ENTREPRENEURSHIP AND

BUSINESS MANAGEMENT
LEARNING OUTCOMES
1. Explain why entrepreneurship is an important component of economic
development.
2. Discuss the advantages of entrepreneurship to an individual and to
the nation.
DEFINITION OF TERMS
ENTREPRENEURSHIP

 the capacity for innovation, investment and expansion in new markets,

products, and techniques.
INNOVATION

 This is a new or different ways of doing things, like technology, marketing,

human relations, management, and so forth.
ECONOMIC DEVELOPMENT

 A scheme aimed at improving the living standards of the nation’s citizenry.

INTRODUCTION

 There are various definitions of entrepreneurship. However, the key concept

is innovation. This refers to a new or different ways of doing things, like
technology, marketing, human relations, management, and so forth. When an
individual creates a new product, it is innovation. When he sells his product in
a different approach, it is also innovation.
INTRODUCTION

 A more efficient way of producing goods and services contributes to economic

development. Likewise, a more economical and faster method of distributing
goods and services accelerates economic development. A more appropriate
system of utilizing the inputs of production, such as money, materials,
machines and manpower, can favorably contribute to economic development.
 All the three aforementioned situations comprise entrepreneurial activities.
THE IMPORTANCE OF ENTREPRENEURIAL
EDUCATION
 Entrepreneurship is a key driver of economy. Wealth and a high majority of
jobs are created by small businesses started by entrepreneurially minded
individuals, many of whom go on to create big businesses. People exposed to
entrepreneurship frequently express that they have more opportunity to
exercise creative freedoms, higher self-esteem, and an overall greater sense
of control over their own lives. As a result, many experienced business
people, political leaders, economists, and educators believe that fostering a
robust entrepreneurial culture will maximize individual and collective
economic and social success on a local, national, and global scale.
ENTREPRENEURSHIP DEFINED

 Entrepreneurship is a philosophy or process through which an entrepreneur

seeks innovation and employment.

 Dissecting the word we get

ENTREPRENEUR ENTREPRENEURSHIP ENTERPRISE

PERSON PROCESS OR PHILOSOPHY OBJECT

Entrepreneurship can also be described as a creative and innovative response to

the environment.
ENTREPRENEURSHIP DEFINED

 According to Professor Nathaniel Left, is the capacity for innovation,

investment and expansion in new markets, products and techniques. This
definition implies that an enterprise is at work whenever an individual takes
the risks and invest resources to make something unique or something new,
designs a new way of making something that already exists, or creates new
markets.
 When a corporation indulges in entrepreneurial activities, like diversification
into new businesses, it is called entrepreneurship.
 It is a tool for capitalizing the entrepreneurial spirit of employees in the
organization. It gives managers the freedom to try new ideas by employing
firm’s resources in a unique way.
Advantages of Entrepreneurship
To an Individual
 1. Provides self employment for the entrepreneur.
 2. Entrepreneur can provide employment for near and dear one as well.
 3. Entrepreneurship often provides an employment and livelihood for next
generations as well.
 4. Freedom to use own ideas- innovation and creativity
 5. Unlimited income/higher retained income- Bill Gates has risen to become
the richest in the world in a single lifetime through entrepreneurship.
 6. Independence
 7. Satisfaction
Advantages of Entrepreneurship
To the nation
 1. Provides larger employment.
 2. Results in wider distribution of wealth.
 3. Mobilize local resources, skills and savings.
 4. Accelerates the pace of economic development.
 5. Stimulates and efficiency.
ENTREPRENEURSHIP AND ECONOMIC
DEVELOPMENT
 Economic Development is a scheme aimed at improving the living standards of
the nation’s citizenry. To achieve economic development goals, proper
management of the following elements is necessary:
 1. Human resources (labor supply, education, discipline, motivation)
 2. Natural resources (land, minerals, fuel, climate)
 3. Capital formation (machines, factories, roads)
 4. Technology (science, engineering, management, entrepreneurship)
FIVE INNOVATION PRINCIPLES

 1. Innovation is a mindset – a new way to think about business strategies and

practice.
 2. Innovation is a key to gaining competitive advantage.
 3. Effective innovation can boost stock price.
 4. CEOs must lead and be held accountable for innovation.
 5. CEOs must be committed to and instill in others a passion for innovation.
3 ingredients to top management
commitment.
 1. Allocation of adequate financial resources, including R&D and technology
funds, and assigning some of the best people to new products
 2. A perspective that allow for failures, mistakes, and a long-term payback
from the investments being made into innovation “bank”.
 3. An expressively proactive, positive, “can do” I believe-in you attitude.
Examples of Successful Innovations

 1. Cordless microphone
 2. Microwave Oven
 3. Cellular Phone
 4. Kung Fu fight scenes developed by Bruce Lee in movies.
 5. The karaoke music appliance
 6. Use of Laser in the treatment of eye conditions
 7. The use of computers by engineers and architects in the design of
buildings.
NEW VENTURES AND LONG-TERM
ENTERPRISES
 The transition from a new venture to a successful long-term enterprise consist
of at least four major stages. The stages are as follows:
 1. The prestart-up stage
 2. The start-up stage
 3. The early growth stage
 4. The late growth stage
THE PRESTART-UP STAGE

 Happens when the entrepreneur starts to question the feasibility of an idea,

product or service. He seeks answers to questions regarding potential
markets, production, and financing.
THE START-UP STAGE

 In this stage the following are undertaken:

 1.formation of the business
 2. generation of necessary capital
 3. purchase of facilities and equipment
 4. constructing prototype products
 5. testing the market
THE EARLY GROWTH STAGE

 Follows after establishing feasibility. Activities will be on small scale,, i.e.,

selling to limited markets with limited resources. If the enterprise is
successful at this stage, the option to move to the next can be exercised.
THE LATE GROWTH STAGE

 The final stage before the new venture matures into a stable enterprise. This
is when management is structured, long term financing is established, and
facilities planning are undertaken. This is also the stage where the skills of
the entrepreneur are less needed. Instead, the skilled manager begins to take
over.
ACTIVITY#1

 List down at least 100 innovations you have observed on businesses.