ENTREPRENEURSHIP 6 TH EDITION ROBERT D HISRICH NATURE

ENTREPRENEURSHIP 6 TH EDITION ROBERT D. HISRICH

NATURE & IMPORTANCE OF ENTREPRENEURSHIP CHAPTER 1 VISHNU PARMAR (Assistant Professor)

Who is an Entrepreneur? n n The word “entrepreneur” stems from French, means “between-taker” or “go between An Entrepreneur is one who brings resources, Labor, Materials and other assets into combinations that make their value greater than before, and also one who introduces changes, innovations, and new order.

Who is an Entrepreneur? n Entrepreneur is an individual who takes initiatives to bundle resources in innovative ways and is willing to bear the risk and/or uncertainty to act

What is Entrepreneurship? n Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, Psychic, and social risks and uncertainties, and receiving the resulting rewards of monetary and personal satisfaction.

What is Entrepreneurship? n 1. 2. 3. 4. This definition contains four basic aspects of entrepreneurs Creation of a new venture Investing necessary time and effort Accepting associated risks! Enjoying resulting rewards!

What is an Entrepreneurial Process? n It is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, Psychic, and Social risks and uncertainties and receiving the resulting rewards of monetary and personal satisfaction.

2 -2 The Entrepreneurial Process has 4 distinct phases 1. 2. 3. 4. Identification and evaluation of the opportunity Development of the business plan Determination of the required resources Management of the resulting enterprise

1. Identify and Evaluate the Opportunity n n n Opportunity Assessment Creation and Length of Opportunity Real and Perceived Value of an Opportunity Risks and Returns of Opportunity vs Personal Skills and Goals Competitive Environment

2 -3 Opportunity Analysis: Assessing the Opportunity n n n What market need does it fill? What personal observations have you made? What are the underlying social conditions? Examine the market research data. Assess competition. Any patents? Where is the money to be made?

2. Develop Business Plan n n Title Page Table of Contents Executive Summary Major Sections 1. 2. 3. 4. Description of Venture Description of Industry Technology Plan Marketing Plan

2. Develop Business Plan n 5. Financial Plans 6. Production Plan 7. Organization Plan 8. Operational Plan Appendixes (Exhibits)

3. Resources Required n n Determining Resources Needed Determine Existing Resources Identify Resource Gaps and Available Suppliers Develop access to needed resources

4. Manage the Enterprise n n n Develop the Management Style Understand Key variables for success Identify problems and potential Problems Implement Control System Develop Growth Strategy

How Entrepreneurs Think n Entrepreneurs thinks differently than non-entrepreneurs and vary in situation to situation and environment to environment

Thought Process of an Entrepreneur n n Effectuation is a process that starts with what one has (Who they are, What they Know, and Whom they Know) and select among possible outcomes. Entrepreneurial Mind Set, it involves the ability to rapidly sense, act, and mobilize, even under uncertain conditions

Thought Process of an Entrepreneur n Cognitive Adoptability, it describes the extent to which entrepreneurs are dynamic, flexible, self regulating, and engaged in the process of generating multiple decision frameworks focused on sensing and processing changes in their environments and then acting on them

Role of Entrepreneurship in Economic Development 1. 2. 3. Product Evaluation Process: for developing and commercializing an innovation. Iterative Synthesis: The intersection of knowledge and social need that starts the product development process Ordinary Innovation: New products with little technological change

Importance of entrepreneurship in economic development n n n Increase per capita output/income Initiating change in business/society structure Innovation stimulates new products/services Innovation stimulates new investments in new ventures (increased capital expands capacity for economic growth) Growth in economy stimulates additional spending (increased demand)

What type of environment favors entrepreneurial activities? n n n n Culture that values independence, “being one’s own boss” Failure not considered a disgrace Available markets Available capital sources “Critical mass” of entrepreneurial talent Strong educational base Tax structure that favors new ventures Government policies and programs (facilitate technology transfer)