Entrepreneurship

Lecture 1
Mr. Ibrahim Mohamed Ali
BBA,MBA (HRM)
Human Resource Director
Hormuud University
Mogadishu-Somalia. 1
 Chapter 1

The Foundations of
Entrepreneurship.
 Origin of the term entrepreneur

The term entrepreneur is derived from the French

word known as Entreprendre which means to
“undertake”. It appeared in French language also
only in the beginning of the 16th century. In the 17th
century it was extended to cover civil engineering
work also. The term was first used for the economic
activities only in 18th century.

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 What is an Entrepreneur?
Entrepreneur: is someone who is willing to work 16
hours a day to keep from working 8 hours a day for
someone else!
Entrepreneur: a person who sets up a business or
businesses, taking on financial risks in the hope of
profit.
Entrepreneurship is the process of designing, a new 
business, which is often originally a small business, and
the people who create these businesses are called
entrepreneurs.
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 Why Become an Entrepreneur?
The are three most important reasons that
people become entrepreneurs and start
their own firms.
1: To be their own boss
2: To follow their own ideas
3:To get Financial rewards

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 Why Are Small
Businesses Important?
In particular, small businesses do the following:
 Create jobs.
 Contribute to society and to
be recognized for your efforts.
 Provide opportunities for many people,
including women and minorities, to achieve
financial success and independence.
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Types of Entrepreneurship

1: Corporate entrepreneurship

2: private or independent entrepreneurship

3:Social entrepreneurship

4: Public sector entrepreneurship

5: Academic entrepreneurship
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 CON…..
1: Corporate entrepreneurship: is a growing movement in
large companies and opportunity that can improve a
company's performance.
2:private or independent entrepreneurship: independent
entrepreneur is defined extensively as profession or business
activity.
3:Social entrepreneurship is the use of the by 
start up companies and other entrepreneurs to develop, fund
and implement solutions to social, cultural, or environmental
issues.

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 CON…..

4:Public sector entrepreneurship: defined (PSE) as the process of

creating value for citizens by bringing together unique combinations
of public and/or private resources to achievement social
opportunities.
5:Academic entrepreneurship is Business activities of
the academic community, including students, alumni, graduate
students and research workers as a result of which the university
begins to operate on a commercial basis, acting as a seller of certain
goods and services, such as specialized courses or modern
technology.

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Characteristics of Entrepreneurs

Want for Responsibility

Confidence in their ability to succeed
Want for immediate feedback
High level of energy
Future orientation
Skilled at organizing
Value achievement over money

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Benefits of Entrepreneurship
Create your own talent
Make a difference
Reach your full potential
Gain profits
Contribute to society and to be recognized for your
efforts
Do what you enjoy and to have fun at it

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Drawbacks of Entrepreneurship

• Uncertainty of income
• Risk of losing your entire investment
• Long hours and hard work
• Lower quality of life until the business gets well-
known
• High levels of stress
• Complete responsibility
• Discouragement

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 QUALITIES OF ENTREPRENEUR
Risk Taker: Businesses face risk. Entrepreneurs minimize risk through
research, planning, and skill development.

 Craving: They genuinely love their work. They are willing to put in those
extra hours to make the business succeed because there is a enjoy their
business.

 fantastic: Entrepreneurs like to know how things work. They take the time and
creativity to follow the unknown.
 Resourceful: Entrepreneurs are creative. They imagine solutions to solve
problems that encourage them to create new products and generate ideas.
 Determined: True entrepreneurs face make mistakes, receive and deal with
money, family, or stress problems. But they still stick to their dreams of seeing
the project succeed.
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 Con…
 Hardworking: Entrepreneurs need a great deal of energy to see a project start and
succeed. And they need long hours to achieve their goal.

 Self-confident: Entrepreneurs believe in themselves. Their self-confidence.

 Flexible: Entrepreneurs must be flexible in order to adapt to changing movements,

markets, technologies, rules, and economic environments.

 Strong people skills: Most successful entrepreneurs know how to motivate their
employees so the business grows overall.

 Goal-setting: Entrepreneurs are motivated by the interest of staring a new

business. Once achieved, they seek out new goals or projects to try. 14
 Mistakes of Entrepreneurship
1. Management mistakes
2. Lack of experience
3. Poor financial control
4. Weak marketing efforts
5. Failure to develop a strategic plan
6. Uncontrolled growth
7. Poor location
8. Improper inventory control
9. Incorrect pricing
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 What are the key elements of entrepreneurship
and what is the importance of each?

Motivation & Commitment: It’s important to get the basic

parts of start-up right. People who are lending money look at the
person first and primary, so motivation is the most critical.

Abilities & skill: The second element is one of ability and

skills. The individual has to have skills appropriate to the
kind of business.

Resources: The third element is resources. That’s not

only about money and equipment; it’s also about
intellectual capability.
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 Con…

 Strategy & vision: The fourth element is strategy and vision in

terms of thinking four or five years ahead and having some idea of
where that business might be in the future and putting in place a
plan to achieve that goal.

 Planning & organising : The fifth element is planning and

organising. Without planning, organising, coordination and
administration, the product won’t get to market nor will it
satisfactorily meet demand. You need to think about systems, job
roles, and quality issues, which if handed effectively, will ensure
you, can satisfy the market by delivering on time and to the right
place.

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 Con…

 The idea in relation to the market:

The sixth element is the idea and more
specifically, the idea in relation to the market
place. What we are trying to do is to make
certain that we are customer focussed,
ensuring that the individual is satisfied in
their requirements.

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 The Role of Entrepreneurship
Determine objective
.

Development of the organization

Searching Resource
Arranging Technology & Equipment
Development New Market
Good relation between public authorities & society
Manegement of human relations
Financial Manegement
Production Manegement

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 why entrepreneurship is important to
the economy
The following are six reasons:
1. Entrepreneurs Create New Businesses
2. Entrepreneurs Add to National Income
3. Entrepreneurs Also Create Social Change
4. Community Development
5. The Other Side of Entrepreneurs
6.  The Role of States

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 Avoiding the Difficulties of
Small Business Failure
Know your business in deeply
Develop a business plan
Manage financial Resources
Understand financial statements
Learn to manage people effectively
Keep in adjust with yourself
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 Why Do Some Businesses
Fail?
Bad business idea.
Cash problems.
Managerial inexperience or inability.
Lack of customer focus.
Lack of experience
Poor financial control
Lack of strategy and strategic leadership
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