Entrepreneurship For Engineers

Department of Electrical Engineerin

HS 2004 E.C 1
 Entrepreneurship
Trainee be able to :
 define entrepreneurship
 explain entrepreneurial competencies
 identify the costs and reward of being an
entrepreneur
 explain entrepreneurship as a career option
 explain need for entrepreneurship in the
economic development of Ethiopia
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 What Is an Entrepreneur?

• An entrepreneur can be described as someone

who:
– owns and manages his/her own business
– identifies new products/services or opportunities,
– is creative and innovative,
– organizes and controls resources to ensure a profit for
the business,
– has the ability and insight to market, produce and
finance a service or product,
– has financial means or can obtain financing to support
the business and
– is willing to take calculated risks.  
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 Characteristics of Entrepreneurs
Anyone – regardless of age, race, gender, color, national
origin, or any other characteristic – can become an
entrepreneur (although not everyone should).
– Desire for responsibility
– Preference for moderate risk – risk eliminators
– Confidence in their ability to succeed
– Desire for immediate feedback
– High level of energy(work harder and longer than employee
– Future orientation(strong will , less payment at beginning,
do not give up
– Skilled at organizing
– With good health and physical stability
– Value achievement over money
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 Entrepreneurial Competencies
• ECONOMIC PRINCIPLES
– works best in an open market economy
– promotes private enterprise
– adds value to products and services (creates
wealth)
– provides needed products/service
– develops new markets
– uses and impacts natural goods and services

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 Entrepreneurial Competencies
• ENTREPRENEURIAL COMPETENCIES
– taking the initiative
– being highly competitive
– exploiting change
– dealing with uncertainties
– seeking opportunities

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 Entrepreneurial Competencies
• The surrounding environment will affect how
the entrepreneurial competencies are combined
to implement a social or business enterprise.
– Knowledge consists of a set or body of information
stored, which may be recalled at an appropriate
time.
– Skill is the ability to apply knowledge.
– Traits are the total of peculiar characteristics that
constitutes personal individuality.

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HS 2004 E.C 8
• Knowledge
• production process
• a business opportunity • technical matters  
• the market  
• customers • business management
• competitors   • sources of assistance
• production processes

• Skill Managerial
Leadership
Technical Planning
Technical Organization
Catering Financial management
Mechanics Time management
Carpentry Marketing(including selling)
Sewing
Engineering Demonstrates Initiative
Computing
Hard Working
Willing to Listen
• Trait Self-Confident Sets own Standards
Builds for the Future Copes with Uncertainty
Profit-Oriented Committed
Goal-Oriented Builds on Strengths
Persistent
Copes with Failure Reliable and Has Integrity
Responds to Feedback Risk-Taker
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 Costs and Rewards
• Rewards for Being an Entrepreneur:
– Create your own destiny
– Make a difference
– Reap impressive profits
– Self-actualization/personal fulfilment
– Feeling of freedom and independence
– Providing jobs and benefits to others (investors,
suppliers, bankers, subcontractors, work force,
customers)
– Creating economic value (product/service, incomes
for workers, profits for shareholders/partners) 10
HS 2004 E.C
 Costs and Rewards
• COSTS OF BEING AN ENTREPRENEUR:
– Works long Class Sessions
– Always concerned about the business
– Needs high energy
– Sacrifices other important aspects of life
– Limited social life
– Not much time with family and friends
– Risk of losing your entire investment
– Lower quality of life until the business gets
established
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 Role of Entrepreneurship in Society
Entrepreneurs play a key role in business and the private sector where in Most of the
wealth in a society or nation is created.
 Products and Services. Business entrepreneurs fulfill the role both to discover consumer
demands and to do whatever is required to satisfy them  
Employment. Business ventures are the major providers of “real” jobs – i.e. decent work
for people who need and want to work
 Income (Wages, Salaries and Profits) Through its employment creation, business
provides an income base to its stakeholders in terms of salaries, wages, profits and taxes.
Taxes. For social institutions and services afford.  
 Investment in Productive Assets. A business needs capital investments to create
productive capacity: innovative technology, modernization, and the expansion of its
productive assets.  
National Well-being. Most of the capital goods, commercial and social services as well as
technological know-how required to satisfy our needs come from business activity and
economic development of privately owned resources.  
Environmental Sustainability. All business activity uses natural resources and impacts
their present and future availability. Sustainable enterprises do not only maximize their
personal profit in the short term but ensure the long term availability of natural goods and
services
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HS 2004 E.C
 Characteristics of successful Entrepreneurs

• Successful enterprise owners possess many of

the following entrepreneurial characteristics:
– drive and energy
– high initiative & personal responsibility
– self-imposed standards
– continuous pragmatic problem solving
– money as a measure not merely an end
– moderate risk taking
– tolerance of ambiguity

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Characteristics of successful Entrepreneurs
• low fear of failure
• self-confidence
• use of feedback
• use of resources
• clear goal setting
• internal locus of control
• long-term involvement

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 Defining a Risk Situation
• A risk situation occurs when a choice is required between two
or more alternatives whose potential outcomes are not known
and must be subjectively evaluated.
• A risk situation involves potential success and potential loss.
• The greater the possible loss or gain, the greater the risk
involved.
• Risk-takers make decisions in conditions of uncertainty, and
they balance potential success against potential loss. Choosing
a risky alternative depends on:
– how attractive the alternative is
– extent to which the risk taker is prepared to accept the potential loss
– relative probabilities of success and failure and
– degree one’s efforts increase likelihood of success and decrease
likelihood of failure.
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 Calculated Risk-Taking
• Most entrepreneurs take calculated and moderate risks.
• Entrepreneurs avoid low-risk situations because there is
lack of challenge
• but they also avoid high-risk situations because they want
to succeed.
• They set high goals and enjoy the excitement of a
challenge, but they do not gamble.
• Hence, low-risk situations and high-risk situations are
avoided because these risks do no satisfy the
entrepreneur.
• In short, the entrepreneur likes a difficult but achievable
challenge
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Questions to Ask Before Taking a Risk
•  Is the goal worth the risk involved?
• How can the risk be minimized?
• What information is needed before taking the risk?
• What people and other resources can help to minimize the
risk?
• What fears do I have in taking this risk?
• Am I willing to try my best to achieve the goal?
• What will be achieved by taking the risk?
• What preparation will I need to make before taking the risk?
• How will I know (in quantitative terms) when I have
accomplished my goal?
• What are the biggest obstacles to achieving my goal?
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 How to Analyze Risk situation?
• Here are suggested procedures for analysing a risk
situation.
1. Assess the risk: whether or not a risk is involved
2. Determine goals and objectives:. Is the risk involved
consistent with objectives?
3. Clarify the alternatives: survey the various alternatives
4. Gather information and weigh the alternatives: intensive
information-gathering so that a realistic assessment of
the odds can be made for each alternative
5. Minimize risks:
6. Plan and implement the best alternative

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 Negotiations
• Negotiations with others may leave you with a
heightened sense of humility.
• It may be the first time that you were ever
confronted with the fact that negotiating itself
is both a science and an art.
• You may not have much experience. What can
you do to benefit most from the negotiation
process?

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 The following are some possibilities:
• Hire a lawyer who is a good negotiator
• Learn as much as possible about the person or institution
you’re facing.
• Try to list all the issues that will surface in the
negotiation.
• Try to maintain an atmosphere of openness
• The objective of negotiation is not to beat the other side.
It is to strike a deal that is better for everybody than the
initial conditions
• In some business related negotiations, market indicators
such as supply and demand will influence the outcomes
of the negotiations.
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 Personal Attributes Needed to Negotiate
•  In addition to knowledge, negotiators need the following
personal attributes:
– Integrity: A negotiator must be honest as honesty builds mutual trust
and cooperation that is crucial in bringing about free and open
exchange of ideas.
– Empathy: This is the ability to understand the other party’s point of
view
– Patience: This is the calm endurance of the prevailing state of affairs
• Negotiation skills
– Clarity in communication is essential. Do not engage in long
paragraphs. You lose attention.
– Stick to objectives and learn to avoid personalizing situations.
– Control your emotions.
– Occasionally show anger may be effective, but never lose your temper.
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 Successful Negotiating
• Negotiating outcomes should be a win-win for both parties.
• Both parties should feel satisfied with the results.
•  Do not become emotional.
•  Focus on solving problem.
• Use the negotiation style of other party to achieve positive
outcomes.
• Be flexible in your demands.
• Compromise. Don’t expect all of your demands to be met.
• Ask good questions and then listen. You can’t learn
anything when you are talking.

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 TIME MANAGEMENT
• Time is a unique resource because everyone has 24 hours a day
and 168 hours a week—no more, no less
• There is no such thing as lack of time; there is just lack of
planning. Efficient time management involves
– organization and planning, which can result in accomplishing a Best deal
– Planning the use of every minute is important even if some of the time
is used for doing nothing, as long as all-important tasks are provided for.
 
• Once time is lost or wasted it cannot be recovered. Inefficient
time management causes people to waste a very important
resource.  

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 TIPS ON TIME MANAGEMENT
• Efficient time management means that you must organize and plan
• Activities tend to fall into three areas:
–  things that must be done
–  things that should be done, and
–  things that are least important or do not have to be done at all.
• It is recommended that you make a list of all things that you want to
accomplish in a day. Then set up a rating system for your list
• Following a schedule helps to control the time needed to complete
tasks. It is sometimes necessary to adjust a time schedule due to
unforeseen circumstances.
• Choose five activities you would like to accomplish by the end of the
day. Rank each activity by level of importance (A,B,C) and indicate
how much time is needed for each activity
• Set up a schedule for the day to complete these activities
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 Deadly 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
10. Inability to make the “entrepreneurial transition”
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