Chapter One:

An Overview Of Entrepreneurship
Chapters two: Entrepreneurial Motivation
and decision process
Chapter Three: INNOVATION AND
PROJECT IDENTIFICATION
Chapter Four: Starting Small Business.
Chapter five. Financing and Financial
evaluation.
chapter six: Business Planne

nancing and finasfsdfsdfsdfsncial evaluation

 Introduction of
Entrepreneurship
Fu’ad Mohamed Jama
12—20, August, 2017
Case Studies
• Select one business you like most and why
you it, The Lecturer will ask Students what
are the benefits of starting your own business
as entrepreneur and what are the associated
risks to create your business. Each trainee or
student will take time to find some
background information of the business
he/she selected to know challenges the
founder encountered during start up and
early years of formation business and how
he/she tacked the obstacles.
What is Entrepreneurship
The process of identifying opportunities
in the market place, arranging the
resources required to pursue these
opportunities and investing the resources
to exploit the opportunities for long term
gains. It involves creating wealth by
bringing together resources in new ways
to start and operate an enterprise.
Entrepreneur
An entrepreneur is any person who
creates and develops a business idea and
takes the risk of setting up an enterprise to
produce a product or service which
satisfies customer needs.
Entrepreneur refers to the person and
entrepreneurship defines the process
Case Study
Case study: Think of a person who sits by
the roadside leading to your home and
who has been selling the same type of
food, from the same size of saucepan or
pot, from the same table top, and may not
have been able to change their standard
of living to any appreciable extent. Such a
person may be a business person but not
an entrepreneur.
 An entrepreneur is an individual who:

 has the ability to identify and pursue a business

opportunity;
undertakes a business venture;
raises the capital to finance it;
 gathers the necessary physical, financial and human
resources needed to operate the business venture;
 sets goals for him/herself and others;
 initiates appropriate action to ensure success; and
Assumes all or a major portion of the risk!
Who Is An Entrepreneur?

 An Entrepreneur is a person who takes risks

of setting up his/her own Venture for
perceived Rewards
 He/she is a person who initiates the idea ,
formulates a plan, organizes resources and
puts the plan into action to achieve his/her
Goal.
Essential Qualities for Successful
Entrepreneurs
1. Entrepreneurs have a strong desire to
be a winner( Need for achievement)
Entrepreneurs have a quality of stick-to
it(perseverance).
Entrepreneurs prefer a middle of the
Road Strategy when they analyze a risky
problem(Moderate Risk Taker).
Entrepreneurs are a alert to opportunities
they size and covert them.
Continue…
To their advantage (ability to find and
explore opportunity).
Entrepreneurs dislike Working for
others(independence).
Entrepreneurs Think ahead, Plan for
future and then Work to make it come
True(Planner)
Entrepreneurs are Comfortable while
Dealing with people at all levels
Continue..
Entrepreneurs can influence
others(Motivator)
Entrepreneurs are Capable of working for
long hours and tackling different
problems at same time (stress taker.)
Types of Entrepreneurs
1.According to the type of Business.
A.Business Entrepreneurs: who start
business units after developing ideas for
new product/ services.
B.Trading Entrepreneurs: who undertake
buying and selling of goods, but not engage
in manufacturing .
C.Corporate Entrepreneurs: Who Establish
and manage Corporate Form
Continues….
Of organization which have separate legal
existence.
D: Agriculture Entrepreneurs: Who
undertake activities like raising and
marketing of crops, Fertilizers and other
allied activities.
Types Of Entrepreneurs
2. On the Basis of Stages of development
i. First generation Entrepreneurs: who do not
possess any Entrepreneurial Background.
They start industry by their own innovative
skills .
ii. Second Generation Entrepreneurs: who
inherit the family business and pass to next
Generation.
iii.Classic entrepreneurs: who aims to
maximize his economic returns at a level
Continue..
Consistent with the survival of the unit
with or without an element of growth.
Types of Entrepreneurs.
3. On the Basis of Motivation
i. pure entrepreneurs: who are basically
Motivated to become entrepreneurs for
their personal satisfaction ,ego etc.
ii. Induced Entrepreneurs: who are
induced to take up entrepreneurial role by
the assistance and policy of government
including incentives, subsidies etc.
Types of Entrepreneurs
4. on the Basis of Technology
i. Technical entrepreneurs: who are task
oriented and craftsman, they prefer doing to
thinking .
ii. Non-Technical Entrepreneurs: who are not
concerned with technical side , but rather
with marketing and promotion.
iii. Professional Entrepreneurs: who start
business unit, but later sell the running
business and start a new unit later.
Types of Entrepreneurs
5. on the Basis of capital Ownership
i. private entrepreneurs: individual or
group set up enterprise , arrange finance,
share risk etc.
ii.State entrepreneurs. Means the trading
or industrial venture undertaken by the
state or the government it self.
iii. Joint entrepreneurs: the combination
of private and government entrepreneurs.
Types of entrepreneurs
6.on the Basis of Gender and Age.
Man Entrepreneurs.
Women Entrepreneurs.
Young Entrepreneurs
Old Entrepreneurs
Middle-Aged Entrepreneurs
Types of Entrepreneurs.
7. on the Basis of Area
i. Urban entrepreneurs.
Rural Entrepreneurs
Types Of Entrepreneurs.
8. on the Basis of Scale.
i. large Scale entrepreneurs.
ii. Medium scale entrepreneurs.
iii. Small scale entrepreneurs
Iv. Tiny scale entreprenurs
Types of Entrepreneurs
9. other Classifications
i. Spiritual Entrepreneur
ii. Social Entrepreneurs
iii. Edupreneurs.
 Group Work
What are the competencies of
entrepreneurs, think on 10 most
competencies that entrepreneurs should
have to succeed in business start up?
Competencies of an Entrepreneur

Opportunity-seeking
 An opportunity is a favourable set of
circumstances that creates a need for a new
product, service or business. It includes access
to credit, working premises, education,
trainings etc. An entrepreneur always seeks
out and identifies opportunities. He/she seizes
an opportunity and converts it into a realistic
and achievable goal or plan.
Competencies of Entrepreneur cont.
Persevering: An entrepreneur always
makes concerted efforts towards the
successful completion of a goal. An
entrepreneur perseveres and is undeterred
by uncertainties, risks, obstacles, or
difficulties which could challenge the
achievement of the ultimate goal.
The Story of Thomas Edison: light bulb
Competencies of Entrepreneur cont.
Risk Taking
◦ The best entrepreneurs tend to:-
◦ Set their own objectives where there is moderate
risk of failure and take calculated risks
◦ Gain satisfaction from completing a job well
◦ Not be afraid of public opinion, scepticism
◦ Take responsibility for their own actions
 Importance of risk-taking
◦ Build self confidence
◦ Create a feeling of leadership
◦ Create strong motivation to complete a job well
◦
 Risk Taking cont..
An entrepreneur needs to consider the following
issues before taking a risk.
Is the goal set realistic?
How big is the potential reward for this risk?
How big is the potential loss?
 What is the probability of failure with this risk?
 How can I minimise the potential negative
effects of taking this risk?
◦ Examples: starting a business based on market study,
share, forming cooperatives or associations etc
Risk Taking cont..
What kind of support or resources do I
need to have in place to help minimize or
prevent potential negative effects from
this risk?
 What further information do I need
before taking this risk?
What past experiences do I need to
review in order to inform the strategy for
taking this risk?
Demanding for efficiency and quality
Efficiency
 Being efficient means producing results with
little wasted effort.
 Quality refers to:
 The ongoing process of education,
communication, evaluation and constant
improvement of goods/services to meet the
customer’s need in a way that exceeds the
customer’s expectations;
Benefits of Quality
Reduction of waste:
Cost-effectiveness:
An increase in market share:
Better profitability:
Social responsibility:
Reputation: Quality of goods and services
improves the reputation of the business
for competition in the market and growth.
Time management
Time management refers to a range of skills,
tools, and techniques used to manage time
when accomplishing specific tasks, projects
and goals. Time management is about getting
more value out of your time and using it to
improve the quality of your life.
 Initially time management referred to just
business or work activities, but eventually the
term broadened to include personal activities.
Time Management Activities
The participants will be grouped into
three/four
1. One group will list time-management
challenges/factors that waste time
(experiential)
2. The other group will list some ways to
overcome these challenges/time
management strategies you can think of
(experiential)
Factors that waste time
Poor planning, lack of contingency plan
Lack of self-confidence about how to
accomplish task at hand
Socialising on the job
Cluttered work space
Telephone interruption; too much time on
telephone
Absence from, or being late to the work
place
Factors that waste time
Postponing jobs or assignments
Extended lunches or breaks
Procrastination
Poor organisation
Difficulty with task prioritisation - not
knowing which tasks to focus on in what order
Not setting /sticking to priorities
Inefficient delegation, or failure to delegate
duties to others
Information-seeking
Successful entrepreneurs do not rely on
guesswork and do not rely on others for
information. Instead, they spend time
collecting information about their customers,
competitors, suppliers, relevant technology
and markets. Gathering relevant information is
important to ensure that the entrepreneur
makes well informed decisions.
Information-seeking Cont..

Types of information that are important

for business
 An entrepreneur should have sufficient
information and seek additional
information on various factors that are
relevant to his/her intended new business
activity. The different types of
information required are indicated below.
Information-seeking Cont..
Market
◦ Market segments for low, middle and high income
groups
◦ Competitors and similar products
◦ Sales forecast
◦ Strategic business location
Supply
◦ Machines/equipment
◦ Raw materials
◦ Other assets like office furniture
◦ List of suppliers and prices
Information-seeking Cont..
Infrastructure
◦ Business premises available
◦ Size of premises and rooms
◦ Power, water & other facilities
◦ Transport facilities
Business Management
◦ Organisational form of the business
◦ Needs in accounting & accounting courses
◦ Availability of qualified personnel
◦ Training facilities for staff and owner
Information-seeking Cont..
Finance
 Micro-finance loan conditions
 Government financial facilities
 Legislation
 Commercial code
 Business registration process
 Tax obligations
 Tender procedures
Goal Setting

A Goal - is a general direction, or long-term

aim that you want to accomplish. It is not
specific enough to be measured. It is large in
scope, not necessarily time-bound, and is
something that people strive for by meeting
certain objectives which will hopefully add up
to eventually achieving the goal.
Goal Setting Cont..
Objectives - are specific and measurable.
They can be output objectives, or they can
be attitudinal or behavioural. But most of
all, they can be measured. They are
concise. They are specific. Think of the
word object.” You can touch it, it’s there,
it’s actual, and it’s finite. An entrepreneur
must have a goal and an objective which
is specific, measurable, attainable
relevant, and time bound (SMART).
Planning
Planning is making a decision about the future
in terms of what to do, when to do, where to
do, how to do, by whom to do and using what
resources. An effective entrepreneur therefore
usually plans his/her activities and accounts as
best as they can for unexpected eventualities.
 Exercise: The facilitator will ask the
participants whether they have a plan for their
businesses and encourage those who do to
share their experience.
Persuasion and networking
Persuasion is
◦ a way of convincing someone to get something or
make a decision in your favour
◦ Inducing or taking a course of action or embracing
a point of view by means of argument, reasoning,
or entreaty; to convince
◦ to succeed in causing a person to do or consent to
something; to win someone over, as by reasoning
or personal forcefulness
◦ to cause to believe; to induce, urge, or prevail upon
successfully
Importance of Persuasion in Business

We purchase goods from people

 We sell goods to people
 We need support from people
 We work with people.
 Without people be they suppliers, workers,
and most importantly customers, there is no
business.
Networking
Networking is an extended group of people with
similar interests or concerns who interact and remain
in informal contact for mutual assistance or support.
 Business Networks: In a business environment
where we are in, we network with customers,
suppliers, competitors, various firms, different
organisations, government offices and family, etc
◦ Factors that affect persuasion and networking
◦ Socio-cultural background and perceptions
◦ Communication skills (both verbal & non-verbal).
◦ Negotiation skills
Building self-confidence
Self-confidence is the state of being certain that a
chosen course of action is the best or most effective
given the circumstances. Confidence can be
described as a subjective, emotional state of mind,
but is also represented statistically as a confidence
level within which one may be certain that a
hypothesis will either be rejected or deemed
plausible. Self-confidence is having confidence in
oneself when considering a capability.
Overconfidence is having unmerited confidence-
believing something or someone is capable when
they are not.
Characteristics of a self-confident
person
A person with self-confidence may exhibit
some of the following characteristics:
 Risk-taking: willing to take risks and go the
extra mile to achieve better things.
 Independent: entrepreneurs like to be their
own masters and want to be responsible for
their own decisions.
 Perseverance: Ability to endure and survive
setbacks and continue to build confidence in
whatever you do in your business.
Characteristics of a self-confident person
Cont…
Able to learn to live with failure.
Entrepreneurs are going to make mistakes.
They are human. But they learn from these
mistakes and then move on.
 Ability to find happiness and contentment in
work.
 Doing what you believe to be right, even if
others mock or criticise you for it.
 Admitting mistakes and learning from them
Entrepreneurial Skills
Skills needed by successful entrepreneurs
are:
1.Communication Skills(possessing the
ability to read, write and speaking in an
understandable, accurate and professional
manner).
2. Human relation Skills:(the ability to
build and maintain positive relationships,
working well with others)
Continue.
3.Math skills (knowledge of basic
arithmetic and business math skills such
as calculating profit.)
4.problem-solving and decision making
skills (the ability to assess situation and
make good decision)
5. Technical Skills (knowledge of
computers and how to use them
productively).
Continuee…
6.Basic Business Skill(Knowledge and
understanding of the economy and
business Functions such as marketing and
management)
Common Myths About
Entrepreneurs
There are many misconceptions about who
entrepreneurs are and what motivates them to
launch firms to develop their ideas. Let's look at
the most common myths and the realities about
entrepreneurs:
1. Entrepreneurs are born, not made: This
myth is based on the mistaken belief that some
people are genetically predisposed to be
entrepreneurs. The consensus of many studies
is that no one is “born” to be an entrepreneur;
everyone has the potential to become one
2) Entrepreneurs are gamblers: A second myth
about entrepreneurs is that they are gamblers and
take big risks. The truth is, entrepreneurs are
usually moderate risk takers, as are most people.
3) Myth 3: Entrepreneurs are motivated
primarily by money. It is naïve to think that
entrepreneurs don’t seek financial rewards.
however, money is rarely the primary reason
entrepreneurs start new firms and persevere.
◦ In fact, some entrepreneurs warn that the pursuit
of money can be distracting.
4) Myth 4: Entrepreneurs should be
young and energetic. Entrepreneurial
activity is fairly evenly spread out over
age ranges.
5) Myth 5: Entrepreneurs love the
spotlight. Indeed, some entrepreneurs
are flamboyant; however, the vast
majority of them do not attract public
attention.
ROLE OF ENTREPRENEUR IN

ECONOMIC DEVELPOMENT
Entrepreneurship is the dynamic need of a
developing nation and sustains the process
of economic development in the following
ways:
 Employment generation
 National income
 Dispersal of Economic power
 Balanced Regional development
 Reducing unrest and social tension
amongst youth
 Innovations in enterprises
 Improvement in living standards
 Economic independence
The End