MODULE 1

OVERVIEW OF
ENTREPRENEURSHIP

10/22/2023 1
INTRODUCTION

 This particular module begins with the definition

and the proper introduction to entrepreneurship.
The module stresses the importance historically of
entrepreneurship. It provides a basic understanding
of the beginning and the modern economic
definitions.
 To be a successful entrepreneur, an individual must
be an independent thinker who is willing to take
risks and to dare to be different. Personal initiative,
ability to consolidate resources, management skills,
and risk taking are just a few of the important
qualities needed to be a successful entrepreneur .
10/22/2023 2
Cont…..

 The module continues to define and discuss

ten specific myths associated with
entrepreneurship. The myths are present
because of the lack of research within this
particular field. Also, the technology within
this field is becoming more advanced and
more widely known.
 Also the evolution of entrepreneurship is

covered under this module

10/22/2023 3
A: CONCEPT OF ENTREPRENEURSHIP AND ENTREPRENEUR

Entrepreneurship
 Entrepreneurship is the process of identifying

opportunities in the market place, marshalling the

resources required to pursue these opportunities and
investing the resources to exploit the opportunities for
long term gains.
OR
 Entrepreneurship is a dynamic process of vision,

change, and creation. It requires an application of

energy and passion towards the creation and
implementation of new ideas and creative solutions.

10/22/2023 4
Cont…..

Entrepreneur
 The word entrepreneur is derived from the

French word entreprendre meaning to

undertake. The entrepreneur is one who
undertakes to organize, manage, and assume
the risks of a business. In recent years
entrepreneurs have been doing so many things
that it is necessary to broaden this definition.

10/22/2023 5
Cont…….

 There is no single definition of

entrepreneur and no one profile can
represent today’s entrepreneur.
 Entrepreneur defined as the agent who

buys factors of production at a certain

prices in order to combine them into a
product with a view to selling it at
uncertain prices in future.

10/22/2023 6
Cont…..

 Also defined as the economic agent who

unites all means of production – land of one,
the labour of other and the capital of yet
another and thus produce a product.
 Today, an entrepreneur is an innovator or

developer who recognizes and grabs

opportunities into workable/marketable ideas,
adds a value through time, effort, money, or
skills; assumes the risks of the competitive
market place to implement these ideas and
realizes the rewards from these efforts.
10/22/2023 7
Cont…….

We may categorize the usage of the

term entrepreneur in three broad
connotations; entrepreneurs as owner-
managers, entrepreneurs as a
particular category of owner-
managers; or entrepreneurs as people
who display particular behaviors in any
Endeavour or organization.
 Entrepreneurs as owner-mangers- The

term is used to refer to someone who

sets up and /or independently runs his
own business. 10/22/2023 8
Cont…..
 Entrepreneurs as a special category of
owner managers-some people hold the
view that most business owners are not
entrepreneurial. They are simply cloning
an existing well proven form of enterprise
and many people simply prefer to do their
own job. Two dimensions-the owner
mangers’ motives and their behaviours
have been used to make this distinction.
Entrepreneurs are seen as those owner
managers whose motive for being in
business is profits and growth as opposed
to mere survival or independence.
10/22/2023 9
Cont…….

 Entrepreneurs as people who display

specific behaviours anywhere- In this
sense, entrepreneurs are people who
display the special (entrepreneurial) types
of behaviours- initiating, value, creating,
transforming, opportunism, strategic
practices, innovation and pro activeness
in any organization or field of endeavor.

10/22/2023 10
Cont…..

 Essential ingredients of entrepreneurship

include the willingness to take calculated risks
in terms of time, equity, or career; the ability
to formulate an effective venture team; the
creative skill to Marshall needed resources; the
fundamental skill of building a solid business
plan and finally, the vision to recognize
opportunity where others see chaos,
contradiction and confusion.

10/22/2023 11
Entrepreneurship and Intrapreneurship

 Intrapreneurship has definite similarities to

entrepreneurship except that Intrapreneurship
takes place within an organization.
 Intrapreneurship is the process by which other

new ventures are born within the confines of

an existing corporation. It involves expansion
by exploring new opportunities through new
combinations of existing resources.

10/22/2023 12
Cont…..

 Entrepreneur is an independent
businessman whereas an entrapreneur is a
semi-dependent on the promoters/owners
of the corporation.

10/22/2023 13
B: MYTHS OF ENTREPRENEURSHIP

Through the years many myth have risen about

entrepreneurship. These myths are a result of
lack of research on entrepreneurship. As many
researchers in the field have noted, the study of
entrepreneurship is still emerging, and thus
“Myths” will tend to prevail until it is dispelled
with contemporary research findings. Ten of
Notable myths include the following with as
explanation to dispel each.

10/22/2023 14
Cont…..

Myth 1: Entrepreneurs are Doers not

Thinkers
 Although it is true Entrepreneurs tend

toward action, they are also thinkers.

Indeed, they are often very
methodological .The emphasis today on
the creation of clear and complete
business plans is an indication that
“Thinking “entrepreneurs are as
important as “doing” entrepreneurs.
10/22/2023 15
Cont…….

Myth 2: Entrepreneurs are born not made

 The idea that the characteristics of entrepreneurs
cannot be taught or learned, that they are innate
traits one must be born with, has long been
prevalent. Today the recognition of
entrepreneurship as a discipline is helping to
dispel this myth. Like all disciplines,
entrepreneurship has models, processes and case
studies that allow the topic to be studies and the
knowledge to be acquired.

10/22/2023 16
Cont…..

Myth 3: Entrepreneurs are always

inventors
 The idea that entrepreneurs are inventors

is a result of misunderstanding and tunnel

vision. Although many inventors are also
entrepreneurs, numerous entrepreneurs
encompass all sorts of innovative activity.

10/22/2023 17
Cont…..

A contemporary understanding of
entrepreneurship covers more than just
invention. It requires a complete
understanding of innovative behaviour in
all forms.

10/22/2023 18
Cont…….
Myth 4: Entrepreneurs are Academic and
Social misfits
 The belief that entrepreneurs are academically
and socially ineffective is a result of some
business owners having started successful
enterprises after dropping out of school or
quitting a job. In many cases such an event has
been blown of proportion in an attempt to
“profile” the typical entrepreneur. Historically,
in fact, educational and social organizations did
not recognize the entrepreneur.
10/22/2023 19
Cont…..

Myth 5: Entrepreneurs must fit the

“Profile”
 Many books and articles have presented

checklists of characteristics of the

successful entrepreneur. These lists were
neither validated nor complete. They were
based on case studies and on research
findings among achievement oriented
people.
10/22/2023 20
Cont…..

 Today we realize that a standard

entrepreneurial profile is hard to compile.
The environment the venture itself and
the entrepreneur have interactive effects,
which result in many different types
profiles.

10/22/2023 21
 Cont…….

Myth 6: All entrepreneurs need is money

 It is true a venture needs to survive, it is also true
that a large number of business failure occur
because of lack of financial understanding. Yet
having money is not the only bulwark to against
failure. Failure due to lack of proper financing
often is an indicator of other problems:
Managerial incompetence, lack of financial
understanding, poor investment, poor planning
and the like. To entrepreneurs Money is a resource
but never an end in itself.

10/22/2023 22
Cont…..

Myth 7: All entrepreneurs need is luck

 Being at the right place at the right time

is always an advantage. But “Luck

happens when preparation meets
opportunity”. Prepared entrepreneurs
who seize the opportunity when it arises
often seems “lucky”. They are, in fact
simply better prepared to deal with
situations and turn them into success.
What appears to be luck really is
preparation, determination, desire,
knowledge and innovativeness. 10/22/2023 23
Cont…….

Myth 8: Ignorance is bliss for

entrepreneurs
 The myth that too much planning and
evolution lead constant problems, that
over analysis- leads to paralysis , does
not hold in today’s competitive
markets, which demand detailed
planning and preparation. Thus careful
planning is not ignorance of it- is the
mark of an accomplished entrepreneur.

10/22/2023 24
Cont…..
Myth 9: Entrepreneurs are extreme risk takers
(gambles)
 The concept of risk is a major element in

entrepreneurial process. However, the public’s

perception of the risk most entrepreneurs assume
is distorted. Although it may appear that an
entrepreneur is gambling on wild chance, the fact
is the entrepreneur is usually working on a
moderate or calculated risk .Entrepreneurs usually
work in moderate calculated risks. Looking at
them as gamblers can be misleading. Most
Successful entrepreneurs work hard through
planning and preparation to minimize the risk
involved in order to better control destiny of their
vision. 10/22/2023 25
Cont…….
Myth 10: Entrepreneurs seek success but
experience high failure rates
 It
is true that many entrepreneurs
suffer a number of failures before
they are successful. They follow
the adage “if at first you don’t
succeed, try, and try, again”. In
fact, failure can teach to those
willing to learn and often leads to
future successes.
10/22/2023 26
C: CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS

A review of the literature related to

entrepreneurial characteristic
reveals the existence of a large
number of factors that can be
consolidated into a smaller set of
profile dimension. For example, if
the work of John Kao is considered,
11 common characteristics can be
identified:
10/22/2023 27
Cont…..

 Commitment, Determination and

Perseverance: More than any other
factor, total dedication to success as
success as an entrepreneur can
overcome obstacles and setbacks.
Absolute determination and an
unwavering commitment to succeed
often win out against many people
would consider impossible. They also
can compensate for personal
shortcomings. 10/22/2023 28
Cont…….

 Drive to Achieve: Entrepreneurs

are self starters who appear to
others to be driven by a strong
desire to compete, to excel
against self imposed standards,
and to pursue and attain
challenging goals. High achievers
tend to be moderate risk takers.

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Cont…..
 Opportunity orientation: One clear pattern
among successful, growth minded
entrepreneurs is their focus on opportunity
rather than on resources, structure, or
strategy. They start with the opportunity and
let their understanding of it guide other
important issues. They are goal oriented in
their pursuit of opportunities. Setting high
but attainable goals enables them to focus
their energies, to selectively sort out
opportunities, and to know when to say no.
Their goal orientation also helps them to
define priorities and provides them with
measures of how well they are performing.
10/22/2023 30
Cont…….

 Initiative and Responsibility; Effect

entrepreneurs actively seek and take
initiative. They willingly put themselves in
situation, they are personally responsible
for the success or failure of the
operation.
 Persistent Problem solving: Entrepreneurs
are problem solvers. Moreover although
they are persistent, but are realistic in
recognizing what they can and what they
cannot do, and where can get help in
solving difficult but unavoidable tasks.
10/22/2023 31
Cont…..

 Seeking feedback: Entrepreneurs

have a strong desire to know how
well they are doing and how they
might improve their performance.
In attempting to make these
determinations, they actively seek
out and use feedback. Feedback is
also central to their learning from
their mistakes.
10/22/2023 32
Cont…….

 Internal Locus of Control:

Successful entrepreneurs believe
in themselves. They do not believe
the success or failure of their
venture will be governed by fate,
luck or similar forces. They believe
their accomplishments and set
backs are within their own control
and influence and they can affect
the outcome of their actions.
10/22/2023 33
Cont…..

 Tolerance for Ambiguity; Start up

entrepreneurs face uncertainty
compounded by constant changes
that introduce ambiguity and
stress into every aspect of the
enterprise Setbacks and surprises
are inevitable, yet successful
entrepreneurs thrive on the
fluidity and excitement of such
an ambiguous existence. 10/22/2023 34
Cont…….

 Calculated Risk Taking: Successful

entrepreneurs are not gamblers. When they
decide to participate in a venture, they do so in
a very calculated, carefully thought manner.
They do everything possible to get the odds in
their favour, and they often avoid taking
unnecessary risks.
 Integrity and Reliability: Integrity and reliability
are the glue and fiber that bind successful
personal and business relationships and make
them endure. Investors, partners, customers,
and creditor’s alike value these attributes
highly. Integrity and reliability help build and
sustain trust and confidence. 10/22/2023 35
Cont…..

 Tolerance for Failure: Entrepreneurs use

failure as a learning experience. The
trial and error nature of becoming a
successful entrepreneur makes serious
setbacks and disappointments an
integral part of the learning process.
They do not get disappointed,
discouraged or depressed by a setback
or failure .Many of the entrepreneurs
believe they learn more from their early
failures than from their earlier
successes. 10/22/2023 36
Cont…….
 High energy level: The extraordinary
workloads and the stressful demands
entrepreneurs to place a premium on
energy .Many entrepreneurs fine tune
their energy levers levels by carefully
monitoring what they eat and drink,
establishing exercise routines, and
knowing when to get away for relaxation.
 Creativity and innovativeness: This
consists of ability to seek new ways to do
things or solve problems. Entrepreneurs
as an agent of change bring about new
resource combinations. 10/22/2023 37
Cont…..

 Vision:Entrepreneurs know where

they want to go. They have a
concept of what their firm can be.
 Self confidence and optimism:

Although entrepreneurs often

face major obstacles, they belief
in their ability seldom wavers.
During these down periods they
maintain their confidence and let
those around them know it.
10/22/2023 38
Cont…….

 Independence. The desire for

independence is the driving force
behind contemporary
entrepreneurs. Their frustration
with rigid bureaucratic systems,
coupled with a sincere
commitment to make a difference
adds to an independent
personality trying to accomplish
tasks his or her own way.
10/22/2023 39
Cont…..

 Team building: The desire for

independence and autonomy does
not preclude the entrepreneur’s
desire to build a strong
entrepreneurial team. Most
successful entrepreneurs have
highly qualified well motivated
teams that help handle the
ventures growth and
development. 10/22/2023 40
D:RISKS AND REWARD OF ENTREPRENEURSHIP

BENEFITS OF ENTREPRENEURSHIP
 The Benefits of Entrepreneurship:
Survey show that owners of small
business believe they work harder,
earn money, and are more satisfied
than if they worked for some one.
 Before launching any business
venture, every potential entrepreneur
should consider the benefits of small
business ownership which are as
follows:-
10/22/2023 41
Cont…..
 Opportunity to create own destiny.
Owning a business provides entrepreneurs
the independence and the opportunity to
achieve what is important to them.
 Opportunity to make a difference.
Entrepreneurs are starting business
because they see an opportunity to make
a difference in a cause that is important to
them. Whether it is providing low cost,
housing for families or creating a
company that educates young people
about preserving the earth’s limited
resources etc. 10/22/2023 42
Cont…….
Opportunity to reach full potential. Too many
people find their work boring,
unchallenging, and unexciting. But to most
entrepreneurs, there is little difference
between work and play. Entrepreneurs’
businesses become the instruments for self-
expression and self- actualization.
Opportunity to contribute to society and be
recognized for effort. Often, small business
owners are among the most respected and
most trusted members of their communities.
Business deals based on trust and mutual
respect are the hallmark of many established
small companies. 10/22/2023 43
Cont…..

 Opportunity to reap in positive

profit. Although money is not the
primary force driving most
entrepreneurs, the profit their
businesses can earn are an
important motivating factor in their
decision to launch companies. If
accumulating wealth is high on your
list of priorities, owning a business
usually the best way to achieve it.
10/22/2023 44
Cont…….
 Opportunity to do what you enjoy and
have fun at it. A Common sentiment
among small business owners is that
their work really isn’t work. Most
successful entrepreneurs choose to
enter their particular business field
because they have an interest in them
and enjoy those lines of work. They
have made their avocation (hobbies)
and their vocations (work) and are
glad they did.
10/22/2023 45
THE POTENTIAL DRAWBACK OF ENTREPRENEURSHIP

• Although owning a business has

many benefits and provides
many opportunities, anyone
planning to enter the world of
entrepreneurship should be
aware of its potential
drawbacks.
Some of the disadvantages of
entrepreneurship include the
following;- 10/22/2023 46
Cont…..

 Uncertainty of Income. Opening and

running a business provide no
guarantee that an entrepreneur will
earn enough money to survive. Some
small businesses barely earn enough
to provide the owner manager with
adequate income. In the early days of
a business, entrepreneurs often have
trouble meeting financial obligations
and may have to live on savings.
10/22/2023 47
Cont…..
 Risk of Losing the Entire Invested
Capital. The small business
failure rate is relatively high.
According to recent survey 34% of
new business fails within two
years, and 50% shut down within
four years, within six years 60% of
new business will have folded. A
failed business can be financially
and emotionally upsetting.
10/22/2023 48
Cont…….
 Long Hours and Hard Work.
Business start ups often demand
that owners keep night marsh
schedules. In many start ups, 10
to 12 hours a day and six or seven
work day, work weeks with no paid
vacations are the norm. Because
entrepreneurs do everything
themselves, they experience
intense, draining workdays.
10/22/2023 49
Cont…..
 Low Quality of life until the
Business gets established. The
long hours and hard work to
lunch a company can take their
fall on the other aspects of the
entrepreneur’s life.
 Business owners often find their
roles as husbands or wives and
father or mother take a back seat to
their roles as company founders.
10/22/2023 50
Cont…..

 High Levels of Stress. Starting and

managing a business can be an
incredibly rewarding experience, but it
also can be a highly stressful.
 Complete Responsibility. Owning a
business is highly rewarding, but
many entrepreneurs find that they
must make decisions on issues about
which they are not really
knowledgeable. Many business owners
have difficulty finding advisors.
10/22/2023 51
Cont…….

 Discouragement. Launching a
business is a substantial undertaking
that requires a great deal of
dedication, discipline, and
persistence. A long the way to
building successful business
entrepreneurs will run headline into
many different obstacles, some of
which appear to be insure mountable.
In the face of such difficulties,
discouragement and disillusionment
are common emotions. 10/22/2023 52
Cont…..
Starting or buying a new business involves risk.
The higher the rewards, the greater the risk
entrepreneurs usually face. This is why
entrepreneurs tend to evaluate risk very carefully.
Entrepreneurs face a number of different types of
risk. These can be grouped into four basic
areas.
 Career risk- A question frequently raised by

would be entrepreneurs are weather they will be

able to find a job or go back to their job if their
venture should fail. This is a major concern to
managers who have a secure organizational job
with a high salary and a good benefit package.

10/22/2023 53
Cont…….
 Family and social risk - Starting a new
venture uses much of the
entrepreneur’s energy and time
consequently; his or her other
commitments may suffer.
Entrepreneurs who are married, and
especially those with children, expose
their families to the risks of an
incomplete family experience and the
possibility of permanent emotional
scars. In addition, old friends may
vanish slowly because of missed get
together. 10/22/2023 54
Cont…..

 Supernatural risk - The greatest risk

may be to the well – being of the
entrepreneur. Money can be replaced;
a new house can be built, spouse,
children and friends can usually
adopt. But some entrepreneurs who
suffered financial catastrophes have
been unable to bounce back, at least
not immediately. The psychological
impact has proven to be too severe for
them. 10/22/2023 55
Cont…..

 Financial risk - In most new

ventures the individual puts a
significant portion of his or her
savings on other resources at
stake. This money or these
resources will, in all likelihood, be
lost if the venture fails. Many
people are unwilling to risk their
savings, house, property, and
salary to start a new business.
10/22/2023 56
E: ROLE OF ENTREPRENEURSHIP IN TANZANIA

 Create Jobs. Establishment of new

businesses creates jobs in the business
formed. The more enterprising people
are the more the chances of investing in
new ventures and creating new jobs.
 Promote Healthy Competition.
Entrepreneurs enable a country to
produce quality products and services,
which are sold at reasonable prices.
Consumption of high quality goods at
low prices improves the consumers’
standard of living.
10/22/2023 57
Cont…..

 Generate Wealth and Spread

Prosperity. Creation of new
business creates wealth, which is
eventually distributed to all
members in various forms.
Business owners, suppliers,
financiers, distributors and other
interested parties are all
beneficiaries’ to the wealth
created. 10/22/2023 58
 Cont…….
 Growth. Entrepreneurs develop new
products from new ideas every business
strives for growing profits and in a way
that is made possible through newly and
increased quantity of product.
 Ensure Innovation and Creativity.
Innovation and creativity consist of ability
to seek new ways on how to do things or
solve problems. Entrepreneurs as an
agent of change, bring about new
resources combinations.
10/22/2023 59
Cont…..
- Creativity: is “the ability to bring
something new into existence. This
definition emphasizes the “ability”,
not the “activity”, of bringing
something new into existence.
- Innovation: is the process of
doing new thing. Innovation,
therefore, is the transformation of
creative ideas into useful
applications, but creativity is a
prerequisite to innovation. 10/22/2023 60
Cont…..
 Maintain Free Enterprise. Free enterprise,
an economic system in which individuals
are free, singly or collectively to own
capital and undertake economic activity
within the framework of social legislation
designed to protect the interests of the
individual. In its extreme form it is the
direct opposite of the state planned
economy. There is no interference by the
state in production and distribution that is
where the composite demand of all
consumers determines what
entrepreneurs shall produce. 10/22/2023 61
Cont…….
 Encourage Grass Root Development. There
has been a notion that those who form small
businesses are likely to have previously
worked in small firms and to have used them
as role model. For one thing, it may become
easier for the potential entrepreneur to
envision a role comparable to that of his
boss. An employee may be convinced that if
the owner manager can do it, he should be
able to do it equally or even better.
 Empirical work shows that new companies are

more likely to originate from small corporate

decisions that form large ones.
10/22/2023 62
Cont…..

 Social Progress. New enterprises

become tax payers, thus returning
revenue to the government. More
revenue is also accruing to the
government from business
employees when they pay income
tax, Revenue generated may well
be used for social progresses in
terms of education, healthy and
other social activities. 10/22/2023 63
Cont…….

 Promote Economic Growth.

Entrepreneurs are involved in
production of goods and services
ventures they established. These
goods and services contribute on the
country’s GDP hence promote
economic growth.
 Formation of New Industries.
Entrepreneurship leads to the
formation of new ventures, which are
involved in production.
10/22/2023 64
Cont…..

 Standard of Living. Entrepreneurship

enables a country to produce quality of
products and services, which are sold at
reasonable prices. Consumption of high
quality goods at lower prices improves
the consumer’s living standard.
 Technology Development.
Entrepreneurs develop new products
from new idea. Every business strive
from profitability competition dictates
that great stride be made in technology.
10/22/2023 65