“ PUIC TRAINING MANUAL Entrepreneurship Development _ PISONGIHITES UNIVERSAL INHERITANCE CONCEPT LIMITED [PUIC LTD]. ENTREPRENEURSHIP, Entrepreneurship: Is tho lifeblood of tho business world. Tho best managers have the ability to spot business PPortunitos and como up with new ideas. Enlreproneurship Is first and foromost a mindsot. Its tho art of finding reallve profitable solutions to problems. The concept of entrepreneurship has a wide range of meanings: to the ‘one oxiremo, an entropronour Is @ porson of very high aptitude who plonoors chango, possessing characteristics found in only a very small fraction of the population. On the other extromo side of the definitions, anyone who wants 10 work for him or herself Is considered to ho an ontropronour. An Entreprenour Is a person who habitually creates and innovates to bulld something of recognized value around Perceived opportunities. In this definition, all words are key words ‘Entropreneur'-can be an individual entrepreneur, but also an entrepreneurial team or even entrepreneurial organization. ‘A porson'; emphasizes a personally rather than a systom ‘Habitually’: Just cannot stop being an entrepreneur ‘Creates’: starts from scratch and brings into being something that was not there before Novates’: able to overcome obstacles that would stop most people; turns problems and risks into opportunities; delivers-sees ideas through to final application. ‘Bullds something’: describes tho output of the craatlon and Innovation process. ‘Of recognized value’: encompasses economic, commercial, social, or aesthotic value. ‘Porcelved opportunities’: spotting the opportunity to explolt an idea that may or may not be original to the entrepreneur; seeing something others miss or only see in retrospect. ‘The word entrepreneur originates from the French word, entreprendre, which means "to undertake", In a business context, It means to start business. The Merriam-Webster Dictionary presents the defintion of an entrepreneur as ‘one who organizes, manages, and assumes the risks of a business or enterprise. An entrepreneur Is an agent of change. Entrepreneurship is the process of discovering new ways of combining resources. Professor Howard Stevenson, the godfather of entrepreneurship studios at HBS defined entrepreneurship as the pursult of opportunity beyond resources controlled. The first academic use of the word by an economist was likely In 1730 by Richard Cantillon, 1 ‘Scanned with CamScannerPUIC TRAINING MANUAL Entrepreneurship Development Who identified the willingness to bear the personal financial risk of a business venture as the defining characteristic of an entrepreneur. In the early 1800s, economists Jean-Baptiste Say and John Stuart Mill Further popularized the ‘academic usage of the word “entrepreneur.” Say stressed the role of the entrepreneur in creating value by moving esources out of less productive areas and into more productive ones. Mill used the term “entrepreneur” in his, Popular 1848 book, Principles of Political Economy, to refer to a person who assumes both the risk and the management of a business. In this manner, Mill provided a clearer distinction than Cantillon between an entrepreneur and other bu! jess owners (such as shareholders of a corporation] who assume financial risk but do not entirely participate in the day-to-day operations or management of the firm. WHAT ENTREPRENEURS ARE LIKE Personality Factors Bor/made rati 9: 50/50, a synergy of genetic and environmental influence. Motivation and emotion: independence, competitive spirit, challenge, wealth, Behavioral characteristics-perseverance, determination, orientation to clear goals, need to achieve, opportunity orientation, creativity, persistent problem-solving, risk-taking, integrity, honesty, internal focus on control. Personality attributes-preferred styles: extrovertintrovert; sensor /intuit; thinker/feeler; and judgeriperceiver. Environmental factors Family background-entrepreneurial heritage ‘Age and education-begin entrepreneurial activity early; are not over-educated Work experience-most entrepreneurs first gain some work experience in the line of business they later start up. Action factors Make the difference: initiate change and enjoy it Create and innovate-a continuous activity, seeing creative idea through to the end and then start climbing another mountain Exploit opportunities- able to see or craft opportunities that other people miss. Find resources and competencies- experts at exploiting opportunities and skills sets to hamess the same. Network-expertise oriented; know when they need experts and how to use them effectively Face adversity-resolve problems under pressure; turn problems into opportunities. Manage risk-not adventurers, but manageable risk takers; their success lies in learning, flexibility and change during implementation, Control the business-pay attention to details and essential ratios: exercise strategic control over their business. Put the customer first-listen to the customer and respond to the customers’ feedback Creates capital -financial, social, and aesthetic ‘Scanned with CamScannerPUIC TRAINING MANUAL Entrepreneurship Development Schumpeter’s View of Entrepreneurship ‘Schumpeter describes an entrepreneur as a person who is willing and able to convert a new idea or invention into a successful Innovation. Entrepreneurship employs what Schumpeter called the gale of creative destruction. This replaces in whole or in part inferior innovations across markets and industries, simultaneously creating new products, including new business models. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth. In his definition entrepreneurship placed an emphasis on innovation, such as: New products New production methods New markets, New forms of organization Wealth is created when such innovation results in new demand. From this viewpoint one can define the function of the entrepreneur as one of combining various input factors in an innovative mannor to generate value to the customer with the hope that this value will exceed the cost of the input factors, thus generating superior retums that result in the creation of wealth. Entrepreneurship vs. Small Business Many people use the terms ‘entrepreneur’ and ‘small business owner’ simultaneously while they may have much in common, there are significant differences between the entrepreneurial venture and the small business owner. Entrepreneurial ventures differ from small businesses in these ways: Amount of wealth creation-rather than simply generating an income stream that replaces traditional employment, ‘a successful entrepreneurial venture creates substantial wealth, typically in excess of several million dollars of profit. Speed of wealth creation-while a successful small business can generate several milion dollars of profit over a lifetime, entrepreneurial wealth creation often is rapid; for example, within years. Risk-the risk of an entrepreneurial venture must be high; otherwise, with the incentive of sure profits many entrepreneurs would he pursuing the idea and the opportunity no longer would exist. innovation-entropreneurship often involves substantial innovation beyond what a small business might exhibit. ‘This innovation gives the venture the competitive advantage that results in wealth creation. The innovation may be in the product or service itself, or in the business processes used to deliver it. ‘Scanned with CamScannerPUIC TRAINING MANUAL Entrepreneurship Development Fun ions of an entrepreneur ‘An entrepreneur performs a series of functions necessary right from the genesis of an idea up to the establishment and effective operation of an enterprise. He carries out the whole set of activities of the business for its success. He recognizes the commercial potential of a product or a service, formulates operating policies for production, product design, marketing and organizational structure. He is thus a nucleus of high growth of the enterprise. These functions include: 1) Planning This is the first step in setting up an enterprise. The planning process involves: Scanning for the best suitable idea Selection of the product line Introduction of the business Determining the type of business organization (individual or partnership or corporate) Estimation of capital resources ‘Selection of locationisite ‘Studying the government policies and regulations Studying the availabilty of labour force ‘Studying of the market and marketing strategy to be adopted 2. Organizing Entrepreneur as an organizer and his organizing function is described by J.B. Saz as a function whereby the entrepreneur brings together various factors of production ensure continuing management and renders risk-bearing functions as well, this definition associates entrepreneur with the functions of coordination, organization and supervision. According to him, an entrepreneur is one who combines the land of one, the labour of another and the capital of yet another and thus produces a product. By selling the product in the market, he pays interest on capital, rent on land and wages to labourers and what remains is his/her profit. 3. Decision-making ‘The most vital function an entrepreneur discharges refers to decision making in various fields of the business enterprise. He is the decision maker of all activities of the enterprise. A. H. Cole described an entrepreneur as @ decision maker and attributed the following functions to him. ‘Asa decision maker, an entrepreneur takes various decisions regarding the following matters: Determining the objectives of the business enterprise Procurement of machinery, material, men, etc “Acquisition of efficient technology and new equipment ‘Scanned with CamScanner0 PUIC TRAINING MANUAL Entrepreneurship Development Development of a market for the product, 4. Management He undertakes the basic managerial functions of planning, organizing, coordinating, staffing, directing, motivating and controlling in the enterprise. He provides a logical and scientific basis to the above functions for the smooth operation of the enterprise thereby avoids chaos in the field of production, marketing, purchasing, recruiting and selection etc. 5. Innovation The basic function an entrepreneur performs is to innovate new products, services ideas and information for the enterprise. As an innovator, the entrepreneur foresees the potentially profitable opportunity and tries to exploit it. He is always involved in the process of doing new things. This may involve: Launching of a new product on the market Introduction of new technology in production Creation of new markets Discovery of new and better sources of raw materials 6 Risk bearing The function of an entrepreneur as risk bearer is specific in nature. The entrepreneur assumes all possible risks of business which emerges due to the possibilty of changes in the tastes of consumers, modern techniques of production and new inventions. Such risks are not insurable and incalculable. In simple terms such risks are known as uncertainty concerning a loss. Richard Cantillon conceived of an entrepreneur as a bearer of non-insurable risk because he described an entrepreneur as a person who buys things at a certain price and sells them at an uncertain price. ‘An entrepreneur undertakes the responsibilty for loss that may arise due to unforeseen circumstances in the future. Characteristics of an Entrepreneur “There is no such thing as a typical entrepreneur. Some entrepreneurs are quiet and hardworking. While others are more outgoing and flamboyant. The key to being a successful entrepreneur lies in the ability to take an idea and then, through the process of innovation, develop it in such a way that it becomes a marketable product or service. Research indicates that there are a number of characteristics that are quite likely to be present in high-achieving entrepreneurs. — ‘Scanned with CamScannerPUIC TRAINING MANUAL Strong vision and unique ideas not available in the marketplace. Pioneering spirit and strong passion. Creativity and innovation, the driving force of success Result oriented ‘The power of focus and commitment Persistence, perseverance and determination to transiate vision to reality, Hardworking and desire to achieve success Self-confidence and boldness Desire for independence Discipline and self-sacrifice Leadership and persuasive abi to make others join hisiher team Control over perceived destiny or life situation Rational and positive thinking, Risk taking and acceptance of fallure Points of advice for potential entrepreneurs. Lear from your mistakes, and then never make them again. Be prepared emotionally for entrepreneurship's ups and downs. Be willing to live with fear, risk and occasional failure. Understand, nurture and refine your vision of the enterprise Entrepreneurship Development Line your business up with your passions e.g Footballers, Caterers, Musicians etc. Courage/willingness to take risks Positive attitude, opportunistic Vision/ability to see things as they might be and to anticipate change Self-confident, assured Dedication/commitment Self-starter/Pioneering spirit, Innovative spirit Leadership skills (listens, delegates, motivates etc). Team building/team work abilities Resourceful (Productive). Perseverance/Resilience (Never giving up) Flexible/adaptable ‘Scanned with CamScannerPUIC TRAINING MANUAL Entrepreneurship Development UNLOCKING ENTREPRENEURIAL COMPETENCES Entrepreneurial Competencies ‘An entrepreneurial competence is an underlying characteristic of a person, which results in effective andlor superior performance in a business venture, itis an underlying characteristics of a person, in that it may be motive a body of knowledge, set of skills and cluster of appropriate motivesftaits that an individual possess to perform in his business, Important entrepreneurial traits or competencies Whenever we are looking around, we find certain entrepreneurs doing exceedingly well. They are managing their enterprises very well and are out to make them grand success. The various questions that normally arise are-who are they? What they possess and various other questions related with their style of functioning. In their case there is a judicious mixture of knowledge, skill and personality. All these are called entrepreneurial traits or competencies. Knowledge refers to the collection and retention of information about any job or activity. Knowledge forms the basis for any action, Only knowledge cannot ensure success. ‘An entrepreneur may possess certain competencies and at the same time it is possible to develop these through training, experience and guidance. Various competencies required for superior-performance are as follows. Initiation: this is an inner urge in an individual to do or initiate something. Its the entrepreneur who takes or initiates the first move towards setting up of an enterprise. Most of the innovators have got this urge to do something different. Entrepreneur basically is an innovator who carries out new combinations to initiate and accelerate the process of economic development. Commitment to Work: Successful entrepreneurs are prepared to make all sacrifices for honouring the ‘commitments they have made. Whatever they commit, they take it is a moral binding for honoring their commitments, irrespective of the costs involved. ‘Assertion: An assertive person knows what to say, when to say, how to say and whom to say. He believes in his abilities and ensures that others fall in line with his thinking, aimed at promoting the interests of the organization. Persuasive: A successful entrepreneur through his sound arguments and logical reasoning is in a position to convince others to do the works the way he wants them to do it. It is not physical but intellectual force he uses to convince others. ‘Scanned with CamScannerPUIC TRAINING MANUAL Entrepreneurship Development Problem Solver: Successful entrepreneurs take problem as a challenge and put in their best on finding out the most appropriate solution for the same. They will first of all understand the problem and then evolve appropriate strategy for overcoming the problem. Sell Confidence: Top performers are not cowed down by difficulties as they believe in their own abilities and strengths. They have full faith on their knowledge, skill and competence and are not worried about future uncertainties. Opportunity seekers: An entrepreneur is always on the look-out or searching for opportunity and is ready to exploit itin the best interests of the organization. Persistence: An entrepreneur is never disheartened by failures. He believes in the Japanese proverb “Fall seven times, stand up eight”. He follows Try-Try Again for overcoming the obstacles that come in the way of achieving goals. ‘Scanned with CamScanner