSHIP

Economic growth
New industry formation
Job creation
Assignment One:
What is franchise & franchisee in business?
[max 1page]
Discuss the role of entrepreneurship in the
economy of a country. [max 2page]

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FACTORS INFLUENCING
ENTREPRENEURSHIP

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PUTTING FAILURE INTO PERSPECTIVE

Failure is a natural part of the creative process.

Failures are simply stepping stones along the path to
success.
The “secret” to success is the ability to fail
intelligently, learning why you failed so that you
can avoid making the same mistake again.

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 Current Entrepreneurial
Trends
One way to identify business opportunities is to
study current trends that provide opportunities for
entrepreneurs.
social entrepreneurship
Internet businesses

focus on technology
service businesses

outsourcing and
home-based businesses strategic alliances

green businesses corporate ventures

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 ENTREPRENEURIAL FACTS

Entrepreneurs are Lucky

Entrepreneurs make or break on the first venture
Entrepreneurs are born not made
Entrepreneurs are High-Tech wizards
Entrepreneurs extreme risk takers (Gamblers)
All Entrepreneur need to be successful is Money

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