Entrepreneurs need for

Achievement
Introduction of Entrepreneurship in terms of:
1. Opportunity, identification, evaluation and exploitation
2. The management of a new or transformed
organization
3. The creation of value through the successful
exploitation of a new idea
The need for achievement manifests itself in a number
of ways:
Risk taking
Confidence of success
Desire for independence
Energy in pursuing goals
Measurement of success by wealth

STARTING A BUSINESS
Motivations for starting an independent business
Some individuals are attracted towards business
ownership by positive motives such as a specific idea
which they are convinced will work
Opportunity-based Entrepreneurship:
A.Pull influences
Desire for independence, prove that one accomplish a
start-up
Desire to exploit an opportunity
Turning a hobby or previous work experience into a
business, adventure of a start-up
Financial incentive, supplementary income

STARTING A BUSINESS
Necessity-based Entrepreneurship
B. Push influences

Many people are pushed into founding a

new enterprise by a variety of factors,
including:
Redundancy
Unemployment or threat thereof
Disagreement with previous employer

Business Ideas
Identifying which business idea has real
commercial
potential is one of the most difficult challenges
entrepreneurs face.
Ideas do not have to be novel, original or
revolutionary
Being the first mover is not always
advantageous.
The first to offer such a product or service has to
educate a market and possibly establish a
marketing structure

Business Ideas
The second or third into a market can
capitalize on all the efforts and marketing
investment made by the predecessor.
One should not stay away from an idea
because it is not original or award winning
One should not on the other hand offer
something very identical to another
business. If you do, you dont give the
potential customer any choice. The choice
could only be on the basis of price
struggle to make a profit unless sale in
volumes

Sources of Business
ideas
Prior employment
Universities and research institutions
Franchises right to opportunity, often
a proven business concept
Existing businesses
Hobbies
Industry and trade contacts (Trade fairs)
Professional contacts for licence patents
or patented products

Barriers to market entry

Economies of scale
Product differentiation
Capital requirements
Switching costs changing computer
software (new training)
Access to distribution
Other cost advantages (learning curve,
location)
Government policy

Key problems faced by small

business owners

Interest rates
Cash flow and payments
Low turnover
Lack of skilled employees
Total tax burden
Premises, rent and rates
Inflation
Government regulations and paperwork
Access to finance
Competition from big businesses

Business Uncertainties
Uncertainty is a key feature in small
business environment and a central
factor in explaining entrepreneurship:
Technical uncertainty the
entrepreneur does not know if the
product or service being produced will
work, and if so, if it can be produced
at a cost that is less than the price at
which it will be sold

Business Uncertainties
Market uncertainty the
entrepreneur does not know if demand
will exist for the product
Competitive uncertainty the
entrepreneur does not know if they will
be able to appropriate the profits from
the introduction of the new product or
service, or whether these will be
reduced by the action of competitors

When to set up a
business
Storey (1998) identified several possible
factors on the timing of new businesses
Levels of unemployment
Government policies
Profitability
Interest rates
Personal savings and assets
Consumer expenditure
Structural change

How do I start?