Entrepreneurship

Entrepreneur – A person who organizes, manage and assumes the risks of enterprises.

Types of entrepreneurs
 Sole proprietor - Person who owns and run a b/ss on him/herself
 Active partner - It’s a joined renature of two individuals
 Investors - People with money who come into a business finance and get a share
 Challengers - Invest in a b/ss
 Life timers - The individual take b/ss as part of their life

Classification of Entrepreneur
a) According to the type of b/ss they do
b) According to the technology
c) According to entrepreneur and motivation
d) According to growth and stages of development
e) According to entrepreneur and stages of development

Role of Entrepreneur in enterprise b/ss

 Promote initiator – Scan the environment, identify the opportunity, implement b/ss idea
 Shareholders - S/he shares into buying of a b/ss when the b/ss is too big for one to
buy alone
 Partner / mobilizer – Elicit the participation of other in b/ss
 Director - Contribute ideas to advance enterprises
 Organizer - Develop structure that will effectively control, monitor operations
and facilitates communication with others
 Designer - Understand the degree of external b/ss that can be managed
 Controller - Leader rather than a follower who makes the final decision and
control all aspects of the b/ss
 Coordinator - Coordinates all factors of production need in a b/ss
 Creativity and Innovation
Creativity - Ability to bring new things in existences
Innovation - Process of doing/ inventing new things

Process of Creativity
1) Idea generation
2) Preparation
3) Incubation
4) Illumination
5) Verification

Innovation process
 Analytical planning
 Organizing resources
 Implementation stage
 Commercial application
Importance of Innovation
I. Reduce cost of production and distribution
II. Improvement in quality and quantity
III. Customer satisfaction to product of lower prices
IV. Cooperate image as people see the firm and quality of the product
V. Customer loyalty as products becomes loyal to innovate
VI. Competitive advantage as the b/ss strive to innovate
VII. Motivation to employees as they are always innovated due to innovative produce in the
organization
VIII. Expansion of the b/ss due to firm innovation make it gain competitor advantage

Ways of managing barriers to creativity and innovation

 Support from top management
 Rewarding innovative employees
 Embrace diversity
 Learn from outside world
 Experience and evaluate
Barriers to creativity and innovation

 Fear of change
 Fear of failure
 Lack of direction
 Lack of inspiration

Entrepreneurial culture
Set of values, attributes and believes supporting entrepreneurship in the community of
independent entrepreneur

Importance of Entrepreneurial culture

a) Enhance economic growth
b) Enhance job creation
c) Acts as a primary source of innovation
d) Has a direct influence in utilization of the technology

Factors that promotes entrepreneurial culture

Increased awareness of entrepreneurial opportunities
Intensify education about entrepreneurship
Creation on models and champions which people are identifying
Establishment of mentors and patron panel
Incentive and support of b/ss
Enhanced entrepreneurship

Factors inhibiting Entrepreneurship

o Lack of capital
o Availability of market
o Poor infrastructure
o Negative government polices
o Lack of raw materials
o Low status
o Narrow attitude towards women
Entrepreneurship of opportunity
Opportunity – A favorable chance to start a b/ss
Idea - Thoughts on possible b/ss for an entrepreneur may start

Sources of b/ss Ideas

1. Internal
2. External
3. Personal

Evaluating a b/ss opportunities

Ability to sell products and get income

Screening b/ss Ideas

Quality of the products
Customer attraction and practices
Product benefits
Simplicity of the products
Technology available
Security
Infrastructure
Impact of the b/ss to the environment

Qualities of a good b/ss opportunities

 Legality
 Growth
 Uniqueness
 Competitiveness
 Marketability
 Financial feasibility
 Social acceptability
 Operational feasibility
 B/ss life cycle
 Introduction
 Growth stage
 Maturity
 Decline

Aspects of B/ss
1) Licensing
2) Health regulation
3) Labour laws
4) Building laws
5) Insurances

Factors to consider when Accessing production demand

a) Demand
b) Customer potential
c) Market size
d) Physical infrastructure
e) Legal regulation
f) Competitors strengths
g) Demographic trends
h) Market acceptancy
i) Attitude of suppliers

Types of B/ss Employment

a) Extractive industries……………. Mining
b) Manufacturing sector…………… vehicles assembly
c) Processing sector…………………. Sugar, milk, tea
d) Construction sector……………… roads, houses
 FORMS OF ENTREPRENEURSHIP
1. Sole proprietorship
2. Family b/ss
3. Partnership
4. Cooperative
5. Limited company

Entrepreneurial Motivation
Motivation – the motive of factor that energize behavior and give it direction

Classification of Motivation
a) Internal
b) External

Internal Motivation
 Employment creation needs
 Need of indented
 Need of power
 Need of recognition
 Need of security
 Self- actualization needs

External Motivation

 Infrastructures
 Credit facilities
 Information support
 Pricing policy
 Legal control
 Political climate
 Technical and technology assistance
 Training consultancy services
 Competition
Activity or condition of driving to gain or win something by defeating

Types of competitions
-direct
- Indirect

Direct competition - Where an entrepreneur gets competition from other competitors selling
the same products to group of buyers
Indirect competition - Raw materials or labour force were these are supplied

Planning / strategies of copying with competition

- Way you mobilize your resources to achieve a given objective

 Cooperation
 Market expansion
 Market leadership
 Market development
 Market segmentation
 Appropriate technology
 Improving cost effectiveness
 Training
 Diversification
 Customer incentives
 Competitive pricing

Leadership
Ability to inspire others to give maximum effort and prepare willingly and voluntarily towards
the attainment of the personal goals
Leadership behavior/ qualities
- Vision and foresight
- Strong desire to influence others
- Ability to learn from past error and build experience
- Need to achieve
- Creativity
- Initiative
- Good human relation

Types of the leadership styles

a) Autocratic/ authoritative
b) Democratic
c) Laissez faire
d) Leading and motivating others
e) Building work esteem
f) Informing the employees
g) Delegate authority
h) Maintain contact
i) Apply reinforcement principal
j) Be an active listener
k) Set specific goals
l) Take correction action

Market and Marketing

Market – the summation of all the buying and selling in an area or region under considerations
Marketing – b/ss process of creating relationships with and satisfying the customers

Components / Elements of a market

 Place
 Seller
 Buyer
 Demand
 Price
  Government regulation
X- tics of Market
- Share of consumption as well as total part of demand
- Potential of buying and selling
- Place of innovation and creation
- A place you can negotiate for commodities
- Coverage of all customer requirements are found here
- Goods can be swapped for money, land or some commodities
- Place of swapping of goods and services for some values

Factors affecting the Market

a) Number of buyer and sellers
b) Types of commodities being sold
c) Presence of competition
d) Expectation of buyers
e) Economic factors
f) Social factors
g) Political factors

Process of marketing
1. Situation analysis
2. Marketing strategy
3. Marketing needs
4. Implementation and control

Social responsibility and ethics

Individual or company have a duty to act in the best interest of their environment and society
as a whole

Types of social responsibilities

To the customers
To the suppliers
 To creditors and investors
To your community
To the employees
Respect the environment

Cases for the enterprise social responsibilities Ethics

1) Profitable opportunities
2) Moral justification
3) Ensure law and order
4) Long term self- interest of the company
5) Maintenance of a free enterprise
6) creation of the society
7) Better use of the surplus resources
8) System inter-dependence
9) Creating favorable environment

B/ss Ethics
Ethics – it’s the study of moral choice and values
B/ss Ethics – reducing accompany freedom to maximize its profit

Merits of b/ss Ethics

 Creates social consciousness
 Facilitates b/ss expansion
 Support from employees
 Serves as guidance to the b/ss man
 Favorable for the social image
 Orderly functioning
Importance of the b/ss Ethics
o Protects the company’s reputations
o Better decision making
o Give value credibility to the public
Merits of b/ss Ethics to employees/workers
1. Offer companies a competitive advantage
2. Customers learn to trust ethical brands and remain loyal to them
3. Society benefit from b/ss ethics because ethics companies recognize their social
responsibilities

Emerging Issues in Entrepreneurship

I. E- commerce
II. Globalization
III. Gender and entrepreneurship
IV. Youth entrepreneurship

Gender and entrepreneurship

Merits to B/ss Demerits to B/ss

Change of culture Cultural beliefs
Government policy Fear of failure
Women welfare Lack of skills

Women motivation to b/ss

- Being your own boss
- Opportunity to make money
- Need for independence
Barriers that prevent women to join B/ss
1) Culture
2) lack of decision making and authority
3) Taxes and customs
4) Limited mobility
5) Competition from well off established men enterprises
Rural Entrepreneurship
Emerges in the rural areas
Need of the rural E/E
 Employment creation
 Income generation
 Balanced regional development
 County government development
 Promotion of creativity
 Economic development
 Conservation of the environment

Problems to rural E/E

o Lack of capital
o Poor infrastructures
o Lack of skilled labour
o Lack of raw materials
o Poor technology
o Lack of marketing

Enterprise management
Management – getting things done via people

Function of management
a) Directing
b) Controlling
c) Command
d) Coordinate
e) Planning
f) Motivation
g) Organizing
h) Staffing
Inventory management
Is a component of suppliers and supervision that involves supervisors capitalize the assets
Methods of inventory
a) Just in time
b) Material required planning

Importance of inventory management

- Determine whether a periodic system is the best system for b/ss
- Implement a circle counting program after considering counting frequency, strategy and
circle count management
- Manage your inventory by knowing the inventory levels that are most beneficial to the
flow of your b/ss
- Implementing quality control procedures so that employees can work towards the same
goals
- Optimize inventory levels to boost efficiency and meet customer demand
- Prepare for growth and implement inventory management best practices that will
support your b/ss goals

Financial Management
The analysis, classification and recording of financial transactions and the attachment of
how such transactions affect the performance and financial positions of the b/ss

Importance of Financial Management

 To facilitate credit transactions
 Ascertainment of profits and loses
 Based for further planning
 Tool for control
 Evaluation of assets and liabilities
 Assessment of tax; VAT, Custom duty
 Source of B/ss finance
1. Financial institutions
2. Profit from the b/ss itself
3. Selling of shares
4. Savings
5. Contribution from friends, family members
6. Ventures capitalist
7. Grants from NGOs foundations

Examples of B/ss Transactions

 Official receipt issued
 Sales invoice for the sales transactions
 Cash voucher for payment in cash
 Statement of account from suppliers
 Vendors invoice
 Promissory notes

X-tics of B/ss transaction

- A monetary event
- Affects financial position of the b/ss
- Initiated by an authorized person
- Supported by a source document
- Belongs to b/ss not to the owner/ any other person managing the b/ss

Types of financial records

Cash transaction
Credit transaction
Debtors
Creditors
Asset
Liabilities
Capital
Balance sheet