MAGANI EP NOTES@19TH SEPTEMBER 2023

TOPIC 1-LESSON 1
ENTREPRENEURSHIP
Entrepreneurship is the acquisition of knowledge, skills and attitudes required for one to start and
operate his or her own business.
(a) Knowledge:-collection and retention of information in one’s mind. It is necessary for performing a
task but not sufficient e.g. person having knowledge of swimming can be in a position
to describe how to swim but mere description will not enable the listener to swim
unless something extra, the skill is added. Skills translate knowledge into action.
Knowledge is acquired or enhanced through reading, talking etc.
(b) Skill it is the ability to demonstrate a sequence of behavior which results in something
Observable.
It is acquired through practice. Both knowledge and skill are required to perform a
task.
N/B: - While knowledge is acquired by reading, talking etc; skill is acquired by
Practice (actual playing)
(c) Attitude is the motive or urge to achieve a goal
Entrepreneur
 Entrepreneur is a French word meaning organizer of entertainment
 This is somebody who assumes the responsibility and the risk for a business operation with the
expectation of making a profit. He decides on the product, acquires the facilities and brings
together the labour force, capital and production material.
 He creates value by offering a product or service thus carving a niche in the market that may not be
in existence.

Benefits of entrepreneurship:
 Self employment and employment of others which come with more job satisfaction
 Financial gains in the form of profits
 Increased economic growth both at individual and national level
 Healthy competition as a result of production of more higher quality goods into the
competitive market
 Development of new markets: competitors are forced to venture into new markets

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  Development of entrepreneurial qualities among entrepreneurs as a result of interaction
 Reduction of informal economy with significant tax advantages
MAGANI EP NOTES@27TH SEPTEMBER 2023

TOPIC 1-LESSON 2

Characteristics of successful entrepreneur

There are some traits which must be possessed by an entrepreneur or be developed within him in order
to be in business. These factors are sometimes called entrepreneurial characteristics.
Opportunity seeking; An entrepreneur is always looking-out for a favorable moment or occasion. He
takes advantage of every available chance for success.
Initiative: There is a desire and willingness to initiate action and not accepting or take direction from
others. He Does not wait for others to push him to do things that he knows need to be done
Energetic: This refers to high amount of energy and drive inside an individual.
Risk taker (moderate): this means identifying risks and weighing their relative dangers. Should
not be one who is over ambitious or risk averse.
Take moderate calculated moves.
Persistence, perseverance, resilience:
Persistence - Taking action in the face of significant obstacles. It means to be steadfast in one’s
pursuit of an aim.
Perseverance - Stand firm despise all obstacle
Resilience - Forgetting fast or recovering quickly from a misfortune.
Envisager- An entrepreneur is a Goal setter who has the ability and commitment to set clear and
attainable goals. The goals must be SMART (S-Specific; M- measurable; A- Achievable; R-
Realistic; T- time bound)
Independence and Self Confidence
The desire to be one’s own boss, taking one’s own orders and making one’s own decisions.
Stick to your own judgment in the face of the opposition, or early lack of success.
It also involves having a strong and realistic belief in your self. He takes responsibility for his actions.

Persuasion and net-working

The ability to understand and interact well with people of varying personalities and values.
To work with other people by use of deliberate strategies to influence, convince or persuade them.
Information Seeking

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This is the skill of seeking and using feedback from the employee, clients, suppliers, competitors etc.
It includes consulting experts and professional for business or technical advice.
It includes personal research on a given product or service.

Courage and Commitment

The ability to act on ones own convictions, despite criticism e.g. having the ability to give up your job
to embark on a new venture.
Novelty oriented:
Novelty means originality, newness or uniqueness in doing things. It therefore refers to creativity and
innovativeness in a person.
Creativity- Means To come up with an idea that had never been there before.
Innovativeness- It refers to coming up with a new idea, product, concept or otherwise a risky Venture
and developing it into a profitable business enterprise. It also means finding new uses for something
that is already known or in existence..

Traits of creativity and innovation:

Creativity means to come up with an idea that has never been there: to explore non-existing resources.
Generating new ideas and discovering the existence of opportunities and resources. It involves
originality, adventure. Creativity can be stimulated by:
 Employee empowerment: Giving freedom to employees enables them to exploit their hidden
talents.
 Decentralizing tasks: Facilitates specialization that ensures that employees work in fields in
which they have special knowledge. This enables them refine their skills and make new
discoveries.
 Minimized bureaucracy: encourages logical thinking and hence creative thinking.
 Risk management: Policies that cover risks associated with creativity thus minimizing
impact.
 reward scheme: Recognizing efforts made by creative thinkers through: Reward system
Incentives and prizes, investing on research, providing job security,
Innovativeness- It refers to taking of new idea, product, concept or otherwise a risky Venture and
developing it into a profitable business enterprise. It means to find new use for something that is
already known. It involves idea selection and building on new concepts. It utilizes opportunities

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developed from creativity and modifies them into new and improved quality products with lower
production costs.

Roles of an entrepreneur in a business

1. Promoter: Promoter is one who comes up with an idea. Entrepreneurs are promoters because they
scan the environment: identify opportunities: Marshall or mobilize resources and implement the
business idea.
2. Participation of others – Entrepreneur solicits the participation of other persons in a business
project because of the following:
a. Degree of success or failure factor involved
b. Complexity of business idea demanding more than one person.
c. Making use of the experience influence, and capacity of others.
d. Consolidating friendship or acquaintanship through joint business association

3. Share holders- Entrepreneurs can participate as shareholders in a business under the following
circumstances: When the enterprise is too big for them to buy.
a. When they do not want to commit their full time in the enterprise
b. By spreading their investment portfolio to reduce risks.
c. When they do not have the capacity to manage such an enterprise potential.

4. Directors – Entrepreneur participate as directors by:

a. Contributing ideas to advance the enterprise objectives.
b. Convincing other directors to consider their view by using various techniques.

5. Designers of Organization structure –

An organization structure is an established pattern of relationship among the components or units
of an organization.
- It is a designed system (set up) in an organization indicating hierarchy of positions of various
members assigned to various duties, at different levels.
- For entrepreneurs to effectively control, monitor operations and facilitate communication within
the workers, it is important to design and maintain a working organization structure.

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Advantages of organization structure
- It allows for unity of command - subordinates get orders from (and report to) one superior.
- It increases accountability and responsibility.
- It provides room for delegation
- It provides freedom for Head of Department, to make necessary decision relating to his
department.
- It’s flexible and provides scope for expansion and adjustment.
- It allows for maximum utilization of resources since it allows for accurate planning.
- It creates a conducive environment for human performance.

Disadvantages of organization structure

- It is expensive.
- It results in delayed decision-making.
- Difficulty in fixing responsibility.
- Lead to unnecessary conflict.

Delegation of duties and authority

- This is the conferring of authority from one executive to another in order to accomplish a
particular assignment.
- The granting or passing of authority to subordinates down the organization structure to operate
within described authority.

Advantages/ merits of delegation of duties and authority .

- It maintains a healthy relationship between the manager and the subordinate.
- It’s a source of motivation i.e. it creates a feeling of acceptance.
- It lessens burden on top executives and gives them time to concentrate on other vital aspects of
management.
- It saves time for prompt decisions to be made.
- It acts as a source of training or learning session for the subordinates.
- Encourages team work
- Facilitates specialization and ensures that employees work in fields in which they have special
knowledge
- Tasks are done by experts
- Used to evaluate performance of employees
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- Work is spread evenly

Disadvantages/ demerits
- Creates conflict and misunderstanding.
- It can lead to duplication of duties.
It can lead to a subordinate overreaching his domain i.e. surpassing powers beyond his jurisdiction.
(overstepping his mandate)