Faculty of Technology

Abunie A., Mechanical Engineering Department, DTU_ 2022

 Objectives of the Course
To increase students’ understanding of
entrepreneurships and small business venture.
To equip engineering students with the required
entrepreneurship tools and inspirations they need
to start and grow a successful business.
To develop students’ ability to integrate the
various functional activities involved in managing
a small business venture.

2
 CHAPTER ONE:
ENTREPRENEURS AND ENTREPRENEURSHIP
 Introduction
 Meaning of the terms Entrepreneur, Entrepreneurship
and Owner manager
 Entrepreneurship and Innovation
 Entrepreneurial Skills and Attributes
 Creativity and Idea Generation
 Reasons to Become an Entrepreneur
o Decisions and Downfalls
Who is an Entrepreneur?
1. Entrepreneur is a person who owns, organizes, manages and runs
an enterprise taking the risk of a business or an enterprise.
2. Entrepreneur is a person who establishes a new business venture
and is a visionary leader- a person who dreams great dreams.
(Robert Hisrich)
3. Entrepreneur is a person who has the ability to see and evaluate
business opportunities to gather the necessary resources to take
advantage of them, and to initiate appropriate action to ensure
success. (Meredith, 1982)
 Entrepreneurs: are the Driving Force Behind Small Businesses

Entrepreneur is a person who starts an enterprise. The process

of creation is called entrepreneurship.
Entrepreneurs: Entrepreneurs are people that notice
opportunities and take the initiative to mobilize resources to
make new goods and services.
Intrapreneurs: Intrapreneurs also notice opportunities and
take initiative to mobilize resources, however they work in
large companies and contribute to the innovation of the firm.
Intrapreneurs often become entrepreneurs.
 Entrepreneurial Process contains three distinctive stages.
Income Self Entrepreneurship
Generation Employment
Initial stage Middle Stage Final stage
 Income generation: is the initial stage in the entrepreneurial
process in which one tries to generate surplus or profit. They
are often taken on part- time or casual/informal
 Self-employment: is the 2nd stage in the entrepreneurial process
and refers to an individual’s fulltime involvement in his own
occupation.
 Entrepreneurship: is the terminal stage of the entrepreneurial
process wherein after setting up a venture one looks for
diversification and growth.
Entrepreneurship is the process of creating something different
with value by devoting the necessary time and effort, assuming
the accompanying financial, psychic, social risks and receiving
the resulting rewards of monetary and personal satisfaction and
independence.
 CON…
Entrepreneurship (specifically in engineering
aspect) is
 The integration of
◦ Business management, with
◦ Engineering/technical skills
leading to the formation of Engineer-
Entrepreneurs
 Owner Manager
 They may or may not be Entrepreneurs.
 They own and manage a small enterprise, in a way, which fits
with their personal motivations.
 They are more intent on survival than seeking innovative change
and growth.
 Limited scope for innovativeness, creativity and imagination
Managerial jobs are transferable, As a manager in the business
organization, his/her job is transferable from office to office, from
one unit and location to another location
.Managers do not bear-risk
 -Risk bearing capacity is an entrepreneurial quality
 Innovation is a process of producing something new. It can be
accomplished weather by adding new features to an existing
product or by creating completely new product.
 Joseph Schumpeter’s five types of innovation
 New product or substantial change in existing product
 New process
 New market
 New sources of supply
 Changes in industrial organization
o Incremental Innovation = Improvements on existing products
o Disruptive Innovation = Game changers
o Communication Skills
o Human Relations Skills
o Mathematical Skills
o Problem Solving & Decision Making Skills
o Technical Skills
o Basic Business Skills
o Desire for responsibility
o Preference for moderate risk
o Confidence in their ability to succeed
o Desire for immediate feedback
o High level of energy
o Future orientation – serial entrepreneurs
o Skilled at organizing
o Value achievement over money
1. Commitment and determination
2. Leadership
3. Opportunity obsession
4. Tolerance of risk, ambiguity, and uncertainty
5. Motivation to excel
6. Creativity, self-reliance, and adaptability
 Creativity:

The ability to develop new ideas and to discover new ways of

looking at problems and opportunities; thinking new things.
 Entrepreneurship – the result of a disciplined, systematic
process of applying creativity and innovation to the needs and
opportunities in the marketplace.
 Entrepreneurs connect creative ideas with purposeful
action/structure of a business.
 Creativity is an important source for building a competitive
advantage.
o Searching for the one “right” answer
o Focusing on “being logical”
o Blindly following the rules
o Constantly being practical
o Becoming overly specialized
o Avoiding ambiguity
o Fearing looking foolish
o Fearing mistakes and failure
o Believing that “I’m not creative”
o Always ask, “Is there a better way?”
o Challenge custom, routine, tradition and formalized
procedures
o Are prolific/ inexhaustible (never-ending) thinkers
o Play mental games
o Realize there may be more than one “right” answer
o See mistakes as pit stops on the way to success
o See problems as springboards for new ideas
o Relate seemingly unrelated ideas to a problem
o Is there a substitute?
o Can you rearrange the parts?
o What if you do just the opposite?
o Can you combine ideas?
o Can you put it to other uses?
o What else could you make from this?
o Are there other markets for it?
o Can you reverse it?
o Can you rearrange it?
 Three switches outside a windowless room are connected to
three light bulbs inside the room. How can you determine
which switch is connected to which bulb if you may enter the
room only once.
 Ans: Switch one light on for a minute; turn it
off and turn another on. Go into the room
and feel the off-bulbs. The warm one is
connected to the first switch, the on-bulb is
connected to the second.
o Researchers believe that
entrepreneurs succeed by thinking
and doing new things or old things
in new ways .

Entrepreneurship = creativity + innovation

o A business idea is the response of
a person or persons, or an
organization to solving an
identified problem or to meeting
perceived needs in the
environment (markets,
community, etc.).
o Hobbies/Personal Interests
o Personal Skills and Experience
o Media (newspapers, magazines, TV, Internet)
o Business Exhibitions
o Surveys
o Customer Complaints
o Natural scarcities and pollution
o Changes in Society
o Brainstorming
o Being Creative
o Ideas from overseas (Global) Potential Imports
I. Pull Factors: the factor which attract a person to become
entrepreneur; (positive motive)
o Perception of Advantages.
o Spotting an Opportunity
o Government Policies
o Motivation
o Influenced by Culture, Community, Family Background,
Teachers, Peers, etc.
II. Push Factors:
Many people are pushed into founding a new enterprise by variety of
factors including: (Negative motive)
o Job Dissatisfaction
o Relocation
o Joblessness
o Lay off
o Retirement
o Boredom
To an Individual, It gives the Opportunity to:
o Create your own destiny
o Reach your full potential
o Reap impressive profits
o Contribute to society and to be recognized for your efforts
o Do what you enjoy and to have fun at doing it
o Freedom to use own ideas – Innovation and creativity
o Provides larger employment
o Results in wider distribution of wealth
o Mobilizes local resources, skills and savings
o Accelerates the speed of economic development
o Stimulates innovation & efficiency
o Uncertainty of income
o Risk of losing your entire investment
o Long hours and hard work
o Lower quality of life until the business gets established
o High levels of stress
o Complete responsibility
o Discouragement
Wage Employment
o Work for Others
o Follow Instructions
o Routine Job
o Earning is fixed, never
negative
o Does not create wealth
o Can choose from-
 Government service
 Public Sector
 Private Sector
Entrepreneurship
o Own Boss
o Make own plans
o Creative activity
o Can be negative
sometimes, generally
surplus
o Creates Wealth,
contributes to GDP
o Can choose from-
 Industry
 Trade or Service Enterprise
Entrepreneurship is an attractive career choice. But many decisions
have to be made before launching and managing a new business.
Among the questions that need to be answered are:
o Does the individual truly want to be responsible for a business?

o What product or service should be the basis of the business?

o What is the market, and where should it be located?

o Is the potential of the business enough to provide a living wage

for its employees and the owner?
o How can a person raise the capital to get started?

o Should an individual work full or part time to start a new

business?
o Should the person start alone or with partners?
Motivation:
o What is the incentive for starting a business?
o Is it money alone? True, many entrepreneurs achieve great
wealth.
o However, money is almost always tight in the startup and
early phases of a new business.
o Many entrepreneurs do not even take a salary until they can do
so and still leave the firm with a positive cash flow.
Strategy:

o What is the strategy for distinguishing the product or service?

o Is the plan to compete solely on the basis of selling price?
o Price is important, but most economists agree that it is
extremely risky to compete on price alone.
o Because, Large firms that produce huge quantities have the
advantage in lowering costs.
Realistic Vision:
o Is there a realistic vision of the enterprise's potential?
Insufficient operating funds are the cause of many failed
businesses.
o Entrepreneurs often underestimate start-up costs and
overestimate sales revenues in their business plans.
o Some analysts advise adding 50 percent to final cost
estimates and reducing sales projections.
 Qualities of an Engineer-Entrepreneur
 Deal with uncertainty and ambiguity (risk taking)
 Team player;
 Convincing speaker and attentive listener;
 Creative and inquisitive mind;
 Understand economic and financial aspects of an engineering effort;
 Able to design sound business plan;
 Work effectively across multiple organizations, boards, companies,
and departments;
 Be willing to learn and grasp new things (approaches, ideas);
 Good manager of resources (money, materials, machines, etc.);
 Understand market dynamics;
 Good communication skills, both oral and written;
 “The hardest part about being an entrepreneur is that
you’ll fail ten times for every success.”
- Adam Horowitz
 “There is no reason to be hesitant… becoming an
entrepreneur is a learning experience.”
-Savannah Britt
1) Entrepreneurs are born, not made?

2) Money is the key to entrepreneurial success?