Introduction to Entrepreneurship

1. Introduction to Entrepreneurship

2. Chapter Outline • The Evolution of Entrepreneurship • Concept of Entrepreneurship • Who are Entrepreneurs? • Entrepreneurship • Intrapreneurship • Social-entrepreneurship • The Importance of Entrepreneurship • The Myths of Entrepreneurship • Entrepreneurship Development

3. Entrepreneurship • The word ‘entrepreneurship’ comes from the French verb “entreprendre” and the German word “unternehmen”, both means ‘one who undertakes’ – that is, a ‘manager’.

5. Evolution of ‘Business’

6. The evolution of Entrepreneurship

7. The Evolution and development of Theory of Entrepreneurship

8. Who are Entrepreneurs?

9. Common Man’s approach to life • Are very cautious – never want to make any risks • Assume that things are the way have to be • Like to be sure of the next month’s salary – and the one after…………. until retirement……….. perhaps the pension even after!!!!!!!

10. ENTREPRENEUR- “defined”

11. ENTREPRENEUR- “defined”

12. Entrepreneur • An entrepreneur is a person who is willing to put his/her career and financial security on the line and take risks in the name of an idea, spending time as well as capital on an uncertain venture.

13. The new Entrepreneur

14. ENTREPRENEURSHIP- “defined”

15. ENTREPRENEURSHIP- “defined”

16. What is Entrepreneurship?? • NOTsmall business management • NOTjustbusiness startups • NOT just for-profit firms

17. What is Entrepreneurship?? • IS ……………….

18. Entrepreneurship • Entrepreneurship is thus being taken as a value adding process of discovering, evaluating, organizing and exploiting opportunities.

19. Entrepreneurial Management • Universality of principals, rules, application and contexts in which entrepreneurship is considered as a discipline.

20. Basic aspects of Entrepreneurship

21. Entrepreneurship Process Exploring the entrepreneurial context – ‘rules’ of the game Identifying opportunities & possible competitive advantages Starting the venture Managing the venture

22. Level of Entrepreneurial activities Source: based on ‘Economic growth lined to level of business startups”, GEM 2000 report, adapted from Management-7th Ed. Stephen Robbins & Mary Coulter; Pearson Education, 2002.

23. Importance of Entrepreneurship • New ideas and inventions are developed and this enables continual improvement of societies and their organizations • Sky-scraping heights of apparent prospects; - the individual gets maximum scope for growth and opportunity • It is a challenging opportunity for the people • Entrepreneurship provides self sufficiency • Creates wealth for nation and for individuals as well • Provides employment to huge mass of people • Contributed towards research and development system

24. Why be an Entrepreneur?

25. What motivates them Source: Adapted from material published by NatWest bank, IFF research, May 2007.

26. Role of an Entrepreneur An entrepreneur is a person who is ready to supply enterprise necessary to; • take advantage of business opportunities • acquire productive resources • Combine them & use them effectively & efficiently • create value in goods & services that customers want to buy which creates profits

27. What it takes to be an Entrepreneur? • ‘Train your self to see vacuum or gaps in the market and fill them’ - William Heinecke • ‘If something makes you angry, you have uncovered a gap in the market’ - Anita Roddick

28. Some examples …….. • Isaac Singer • Henry Ford • George Eastman • Ray Kroc • Stephen Jobs • And Dewitt and Lila Wallace

29. Sources where entrepreneurs get their ideas • Your job • Hobbies or interests outside work • ‘Pedestrian observation’ – spotting an opportunity through a casual encounter or an incident in your daily life

30. Once again some examples …….. • The idea for a Diners Club struck Ralph Schneider when he went out for dinner & discovered he had no cash!!!!!!!! • Leo Gerstenzag invented Q-tips (cotton buds) when he saw his wife using cotton wool wrapped around a toothpick to clean their baby daughter’s ears. • King C. Gillette got the idea of a disposable razor when he became annoyed that his razor blade was dull in one morning!!!!!

31. Entrepreneurship as ‘creative destruction’ • ‘The process drives ineffective companies out of business as they are replaced by new, more efficient ones’ - Joseph Schumpeter

32. Types of Entrepreneurs • Small businesses, lifestyle and family entrepreneurs • Franchise entrepreneurs • Professional fast growth and serial entrepreneurs • Corporate entrepreneurship or intrapreneurs • Creative disruptors or innovators • Extreme entrepreneurs • Social and non-profit entrepreneur

33. Intrapreneurship • Intrapreneurship or corporate entrepreneurship involves the developing of new business ideas and the birthing of a new business activity within the context of large and established companies. • Alearning organizationencourages employees to act as intrapreneurs to help, form: • Product Champions: person that takes ownership of a product from concept to market. • New Venture Division: allows a division to act as its own smaller company. • Rewards for Innovation: link innovation by workers to valued rewards.

34. Social - Entrepreneurship • Social entrepreneurs combine the passion of; • A social mission (explicit and central) • With business-like discipline, innovation, and determination

35. 10 Myths of Entrepreneurship • Entrepreneurs are does, not thinkers • Entrepreneurs are born, not made • Entrepreneurs are always inventors • Entrepreneurs are academic and social misfits • Entrepreneurs must fit the profile

36. 10 Myths of Entrepreneurship • All entrepreneurs need is money • All entrepreneurs need luck • Ignorance is bliss for entrepreneurs • Entrepreneurs seek success but experience high failure rates • Entrepreneurs are extreme risk takers, i.e. gambles

37. What makes an Entrepreneur???

38. Shortcomings of entrepreneurs • Overestimation of their ability to create new products that customers desire • Underestimate how difficult it is to actually reach prospective customers & get them to try their products • Do not realize how much ready cash is needed to see a business through its critical, initial ‘birth’ period.

39. Entrepreneurship development in Maldives • Privatization • Loan schemes for SME’s • Entrepreneurship education

40. WHAT MAKES AN ENTREPRENEURIALECONOMY? • Competitive environment with a level playing field • Free and flexible markets that will enable the closing down of business that have run their course and be replaced by more efficient firms • Rule of Law: Protection of property rights & Contract enforcement • Availability of a financial system that provides the entrepreneurs with an easy access to capital • A quality educational system

41. Fundamental practices for entrepreneurship development of a country • Creating a national sense of mission • Creating customer / product competitiveness • Creating a nation of self-inspired people • Creating a national urgency to improve - Larry C. Farrell, ‘The Entrepreneurial age’ (2001)

42. Some concerns on Entrepreneurship • Ethical issues • Social responsibility