Overview of entrepreneurship Unit 1

What is Entrepreneurship? Origin of the Word “Entrepreneur” The word was originally used to describe people who “take on the risk” between buyers and sellers or “undertake” a task such as starting a new venture. The “undertake” interpretation of the word has been central to its usage in English. Difference Between an Inventor and an Entrepreneur An inventor creates something new. An entrepreneur puts together all the resources needed—the money, the people, the strategy, and the risk-bearing ability to transform the invention into a viable business.

What is Entrepreneurship Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort; assuming the accompanying financial, psychic, and social risks and uncertainties; and receiving the resulting rewards of monetary and personal satisfaction. The definition stresses four basic aspects: First, entrepreneurship involves a creation process Second, entrepreneurship requires the devotion of the necessary time and effort by entrepreneur Third, it involves the rewards of being an entrepreneur Fourth, it assumes the necessary risks and uncertainties

What is Entrepreneurship? Entrepreneurship is the process of identifying opportunities in the market place, arranging the resources required to pursue these opportunities and using the resources to exploit the opportunities for better gains. It is concerned with starting one’s own business.

Entrepreneur Entrepreneur is an individual who takes initiative to bundle resources in innovative ways and is willing to bear the risk and uncertainty to act. Entrepreneurs are individuals who actively form or lead their own business and nurture them for growth and prosperity.

Why Become an Entrepreneur? There are three primary reasons that people become entrepreneurs and start their own firms Desire to be their own boss Desire to pursue their own ideas Financial rewards

Characteristics of Successful Entrepreneurs Four Primary Characteristics of Successful Entrepreneurs

Characteristics of Successful Entrepreneurs Passion for the Business The number one characteristic shared by successful entrepreneurs is a passion for the business. This passion typically stems from the entrepreneur’s belief that the business will positively influence people’s lives. Product/Customer Focus A second defining characteristic of successful entrepreneurs is a product/customer focus. An entrepreneur’s keen focus on products and customers typically stems from the fact that most entrepreneurs are, at heart, craftspeople.

Characteristics of Successful Entrepreneurs Tenacity Despite Failure Because entrepreneurs are typically trying something new, the failure rate is naturally high. A defining characteristic for successful entrepreneurs is their ability to persevere through setbacks and failures. Execution Intelligence The ability to fashion a solid business idea into a viable business is a key characteristic of successful entrepreneurs. The ability to translate thought, creativity, and imagination into action and measurable results is the essence of execution intelligence.

What Entrepreneurs Contribute provide venture capital turn demand into supply What Entrepreneurs Contribute create more wants provide jobs promote changes in society 10

Types of Entrepreneurs On the basis of innovation: Innovative entrepreneurs: Aggressive assemblage of information for trying out a novel combination of factors Imitating entrepreneurs: They do not innovate themselves, but imitate techniques technology innovated by others Fabian entrepreneurs: Who display great caution and doubt in experimenting with any change Drone entrepreneurs: Characterized by a refusal to adopt opportunities to make changes in production formulae even at the cost of severely reduced returns Forced entrepreneurs: Forced to become entrepreneurs to fashion their own economic livelihood; victims of circumstances Empire builder entrepreneurs: They go on creating new ventures one after another; do not get involved in day-to-day activities, but keep strategic control

B. On the basis of behavior Solo-entrepreneurs Active and sleeping entrepreneurs Inventor entrepreneurs Challenger entrepreneurs: When one challenge seems to be met, they begin to look for new challenges Buyer entrepreneurs Life timer entrepreneurs

C. On the basis of focus group Women entrepreneurs Minority entrepreneurs Immigrant entrepreneurs Part-time entrepreneurs Home-based entrepreneurs Family business entrepreneurs Entrepreneurial couples Intrapreneurs/corporate entrepreneurs

Entrepreneurial decision process Identify and evaluate the opportunity Identify a specific opportunity Estimate the length of opportunity (market size) Assess the real and perceived value of opportunity Evaluate the risks and returns of opportunity Assess the opportunity against personal skills and goals Assess the competitive environment

Develop business plan with proper contents Determine the resources required Determine resources needed Determine existing resources Identify resource gaps and available suppliers Develop access to needed resources Manage the enterprise Develop management style Understand key variables for success Identify problems and potential problems Implement control systems Develop growth strategy

Role of entrepreneurship in economic development Capital formation Employment creation National integration Utilization of resources Revenue generation Better international relation Earning of foreign currency Equitable distribution of wealth

Becoming an Entrepreneur on the Job Intrapreneurship Becoming an Entrepreneur on the Job

What keeps most people away from becoming entrepreneurs? Funding Manpower Strong backing Branding/Marketing Fear Funding – becoming an entrepreneur often requires not only funding to get your project started, but money to pay your living expenses while you are working on your project. Manpower – projects often requires a wide range of skill sets. Everything from design and production to marketing. Entrepreneurs usually have to do it all themselves or hiring someone to do the tasks they are unable or unqualified to do. Strong backing -

Intrapreneur A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation. Intrapreneurs have entrepreneurial skills blended with managerial skills but operate within the confines of an organization.

Positive differences between entrepreneur vs intrapreneur Funding company/organization often has capital to fund the project Manpower intrapreneurs do not have to worry about finding the talent to get tasks performed Branding intrapreneurs can use the branding of the company/organization to get their ideas to take root

Characteristics Results driven Ambitious Creative Original Self Confident Risk Tolerant Persistent Influencing High Energy Action oriented Interpersonal Innovative

Defined as… Intrapreneurs are “dreamers who do”, those who take hands-on responsibility for creating innovation of any kind within an organization. Gifford Pinchot The intrapreneur is an essential ingredient in every innovation. Dr. William Souder

Why should organizations embrace intrapreneurs?

Innovation To create and bring into use profitable new products, processes, services, and ways of doing business. Creation of new or alternative products Opening of a new market Capture of new sources of supply

Intrapreneurial Activity Spotting ways to improve service Save time, money, or make life easier Visualizing variations of current products / services Realizing new communication avenues with customers Enhancing the quality New ways to get the job done quicker or smarter

How does Business benefit? Firms create competitive advantages by discovering new and better ways to compete in an industry and bringing them to market An enterprise that does not daily innovate inevitably ages and declines Even in a successful business the disease of bureaucracy and complacency is dangerous

How do Intrapreneurs benefit? Flexibility Less restrictions but supportive environment Recognition Their ideas are vehicles towards advancement Increased value to organization - increased PAYCHECK

Implementing the Intrapreneurship Culture Encourage employees to be creative and to look for new ways to improve your current way of doing business Grant intrapreneurs something akin to ownership rights in the internal intraprises they create Encourage company wide involvement by insisting on truth and honesty in marketing and marketplace feedback

Implementing the Intrapreneurship Culture Treat intrapreneurial teams as profit centers rather than as cost centers Allow team members a variety of options in jobs, in innovation efforts, alliances, and exchanges Encourage employees to develop through training programs