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MODULE 1
2.
CONCEPT OF ENTREPRENEURSHIP
ENTREPRENEURSHIP: the ability and readiness to
develop, organize and run a business enterprise,
along with any of its uncertainties in order to make a
profit.
More than the mere creation of business
Seeking opportunities
Taking risks beyond security
Having the tenacity to push an idea through
to reality
Integrated concept that permeates an individual’s
business in an innovative manner
3.
Example: starting new businesses.
ENTREPRENEURIAL VISION: discovery and
risk-taking and is an indispensable part of a nation’s
capacity to succeed in an ever-changing and more
competitive global marketplace.
ENTREPRENEURIAL MINDSET: a way of thinking
that enables you to overcome challenges, be
decisive, and accept responsibility for your outcomes.
It is a constant need to improve your skills, learn from
your mistakes, and take continuous action on your
ideas. Anyone willing to do the work can develop an
entrepreneurial mindset.Importance: can aid the
development of confidence and mean that one is
more inclined to take on opportunities as well as not
being afraid to take risks.
In order to have an entrepreneurial mind, one must be
or have:
1. Revisit your vision on a daily basis
2. Put yourself in challenging situations
3. Read on a daily basis
4. Approach problems from all sides
5. Always be in motion: Provide values
KEY ELEMENTS OF ENTREPRENEURSHIP
1. Entrepreneur
○ active search for opportunities
○ Entrepreneurial alertness - sensitive
to information about objects,
incidents and patterns of behavior
○ Prior knowledge - people tend to
notice info that is related to what
they already know
4.
5.
Social networks - connected to
social relationships
Market Opportunity
○ A situation in which a new product,
service or process can be
introduced and sold profitably.
○ Market Pulled Opportunities identify the needs, interests and
problems
○ Market Pushed Opportunities creating the needs, interests and
solutions
○ Social networks - connected to
social relationships
Adequate Resources
○ Resources is a person, an asset,
material or capital that can be used
to create value
○ Physical, Reputational,
Organizational, Financial, Human
Capital and Technological Resource
Business Organization
○ can focus on start-up, franchise,
joint ventures, and business
acquisitions.
Favorable Environment
ROLE OF ENTREPRENEURSHIP IN ECONOMIC
GROWTH
1. Creates employment
2. Develops new market
3. Introduces innovation
4. Generates new sources of materials
5. Stimulates investment interest in the new
business ventures being created
6. Improves quality of life
7. Serves as role models
8. Brings social benefits to the people
9. Utilizes and mobilizes indigenous resources
10. Provides more alternatives for consumers
KEY ATTRIBUTES OF EFFECTIVE
ENTREPRENEURSHIP
1. Adaptability- ability to adjust to new market
needs/ trends on a timely fashion
2. Flexibility - ability to design strategies and
processes to meet ever changing situations
and needs
3. Innovativeness - ability to create unique
difference for your product and strengthening
market equity on a sustained basis
4. Speed - ability to act swiftly on business/
organizational issues and concerns
5.
6.
7.
Aggressiveness - intense, focused and
proactive approaches in meeting competitive
pressure and external forces
Visionary - must know the long term
business direction and plan on it
Resilient - must be able to accept defeat
and challenges and learning from these
experiences
INNOVATION
INNOVATION
● process of translating and applying an idea
into a product or service
● that is applied or launched to create unique
value
● and satisfied a particular consumer need
● can be produced or developed at an
economical cost
● with challenging risks
Example:
Steve Jobs - Apple products
creates value
satisfies specific needs
has economical cause
is launched and applied
TYPES OF INNOVATION
1. Sustaining/Incremental Innovation improvements on existing products or
services
2. Disruptive/Breakthrough/Radical Innovation offering something ‘NEW’ to the market,
uprooting the market
3. Process Innovation - internal enhancement,
services, systems, customer
relations/linkages
4. Business model Innovation - changing
business model aimed at reducing operating
costs, thus increasing profit that result to
higher efficiency
ENTREPRENEURSHIP VS INTRAPRENEURSHIP
ENTREPRENE
UR
someone who
sets off to build
their own
VS
INTRAPREN
EUR
an employee
responsible
for innovating
business from
scratch
Start their own
change at an
existing
company
ORGANIZATION
Procure their
own
RESOURCES
Independent
DEPENDENCY
Assumed by
themselves
RISK
Reap all the
benefits of
potential
success
REWARD
Start
initiatives
within an
existing
business
Provided by
the company
Dependent
Taken by the
company
Company
receives
financial
reward
Complete
control
AUTONOMY
Works within
an existing
system
Full
OWNERSHIP
None
Entrepreneurship
Intrapreneurship
Entrepreneurs provide
the spark
Intrapreneurs keep the
flame going
Entrepreneurs are
found anywhere their
vision takes them
Intrapreneurs work
within the confines of an
organization
Entrepreneurs face
many hurdles, and are
sometimes ridiculed and
riddled with setbacks.
Intrapreneurs may
sometimes have to deal
with conflict within the
organization
Entrepreneurs may find
it difficult to get
resources
Intrapreneurs have their
resources readily
available to them
Entrepreneurs may lose
everything when they
fail.
Intrapreneurs still have
a paycheck to look
forward to (at least for
now) of they fail
Entrepreneurs know the
business on a macro
scale
Intrapreneurs are highly
skilled and specialized
Similarity: the passion to see things through to the
end and the courage to face failure
ATTRIBUTES, QUALITIES, AND
CHARACTERISTICS OF AN ENTREPRENEUR
ENTREPRENEUR: someone who has the ability and
desire to establish, administer and succeed in a
startup venture along with risk entitled to it, to make
profits; often known as a source of new ideas or
innovators, and bring new ideas in the market by
replacing old with a new invention.
Recognize opportunities where others see
chaos or confusion
Aggressive catalysts for change within the
marketplace
Challenge the unknown and continuously
create the future
Crafting a Personal Entrepreneurial Strategy
b.
And a lack of fear of conflict that
may arise
Leadership and achievement, the heart of the
entrepreneur are not measured by IQ tests but
include:
1. Leadership skills
2. Interpersonal skills
3. Team building and team playing
4. Creativity and ingenuity
5. Motivation
6. Learning skills (versus knowledge)
7. Persistence and determination
8. Values, ethics, honesty and integrity
9. GOal-setting orientation
10. Self-discipline
11. Prudence
12. Resourcefulness
13. Resiliency and capacity to handle adversity
14. Ability to seek, listen and use feedback
15. Reliability
16. Dependability
17. Sense of humor
Achieving Entrepreneurial Greatness
Principles of Marion Labs and the Kauffman
Foundation:
1. Treat others as you would want to be treated
2. Share the wealth that is created with all
those who have contributed to it at all levels
3. Give back to the community
Leadership and Human Behaviour
Behavioral scientists, venture capitalists,
investors, and entrepreneurs agree the
venture will depend a great deal upon the
talent and behavior of the lead entrepreneur
and his or her team
Converging on the Entrepreneurial Mind
Desirable and acquirable attitudes, habits and
behaviors
Dominant Themes
1. Commitment and Determination
2. Leadership
3. Opportunity Obsession
4. Tolerance of Risk, AMbiguity and Uncertainty
5. Creativity, Self-Reliance and Adaptability
6. Motivation to Excel
Important Aspects of Courage
1. Moral strength and principles
2. Being a fearless experimenter
3. A lack of fear of failing at the experiment
a. And most undertakings
Crafting a Personal Entrepreneurial Strategy:
exercise addresses the apprenticeship issue further.
Conceptual scheme for self assessment
Profiling the past
Profiling the present
Getting constructive feedback
Putting it all together
Thinking ahead
Personal Entrepreneurial Strategy: exercise is an
inventory of one’s entrepreneurial abilities.
Gather data both from yourself (past and
present profiles)
Gather data from others (constructive
feedback)
Evaluate the data you have
Think ahead
Craft your personal entrepreneurial strategy
Estimated time to complete this important
planning and goal setting exercise is 90 min3 hours
Reasons for Planning
Managing the risks and uncertainties of the
future
Working smarter rather than harder
Developing and updating a keener strategy
by testing the sensibility of his or her ideas
and approaches with others
Motivating
Achieving “results orientation”
-
Managing and coping with what is by nature
a stressful role
Self Assessment
1. Generate data through observation of
thoughts and actions and by getting
feedback from others
2. Study the data generated
3. Develop insights
4. Establish apprenticeship goals to gain any
learning, experience and so forth
5. Determine goals and opportunities to be
seized
Constructive Feedback
1. Solicit feedback from those who know you
well and who can be trusted
2. Seek specific comments in particularly
important areas and probe for detail if the
feedback is unclear
3. Recognize that feedback is most helpful if it
is neither all positive nor all negative
4. Ask for feedback in writing for contemplation
and so feedback from various sources can
be pulled together
5. Be honest and straightforward with yourself
and with others
6. Avoid game playing or hidden agendas;
avoid defensiveness over negative
comments
7. Listen carefully to what is being said and
think about it; avoid answering, debating or
rationalizing
8. Assess whether all important information has
been considered and you have been realistic
in your references and conclusions
9. Request help in identifying common threads
or patterns, possible implications of
self-assessment data and certain
weaknesses and other relevant information
that is missing
10. Seek additional feedback from others to
verify feedback and to supplement data
11. Reach final conclusions at a later time
Effective Goal Setting
-
Establishment of goals that are SMART
Establishing priorities: identifying conflicts
and trade-offs + solutions
Identifying potential problems that could
prevent goals from being achieved
Specifying action steps to be performed in
order to achieve a goal
-
-
How results will be measured
Establishing milestones for reviewing
progress and tying to specific dates on the
calendar
Identifying risks involved in meeting the
goals
Identifying help and other resources needed
to obtain goals
Periodic review of progress and revision of
goals
ATTRIBUTES AND QUALITIES OF AN
ENTREPRENEUR
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Self-awareness
Self-motivated
Courage
Confidence
Positive Thinkers
Patience
Decisiveness
Experience
Knowledge
Information-Seeking
Perseverance
Drive
Risk-Taking
Innovative
Opportunity Seeking
Demand for efficiency and quality
Systematic planning and monitoring
Persuasion and networking
CORE PRINCIPLES OF EFFECTIVE LEADERSHIP
1. Listening
2. Empathy
3. Attitude
4. Dreaming
5. Effective
6. Resilient
7. Integrity
8. Packing others’ parachute
Personal Entrepreneurial Competencies
●
●
Achievement Cluster
○ Opportunity Seeking
○ Persistence:
○ Commitment to Work Contract
○ Demand Efficiency and Quality
○ Risk Taking
Planning Cluster
○ Goal Setting
○ Information Seeking
●
○ Systematic Planning and Monitoring
Power Cluster
○ Persuasion and Networking
○ Self-Confidence
THE MYTHS OF ENTREPRENEURSHIP
1.
2.
3.
4.
Entrepreneurs are doers, not thinkers
Entrepreneurs are born, not made
Entrepreneurs are always inventors
Entrepreneurs are academic and social
misfits
5. Entrepreneurs must fit the “Profile”
6. All Entrepreneurs need is money
7. All entrepreneurs need is luck
8. Ignorance is bliss for entrepreneurs
9. Entrepreneurs seek success but experience
high failure rates
10. Entrepreneurs are extreme risk takers
(Gamblers)
Entrepreneurial Process
-
On the basis of capital ownership
Private entrepreneurs
State entrepreneurs
Joint entrepreneurs
ENTREPRENEURIAL CHALLENGES
1. Cash flow management
2. Hiring employees
3. Time management
4. Delegating tasks
5. Choosing what to sell
6. Marketing strategy
7. Capital
8. Strapped budget
9. Business growth
10. Self Doubt
SOURCES OF BUSINESS IDEAS AND
OPPORTUNITIES
1. Interests and hobbies
2. Customer Surveys
3. Brainstorming and Dreams
4. Franchise
5. Mass Media
6. Personal experience and talents
7. Trade fairs and exhibitions
BUSINESS PLANNING
Business Opportunity:defined as a situation that
enables an entrepreneur to offer marketable products
or services to interested buyers or end users
TYPES OF ENTREPRENEURS
-
-
-
-
According to the type of business
Business Entrepreneurs
Trading Entrepreneurs
Corporate Entrepreneurs
Agricultural Entrepreneurs
On the basis of stage of development
First generation entrepreneurs
Second generation entrepreneurs
Classical entrepreneurs
On the basis of motivation
Pure entrepreneur
Induced entrepreneurs
On the basis of technology
Technical entrepreneurs
Non-technical entrepreneurs
TYPES OF SITUATIONAL FACTORS
How to identify when there is an opportunity?
● Product or service is still not inexistence
● Product or service is already in the market
but failed to satisfy the customers – so need
to be improved
APPROACH TO OPPORTUNITY IDENTIFICATION
1) Observe changes in the environment: Changes
in the environment give rise to needs and wants
and/or problems, and an opportunity emerges
Important environment forces to observe include :
1) Economic forces
2) Social forces
3) Technological advances
4) Political and regulatory statutes
2) Recognize a need that customers have that is
not being satisfied:
● Opportunity occurs whenever there is a need
and want to fulfill.
●
The term “needs” refers to basic needs that
the consumer must have in order to live
while the term “wants” refers to a personal
desire for something that is more than a
basic need.
3) Recognize problems and find ways to solve it:
● Problems can be recognized by observing
the challenges that people encounter in their
daily lives.
● Solution to the problem represented a
business opportunity.
ABILITY TO SEARCH AND DISCOVER BUSINESS
OPPORTUNITIES
1. Experience and exposure
2. Knowledge and skills
3. “Special alertness”
4. Social network
5. Creativity
6. Vigilant
7. Customers
8. Retailers and Distributors
9. Business associates
10. Bankers
11. Consultants
12. Employees
13. Others
HOW TO IDENTIFY BUSINESS PLAN
OPPORTUNITIES
1. Listen to what customers have to say
The Internet — and specifically online review
sites — can be an excellent source of
inspiration for new business opportunities.
Customers, it turns out, have very strong
opinions about what they’ve bought, and
they’re not afraid to voice them. Just look at
the reviews on Amazon and other shopping
sites
2. Spot changes that open up new business
opportunities
Many fledgling businesses succeed by
jumping on new opportunities that arise
through technological, social, policy, or other
changes. Change can be scary, but it can
also open new doors. Spotting that door
requires skill and a little daring. For Example,
when Apple launched the iPad, a whole new
industry of apps sprang into existence,
created by developers daring enough to
plunge into a new technology and a new
marketplace
BUSINESS MODEL CANVAS
Business Model Canvas: describes the rationale of
how an organization creates, delivers, and captures
value.
Building Blocks
1. Customer Segments: An organization
serves one or several Customer Segments.
2. Value Propositions: It seeks to solve
customer problems and satisfy customer
needs with value propositions
3. Channels: Value propositions are delivered
to customers through communication,
distribution, and sales channels
4. Customer Relationships: established and
maintained with each Customer Segment
5. Revenue Streams: result from value
propositions successfully offered to
customers
6. Key Resources: the assets required to offer
and deliver the previously described
elements
7. Key Activities: By performing a number of
KeyActivities
8. Key Partnerships: Some activities are
outsourced and some resources are
acquired outside the enterprise
9. Cost Structure: The business model
element results in the cost structure.