Entrepreneurship Development

Course Instructor: Rezene m.

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 What is “entrepreneurship”?
 Why be an entrepreneur?
 Are you interested to learn
entrepreneurship? Why? 2
 Entrepreneurs:
Entrepreneurs:
The
The Driving
Driving Force
Force Behind
Behind
Small
Small Businesses
Businesses

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 Course objective

• The main aim of this course is to give the student a

broad understanding of the field of entrepreneurship
development, and commercialization of technology-
based innovation in existing firms
• Through the development of a business plan, evaluate
the opportunities of a selected venture idea along with
the constraints on its feasibility.
• To equip engineering students with the required
entrepreneurship tools and inspirations they need to start
and grow a successful business.

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 Outline
• Introduction
• Forms of Entrepreneurship
• Concepts of Entrepreneurship;
• Deconstructing Entrepreneurs: Core Competences
• Entrepreneurial Process;
• Factors affecting entrepreneurships development
• Types and Models of Entrepreneurship
• The Role of Entrepreneurship in an Economy

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 Introduction

Who is an Entrepreneur?

• What are the profiles of Entrepreneurs?

• Are Entrepreneurs Born or Made?
• What is the distinction between Entrepreneurship and
Entrepreneurs?

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 Cont…
…Who is an Entrepreneur?
Entrepreneur is a person who owns, organizes, manages and
runs an enterprise assuming the risk of a business or enterprise.

Hisrich:- “a person who estabilishes a new business venture and

is a visionary leader- a person who dreams great dreams”

Entrepreneur is a person who has the ability to see and evaluate

business opportunities to gather the necessary resources to take
advantage of them, and to initiate appropriate action to ensure
success. (Meredith, 1982)

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 Cont…

• Entrepreneur is someone who is specialized in taking

judgmental decisions about the coordination of scarce
resources (Casson)
• Entrepreneur is an individual who:
– Has the ability to identify and pursue a business
opportunity
– Undertake a business venture
– Raises the capital to finance it
– Gathers the necessary resources
– Set goals for himself/herself and others
– Assumes major portion of the risk
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 Cont…

A person who creates a new business in the

face of risk and uncertainty for the purpose of
achieving profit and growth by identifying
opportunities and assembling the necessary
resources to capitalize on those opportunities.

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 Cont…
 Definition: Entrepreneur
 (New Encyclopaedia Britannica) – An individual who bears the risk
of operating business in the face of uncertainty about the future
conditions

Definition:Entrepreneurship
 It is a philosophy or process through which an entrepreneur seeks
innovation and employment.

Standard definition
 Entrepreneurship is the process of creating something different
with value by devoting the necessary time and effort, assuming the
accompanying financial, social risks and receiving the resulting
rewards of monetary and personal satisfaction and independence.
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 Cont…

Entrepreneur Entrepreneurship Enterprise

The person The process The outcome

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Forms of Entrepreneurship
 Entrepreneurship can take three different forms

1. The individual entrepreneur

2. Intrapreneur: a person who does entrepreneurial
work within large organization

3. Social Entrepreneur: People who drive social

innovation and transformation in various fields
including education, health, environment and
enterprise development
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 Entrepreneurs Vs. Intrapreneurs
• Entrepreneurs are people that notice opportunities
and take the initiative to mobilize resources to make
new goods and services.

• Intrapreneurs also notice opportunities and take

initiative to mobilize resources, however they work in
large companies and contribute to the innovation of
the firm.

• Intrapreneurs often become entrepreneurs.

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 Entrepreneurial Skills

The following are foundational skills entrepreneurs need to run

and operate a successful business:
• Communication Skills
– Writing, Speaking & Listening
• Human Relations, communication and negotiation Skills
• Math or financial Skills
• Problem Solving & Decision Making Skills
• Planning and leadership skills
• Technical Skills
• Basic Business / marketing Skills
• Project Management Skills
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 Advantages of Entrepreneurship

 To an Individual
(a) Provides Self Employment for the entrepreneur
(b) Entrepreneur can provide employment for near & dear one
(c) Entrepreneurship often provides an employment and
livelihood for next generations
(d) Freedom to use own ideas – Innovation and creativity
(e) Unlimited income / higher retained income
(f) Independence
(g) Satisfaction

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 Cont…
To the nation
(a) Provides larger employment
(b) Results in wider distribution of wealth
(c) Mobilizes local resources, skills and savings
(d) Accelerates the speed of economic development
(e) Stimulates innovation & efficiency

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 Wage Employment Vs Entrepreneurship
 Wage Employment • Entrepreneurship
 Work for Others  Own Boss
 Follow Instructions  Make own plans
 Routine Job  Creative activity
 Earning is fixed, never  Can be negative sometimes,
negative generally surplus
 Does not create wealth  Creates Wealth, contributes to
GDP
 Can choose from-  Can choose from-
 Government service  Industry
 Public Sector  Trade or Service Enterprise
 Private Sector

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 Entrepreneurial Process
• Income generation is the initial stage in the entrepreneurial process
in which one tries to generate surplus or profit. They are often taken
on part- time or casual/informal
• Self-employment is the 2nd stage in the entrepreneurial process
and refers to an individual’s fulltime involvement in his own
occupation.
• Entrepreneurship is the terminal stage of the entrepreneurial
process wherein after setting up a venture one looks for
diversification and growth

Income Generation Self Employment Entrepreneurship

Initial stage Middle stage Final stage

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 Deconstructing Entrepreneurs: Core
Competences
• Entrepreneurs have some competences, which
distinguish them from the general population and even
from hired professional manager. Some of the
characteristics that can be easily perceived are the
following:

Commitment and Determination: Entrepreneurs are

highly committed in that they exert their utmost effort to
make their venture a reality. They often immerse
themselves completely in their businesses. It is often
suggested that many entrepreneurs are workaholics. Most
entrepreneurs have a strong appetite for hard work.
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 Derive to achieve: Entrepreneurs are internally
driven by a strong desire to compete, to excel
against self imposed standards.
 Besides, they have the desire to achieve
something that they can be proud of.
 Individuals with a low need for achievement
are those who seem to be contented with their
present status.
 On the other hand, individuals with the high
need for achievement like to compete with some
standard of excellence and prefer to be personally
responsible to their own assigned tasks.
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Information Seeking: Entrepreneurs take
action on own to get information to help reach
objectives or clarify problems. They does personal
research, consult experts for business and
technical advices and use their personal networks
for the same.
Opportunity Oriented: Entrepreneurs start by
finding a need and quickly satisfying it. Successful
growth minded entrepreneurs focus on
opportunities rather than on resources, structure,
and strategy. They look for and take action on
opportunities. 21
Initiative and Responsibility: entrepreneurs
take action that goes beyond job requirement.
They do things before being asked or forced by
others/ events. They morally, legally and mentally
accountable for their ventures.
Persistence Problem Solving: entrepreneurs
are not intimidated by difficult situations. They
attack problems/ obstacles that are impeding to
business operations. They take repeated action to
overcome obstacles. If tasks are extremely easy/
unsolvable ones, they don’t warrant their time.
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Seeking Feedback: “How are we doing?” The
question is ever present in the entrepreneurs
mind. Unlike other people, entrepreneurs have a
strong desire to know how well they are doing
and how they are going to improve.
Internal Locus of Control: Successful
entrepreneurs believe success and failure of their
venture will be controlled and governed by their
accomplishment and they believe that they can
influence their outcomes and actions.

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 Calculated Risk Taking: Entrepreneurs are
calculated/moderate risk-takers.
 Risk taking is an inherent part of business
ownership. Staying safe rarely pays of in the long
run.
 Risks are not taken blindly, careful research and
previous are taken into account.
 With this in concern, they carefully think about
these four forms of risks: Financial risk, career
risk, family risk, and psychic risk.
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Creativity and Innovation: The ability to create
new ideas, new concepts, and new ways of viewing
problems is at the heart of successful entrepreneurs.
The ability to see an opportunity instead of a problem
and a solution instead of a dilemma is a fundamental
skill associated with many entrepreneurs.
Tolerance for Failure: Entrepreneurs do not get
disappointed, distressed or discouraged by failures.
Rather, they use failure as a learning experience.
Entrepreneurs learn more from their failures than
their successes. They use their willpower to conquer
the barriers that stand in their way. Japanese proverb,
“Fall seven times; stand up eight.”
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 Independence: Entrepreneurs want to be their
own bosses. They don’t wish to be commanded
by others. They don’t like to be ordered by others.
They have a high need for autonomy.
Persuasion: Successful entrepreneurs persuade
others. They are good at convincing others.
 Convinces someone to buy a product
 Convinces someone to provide financing
 Convinces someone to do something else that
he/she would like that person to do.
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Team building: entrepreneurs are good at
creating teams which comprises of highly
qualified and well motivated employees to ensure
the establishment of successful business
ventures.
Visionary: entrepreneurs have an enthusiastic
vision, the driving force of an enterprise. They
know where they want to go. They do have a
concept of what their firm can be in some years
to come.

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 High Energy level: Entrepreneurs are more
energetic than the average person. That energy
may be a critical factor given the incredible efforts
required to launch a start-up company.
 Building a company requires a great deal of
energy. It is obvious that entrepreneurs are
engaged in extraordinary work load and stressful
dedication that require great deal of energy.
 Successful entrepreneurs fine-tune their energy
level by carefully monitoring what they eat, drink,
and know when to go away for relaxation.
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Self Confidence : Individuals who possess self-
confidence feel that they can meet the challenges
which confront them. They have the sense of
mastery over the types of problems that they
might encounter. Entrepreneurs have a strong
belief in self and own abilities.
Optimism: they live by the philosophy that this
is the best of times, and that anything is possible.

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Flexible and able to adapt to change : one
hallmark of true entrepreneurs is their ability to
adapt to the changing demands of their
customers and their businesses. Entrepreneurs
understand that in this rapidly changing world
economy, rigidity often leads to failure.
Dynamic leaders: entrepreneurs are dynamic
leaders in the sense that they transform the
pattern of production or distribution to focus on
catching up with the changing demands of the
environment and the market. They are more of
transformational leaders than transitional ones.
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Time management: Entrepreneurs know that
time is finite. They know how to manage their
time effectively in that they would be able to live
their lives, accomplish the tasks that they need
to accomplish, and enjoy lives.
Concern for High quality work:
Entrepreneurs act to do things that meet or beat
existing standards of excellence. They have high
desire to produce of work of high quality.

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 Entrepreneurial Decision Process

• Pull Factors- the factor which attract a person

to become entrepreneur
– Perception of Advantages- If a person feels that he
can earn better or overall gains in terms of money.
– Spotting an Opportunity
– Government Policies
– Motivation
– Influenced by Culture, Community, Family
Background, Teachers, Peers, etc.
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 Cont…
• Push Factors- the factors that force him
– Job Dissatisfaction
– Relocation
– Joblessness
– Lay off
– Retirement
– Boredom- This is applicable to many ladies from well to do
families. With their army of servants to take care of home, they find
an opportunity to keep the boredom away and start ventures

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Factors Influencing Entrepreneurship

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 Putting Failure Into Perspective
• Failure is a natural part of the creative process.
• Failures are simply stepping stones along the path to success.
• The “secret” to success is the ability to fail intelligently,
learning why you failed so that you can avoid making the same
mistake again.

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Current Entrepreneurial Trends
One way to identify business opportunities is to study current
trends that provide opportunities for entrepreneurs.

social
Internet businesses
entrepreneurship

service businesses focus on technology

home-based outsourcing and

businesses strategic alliances

green businesses corporate ventures

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Roles of Entrepreneurship in an Economy

• Entrepreneurship raises productivity through

technical and other forms of innovation.
• Entrepreneurship is powerful tool of job creation.
• Entrepreneurship facilitates the transfer of
technology.
• Entrepreneurs play a strategic role in
commercializing inventions and products.
• Entrepreneurs play a critical role in restructuring
and transformation of economy. 37
 Roles of Entre….Con’td

• Entrepreneurship and entrepreneurial behavior can

breathe vitality into the life of large corporations
and government enterprises.
• Entrepreneurs make markets more competitive and
thereby reduce both static and dynamic market
inefficiencies.
• Entrepreneurs improve the social welfare of a
country by harnessing dormant, previously
overlooked talent.
• Entrepreneurs create new markets and facilitate
expansion into international markets. 38
 Entrepreneurial Myths-NOT facts

• Entrepreneurs are Lucky

• Entrepreneurs make or break on the first venture
• Entrepreneurs are born not made
• Entrepreneurs are High-Tech wizards
• Entrepreneurs extreme risk takers (Gamblers)
• All Entrepreneur need to be successful is Money

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