ENTERPRENEURSHIP

1. ENTERPRENEURSHIP

2. Session objectives • Define entrepreneurship and intrapreneurship • Explain the entrepreneurship process • Validate business ideas to ensure that they are opportunities • Identify different ways of financing business • Identify the requirements for starting new business ideas for the cooperatives

3. DEFINING ENTREPRNEUSHIP • Entrepreneurship is creating and building something of value from practically nothing. • It is the process of creating or seizing an opportunity and pursuing it regardless of the resources currently controlled. • It involves the definition, creation, and distribution of value and benefits to individuals, groups, organization, and society.

4. A dynamic process of creating incremental wealth • Creation of wealth by individuals who assume major risks in terms of equity and/or career, commitment of providing value for some products

5. DEFINING ENTREPRNEUSHIP (cont..) • The process of taking or bearing uninsurable risks in buying and selling good and services • Process of combining factors of production or resources such that wealth is created • Creating and building something of value from practically nothing

6. DEFINING ENTREPRNEUSHIP (cont..) • Pursuing new opportunities without regard to resources currently controlled • The process of creating new organisation

7. DEFINING ENTREPRNEUSHIP (cont..) An innovative process that involves bringing new combinations into the production process such that: • New products or services are offered • New methods or technology is applied • New markets are targeted or opened • New sources of supply and raw materials are used • New forms of organisations are formed

8. DEFINING ENTREPRNEUSHIP (cont..) • The process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychological and social risk, and receiving the necessary reward of monetary and personal satisfaction

9. Entrepreneurship • It also requires a willingness to take calculated risks – both personal and financial – and then doing everything possible to influence the odds.

10. Basic aspects of being an entrepreneur • Entrepreneurship involves the creation process • creating something new of value • Entrepreneurship requires devotion of the necessary time and effort • In order to create something new and make it operational

11. Basic aspects of being an entrepreneur (cont..) • Entrepreneurship means assuming the necessary risks: • Financial • psychological • social etc

12. Basic aspects of being an entrepreneur (cont..) • Reward for being an entrepreneur: • Independence • Personal satisfaction • Financial

13. Is it a Get-Rich Quick Plan?

14. Entrepreneurship • Entrepreneurship is very rarely a get-rich-quick proposition. • Rather, it is one of building long term value. • This leads to long term cash flow streams. • Entrepreneurship is a human creative act. • It involves using personal energy to initiate and build an enterprise.

15. Entrepreneurship • It also requires a willingness to take calculated risks – both personal and financial – and then doing everything possible to influence the odds.

16. Myths about Entrepreneurs • Myth1- Entrepreneurs are born, not made • Myth2- Anyone can start a business • Myth3- Entrepreneurs are gamblers • Myth4- Entrepreneurs want the whole show to themselves • Myth5- Entrepreneurs are their own bosses and completely independent • Myth6- Entrepreneurs work longer and harder than managers in big companies

17. Myths about Entrepreneurs • Myth7- Entrepreneurs experience a great deal of stress and pay a high price • Myth8- Starting a business is risky and often ends in failure • Myth9- Money is the most important start-up ingredient • Myth10- Entrepreneurs should be young and energetic • Myth11- Entrepreneurs are motivated solely by the quest for the almighty dollar

18. Myths about Entrepreneurs • Myth12- Entrepreneurs seek power and control over others • Myth13- If an entrepreneur is talented, success will happen in a year or two • Myth14- Any entrepreneur with a good idea can raise venture capital • Myth15- If an entrepreneur has enough start- up capital, he or she can’t miss

19. INTRAPREPNEURSHIP

20. DEFINING INTRAPREPNEURSHIP • The practice of entrepreneurship within the confines of the organisation • Creating something new and of value within the confines of the organisation • Thrives in organisations with an entrepreneurial culture

21. Intrapreneurial culture • Intrapreneurial culture: • Employees with talents to act with freedom to take initiatives or try out new ideas as if they were running their own business

22. Intrapreneurship Acts within the confines of existing organization Challenges the status quo and fights to change the system from within Has “free” resources found in the organisation Entrepreneurship Acts outside the organisation Challenges the status quo outside the organisation Has to look for his resources Differences between entrepreneurship and entrepreneurship

23. Factors retarding intraprenuership • The cost of failure too high, the reward of success too low • No space is provided for failure • No reward for innovative ideas • Inertia caused by established systems that no one is willing to changed • “we have always done it like this’ If it ain’t broken, don’t fix it” “changing now would be too much effort”

24. Factors retarding intraprenuership (cont…) • Hierarchy – the deeper the hierarchy, the more difficult it is to get permission for anything new. Support from top management • Recognition that entrepreneurship culture needs to be compatible with the overall organizational culture • Communication system within the organization is strong so that entrepreneurs within the company can be heard

25. Characteristics of successful entrepreneurs

26. Research has shown that certain traits seem to be associated with entrepreneurs

27. Who are entrepreneurs? • Are opportunity driven, not resource driven • Managers ask: • “given the resources under my control, what can I achieve?” • Entrepreneurs ask: • “Given what I want to achieve, what resources do I need to acquire?” • Good as seeing pattern changes within the environment

28. Who are entrepreneurs? (cont…) • “The reasonable man adopts him/herself to the world: the unreasonable one persist in trying to adapt the world to him/herself” • The entrepreneur is the unreasonable man/woman who is motivated by the dream of things that conventional wisdom says can’t, won’t or shouldn’t be • Entrepreneurs have therefore stubborn perseverance

29. Who are entrepreneurs? (cont…) • Stand up to ridicule • Stand up to failure, good at failure but • See failure as a temporary setback and an opportunity to learn and do better next time • “success is the ability to go from failure to failure with no less of enthusiasm”

30. Who are entrepreneurs? (cont…) • The two magic words of an entrepreneur “what if …?” • What if telephone didn’t have to be connected to each other with wires” • Constantly scanning the environment for opportunities

31. Who are entrepreneurs? (cont…) • Entrepreneurs create their own future – get up , look up for circumstances they want, if they find them, make them”

32. Characteristics ( cont…) • A desire to achieve: The push to conquer problems, and give birth to a successful venture. A strong urge to build • Hard work: It is often suggested that many entrepreneurs are workaholics. • Desire to work for themselves/need for independence Entrepreneurs like to work for themselves rather than working for an organization or any other individual. They may work for someone to gain the knowledge of the product or service that they may want to produce. They seldom are willing to submit to authority

33. Nurturing quality: Willing to take charge of, and watch over a venture until it can stand alone. • Acceptance of responsibility: Are morally, legally, and mentally accountable for their ventures. Some entrepreneurs may be driven more by altruism than by self-interest. • Reward orientation: Desire to achieve, work hard, and take responsibility, but also with a commensurate desire to be rewarded handsomely for their efforts; rewards can be in forms other than money, such as recognition and respect. • Optimism: Live by the philosophy that this is the best of times, and that anything is possible.

34. Orientation to excellence: Often desire to achieve something outstanding that they can be proud of. • Organization: Are good at bringing together the components (including people) of a venture. • Profit orientation: Want to make a profit; but the profit serves primarily as a meter to gauge their success and achievement.

35. Ingenious and resourceful, they are cunning, opportunistic, creative and non sentimental • Innovative, calculating inventor, over-optimistic promoter, organizational builder. These four terms are used to describe the characteristics which is not based on personality but on the type of opportunity the entrepreneur faces

36. Visionary – the entrepreneur ha an enthusiastic vision which is the driving force of the enterprise. This vision is supported by an interlocked collection of specific ideas not available to the market • Persistence and determination - this helps the entrepreneur to develop strategies to make the vision into a reality

37. Risk taker – calculated risks which includes assessment of costs, market/customer needs and persuading others to join and help

38. Competitive Hardworking Forceful Knowledgeable Networking Persuasive Good communicator Takes initiative Independent Problem solver Time conscious Leadership traits Adaptive to change Likes people Additional Characteristic of successful entrepreneurs

39. Skills and competencies required for entrepreneurship

40. What skills are required of in entrepreneurship • Technical skills • Someone in the business must possess the professional skill and knowledge to generate the company’s product or service. • The concept for what product or service the company will offer must become clear before the venture can succeed. • Business management skills • Personal entrepreneurial skills – disciplined, risk taker, innovative, change oriented, persistent, visionary etc

41. ENTERPRISE CULTURE

42. Enterprise culture • Culture is a pattern of share beliefs and values that provide the members of an organization with rules of behaviour or accepted norms for conducting their operations • It is the philosophies, ideologies, values, assumptions, beliefs, expectations, attitudes and norms that knit an organization or a community together and are shared by members

43. Enterprise culture (cont..) • Enterprise culture, therefore can be defined as a set of altitudes, values, and beliefs operating within a community or environment that lead both to the entering behaviour and aspiration towards self employment or venture creation

44. Research on enterprise culture Research findings indicate that: • Those who have parents or relative who own small businesses are likely to become entrepreneurs than those without similar acquaintances • Those who have worked in small enterprises are more likely to establish such enterprises later

45. Research on enterprise culture • Those who work in organizations which allow hem greater deal of independence and freedom of operations under conditions of uncertainty are more likely to establish businesses than others • Those coming from a culture which supports individual small business ownership whether for religious purposes, ethical or moral reasons are more likely to establish businesses than others outside the culture

46. Components of an enterprise culture • Abundant positive role models of successful independent businesses • Ample opportunity for familiarization with small business tasks especially during youth • Network of independent businesses family contacts and acquaintances reinforcing familiarity and providing market entry opportunities • Provision of formal/informal knowledge and insight into the process of independent business management • Opportunity to practice entrepreneurial attributes reinforced by society culture during formative years

47. ENTREPRENEURIAL BEHAVIOUR THEORIES

48. Entrepreneurial behaviour theories • Entrepreneurial behaviour looks at activities, interactions, competences and feeling of entrepreneurs • There exist a number of schools of thought which view entrepreneurship from a fundamentally different perspective. • Such perspectives are: • Economic • Psychological • Social • Managerial

49. Economic theories perspective • Economic theories of entrepreneurship focus on the effects that economic environment has on entrepreneurial activities and what impact entrepreneurs have upon the economy • From the economic perspective, an entrepreneur is a person who brings together the resources or factors of production into combinations that make their value greater than before • Economic theories help in providing missing links in the economic environment that are necessary for business startup and survival

50. Economic perspective (cont…) • Proponents of economic theory believe that entrepreneurship and small business development is influenced by factors such as: • Market structures and opportunities • Investment climate • Government restrictions or encouragement • An entrepreneur is seen as a person who specializes in taking judgmental decisions about the coordination of scarce resources (Casson, 1982)