FOUNDATIONS OF ENTREPRENEURSHIP Elikem Nutifafa Kuenyehia CLASS THREE: INTRODUCTION TO ENTREPRENEURSHIP

Agenda for Class Three Mid term assignment – 10 Groups Recap of last week’s class Introduction to entrepreneurship Forms of entrepreneurship Opportunity vs. Necessity entrepreneurship Entrepreneur vs. businessman Incubation Entrepreneurship in Ghana Guest Speaker – Mike Nyinaku, MD, Beige Capital

Mid Term Assignment Group 1 & 2 – Brand Management & Marketing Group 3 & 4 – Consumer Insights Group 5 & 6 – Sales and Channel Strategy Group 7 & 8 – Finance and Capital Raising Group 9 & 10 – Operations and Logistics

Recap of last week’s class What did you learn from Co-founders of ‘Heel The World’?

Introduction to Entrepreneurship History and Development of Entrepreneurship Entrepreneurship evolved from the French word “entreprendre” meaning “to undertake” Other referrals included middleman, director of resources, tax contractor Richard Cantillon saw entrepreneurs as middlemen in his postulation of agents of economy (landowners, entrepreneurs, hirelings Mid 20 th century definition of entrepreneurship were based on economic situations

Some Definitions An entrepreneur is ‘a necessary destabilising force bringing economic growth through the disequilibrium of constant change and innovation’. Joseph Schumpeter ‘Individual who undertook formation of an organisation for commercial purposes’. Adam Smith ‘It is possessing the know-how to find, marshal and control resources (often owned by others). Timmons

My Definition It is the process of risking resources based on an idea (or series of ideas) to develop the idea(s) into goods and/or services that people perceive as valuable and are willing to pay for, in such a way as to maximise return for the enterprise.

Entrepreneurship as a process Entrepreneurial process begins with an idea which develops into an opportunity or vice- versa Idea and opportunity are intertwined by size of willing patronisers Product or service at the heart of the venture must “remove an existing pain” Key resources risked include time, human and capital resources

Entrepreneurship as a state of mind or series of attributes Entrepreneurship is also use to describe the characterization of attributes that enable people to exploit opportunities for financial reward Motivation factor is the individual’s state of mind Entrepreneurship as a pattern of behaviour Involves the ability to build a vision from nothing- Timmons Complementing one’s skills by building a venture team

Forms of entrepreneurship Social Entrepreneurship Creating social change through an enterprise Enterprises include non-profit organizations and businesses set up with a social purpose Intrapreneurship Formation of new idea within an existing organisation Entrepreneurial concept belongs to the organisation and not the intrapreneur Financial rewards also go to the company (Intrapreneur’s reward is limited)

Forms of entrepreneurship Extrapreneurship Break off from existing company New company may carry similar idea from parent company New enterprise may be in the same line of business as the one it broke off from or may become a customer of or a supplier of a product or service for the enterprise it broke from

Opportunity vs. Necessity entrepreneurship Opportunity entrepreneur develops an idea to exploit an existing opportunity Necessity entrepreneurs result from lack of alternatives

Entrepreneur vs. Businessman All entrepreneurs are businessmen but not all businessmen are entrepreneurs A Businessman establishes a business for personal goals while an entrepreneur establishes an enterprise for profit and growth – Beaver and Jenkins Unlike businessmen, entrepreneurs always look for opportunities

Incubation It involves “nurturing” start-up businesses with an enabling environment, material and intangible resources to grow their businesses to the stage where they can stand on their own and leave ‘the mother hen’ Examples: Busy Internet Incubation Program and the Meltwater School of Technology.

Evolution of entrepreneurship in Ghana Entrepreneurship in Ghana began before the arrival of the Europeans Europeans were also entrepreneurs as they risked resources to identify trading opportunities in Ghana Post independence witnessed the introduction of a mixed economy in Ghana Nkrumah’s Government encouraged private enterprise The NLC government also supported local entrepreneurs when it published in 1968, ‘The Promotion of Ghanaian Business Enterprise’

Evolution of entrepreneurship in Ghana Busia’s government was the first to extensively draw up policies and establish bodies to aid entrepreneurs Acheampong introduced ‘Operation Feed Yourselves and Industry’ Rawlings Government introduced ERP and SAP leading to the divestiture of SOEs Kufour’s government is dedicated to making the private sector the engine of growth in the economy. Mills government reconstituted and strengthened the National Board for Small Scale Industry (NBSSI) to provide technical and financial support for small and medium scale enterprises

Role of entrepreneurship in development of a country’s economy Creates jobs Drives economic growth Frees up states resources Fosters competition Fosters innovation Increases productivity Provides a tax base for government

Challenges facing Ghanaian Entrepreneurs Access to finance Low incomes and corresponding low savings culture Little initiative by banks to be creative Inability to properly evaluate and price entrepreneurial credit Unfriendly government machinery Political and economic instability Access to information

Factors favouring entrepreneurship Access to finance Political stability Macro-economic stability Secure property rights Ease of starting a business Free flow of information The rule of law and mechanism for contract enforcement Access to finance Size of the market in terms of numbers and income levels Regulation of businesses Access to information

Why become an entrepreneur? Most graduate students take regular executive or civil service career paths while Some, after a few years of experience quit to start their own enterprise or buy one Appeal for joining ‘Corporate Ghana’ or civil service: More security Certainty of income Greater training opportunities Lower levels of stress Smaller personal risk Responsibility Autonomy & desire to control one’s own destiny

Overview of entrepreneurial cycle: four(4) stages of entrepreneurship Identification of opportunities Acquiring resources Implementing plan to take advantage of opportunity Harvesting the opportunity

Guest Speaker Mike Nyinaku, Managing Director, Beige Capital