HRD 2401 Entrepreneurship Skills Notes (BJ, BCCM & BMC) 2024

JOMO KENYATTA UNIVERSITY
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AGRICULTURE AND TECHNOLOGY
P.O. Box 62000, (00200) NAIROBI, TEL: (067) 52711 ext 2125. THIKA
College of Human Resource Development: MTAC, 2024 (Jan-April Sem)
HRD 2401 for (-Total Students 110-HRD 207) hrs of contact 45
HRD 2401 ENTREPRENEURSHIP SKILLS

LESSON ONE:
1. Topic (1) ENTREPRENEURSHIP AND SELF-EMPLOYMENT
INTRODUCTION:
HISTORICAL PERSPECTIVE OF ENTREPRENEURSHIP
 During the ancient period the word entrepreneur was used to refer
to a person managing large commercial projects through the resources
provided to him.
 In the 17th Century a person who has signed a contractual
agreement with the government to provide stipulated products or to
perform service was considered as entrepreneur.
 In the 18th Century the first theory of entrepreneur has been
developed by Richard Cantillon. He said that an entrepreneur is a risk
taker. If we consider the merchant, farmers and /or the professionals they
all operate at risk. For example, the merchants buy products at a known
price and sell it at unknown price and this shows that they are operating
at risk.
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 The other development during the 18th Century is the differentiation

of the entrepreneurial role from capital providing role. The later role is the
base for today’s venture capitalist.
 In the late 19th and early 20th Century an entrepreneur was viewed
from economic perspectives. The entrepreneur organizes and operates an
enterprise for personal gain.
 In the middle of the 20th and early 21thCentury the notion of an
entrepreneur as an inventor was established.
ENTREPRENEURSHIP:
Entrepreneurship, like an entrepreneur, has no single definition.
Entrepreneur is a person while entrepreneurship is a process.
 An Entrepreneur is an individual who takes on financial risks to
start and grow a business, using innovative ideas and strategies to
capitalize on market opportunities.
Entrepreneurship
 Is a process under-taken by an entrepreneur to create incremental
value and wealth by discovering investment opportunities, organizing

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enterprises, undertaking risks and economic uncertainty and there by

contributing to economic growth.
Entrepreneurship
 Is a process of creating, developing, and managing a new business
venture with the aim of generating profits or creating value?
Entrepreneurship
 Is about the pursuit of new ideas and the willingness to pursue those
ideas and combine resources to achieve the goal of fulfilling the needs of
market. The relentless pursuit is based on the individual decision to pursue
an opportunity that makes an opportunity profitable
Entrepreneurship
 Is an individual acts on an idea, usually to disrupt the current market
with a new product or service? Entrepreneurship usually starts as a small
business but the long-term vision is much greater, to seek high profits and
capture market share with an innovative new idea.

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In Summary
 Entrepreneurship is a process by which individuals pursue
opportunities without regards to resources they currently control.
Therefore, entrepreneurship is = Innovation + Invention + Creativity
Novelty Creative Original

Invention Discovery Imagination
Revolution Development Inspiration
Modernized Brain child Vision
Improvement Device Resourceful

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An entrepreneur
 An entrepreneur is a risk taker, is also a person who decides to start
a new business, endures the potential risks, and
relishes/enjoy/delights/pleasures/appreciates the rewards
 An entrepreneur is a person who is action oriented, highly
motivated, takes risks to achieve goals
 An entrepreneur is a person who establishes his own business with
the intention of making profits
 An entrepreneur is a person who only provides capital without
taking active part in the leading role in an enterprise.
 An entrepreneur is a one who innovates, raise money, assemble
input, choose managers and set the organization growing.
How to reduce Risks by an Entrepreneur
1. Build organizations
2. Skillful/Strategic Management
3. Innovative
4. Resource Mobilization

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Why to become an entrepreneur

1. To your own boss
2. Pursue their own ideas
3. Pursue financial rewards
4. To contribute to the economy
5. To enjoy the benefits of being own boss
6. etc
TERMS USED IN ENTREPRENEURSHIP:
Therefore the following terms will be used in the field of entrepreneurship
and each and every entrepreneur must be well acquainted with them as
long as the world still coexist:
Intrapreneur
 This is aperson or an employee who uses entrepreneurial skills to
generate profit for the venture.
Intrapreneurship
 This is the practice of entrepreneurship by the employee within an
organization

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 Is a novel way of making organization more profitable?

 It is a significant method for companies to re-invent themselves and
improve performance

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Enterprise
 Business organization that provides goods and services to make
profits and has growth potential
Innovation
 Innovation is a change that adds value to an existing product or
service.
 According to the management thinker and author like Peter Drucker,
Innovation is a response to both changes within the markets and
changes from outside markets.
 According to Bwisa (2011). Innovation is Creativity plus Inventions
either on a new or an existing product and services
Types of Innovation
Just to mention, there are three type of innovation here:
 Disruptive innovation is a process that significantly affects the
market by making a product or service more affordable and/or
accessible, so that it will be available to a much larger audience.

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 Incremental/Synthesis innovation, an innovation that modifies an

existing product or service.
 Pioneering/inventive/Original innovation is one based on a new
technology, a new advancement in the field, and/or an advancement
in a related field that leads to the development of a new product.
Accounts payable
 Accounts payable is a measure of how much you owe your
creditors for goods or services supplied to you.
Assets
 "Assets" refers to your business' cumulative financial holdings.
These are usually classified as current or fixed. Current, or short-
term, assets (include cash or inventory). Fixed, or long-term assets,
(include equipment or land).
Liabilities
 Liabilities are debts your business owes another person or entity.
Like assets, you'll have to define liabilities as current or long-term.

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Current, or short-term, liabilities might include (an expense payable

to a supplier). Many business loans are long-term debts.
Revenue
 Revenue refers to the income you get from a business activity in a
given time. You can calculate earnings by multiplying the per-unit
cost of goods or services by the number of units sold.
Expenses
 Does your business incur expenditures for equipment, utilities or
inventory? These are all examples of expenses‚ money you spend
to operate your business. For the self-employed,
legitimate business expenses are tax-deductible.
Owner's equity
 Usually represented as a percentage, Owner's Equity refers to the
owner's part of business assets.
Balance sheet
 This key financial document provides a snapshot of business
assets, liabilities and owner's equity.

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Net profit
 Also known as your "bottom line." Net profit represents total
revenues less total expenses. This figure is especially important at
tax time. This is because you pay self-employment taxes as a
percentage of net profit.
Net loss
 If your total expenses exceed your overall revenues, you have a net
loss. The risk of a net loss is one of many strong reasons to keep
company costs under control.
Profit margin
 This essential business term measures how much profit you keep
relative to total sales. There are three types of profit margins: gross,
operating and net. Calculate these by dividing the profit (revenue
minus costs) by the revenue.
Cash flow
 Cash flow is the movement of money in and out of your business.
You want there to be a higher flow of income into the business

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than there is an outflow of expenses from the business. This is

called positive cash flow.
Return on investment
 Your Return on Investment, or ROI, shows how much you gained
or lost on a business investment relative to how much you spent on
it. Calculate ROI by dividing net profit by the cost of the
investment.

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References:
Bwisa, (2011). Entrepreneurship Theory and Practice: A Kenyan
Perspective, (1st.ed), Jomo Kenyatta Foundation. Nairobi.
Drucker (1986). Innovation and Entrepreneurship: Practices and
Principles. New York: Harper & Row Publishers.
Principles. (New York: Harper & Row Publishers.
Principles. New York: Harper & Row Publishers.
Invention
 An invention is a leap in capability beyond innovation +
creativity. Inventions combine several innovations into something
new.
 Invention requires creativity, which goes beyond coming up with
new ideas, combinations of thought, or variations on a theme.
(Inventors build).

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 Developing something users and customers view as an invention

could be important to some entrepreneurs, because when a new
product or service is viewed as unique, it can create new markets.
 True inventiveness is often recognized in the marketplace, and it
can help build a valuable reputation and help establish market
position if the company can build a future-oriented corporate
narrative around the invention.
Summary
Invention = Creativity + Innovation
Creativity
Creativity = Innovation + Invention
 Entrepreneurial creativity is an inspiration from existing products
and services. You can find creative inspiration in nature, in
conversations with other creative minds, and through formal
ideation exercises, for example, brainstorming.

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 Ideation is the purposeful process of opening up your mind to new

trains of thought that branch out in all directions from a stated
purpose or problem.
 Brainstorming, the generation of ideas in an environment free of
judgment or dissension with the goal of creating solutions, is just
one of dozens of methods for coming up with new ideas.
 Entrepreneurs who are creative should be to work with two types of
thinking, that is:
 Linear thinking/Vertical thinking
 Involves a logical, step-by-step process. In contrast, creative
thinking is more often.
 Linear thinking is crucial in turning your idea into a business.
Lateral thinking will allow you to use your creativity to solve
problems that arise
 Lateral thinking/free open thinking
 Established patterns of logical thought are purposefully ignored or
even challenged. You can ignore logics; anything becomes possible.

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Role of an entrepreneur (s) within the economy

Capital formulations: - Entrepreneurs mobilize the idle saving of the
public through the issue of industrial securities.
 Improvement in per capita income
 Generation of employment
 Improvement of the living standard
 Economic independence
 Balances regional development
 Innovation: the commercial application of invention
 Imitating role Entrepreneurs, Invention and innovation
 Entrepreneurs
 Invention
 Innovation Areas of Innovation
 New product
 New Services
 New Production Techniques
 New Way of Delivering the Product or Service to the Customer

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 New Operating Practices

 New Means of Informing the Customer about the Product
 New Means of Managing Relationship within the Organization
 New Ways of Managing Relationships between Organizations
SELF-EMPLOYMENT
 Self-employment is like a fling/toss/hurl/throw/pitch/cast- you
offer your specialized services to clients on a project basis and then
move on to the next one.
 Self-employment is act of being your own boss.
Factors to consider when you prepare to be self-employed
1. Sources of finance ie bank, family or savings
2. Government policies
3. Availability of transport and communication
4. Availability of work force/labor ie with rightful skills, knowledge
and experience
5. Availability of security
6. Disposable of income market/purchasing powers
7. Competition
8. Land availability
9. Availability of axillary services ie bank, postal and insurances

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IMPORTANCE OF SELF-EMPLOYMENT
 Fast decision making because of less consultation
 Job security
 Enjoyment of profits alone
 You are your own boss
 Self-Satisfaction thus high production & ability to satisfy person
 Reference by ensuring there is a 500, working environment
 The owner can working hours and generate more
Comparison between Salaried employment and self-employment
1. Starting Capital
 Salaried employment only need potential employee with education
and experience. While self-employed require capital on top of
education and experience.
2. planning
 Salaried employed make a specified amount as a compensation for
their work. While Self-employed do not always earn consistence
amount.
3. Compensation
 Salaried employed is assured of certain amount worked for each
month. While self-employed is to struggle to expand his or her
earnings

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4. Taxes
 Salaried employed predicts his/her taxes burden. While in self-
employment you can’t predict since each and every moment the
earnings changes.
5. Leave
 Salaried people are entitled to leave days, the self-employed are
not
Stages of business life cycle
As an Entrepreneur, you must consider the following stages for you to be
successful:
1 start-up stage
This is the:
 First stage in business
 The commencement stage/first customer stage/production stage.
 Lack of capital,
 The hardest part in business since the entrepreneurs search and
research for the market.
 Simple Organization
 Very tough competition
 Increased production
 Increased sales (students to read further)).

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2. Expansion stage
This Stage is characterized by:
 New period of growth into markets and distribution channels.
 IT often the choice for small business owners to gain larger market
shares
 Finding new revenue
 Finding profit (students to read further).
3. Maturity stage
The main features of this stage are:
 An advance technology,
 Rich in human resource,
 Financial stability,
 Sales stability,
 Stable cash flow,
 Proper management system etc, (students to read further).
4. Transition stage
Is characterized by
 Innovation capabilities,
 Old products are gradually eliminated from the market place,
 Difficulties in introduction of new product ie this lowers
competitiveness etc,

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 Decline in corporates earnings

 (Students to read further).

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HRD 2401 ENTREPRENEURSHIP SKILLS

LESSON TWO:
Topic (2) ENTREPRENEURIAL OPPORTUNITIES:
 Entrepreneurial opportunities may be defined as the skills and
knowledge to scan the environment to realize business chance,
prospect, breakthrough and occasion, (ie those programs designed to
help accelerate the successful development of entrepreneurial
companies through the arrays of business support).
 In real sense, Entrepreneurial Opportunity is a desirable and an Ex-ante
unknowable possibilities that can be actualized by means of
entrepreneurial action whenever the right set of conditions exist.
 Nevertheless, Entrepreneurial opportunity is the process of identifying
consumers need/demands, meet the feasibility of satisfying the
requested product or services.
 All entrepreneurial opportunities, will help an entrepreneur to incubate
(nature, nurse, protect etc) the business.
N/B

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 For an entrepreneur to perform in her business, he/she needs to have

business ideas, and therefore this calls for classification of the ideas.
What is entrepreneurial opportunities as responsibility?
 In this light, we propose that pursuing an entrepreneurial opportunity

can be understood as intentionally taking more
responsibility/accountable/
 Entrepreneurs willingly take responsibility for serving new stakeholders
through the creation of a good, service, or technology that meets some
stakeholders' needs and/or wants.
In Summary,
 Entrepreneurial opportunities are favorable conditions which
creates the needs for goods and services, to satisfy your customers’
needs and wants.
 Entrepreneurial Opportunities are situations in which new
products, services, materials and organizational methods can be
launched in the market to create values. (Gonzalez-Alvares & Solis-
Rodvrguez, 2011, p.557).

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 Entrepreneurial opportunity leads to the discovery of new means-

ends relationships through which new goods, services, raw materials,
and organizing methods can be introduced in order to create
economic value and move the economic system toward or away from
equilibrium
What are the 4 types of entrepreneurial?

As you start a business and then work to build your start-up, often
you will hear about the four types of entrepreneurship: Small
Business Entrepreneurship, Scalable Start-up Entrepreneurship,
Social Entrepreneurship and Large Company Entrepreneurship.
Types of Business Opportunities to Search For

1. Jobs to Be Done. At its core, entrepreneurship is the process of using
available resources to fill unmet market needs. ...
2. Low-End Market Opportunities. The key to identifying market
gaps is understanding the theory of disruptive innovation. ...
3. New Market Opportunities.
What are 4 examples of opportunities?
 Get help on projects.
 Propose working groups.

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 Get testers for new ideas or products.

 Create a team to work on an idea you have.
 Share your expertise or best practices in a particular field.
What are the 5 characteristics of a good business opportunity?
 A good business opportunity should have clear market demand,
scalability, a competitive advantage, strong profit potential,
manageable risks, and should align with your skills and passions.
 What are the five elements of business opportunity?
A business opportunity has five elements which are as follows:
 Assured market scope,
 An attractive and acceptable rate of return on investment,
 Practicability of the idea,
 Competence of the entrepreneur to encase it,
 Potential of future growth.

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What are the 4 characteristics of opportunity?

An opportunity must be:
1. Rare,
2. Attractive,
3. Timely,
4. Anchored in a product, service, or business that creates or adds value
for its buyer or end user.
Sources of business ideas:
 Are classified in to three:
 External sources
 Internal sources
 Personal sources
Internal sources
 Research and development
 Sales personnel’s
 Employees who offer services to customers
 Production team

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 Executive top level employees

 Customers care department
External sources
 From customers suggestions
 Competitions product (existing products and services)
 Trade journals and magazines
 Members of the distribution channels
 Trade associations
 etc
Personal/sources activities
 Creativity
 Innovative and inventive ( ie always strive to add values on existing
products)
 Experiences and exposure
 Keeping up with technological trends/changes in the
entrepreneurial/market field

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TECHNIQUES OF GENERATING BUSINESS IDEAS

1. Brain Storming (ie through organized groups and discussions to give
positive comments and suggestions without criticizing the business).
2. Use of focused groups
3. Attribute listing
4. Fantasy/inventions/ imaginary etc
QUALITIES OF A GOOD BUSINESS OPPORTUNITY
1. Legality
2. Growth
3. Uniqueness
4. Marketability
5. Competitiveness
6. protect ability
Assessing (evaluating/calculating/measuring/gaging) and selecting
(pick/choose/opt to/ decide etc) a suitable Market
What is a market?
 May mean potential customers with purchasing power and
unsatisfied needs
 A place where people meet to exchange goods and services in
regards to money value

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 Etc
Therefore, there are factors to consider while choosing a suitable market.
1. Potential customers
2. Market size
3. Infrastructure/organization/set ups/ ground work etc
4. Competition (rivalry)
5. Market regulations
6. Attitudes of dealers and suppliers
7. Economic of scale
8. Market budget and cost
9. Market acceptance
10. etc
N/B
Nevertheless, an entrepreneur, should be aware of marching skills and
resources to changing technology/technology trends.


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JOMO KENYATTA UNIVERSITY

HRD 2401 ENTREPRENEURSHIP SKILLS

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 The other development during the 18th Century is the differentiation

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

enterprises, undertaking risks and economic uncertainty and there by

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

Novelty Creative Original

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

Why to become an entrepreneur

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 Is a novel way of making organization more profitable?

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 Incremental/Synthesis innovation, an innovation that modifies an

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

Current, or short-term, liabilities might include (an expense payable

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

than there is an outflow of expenses from the business. This is

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 Developing something users and customers view as an invention

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 Ideation is the purposeful process of opening up your mind to new

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

Role of an entrepreneur (s) within the economy

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 New Operating Practices

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 Decline in corporates earnings

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

HRD 2401 ENTREPRENEURSHIP SKILLS

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 For an entrepreneur to perform in her business, he/she needs to have

 In this light, we propose that pursuing an entrepreneurial opportunity

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 Entrepreneurial opportunity leads to the discovery of new means-

What are the 4 types of entrepreneurial?

Types of Business Opportunities to Search For

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 Get testers for new ideas or products.

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

What are the 4 characteristics of opportunity?

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

 Executive top level employees

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

TECHNIQUES OF GENERATING BUSINESS IDEAS

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

JKUAT is ISO 9001:2008 and ISO 14001:2004 Certified

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