ENTREPRENEURSHIP & NEGOTIATION  Lecture 1  Matching  Entrepreneurial & Management Characteristics  with the  Business Idea

ENTREPRENEURSHIP & NEGOTIATION  ESSENTIAL CHARACTERISTICS:  1.ECONOMIC THEORY  Some one who can coordinate the factors of production (resources) to gain a profitable outcome.  2.KIRZNER  Some one who has information additional to that held by competitors

ENTREPRENEURSHIP & NEGOTIATION  3.SCHUMPETER  The ability to innovate from existing products and practices  4.KNIGHT  On who is prepared to take risks in an uncertain environment  5.CASSON  Some one who has command over resources and can also coordinate and reallocate these resources

ENTREPRENEURSHIP & NEGOTIATION Most common identified characteristics . Most common identified characteristics  High Achievement Orientated .High Ambiguity Tolerance .High Internal Locus of Control .High need for Independence .Innovative .Visionary

ENTREPRENEURSHIP & NEGOTIATION  Deviant (none conformist)‏ .Proactive .Self Confident .Ability to Deal with Failure .Fit & Energetic .Creative & Innovative .Risk Taker

ENTREPRENEURSHIP & NEGOTIATION THE MANAGEMENT PERSONALITY  THE MANAGEMENT PERSONALITY  Ability to Take Decisions .Commitment to Others .Self Confident .Conformist .Emotional Stability .Good Communicator .Ability to Lead and Work with Others .Knowledge of and Access to Resources 

ENTREPRENEURSHIP & NEGOTIATION  THE ENTREPRENEURIAL BUSINESS  Established to provide the founder with commercial prosperity and the satisfaction of being innovative. Additionally this type of business will be looked upon to create new wealth, employment and economic development.  THE MANAGED BUSINESS  The role of the manager is to plan, make decisions, change and coordinate resources and take control of the business activities on a daily basis and in so doing satisfies the objectives of the businesses owners.

ENTREPRENEURSHIP & NEGOTIATION  SUCCESSFUL ENTERPRISE VENTURES  There are 4 fundamental needs for an enterprise venture to succeed:  1.A BUSINESS IDEA  The market opportunity that fits the skills and interest of the persons concerned.  2.ENTREPRENEURIAL DEVELOPMENT  Developing self confidence, initiative and harnessing the motivation/enthusiasm of the entrepreneur.  3.MANAGEMENT SKILLS DEVELOPMENT  Enhancing the functional management skills of the entrepreneur  4.RESOURCES  Information of and access to land, labour, finance and tangible assets

ENTREPRENEURSHIP & NEGOTIATION  WHAT BUSINESS DO I WANT TO BE IN  ADVANTAGES OF RUNNING YOUR OWN BUSINESS .Development of an hobby or interest .Play to own knowledge, skills and experience .Work in field of enjoyment .Opportunity to create your own company .Independence form employer .Determine own remuneration package .Tax advantages  DISADVANTAGES OF RUNNING YOUR OWN COMPANY .Personal Liability .Stressful .Unsociable Hours .Meetings .Bureaucracy .Seed Capital

ENTREPRENEURSHIP & NEGOTIATION  DISADVANTAGES OF RUNNING YOUR OWN COMPANY .Personal Liability .Stressful .Unsociable Hours .Meetings .Bureaucracy .Seed Capital

ENTREPRENEURSHIP & NEGOTIATION BUSINESS START-UP STATISTICS  80% OF NEW BUSINESSES FAIL IN THE FIRST 6 MONTHS .ONLY 40% WILL SURVIVE TO THE 4 TH YEAR .120,000 BUSINESSES FILE FOR BANKRUPTCY EACH YEAR .70% OF ALL INSOLVENCIES ARE CAUSED THROUGH DEBT .1989 WAS THE BEST YEAR TO DATE FOR BUSINESS LAUNCHES (520,000)‏ .OVERTADING COMMON CAUSE OF BUSINESS FAILURE . MAJORITY SEED FINANCE IS THE OWNERS OWN

ENTREPRENEURSHIP & NEGOTIATION  REASONS FOR BUSINESS FAILURES  11 DEADLY SINS: .Lack of Expertise .No Product/Service Market Strategy .Over Optimism of Market size .Under Estimating Start-up time .Lack of Working Capital .Start-Up costs to high .Over-Trading .Mistaking Profit for Cash .Wrong Location .Wrong Staff Selection .Poor Accounting Standards

ENTREPRENEURSHIP & NEGOTIATION  CHOOSING THE BUSINESS  SPOTTING A GAP IN THE MARKET:  FACTORS THAT SHOULD INFLUENCE YOUR CHOICE .What are you good at that could influence your choice .(a) Organising .(b) Selling .(c) buying .How much start-up capital is needed .Is there a market for your idea .Will you like the work .How much time are you prepared to put in .What business is right for you

ENTREPRENEURSHIP & NEGOTIATION  QUALITIES YOU NEED TO SUCCEED  Self Confidence .Being an all Rounder .Ability to Bounce back .Innovative .Positive Result Orientated .Risk-Taker .Total Commitment . (a) Single Minded . (b) Energetic . (c) Hardworking .

ENTREPRENEURSHIP & NEGOTIATION  QUALITIES YOU NEED TO SUCCEED  Self Motivation .Initiative .Communication Skills .Patience .Attention to Detail