Tourism entrepreneurship

1. Tourism entrepreneurship Richard Kisasembe Assistant Lecturer Dept. Wildlife Tourism

2. Entrepreneurship defined • Entrepreneurship is the process of introducing ideas and transform those ideas into marketable products and services with the aim of earning profit. • is the process of getting into and operating one’s own business. • Entrepreneurship is the ability to create and build a vision from practically nothing.

3. What is Entrepreneurship? • 1. The Process of • Initiating a Business Venture, • Organizing the Necessary Resources, • Assuming the Associated Financial, Psychological and Social Risks & Rewards • 2. Having the Characteristics of an Entrepreneur, e.g. • Brave, innovative, independent, and achievement oriented

4. What is an Entrepreneur? • The term  Entrepreneur  • The word entrepreneur is derived from the French entreprendre, meaning to undertake. • An Entrepreneur (ahn’tra pra nur) is a person who organizes and manages a business undertaking, assuming the risk for the sake of profit.

5. Entrepreneur  Cont’d One who creates a new business • in the face of risk & uncertainty • for the purpose of achieving profit & growth • by identifying opportunities • and assembling the necessary resources to capitalize on them.

6. An entrepreneur is an individual who undertakes creation, organization, and ownership of a business (Meyer and allen,2000) • It is also called by various names, e.g. adventurism, risk taking, innovating, etc.

7. Who Are Entrepreneurs? • Persons who start and/or operate a business. • Individuals who discover market needs and develop new ideas to meet those needs. • Risk takers who provide an impetus for change, innovation, and progress. • All active owner-managers(founders and/or managers of small businesses).

8. Varieties of Entrepreneurs • Founder (“Pure” Entrepreneur) • A person who brings a new firm into existence. • Administrative Entrepreneur • An entrepreneur who oversees the operations of an ongoing business • Franchisee • An entrepreneur whose power is limited by the contractual relationship with a franchising organization. • Entrepreneurial Team • Two or more people who work together as entrepreneurs.

9. What do entrepreneurs do? Entrepreneurs introduce a new product or service into the market place Entrepreneurs discus new resources or new uses for old resources Entrepreneurs develop new technology Entrepreneurs open new markets Entrepreneurs organize existing enterprises

10. What does he take? Critical and creative thinking Goal setting Decision making Human relations and communication Management skills and Problem solving

11. Why become an entrepreneur? Being your own boss Doing something you enjoy Having opportunity to be creative Freedom to set you own schedule/independence Controlling your salary Contributing to the community Better quality of life Satisfaction of building something from nothing

12. Rewards of Being an Entrepreneur • High degree of independence-freedom from constraints • Get to use a variety of skills and talents • Freedom to make decisions • Accountable to only yourself • Opportunity to tackle challenges • Feeling of achievement and pride • Potential for greater financial rewards

13. Entrepreneurial • Entrepreneurial- means of or having to do with an entrepreneur (s) • The entrepreneurial process include five key components • The entrepreneur • The environment • The opportunity • Start up resources • The new venture organization

14. The entrepreneur • is the driving force that recognizes opportunity, pull together the resources to exploit the opportunity, and creates a company to execute that opportunity in the market place • The environment • A new business environment includes all those variables that affect it that are not controlled by the entrepreneur e.g skilled labor, taxes, market

15. Start up Resources • To execute a concept for a new business, an entrepreneur must use his or her creative talent to pull together the necessary people and capital. The start up resources an entrepreneur needs to start a business include • Capital • Skilled labor • management expertise

16. iv. a facility v. equipment, vi. and most important customer The opportunity • Is an idea that have commercial value. An idea for a new product only has value if there are customers ready and willingly to buy it. • An idea + a market equals an opportunity

17. The new Venture organization • Is the shell that surrounds all the products, processes, and services that are part of the new business • In new venture creation there are • Entrepreneurs: Individuals who establish a new organization without the benefit of corporate support. • Intrapreneurs: New-venture creators working inside big companies; corporate entrepreneurs.

18. Five elements for entrepreneurship to happen… The environment 1 The entrepreneurial process The entrepreneur The organizational context/ new venture The resources The concept opportunity

19. Dominant Characteristics of entrepreneurs • Persistent. Entrepreneurs are willingly to work until a job is done, no matter how long it takes. • Creative. Entrepreneurs continually looking for new ways to solve old problems • Responsible. Entrepreneurship do not pass the buck. They take responsibility for their decisions and actions

20. 4. Inquisitive. Entrepreneurs want to know as much as possible about anything that might affect their venture. The conduct research to solve problems Goal oriented. Entrepreneurs decide where they want to go and then set out to get there

21. 6. Independent. Entrepreneurs want to set their own and schedules. They want to make their own decision 7. Self demanding. Entrepreneurs have higher expectations of themselves 8. Self confident. Entrepreneurs believe in themselves and act accordingly

22. 9. Risk taking. Entrepreneur like to take risk, but they are not reckless. They seek opportunity that offer both challenge and reasonable chance of success 10.Restless. Once entrepreneurs achieve their goals, they begin looking for new challenges 11. Action oriented. Entrepreneurs are doers as opposed to spectators. They make decision and act on them

23. Table2.1Characteristics Often Attributed to Entrepreneurs • Confidence • Perseverance, determination • Energy, diligence • Resourcefulness • Ability to take calculated risks • Dynamism, leadership • Optimism • Need to achieve • Versatility; knowledge of product, market, machinery, technology • Creativity • Ability to influence others • Ability to get along well with people • Initiative • Flexibility • Intelligence • Orientation to clear goals • Positive response to challenges • Independence • Responsiveness to suggestions and criticism • Time competence, efficiency • Ability to make decisions quickly • Responsibility • Foresight • Accuracy, thoroughness • Cooperativeness • Profit orientation • Ability to learn from mistakes • Sense of power • Pleasant personality • Egotism • Courage • Imagination • Perceptiveness • Toleration of ambiguity • Aggressiveness • Capacity for enjoyment • Efficacy • Commitment • Ability to trust workers • Sensitivity to others • Honesty, integrity • Maturity, balance

24. Sources of enterprise ideas on entrepreneurs 1. PUBLICATIONS: • These include research based and popular publications such as: • Technical and professional journals. • These refer to journals that contain articles dealing with research.

25. Text books on Entrepreneurship. These text books address the operation of small firms and non profit organizations. They may have sections devoted to research on entrepreneurs. Books about Entrepreneurship;-These are written as guides, some deal with problems facing the individual, who starts a business, others deal with a specific aspect of the subject.

26. Bibliographies of entrepreneurs. • New periodicals. • Many newspapers or new periodicals run stories on entrepreneurs either regularly or periodically. • Venture periodicals. • Some new magazines are concerned specifically with new business venture. • News letters-These involve those newsletters related to entrepreneurship.

27. Proceedings of conferences. These are publications relating to annual or periodic conferences deals at least in part with entrepreneurship. Government Publications. A government may publish useful information on entrepreneurship, small business operations and specific small business.

28. 2. DIRECT OBSERVATION: This involves observing practicing entrepreneurs though the use of interviews, surveys and case studies the activities of individual entrepreneurs can be related. Analysis of these experiences can provide insights into the traits, characteristic and personalities of individual entrepreneurs and discovers commonalties that help explain the perspective.

29. 3. SPEECH AND PRESENTATION: These involve speeches by practicing entrepreneurs. This source provides an opportunity to learn about the entrepreneur perspective.

30. RISKS FACED BY ENTREPRENEURS( dark side of entrepreneurship Starting or buying a new business involves risk and the higher the rewards, the greater the risk entrepreneurs usually face. Entrepreneurs face a number of risks that can be grouped into four basic areas:

31. 1. Financial risks: In most new ventures, individual resources will be lost if venture fails. Many people are unwilling to risk their savings, house property and salary to start a new business.

32. 2. Career Risk: A question frequently raised by would be entrepreneurs are whether they will be able to find a job or go back to their old job if their venture should fail. This is a concern to managers who have a secure organizational job with a high salary and a good benefit package.

33. 3. Family and social risk: Starting a new venture uses much of entrepreneurs’ energy and time. Consequently his or her other commitment may suffer e.g. old friends may vanish slowly because of missed get together.

34. 4. Psychic Risk: The greatest risk may be to the well being of the entrepreneur. They can be replaced a new house can be built; spouse, children and friends can usually adopt. But some entrepreneurs who have suffered financial catastrophes have been severely affected psychologically.

35. The ten deadly mistakes of entrepreneurship • Management mistake • Lack of experience • Poor financial control • Weak marketing efforts • Failure to develop a strategic plan • Uncontrolled growth • Poor location • Improper inventory • Incorrect pricing • Inability to make the “entreneurial transaction”

36. Creativity and Innovation Creative as a prerequisite to innovation Creativity - is “the ability to bring something new into existence or Process of generating new ideas Where as Innovation - is the process of doing new thing or Process of generating and applying new ideas. Or Innovation - is the transformation of creative ideas into useful applications by combining resources in new or unusual ways to provide value to society for or improved products, technology, or services. 36

37. Entrepreneurship and small business Entrepreneurship is elusive term It is commonly linked lo small business management because it involves the process of recognizing opportunities and development of new ventures, but entrepreneur operate in a range of context including larger corporations and the public sector, not just small businesses (Stokes and Wilson,2006)

38. Small business It is generally much easier to identify a small business when you see one than to define it, although sometimes even identifying the small business entity may not be easy at all. Some businesses such as shoeshine businesses would most probably be identified as being small by all observed.

39. Likewise, other businesses undertakings, such as Pepsi-Cola Company, would perhaps be identified as being big by every one. But how would most people likely classify business entities that lie between these two extremes? At best, the classifications between the two extremes would largely depend upon the different and biased perceptions of individuals.

40. What is a small business? • Is the one which is independently owned and operated and not dominant in its field • A “small business’ is conceived of as any business undertaking that meets all the following conditions or characteristics and describe the domain of small business; they include: • (i) Ownership: • Independently owned and managed by an individual entrepreneur, or a small group of entrepreneurs or family members.

41. (ii) Dominance: Relatively small in its field of operation when compared to other business entities in the field. (iii) Capital: Capital is supplied by and ownership is held by an individual or a few individuals.

42. (iv) Area of operation: Operated in a definite location or local community, but with no restriction regarding the extent of its market; ie. The area of operation is primarily local although the market isn’t necessarily local. Taken together, these characteristics provide a qualitative description of small business.

43. However, it is important to consider both the qualitative definitions and the qualitative factors when trying of define small business. Economically a small firm has a relatively small share of the market.

44. Managerially, it is administered by its owners or part owners in a personalized way, rather than by means of a formalized management structure. Financially, it is independent in the sense that it does not form part of a larger enterprise and owner-managers are free from outside control in taking their principal decisions (Bolton Committee, UK)

45. However, these are no proper parameters’ by which one can precisely define small business enterprise, much depends on the nature of the industry in which they operate and personalities who ran the businesses.

46. Small Business vs. Entrepreneurial Venture Small business- a business having fewer than 100 employees, independently owned and operated, not dominant in its field, and not characterized by many innovative practices. Entrepreneurial venture- A new business having growth and high profitability as primary objectives

47. In Tanzania small businesses are divided into two categories: Formal sectors; Informal sectors.

48. What is the Tanzanian Definition? It is apparent that a small firm in the UK and/or USA might not be small as in Tanzania, or alternatively a large firm in Tanzania might not be large in the above countries.

49. Tanzanian Definition of SMEs

50. Characteristics of small business 1. Small size: The size of these businesses is small in terms of capital and number of employees. 2. They are independently managed: Managed by owners, family members, relatives or other employees but they don’t have formalized management structure.