ENTREPRENEURS IN THE CONTEXT OF Misconceptions about Entrepreneurship

ENTREPRENEURSHIP1 ● Successful entrepreneurship needs only

a great idea
● Entrepreneur is easy
Entrepreneurship ● Entrepreneurship is risky gamble
● Entrepreneurship is found only in small
● The art or science of innovation and business
risk taking for profit ● Entrepreneurship ventures and small
in business. businesses are the same thing.
● The practice of starting new
organizations or revitalizing Importance of Entrepreneurship
mature organization, particularly new ● Innovation (modern Technology) – a
businesses generally process of creating, changing,
in response to identified opportunities. experimenting, transforming, and
Entrepreneurship – entrependre – “to revolutionizing.
undertake” ● Number of New start-ups (new entrant)
– new firms contribute to economic
Entrepreneurship is the key to innovation, development through increase in tax
productivity and effective competition. revenue, job creation and product
According to Joseph Schumpeter process innovation.
● Job Creation ( More Jobs Created) –
Entrepreneurship is an innovative function. It is new ventures created new jobs which
a leadership rather than an ownership. are vital to the overall long term goal of
the community.
The process of innovation may be in a form of:
Stages/Entrepreneurial process
● A NEW PRODUCT
● NEW METHOD 1. Conducting opportunity process
● NEW MARKET 2. Developing the plan and setting up the
● NEW SOURCE company.
3. Acquiring financial resources
RISK
4. Determining the resources required and
It refers to the VARIABILITY OF OUTCOMES implementing the plan.
(RETURNS). 5. Scaling and harvesting the venture.

ENTREPRENEURS – are RISK –TAKERS.

Common Themes in definitions of Who is ENTREPRENEUR?
entrepreneurship
● Who starts a business
● Individual – (person) ● Organizes, manage and assumes
● Innovation – (Modern technology)
Types of Entrepreneur
● Organization creation – (Management)
● Creating value (finished good – 1. Novice entrepreneur ( No business/New
customer) start –up)
● Profit or not for profit 2. Habitual entrepreneur (Owns a
● Growth business/small– large).
● Uniqueness 3. Nascent entrepreneur ( Ongoing
● Process business)
 4. Serial entrepreneur (Closing – opening
depend on the choice)
5. Portfolio Entrepreneur ( establish
business and adding another business)
Characteristics of entrepreneurs
1. Demographic Profile of entrepreneurs
this approach use to describe who
entrepreneurs are by looking at the
characteristics of the individuals
personal background.
2. Challenges
● Be comfortable with change and
uncertainty
● Make a bewildering number of
decisions
● Face tough economic choices
● Be comfortable with raking risks
● Need many skills and talent
● Be comfortable with potential of failure
Entrepreneur2

This includes: What is intellectual property?

● Family birth order and gender
● Work experience Intellectual Property refers to creations
● Education of the mind: inventions, literary and
● Entrepreneurial family artistic works, and symbols, names,
images, and designs used in commerce.
2. Personality Profile of entrepreneurs –
This approach use to describe who Two categories of Intellectual property
entrepreneurs are by looking the
individuals’ personality traits. Some Industrial property
personality included: 1. Inventions (Patents)
2. Trademarks (logo)
● High level motivation 3. Industrial designs (symbols)
● Abundance of self confidence 4. Geographic indications of source
● Ability to be involved for the (Location)
long term Copyright
● High energy level
● Persistent problem solver ( A. Literary
logic) ● Novels
● High degree of initiative ● Poems
● Ability to set goals ● Plays
● Moderate risk taker ● Films
Rewards and challenges of being an ● Musical works
entrepreneur B. Artistic works
1. Rewards ● Drawings
● High degree of independence ● Paintings
● Opportunity to use a variety of skills ● Photographs
and talents. ● Sculptures
● Freedom to make decisions ● Architectural designs
● Accountability to yourself alone
● Experiencing feeling of achievement Patents
and pride in accomplishing goals
● Potential for greater financial rewards.
It is a contract between the government and an
inventor.
International patents
The agreement concerning the international
patent.
The Disclosure Document
It is a paper disclosing an invention and signed
by the inventor.
Patent application
It is also refer to the process of applying for a
patent.
Copyright
It is the ownership of an intellectual property
within the limits prescribed by a particular
nations or international law.
Trade Secret
It is any information that allows you to make
money because it is not generally known.
Licensing
Is an arrangement between two parties, where
one party has proprietary rights over some
information, process, or technology protected
by a patent, trademark or copyright.
Product safety and Liabilities
It is the responsibility of company to meet any
legal specifications regarding a new product
covered by the consumer product act safety act.
Claims regarding product liability usually fall
under one of the following categories:
1. Negligence – extends to all parts of the
production and marketing process. It
involves being negligent in the way a
product is presented to a client, such as
using deficient labels, false advertising
and so on.
2. Warranty – consumers may sue if
advertising or information overstate the
benefits of a product does not perform
as stated.
3. Strict Liability – a consumer suing
because the product in question was
defective before its receipt.
4. Misrepresentation – this occurs when
advertising, labels or other information
misrepresent materials facts concerning
the character or quality of the product.
Insurance
It is a contract by which a company, in
consideration of a sum of money or percentage,
agrees to indemnify the insured against loss,
injury death. etc. by certain risks.
Types of insurance and possible coverage
Property - Fire insurance to cover losses to
goods and premises resulting from fire and
lighting.
Casualty – This coverage can also be
extended to cover product liability.
Life - Life insurance protects the continuity of
the business (especially a partnership).
Workers compensation - May be mandatory in
some states. Provides benefits to employees in
case of work-related injury.
Bonding - This shifts responsibility for employee
or performance of a job.
Contracts
It is a legally enforceable agreement between
two or more as long as certain conditions are
met.
Contract Conditions
An offer is made. It can be oral or written but is
not binding until voluntary acceptance of offer
is given.
Four essential items in an agreement
1. All of the parties involved should be
named and their specific roles in the
transaction specified (e.g. buyer, seller,
consultant, and client).
2. The transaction should be described in
detail.
3. The exact value of the transaction
should be specified.
4. Obtain signature(s) of the person(s)
involved in the deal.
Benefits and Drawbacks of Business Ownership
3 ●
Benefits and Drawbacks of Business
Ownership
● Generally seen as similar but it is not
● Everyone can be small business owners
but not small business owners are
entrepreneurs.
● Entrepreneurs are economic drivers
that creates jobs and bring new ideas
into the marketplace.
● Small business owners, on the other
hand, contribute to the economy but
not to the same degree as the
entrepreneur.
● What is small Business?
Is a business that is privately owned and
operated, with a small number of
employees and relatively low volume of
sales.
Why bother with small businesses?
1. Shifting firm neglect
2. Entrepreneurial Economy
Small Business
● Independently owned
● Fewer than 100 employees growth
● Doesn’ t emphasize new or innovative
practices
● Little impact on industry
Entrepreneurial Ventures
● Innovative practices
● Goals are profitability and growth
● Seeks out new opportunities
Willingness to take risks
● Starting from scratch or joining an
existing business
Starting from scratch or joining an existing
business
1. Getting started
Identifying start up ideas
● Creating a new business from scratch
● Finding start up ideas
● Integrating internal and external
analysis
● Selecting strategies that capture
opportunities
● Putting it all together
2. Franchising – is an act whereby allowing
one to practice and use another
business philosophy and methodology.
Is the authorization to sell the
company’s goods or services in a
particular place by a particular person
outside of the company.
A. Pros and cons of Franchising
PROS
● The entrepreneur is buying a business
system that is already working.
● Discounts are given by the franchisor
● Advertising is done by the franchisor
● The entrepreneur support of the
franchisor's management whenever
problem about the franchise arises.
● Support programs are there in all
phases of the franchise operation.
CONS
● Franchise cost is much higher than
starting up a business
 ● The entrepreneur is obliged to pay
royalties every year.
● The contract is not guaranteed
renewable
B. Limitation ofFranchising
C. Franchising history
● Franchising is derived from a
French word “ franc” means
free,freedom or exemption
from duties.
D. Structure
● Franchisors
● Franchisees
● Facilitator
E. Evaluating Franchise Opportunities
● Market trends
● Executive background
● Territory coverage
● Company support
● Brand name
● Professional advice
● Exit strategy
● Franchise business plan
F. Finding Global franchising opportunities
Family Business
● A unique institution
A family business is a company that two or more
members of the same family own or operate
together or in succession.
● Culture of a family business
● Family roles and relationships
Key success factors of entrepreneurs
1. skills, expertise and aptitudes
● It is important to start a
business with something
that you feel comfortable
and know a lot about it /or
in which you are skilled.
2. Important personal characteristics
a. Involvement in the business
b. Willingness to take risks
c. Sound human relations
d. Creativity and innovative ability
CREATIVITY, OPPORTUNITY AND INTEGRITY OF
THE ENTREPRENEUR
What is Creativity?
A mental and social process involving the
generation of new ideas or concepts, or new
associations of the creative mind between
existing ideas or concepts.
Attitude of creative person
● Curiosity
● Seeing problem as interesting and
acceptable
● Confronting challenges
● Optimism
● Suspending judgment
● Seeing hurdles as leading to
improvements and solutions
● Perseverance
● Flexible imagination
Synergy of creativity and entrepreneurship
1. Model of Creativity
● Kirton’ s Adaptation –
Innovation theory – he believes
that the former is no less
creative than the latter – its just
thattheysee and approach
things from a different
His theory has an instruments:
● Originality
● Efficiency
● Rule/group conformity.
2. Basadur’ s Applied Creativity –
according to Min Basadur, the
proponent of this theory, creativity is a
combination of knowledge, imagination
and evaluation. But not everyone has
the same method of combining the
three to become creative.
Innovative Results= content+process+process ● Product
killa+style+tools ● Press (situation)
● Persuasion (motivation)
8 activities that can be speed up good thinking. ● Potential
● Problem finding Competitive advantage
● Fact finding
● Problem definition A status in which one company is able to receive
● Idea finding profits above that of the industry average, or
● Evaluate and select even another
● Plan
● Acceptance Porters methods for creating a sustainable
● Action competitive advantages:
● Cost leadership/ cost advantage
● Differentiation advantages
3. Parnes-osborn creative Problem Solving ● Focus advantages
Process (CPS) this - strategy originally
formulated by Alex Osborn, creator of Porter's Five Forces Analysis
brainstorming and sidney Parnes, a 1. Bargaining power of supplier or simply
professor with 40 years of teaching supplier power.
experience delivering creativity 2. Bargaining power of customers or buyer
workshops and courses about thinking power
and the creative process. 3. Threat of new entrants
6 stages of CPS 4. Treat of substitute product
5. Competitive rivalry within the industry.
● Objective finding
● Fact finding Opportunity analysis - phases to success
● Problem finding 1. Seize the opportunity
● Idea finding 2. Investigate the need
● Solution finding 3. Develop a plan
● Acceptance finding 4. Determine resources
5. Management of features

4. Amabile s components of Creativity

Model Derived from Dr. Teresa Integrity and Entrepreneurship
Amabile's theory of creativity. She
presented preliminary assumptions and ● Integrity an uncompromising adherence
observations pertaining to her theory of to doing what is right and proper
creativity. ● Honesty, reliability and fairness in
5. Csikszentmihalyi's System View of business practices.
creativity model contends that ● Doing the right thing
creativity is most usefully
conceptualized in a systematic rather
than an individualistic process.
Common attributes
● Person
● Process