Entrepreneurship in surveying

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 Definitions of Entrepreneurship
• “Entrepreneurship” and “entrepreneur” as concepts
have been defined in various ways.
• Here we review some of these definitions.
• The examination of these definitions will help to broaden
our understanding of these concepts.
• Schumpeter (1934) defined an entrepreneur as
someone who acts as an agent of change by bringing
into existence a new combination of the means of
production.
• Such new combinations include process, product and
organisational innovations.
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• The means of production include capital, equipment, premises,
raw material, labour and—more recently—knowledge. Knowledge
can be considered as the capacity to understand and use
information and processes.
• Casson (1982) defines an entrepreneur as someone who
specialises in making judgmental decisions on co-ordination
of scarce resources.
• Schumpeter, who is a pioneer in entrepreneurship, defined an
entrepreneur as a person, who sees an opportunity, seizes
that opportunity and creates a new product, changes a
production process or, otherwise, creates a new marketable
contribution to the economy.
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• Entrepreneurship is defined as new combinations such as
doing new things or doing things already being done in a
new way (Schumpeter: 1934).
• Kirzner (1973) conceives entrepreneurship as the ability
to perceive new opportunities.
• Stevenson, Roberts and Grousbeck (1985) perceive
entrepreneurship as the pursuit of an opportunity
without concern for current resources or capabilities
• Gartner (1988) considers entrepreneurship as the
creation of organisations, or the process by which new
organisations come into existence.
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• Morrison (1998) defines entrepreneurship in terms of
two key concepts of innovation and creativity.
Entrepreneurship is thus defined as the process of doing
something new (creative) and something different
(Innovative) for the purpose of creating wealth for the
individual and adding value for the society. Creativity and
innovation have been used complimentarily in the field
of entrepreneurship

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• From these definitions, we can develop our operational
definition of entrepreneurship as constituting people
who have the ability to see and evaluate business
opportunities, gather the necessary resources, take
advantage of them and initiate appropriate action to
ensure success.
• When entrepreneurs starts a new business risk is
involved which may be both personal and financial. And
therefore an entrepreneur do everything possible to
reduce the chances of failure.

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 CHARACTERISTICS OF ENTREPRENEUR
Several research studies have been carried out to
identify the characteristics/traits of a true
entrepreneur
1. Entrepreneurs are risk takers
Establishment of any entrepreneurial venture is
risky and the entrepreneur has to assume risk.
As risk and rewards are inseparable, in order to
grow, the entrepreneur should have large
appetite for assuming risk.

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CHARACTERISTICS OF ENTREPRENEUR
Risks faced by Entrepreneurs are:
 Financial risks- In most new ventures, individual
resources will be lost if the venture fail. Many
people are unwilling to risk their savings, house
property and salary to start business.
 Career risk- A question frequently raised by would
be entrepreneurs is whether they will be able to
find a job or go back to their old job if their venture
should fail. This is concern to managers who have a
secure organizational job with high salary and good
benefit package.
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CHARACTERISTICS OF ENTREPRENEUR
Risks faced by Entrepreneurs are:
 Family and social risk-Starting a new business
uses much of entrepreneur’s energy and time.
Consequently his or her other commitment may
suffer. Eg old friends may vanish slowly because
of missed together
 Psychological risk-Many can be replaced, a new
house can be built, spouse, children and friends
can usually be adopted. But some entrepreneurs
who have suffered financial disaster have been
severely affected psychologically.
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 CHARACTERISTICS OF ENTREPRENEUR

2. Opportunity seeking and initiative

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 CHARACTERISTICS OF ENTREPRENEUR
4. Understand the market
Successful entrepreneurs know their market and
their product inside and out.
5. Money management
Successful entrepreneurs realize money
management is mandatory and plan for present
and future obligations.
6. Nertworking abilities
Successful entrepreneurs find experienced mentors
and build nertworks to seek valuable advice.
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CHARACTERISTICS OF ENTREPRENEUR
7. Creativity and Innovativeness
Entrepreneur should anticipate changes and must be able
to study the various situations under which decisions
have to be made. Successful entrepreneurs have the
ability to recognize and pursue opportunities. They are
always on a look out for new ways of doing things,
launching new products, providing new services etc.
• Creativity is about developing new ideas, products or
services.
• Innovation on the other hand, refers to doing something
differently to the way others are doing it presently

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 CHARACTERISTICS OF ENTREPRENEUR
Characteristics of creative people
 Very bright to see and initiate opportunities
 Ability to generate different ideas within short
period
 Have positive image of them selves
 Sensitive to the environment
 Motivated by challenging problems
 Relying on facts

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 CHARACTERISTICS OF ENTREPRENEUR
8. Passion and Motivation
Entrepreneurs are passionate, and highly self-
motivated. They have high energy levels and are
always willing to take initiatives. They always keep
thinking about their business and how to increase
the market share, how to improve their existing
processes.
9. Good Communication Skills
An entrepreneur who can effectively communicate
with customers, employees, suppliers and creditors
will be more likely to succeed than the entrepreneur
who does not.
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[Link] Feedback
• Entrepreneurs are characterised by inquisitiveness. They
are never satisfied by information they have at any time
and constantly seek more.
• They are in particular interested to know how they are
doing and how they might improve their performance.
They actively seek out and use feedback to learn their
mistakes

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[Link]
• Not everything goes right all the time.
• Entrepreneurs need a willingness to accept failure, learn
from it and act boldly in the shadows of doubts.
• They use failure as part of the learning process towards
achieving success.
• This learning process is repeated until there is
satisfactory outcome.
• Entrepreneurs do not accept failure, but see failed
attempts as temporary set backs on the road to success.
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[Link]
• Entrepreneurs tend to be proactive in searching
for opportunity rather than being reactive.
• They are pro active in a sense that they actively
seek out opportunities rather than waiting for
them to occur by chance.
• They act quickly and decisively to make the most
of the opportunity before somebody else does

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[Link] Confidence and optmision
• This is a belief in one self. It has to do with being
confident in your own judgement and ability to start and
run up your business
• Most entrepreneurs have own confidence that their
efforts will yield success.
• They believe that if they work hard enough and push the
envelope of success, they will break through and succeed.
• Although entrepreneurs often face obstacles they believe
in their ability and are confident in overcoming such
obstacles.
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 LEGAL IDENTITIES OF A BUSINESS
A business Is an organization that provides goods
and services to earn profit.
Profit Positive difference between revenues and
expenses

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 Legal forms of business
• Before deciding to launch a venture, an entrepreneur
must choose a vehicle through which her business is to
be conducted. This vehicle is a form of business
ownership through which the entrepreneur will operate.
The choice is to go alone or working in co-ownership
with others.
• A small business can take on three primary legal forms of
organisation. These are sole proprietorship, Partnership
and Limited Liability Company
• Large business may be structured as Cooperative/
cooperation Or Joint venture

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 Sole proprietorship
• This is a form of a business that is normally used in a
situation where the business is small
• It is the oldest and most prevalent form of ownership that
is mostly owned and operated by one person
• In most cases continuity of this form of a business is
limited to the life span and the fate of the owner. The
individual is the business and the business is the individual
• This individual has the right to all profits and bears the
liability of all the debts and obligations of the business.
• Sole proprietor is is said to be the simplest form of a
business endeavor that has few regulations in its
formation. Eg of this is retail businesses
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 Advantages of Sole proprietorship
• Easy formation and dissolution-sole proprietorship are
straight forward and easy to set up. It is less expensive, less
formality and fewer restrictions are involved in its formations
• Sole ownership of profit- a sole proprietor keeps all the profit
for himself/herself as she doesn't share with anyone.
• Total decision making authority- no co-owners or partners to
be consulted in the running of the operation
• Flexibility- Management is able to respond quickly to
business need
• Relative freedom fro government control except for the
acquisition of necessary licenses
• No public diclosure and auditing of account is required
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 Disadvantages of Sole proprietorship
• Unlimited personal liability- the individual is personalally liablbe for
all the business debt. Since the owner is the business, the liability
extends to all the proprietor’s assets.
• Lack of continuity- the enterprise may be crippled or terminated if
the owner becomes ill, retires or dies. Unless the family member can
take over most sole proprietorship face negative concequences
involving the proprietor.
• Less available capital- sole proprietorship has less available capital
than any other type of business ownership. Most sole proprietorship
cannot meet the eligibility criteria for borrowing in most of the
financial institutions
• Felling of isolation-although running a small business alone gives an
entrepreneur maximum flexibility, it also creates feelings of
isolation. Indeed there is no one turn to for help in case of problems

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• Relative limited view point and experience-the
operation depends on one person and the
individual ability, training and expertise will
limit its direction and scope

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 Partnership
• Partnership is a contractual business
relationship between two or more person but
primarily limited to 20 persons who agree to
carry out a business in common with the view
of making profit
• Each partner contribute money, property
labor or skills and each member shares in the
profit as well loses of the business

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 Advantages of a partnership
• Easy formation: Legal formalities and expenses for partnerships
and fewer than those of corporations or companies
• Direct reward- partners are motivated towards putting forth
their best effort through the sharing of profit
• Complimentary skills. Growth and performance are facilitated
because in partnership it is often possible to obtain better
range of skills than in sole proprietorship
• Confidentiality- confidentiality is maintained as there is no
public access to accounts is possible. Important business
secrets remain confided to the partners
• Flexibility of operation- a partnership often is able to respond
quickly o the business need

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 Advantages of Partnership cont…
• Freedom from government control as very little
government interference exists
• Tax advantage as most partnership pay taxes as
individual thus escaping the higher rates assessed for
cooperation's
• Large pool of capital resulting from contributions by
partners.
• Capacity to survive. The survival capacity of the
patneship is higher than that of sole proprietorship as
partnership can continue after the death of a partner of
insolvency of a partner.
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 Disadvantages of Partnership
• Unlimited liability. Although some partnership have limited
liability but at least one must be a general partner who
assumes unlimited liability. The unlimited partner has
unlimited personal liability which makes him/her suffer what
is has been contributed as capital to the partnership
• Capital accumulation: Most patners have difficulties in raising
great deals of capital especialy when long term financing is
involved.
• Risk off implied agency: The act of the partner are binding on
the firm as well as on the partners. An incompetence or
dishonest general partner may bring disaster for all due to
his/her acts.
• Personality and authority conflicts. Friction among the
partners is inevitable and at times can be difficult to control.
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 Limited Liability company

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 LEGAL IDENTITIES OF A BUSINESS
1. Sole proprietorship
A business that is owned exclusively by one
person.
Advantages.
• Easy to get established
• Full control over all business decisions
• Owners keep all profits
• Flexibility

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 LEGAL IDENTITIES OF A BUSINESS
Disadvantages
• It can be difficult to raise money for the
business
• Responsible for every aspect of the business
• Limited skills and knowledge

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 LEGAL IDENTITIES OF A BUSINESS
2. Partnership
A business owned by two or more people
Advantages
• Easy to establish
• Multiple sources of capital
• Risks are spreads among the partners
• Profits are taxed once

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 LEGAL IDENTITIES OF A BUSINESS
Disadvantages
• Responsibilities, profits and losses are shared
• Responsible for all depts.
• Business income is taxed as personal income

3. Corporation
Business that has legal rights of a person but is
independent of its owners.
 You must file articles of incoporation with the
appropriate state government office.

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 LEGAL IDENTITIES OF A BUSINESS
 Article of incorporation is a written document
that defines
• Owrneship
• Operating procedures
• Condition for the business
 Must create corporate bylaws that are the
operating procedures for the corporation
 It must name the board of diretors
 Issue share of stocks to investors.
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 LEGAL IDENTITIES OF A BUSINESS
Board of directors
Group of people who meet several times a year
to make important decisions affecting the
company
Share of stocks
A unit of ownership in a corporation
Dividends
Distribution of corporate profits to share holders

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 LEGAL IDENTITIES OF A BUSINESS
Advantages of corporation
• Personal liability is limited to the amount of
money of each shareholder invested in a
company
• Personal assets of shareholders are protected
• Corporation can raise money by selling stock.
Disadvantages
• Lawyer is required to establish a corporation
because a corporation is complex
• Costly
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 LEGAL IDENTITIES OF A BUSINESS
Disadvantages
• Subject to more government regulations than
other types of business.

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