FOUNDATIONS OF
ENTREPRENEURSHIP
CLASS THREE: INTRODUCTION TO ENTREPRENEURSHIP
Elikem Nutifafa Kuenyehia
Agenda for Class Three
•
•
•
•
•
•
•
•
•
Mid term assignment – 10 Groups
Recap of last week’s class
Introduction to entrepreneurship
Forms of entrepreneurship
Opportunity vs. Necessity entrepreneurship
Entrepreneur vs. businessman
Incubation
Entrepreneurship in Ghana
Guest Speaker – Mike Nyinaku, MD, Beige Capital
Mid Term Assignment
•
•
•
•
•
Group 1 & 2 – Brand Management & Marketing
Group 3 & 4 – Consumer Insights
Group 5 & 6 – Sales and Channel Strategy
Group 7 & 8 – Finance and Capital Raising
Group 9 & 10 – Operations and Logistics
Recap of last week’s class
What did you learn from Co-founders of ‘Heel The
World’?
Introduction to Entrepreneurship
History and Development of Entrepreneurship
• Entrepreneurship evolved from the French word
“entreprendre” meaning “to undertake”
• Other referrals included middleman, director of
resources, tax contractor
• Richard Cantillon saw entrepreneurs as middlemen
in his postulation of agents of economy
(landowners, entrepreneurs, hirelings
• Mid 20th century definition of entrepreneurship were
based on economic situations
Some Definitions
• An entrepreneur is ‘a necessary destabilising
force bringing economic growth through the
disequilibrium of constant change and
innovation’. Joseph Schumpeter
• ‘Individual who undertook formation of an
organisation for commercial purposes’. Adam
Smith
• ‘It is possessing the know-how to find, marshal and
control resources (often owned by others). Timmons
My Definition
• It is the process of risking resources based on
an idea (or series of ideas) to develop the
idea(s) into goods and/or services that
people perceive as valuable and are willing
to pay for, in such a way as to maximise
return for the enterprise.
Entrepreneurship as a process
• Entrepreneurial process begins with an idea
which develops into an opportunity or viceversa
• Idea and opportunity are intertwined by size
of willing patronisers
• Product or service at the heart of the
venture must “remove an existing pain”
• Key resources risked include time, human
and capital resources
Entrepreneurship as a state of
mind or series of attributes
• Entrepreneurship is also use to describe the
characterization of attributes that enable
people to exploit opportunities for financial
reward
• Motivation factor is the individual’s state of
mind
• Entrepreneurship as a pattern of behaviour
• Involves the ability to build a vision from
nothing- Timmons
• Complementing one’s skills by building a
venture team
Forms of entrepreneurship
Social Entrepreneurship
• Creating social change through an enterprise
• Enterprises include non-profit organizations and
businesses set up with a social purpose
Intrapreneurship
• Formation of new idea within an existing
organisation
• Entrepreneurial concept belongs to the
organisation and not the intrapreneur
• Financial rewards also go to the company
(Intrapreneur’s reward is limited)
Forms of entrepreneurship
Extrapreneurship
• Break off from existing company
• New company may carry similar idea from
parent company
• New enterprise may be in the same line of
business as the one it broke off from or may
become a customer of or a supplier of a
product or service for the enterprise it broke
from
Opportunity vs. Necessity
entrepreneurship
• Opportunity entrepreneur develops an idea to
exploit an existing opportunity
• Necessity entrepreneurs result from lack of
alternatives
Entrepreneur vs. Businessman
• All entrepreneurs are businessmen but not all
businessmen are entrepreneurs
• A Businessman establishes a business for
personal goals while an entrepreneur
establishes an enterprise for profit and growth –
Beaver and Jenkins
• Unlike businessmen, entrepreneurs always look
for opportunities
Incubation
• It involves “nurturing” start-up businesses with an
enabling environment, material and intangible
resources to grow their businesses to the stage
where they can stand on their own and leave
‘the mother hen’
• Examples: Busy Internet Incubation Program and
the Meltwater School of Technology.
Evolution of entrepreneurship in Ghana
• Entrepreneurship in Ghana began before the
arrival of the Europeans
• Europeans were also entrepreneurs as they
risked resources to identify trading opportunities
in Ghana
• Post independence witnessed the introduction
of a mixed economy in Ghana
• Nkrumah’s Government encouraged private
enterprise
• The NLC government also supported local
entrepreneurs when it published in 1968, ‘The
Promotion of Ghanaian Business Enterprise’
Evolution of entrepreneurship in Ghana
• Busia’s government was the first to extensively draw
up policies and establish bodies to aid
entrepreneurs
• Acheampong introduced ‘Operation Feed
Yourselves and Industry’
• Rawlings Government introduced ERP and SAP
leading to the divestiture of SOEs
• Kufour’s government is dedicated to making the
private sector the engine of growth in the economy.
• Mills government reconstituted and
strengthened the National Board for Small Scale
Industry (NBSSI) to provide technical and
financial support for small and medium scale
enterprises
Role of entrepreneurship in development
of a country’s economy
•
•
•
•
•
•
•
Creates jobs
Drives economic growth
Frees up states resources
Fosters competition
Fosters innovation
Increases productivity
Provides a tax base for government
Challenges facing Ghanaian
Entrepreneurs
• Access to finance
• Low incomes and corresponding low savings
culture
• Little initiative by banks to be creative
• Inability to properly evaluate and price
entrepreneurial credit
• Unfriendly government machinery
• Political and economic instability
• Access to information
Factors favouring entrepreneurship
Access to finance
Political stability
Macro-economic stability
Secure property rights
Ease of starting a business
Free flow of information
The rule of law and mechanism for contract
enforcement
• Access to finance
• Size of the market in terms of numbers and
income levels
• Regulation of businesses Access to information
•
•
•
•
•
•
•
Why become an entrepreneur?
• Most graduate students take regular executive
or civil service career paths while
• Some, after a few years of experience quit to
start their own enterprise or buy one
Appeal for joining ‘Corporate Ghana’ or civil
service:
• More security
• Certainty of income
• Greater training opportunities
• Lower levels of stress
• Smaller personal risk
• Responsibility
• Autonomy & desire to control one’s own destiny
Overview of entrepreneurial cycle:
four(4) stages of entrepreneurship
• Identification of opportunities
• Acquiring resources
• Implementing plan to take advantage of
opportunity
• Harvesting the opportunity
Guest Speaker
• Mike Nyinaku, Managing Director, Beige Capital