Entrepreneurship

Entrepreneur



Entrepreneurship

The term entrepreneur is derived from
French verb entreprendre which
means to undertake.
Entrepreneurship : entrepreneurship
is the tendency of a person to organize
the business of his own and to run it
profitably, using all the qualities of
leadership, decision making ,
managerial caliber etc.
Entrepreneurship
Entrepreneurship is the process of
creating something new with value of
devoting the necessary time and effort,
assuming the accompanying financial,
psychic and social risk and receiving the
resulting rewards of monetary and
personal satisfaction and independence.
Push-Pull Theory
New venture creation results from positive and negative
external factors
Pushed into Entrepreneurship by negative elements
such as job dissatisfaction or job loss
Pulled into Entrepreneurship by the observation of an
opportunity, idea (e.g. dot-com mania)
Some industries more likely to act as incubators:
computer, garment, restaurant
French immigrant lruthre Irne du Pont de
Nemours started Du Pont in 1802.
David McConnell borrowed $500 from a friend to
start Avon.
George Eastman started Kodak with a $3,000
investment in 1880.
Jeff Bezos started Amazon.com with investments
from his family and friends.
NOTABLE ENTREPRENEURS
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Opportunity
Profit
Independence
Challenge
WHY TAKE the RISK?
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9
Who Is an Entrepreneur?
One 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 them.
WHO IS AN ENTREPENUER
Entrepreneur are doers and not
thinkers.
They do unexpected things.
They are change agents of progressive
societies.
They are the movers and shakers who
constructively disrupt the status quo.
Someone is sitting in the shade today
because someone planted a tree a long
time ago.
Warren Buffett



Who are entrepreneurs?

Common traits
Original thinkers
Risk takers
Take responsibility
for own actions
Feel competent and
capable
Set high goals and
enjoy working
toward them


Common traits
Self employed parents
Firstborns
Between 30-50 years old
Well educated 80%
have college degree and
1/3 have a graduate level
degree

Self-directed
Self-nurturing
Action-oriented
Highly energetic
Tolerant of uncertainty
WHAT DOES IT TAKE to be an
ENTREPRENEUR?
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Entrepreneur
Characteristics of entrepreneur :
Disciplined.
Self Starter.
Creativity.
Strong work ethic.
Risk taking ability.
Competitive.

Characteristics of Entrepreneurs
Desire for responsibility
Preference for moderate risk risk
eliminators
Confidence in their ability to succeed
Desire for immediate feedback
High level of energy
Future orientation
Skilled at organizing
Value achievement over money
Successful and Unsuccessful
Entrepreneurs
Successful
Creative and
Innovative
Position themselves
in shifting or new
markets
Create new products
Create new
processes
Create new delivery
Unsuccessful
Poor Managers
Low work ethic
Inefficient
Failure to plan and
prepare
Poor money
managers

Key Personal Attributes
Entrepreneurs are Made, Not Born!
Many of these key attributes are developed early
in life, with the family environment playing an
important role
Entrepreneurs tend to have had self employed
parents who tend to support and encourage
independence, achievement, and responsibility
Firstborns tend to have more entrepreneurial
attributes because they receive more attention,
have to forge their own way, thus creating higher
self-confidence

Key Personal Attributes (cont.)
Entrepreneurial Careers
The idea that entrepreneurial success leads to
more entrepreneurial activity may explain why
many entrepreneurs start multiple companies over
the course of their career
Corridor Principle- Using one business to start or
acquire others and then repeating the process
Serial Entrepreneurs- A person who founds and
operates multiple companies during one career
Key Personal Attributes (cont.)
Need for Achievement
A persons desire either for excellence or to
succeed in competitive situations
High achievers take responsibility for attaining
their goals, set moderately difficult goals, and
want immediate feedback on their performance
Success is measured in terms of what those
efforts have accomplished
Key Personal Attributes (cont.)
Desire for Independence
Entrepreneurs often seek independence from
others
As a result, they generally arent motivated to
perform well in large, bureaucratic organizations
Entrepreneurs have internal drive, are confident in
their own abilities, and possess a great deal of
self-respect
Key Personal Attributes (cont.)
Self-Confidence
Because of the high risks involved in running an
entrepreneurial organization, having an upbeat
and self-confident attitude is essential
A successful track record leads to improved self-
confidence and self-esteem
Self-confidence enables that person to be
optimistic in representing the firm to employees
and customers alike
Key Personal Attributes (cont.)
Self-Sacrifice
Essential
Nothing worth having is free
Success has a high price, and entrepreneurs have
to be willing to sacrifice certain things
Benefits of Entrepreneurship
The opportunity to:
Create your own destiny
Make a difference
Reach your full potential
Reap impressive profits
Contribute to society and to be
recognized for your efforts
Do what you enjoy and to have fun at it
Drawbacks of Entrepreneurship
Uncertainty of income
Risk of losing your entire investment
Long hours and hard work
Feeding the
Entrepreneurial Fire
Entrepreneurs as heroes
Entrepreneurial education
Demographic and economic factors
Shift to a service economy
Technological advancements
Independent lifestyle
E-commerce and the World Wide
Web
Technical Proficiency
Many entrepreneurs demonstrate strong technical
skills, typically bringing some related experience to
their business ventures
For example, successful car dealers usually have lots
of technical knowledge about selling and servicing
automobiles before opening their dealerships
Especially important in the computer industry
NOT ALWAYS NECESSARY
Questions To Keep In Mind
What are my motivations for owning a business?

Should I start or buy a business?

What and where is the market for what I want to
sell?

How much will all this cost me?

Should my company be domestic or global?
Motivations
Deciding what your motivations are
will direct you toward what type of
business fits you best.
Types:
1. Lifestyle Venture
2. Smaller Profit Venture
3. High Growth Venture
1. Lifestyle Venture
Small company that provides its owner
independence, autonomy, and control.
Is often run out of household
Provides flexibility (hours, meeting
places, attire)
Aligns your personal interests and
hobbies with your desire to make a
profit.
2. Smaller Profit Venture
Small company not concentrated on
pushing the envelope and growing
inordinately large.
Making millions of dollars not important.
Content with making a decent living.
Ex. Mom and Pop Stores
3. High Growth Ventures
Goal is maximum profit and growth.
Concentrated on pushing envelope and
growing as large as possible.
Focus on innovation
Start or Buy?
Start cheapest, but very difficult
-requires most planning/research
Buy expensive may be out or reach
-requires less planning and research
Franchise (middle ground) a business
run by an individual (the franchisee) to
whom a franchiser grants the right to
market a certain good or service.
The Market???
Planning & Research essential
Extensive market surveys (family,
friends, neighbors)
Magazines and Polls offer some
information on the market
-Businessweek, Harris Poll
What about the cost?
Plan realistically, not optimistically
Dont overestimate your profits
Dont underestimate your costs
Sources of Funds
Banks
Venture Capitalists filthy rich, high risk investors
looking for a many-times-over yield
Angels seem to have altruistic motives and less
stringent demands than venture capitalists

Domestic or Global?
Drawbacks to Global more research
and less accessible connections in
startup phase, more travel time
required, more considerations.
Advantages to Global more human
resources, more demand, more
financing, easier to start global than go
from domestic to global.
Entrepreneurship: Growth Pressures
Entrepreneurs often find that as their business grows, they feel
more pressure to use formal methods to lead their
organizations.

Although this formalization process may compromise some
entrepreneurs spirit, it often leads to more focus,
organization, and greater financial returns.

Basically, its a movement from a seat-of-the-pants operation
to a more structured, legitimate and recognizable business.


Ten Deadly Mistakes of
Entrepreneurship
1. Management mistakes
2. Lack of experience
3. Poor financial control
4. Weak marketing efforts
5. Failure to develop a strategic plan
Ten Deadly Mistakes of
Entrepreneurship
6. Uncontrolled growth
7. Poor location
8. Improper inventory control
9. Incorrect pricing
10. Inability to make the entrepreneurial
transition
Avoiding the Pitfalls of
Small Business Failure
Know your business in depth
Develop a solid business plan
Manage financial resources
Understand financial statements
Learn to manage people
effectively
Keep in tune with yourself
The role of entrepreneurship in
economic development
Entrepreneurship is the spirit of person. It
is a quality which may be inherent or
developed . for the economic development
of a country , entrepreneurial skill needs to
be developed. entrepreneurship plays a
very important role in terms of :
Generation of employment opportunities.
Ensuring balanced economic development.
Entrepreneurship -
Misconceptions
Successful entrepreneurship needs only
a great idea.
It is easy.
It is a risky gamble.
It is found only in small business.
Entrepreneurial ventures and small
business is the same thing.
Entrepreneurship cannot be developed.
Small Business --
Independently owned and
operated, not dominant in its
field of operation and meets
certain standards of size.
Businesses are small in
relation to other
businesses in their
industries.
SMALL BUSINESSES
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Intrapreneur -- A creative person who works as an
entrepreneur within a corporation.
Intrapreneurs use a companys existing
resources to launch new products for the
company.
Someone in an existing organization who turns new ideas into
profitable realities.

Not every employee has the ability to become a successful
intrapreneur. It takes well-developed strategic action, teamwork and
communication abilities.

INTRAPRENEURS
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Entrepreneur
Types on entrepreneurs :

Innovating entrepreneurs.

Adoptive or imitative entrepreneurs.

Fabian entrepreneurs.

Drone entrepreneurs.
CLARENCE DANHOF classifies as:
i. Innovative Entrepreneur: Aggressive
and industrial leader, he introduces new
products, new methods, new methods of
production, opens new markets and
reorganises the enterprise.
ii. Imitative or Adoptive Entrepreneur:
He imitates innovations done by others.
CDChin Shipyard used technology
provided by Mitsubishi Heavy industries,
Japan.
iii. Fabian Entrepreneur cautions,
skeptical, shy, lazy. No will or desire. No
risk but follows footsteps of
predecessors, is guided by custom,
tradition, past practices.
They have neither will to introduce new
changes nor the desire to adopt new
methods innovated by most enterprising
entrepreneurs.

Such entrepreneurs are shy and lazy.

Entrepreneur

Drone entrepreneurs : drone entrepreneurship is
characterized by a refusal to adopt and use opportunities
to make changes in production.

They are laggards as they continue to operate in
traditional way and resist changes.

They are conventional in the sense that they stick to
conventional products and ideas.
He may even be pushed out of market when product
marketability decreases but will not change his strategy.
Entrepreneurial Types


Type of business
Use of Technology
Motivation
Growth
Stages in Development
Others
Classification on the basis of:

Type of Business
Business Entrepreneur:

Trading Entrepreneur

Agricultural Entrepreneur

Industrial Entrepreneur

Corporate Entrepreneur

Technical Entrepreneur



Convert ideas into reality; deal with both manufacturing
and trading aspect of business (Small trading and
manufacturing business)

Individuals who conceive an idea for a new product or
service and-then creates a business to materialize their idea
into reality.

They tap both production and marketing resources in their
search to develop a new business opportunity.


Business
Entrepreneurs
Trading
Entrepreneur:
Trading entrepreneur is one who undertakes trading
activities and is not concerned with the manufacturing
work.
Undertakes trading activities; concerned with marketing
(Domestic and international level)

He identifies potential markets, stimulates demand for
his product line and creates a desire and interest among.
buyers to go in for his product.

These entrepreneurs demonstrate their ability in
pushing many ideas ahead to promote their business.


Agricultural
Entrepreneur:

Agricultural entrepreneurs are those entrepreneurs who
undertake agricultural activities as raising and marketing
of crops, fertilizers and other inputs of agriculture.
Production and marketing of agricultural inputs and
outputs (Dairy, horticulture, forestry
They are motivated to raise agriculture through
mechanization, irrigation and application of technologies
for dry land agriculture products.

Industrial
Entrepreneurship
A manufacturer, who identifies the
potential needs of customers and
undertakes manufacturing activities only;
new product development etc- like
(textile, electronics, etc)

He is a product-oriented man who starts
in an industrial unit because of the
possibility of making some new product.

The entrepreneur has the ability to
convert economic resources and
technology into a considerably profitable
venture.

Corporate entrepreneur is a person who
demonstrates his innovative skill in organizing
and managing corporate undertaking. He is
interested in management part of
organization; exceptional organizing,
coordinating skills to manage a corporate
undertaking (Ambani, Tata families)

A corporate undertaking is a form of business
organization, which is registered under some
statute or Act, which gives it a separate legal
entity. A trust registered under the Trust Act,
or companies registered under the companies
Act are example of corporate undertakings.

Corporate Entrepreneur:



Technical Entrepreneur
A technical entrepreneur is essentially
compared to a craftsman. He produces
oriented, possesses innovative skills in
manufacturing, quality control etc.

He develops improved quality of goods
because of his craftsmanship. He concentrates
more on production than marketing.

He demonstrates his innovative capabilities in
matter of production of goods and rendering of
services.
Use of Technology

Non Technical Entrepreneur: Develops
marketing, distribution facilities and strategies

Professional Entrepreneur: Uses the proceeds
from sale of one business to start another one.
Brimming with ideas to start new ventures



Others
Area- Rural and Urban entrepreneur

Gender/Age- Men and Women entrepreneur

Scale- Small and Large scale entrepreneur
Business Plan -- A detailed written statement that
describes the nature of the business, the target
market, the advantages the business will have
over competition, and the resources and owners
qualifications.
A business plan forces potential owners to be
specific about what they will offer.
A business plan is mandatory for talking with
bankers or investors.
BUSINESS PLANS
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A good plan takes a long time to prepare.
A good executive summary catches interest and
tempts potential investors to read on.
WRITING a BUSINESS PLAN
Getting the plan into
the right hands is
almost as important
as getting the right
information in it.

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