ENTREPRENEURSHIP DEVELOPMENT The Foundations of Entrepreneurship Chapter 1

ENTREPRENEURSHIP DEVELOPMENT The Foundations of Entrepreneurship Chapter #1 www. Assignment. Point. com

The Foundations of Entrepreneurship www. Assignment. Point. com

Old Name New Image Few years ago… …was a food Aarong Village market Amazon: was a river in South America Yahoo… was something cowboys yelled www. Assignment. Point. com

What is an Entrepreneur? An Entrepreneur is one who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities & assembling the necessary resources to capitalize on them. Opportunities Resources Ideas An entrepreneur is a Risk bearer Organizer An Entrepreneur Innovator www. Assignment. Point. com

Entrepreneurship is the attempt to create value through recognition of business opportunity, the management of risktaking appropriate to the opportunity, and through the communicative and management skills to mobilize human, financial and material resources necessary to bring a project to completion www. Assignment. Point. com Difference between Entrepreneur and Entrepreneurship Person Process Organizer Organization Innovator Innovation Risk-bearer Risk-bearing Motivator Motivation Creator Creation Visualiser Vision Leadership

Intrapreneurship The term refers to entrepreneurial actions by individuals within an existing organization. Intrapreneurs create new ideas, products, and services for their employer Intrapreneurs have more access to resources than a start-up entrepreneur Most CEOs of large Companies are Intrapreneurs www. Assignment. Point. com

Characteristics of Entrepreneurs Desire for Responsibility prefer to be in control of their resources and use the resources to achieve self determined goal. Preference for Moderate Risk They are calculated risk taker, rarely gamble Confidence in their ability to succeed They are optimistic. This high level of optimism may explain why some of the most successful entrepreneur have failed in business before finally succeeding. Desire for Immediate Feedback High Level of Energy www. Assignment. Point. com

Characteristics of Entrepreneurs Future Orientation Have a well-defined sense of searching opportunities. Entrepreneurs are less concerned about yesterday they are more focused on future. Skilled at Organizing Effectively combining people and jobs. Value Achievement Over Money Achievement seems to be the primary motivating source; money is symbol of achievement. High Degree of Commitment Launching a company successfully needs total commitment from an entrepreneur. www. Assignment. Point. com

Characteristics of Entrepreneurs Tolerance for ambiguity The ability to handle uncertainty is critical because these business builders constantly make decision using new, sometimes conflicting information gained from variety of unfamiliar sources. Flexibility The ability to adopt to the changing demand of their customer and their business. Persistence Obstacle cannot stop pursuing their vision they simply keep trying. Anyone – regardless of age, race, gender, color, national origin, or any other characteristic – can become an entrepreneur (although not everyone should). www. Assignment. Point. com

The Benefits of Entrepreneurship ü Opportunity to Create Your Own Destiny Provides independence and opportunity to achieve what is ü ü ü important to them. Opportunity to Make A Difference Entrepreneurs are finding ways to combine their concerns for social issues and their desire to earn a good living. Opportunity to Reach Your Full Potential Most people find their work is boring, unchallenging and unexciting, but not for the entrepreneurs. It gives them a sense of empowerment. Opportunity to Reap Impressive Profits Opportunity to Contribute to society and To Be Recognized for the Efforts Opportunity to Do What You Enjoy and to Have Fun At It “Find a job doing what you love, and you will never have to work a day in your www. Assignment. Point. com life” – Harvey Mc. Kays. Entrepreneurs make their

The Potential Drawbacks of Entrepreneurship Individual who prefer the security of a steady income, a benefit package, a two week paid vacation, should not go into business for themselves. Uncertainty of Income Risk of Losing Your Entire Investment Failure rate is relatively high Long Hours and Hard Work Lower Quality of Life Until the Business Gets Established Half of all entrepreneurs launch their business between age 25 and 39 just when they start their family. So family life suffers. www. Assignment. Point. com

The. High Potential of Entrepreneurship Level of Drawbacks Stress Sometimes they unnecessarily bear the burden of managing alone, because they can not bring themselves to delegate authority and responsibility to other in the company, even though their employees are capable Complete Responsibility It is great to be boss. But many entrepreneur find that they must make decisions on issues about which they are not really knowledgeable. The realization that the decision they make are the cause of success or failure has a devastating effect on some people. Discouragement www. Assignment. Point. com

Feeding the Entrepreneurial Fire Entrepreneurs as Heroes Mark Elliot Zuckerberg founder of Facebook Bill Gates founder of Microsoft Jeff Bezos founder of amazon. com www. Assignment. Point. com Walter Disney founder of Walt Disney Michael Dell founder of DELL

Feeding the Entrepreneurial Fire Entrepreneurial Education Extremely popular course to study at universities Have small business management center Demographic and Economic Factors 2/3 starts at age 25 -44 Shift to Service Economy Shift from the Manufacturing Industry to Service Industry Technological Advancements Independent Lifestyles E-commerce and World Wide Web (www) www. Assignment. Point. com

Types of Entrepreneurs According to the Type of Business �Business Entrepreneurs �Conceive the idea of a new product or services and then translate their ideas into reality. �Entrepreneurs examine the various possibilities of sources of finance, supply of labor, raw materials or finished products. �Trading Entrepreneurs �Buying the finished products from the producer and selling off to the customer directly or through a retailer. �Has to be creative enough as he has to identify the market, create demand through extensive advertising. So he have to find out the desires tests and choices of his customers in domestic and international market www. Assignment. Point. com

Types of Entrepreneurs Industrial Entrepreneurs Perceive the opportunity to set up his unit complies with necessary formalities Has ability to convert economic resources and technology into considerably profitable venture. Corporate Entrepreneurs The one who plans, develops and manage a corporate body. He is a promoter, an part of board of directors an owner as well as an entrepreneur He gets his corporate body registered under the requisite Act which gives his company the status of separate legal entity. Agricultural Entrepreneurs The one who is engaged in the agricultural activities. He uses latest technology to increase the productivity of www. Assignment. Point. com

Types of Entrepreneurs According to Motivation Pure Entrepreneurs One who may or may not possess an ability for entrepreneur. But is tempted by the monetary reward or profit They are status- conscious and wants recognition. Induced Entrepreneurs Is attracted by the various incentives, subsidies and facilities offered by the government. Every person can be trained to become a good entrepreneur. www. Assignment. Point. com

Types of Entrepreneurs According to Capital Ownership Private Entrepreneurs When an individual or a group of individual set up an enterprise. State Entrepreneurs The trading or industrial venture undertaken by the state or the government itself. Joint Entrepreneurs Combination of private entrepreneur who join hands. www. Assignment. Point. com and state

Difference between Entrepreneur, Intrapreneur and Manager Primary Motive Manager: Promotion and other traditional corporate rewards, such as office, staff and power. Entrepreneur: Independence, opportunity to create, and money. Intrapreneur: Independence and ability to advance in the corporate rewards. Time Orientation Manager: Short term – meeting quotas and budgets, weekly, monthly, quarterly, and the annual planning horizon. Entrepreneur: Survival and achieving 5 to 10 year growth of business. Intrapreneur: Depending on urgency to meet self imposed and corporate timetable. www. Assignment. Point. com

Difference between Entrepreneur, Intrapreneur and Manager Activity Managers: Delegates and supervises more than direct involvement. Entrepreneurs: Direct involvement. Intrapreneurs: Direct involvement more than delegation. Risk Managers: Careful Entrepreneur: Moderate risk taker Intrapreneur: Moderate risk taker Status Managers: Concerned about status symbol. Entrepreneurs: Not Concerned about status symbol. Intrapreneurs: Not Concerned about traditional status symbols --- desires independence. www. Assignment. Point. com

Difference between Entrepreneur, Intrapreneur and Manager Failure and Mistake Managers: Tries to avoid mistakes and surprises. Entrepreneurs: Deals with mistakes and failures. Intrapreneurs: Attempts to hide risky projects from view until ready. Decisions Managers: Usually agrees with those in upper management positions. Entrepreneurs: Follows dream with decisions. Intrapreneurs: Able to get others to agree to help achieve dream. Who Serves Managers: Others Entrepreneurs: Self & customers. Intrapreneurs: Self, customers & sponsors. www. Assignment. Point. com

Ten Deadly Mistakes of Entrepreneurship 1. Management Mistakes Poor management is the primary cause of failure. Lacks leadership ability, sound judgment 2. Lack of Experience Need to have experience in the field they want to enter 3. Poor Financial Control Tend to have overly optimistic and often misjudged the financial requirements. They start undercapitalized. Cash not the profit what matters most in a new venture 4. Weak Marketing Efforts Believe that if they build it, customer automatically come 5. Failure to Develop a Strategic Plan Without a clearly defined strategy business has no sustainable basis for creating and maintaining a competitive edge in the market www. Assignment. Point. com

Ten Deadly Mistakes of Entrepreneurship 6. Uncontrolled Growth Expansion can be done when sales increases 40 to 50 percent Expansion should be financed by the profit they generate (retained earning) or by capital contribution of owner. Most business wind up borrowing a portion of the capital investment Expansion increase problems and entrepreneurs must learn to deal with the problems. 7. Poor Location are selected without proper study, investigation and planning 8. Improper Inventory Control Insufficient inventory levels results in shortages and stock outs causing customers to become disappointed and leave. 9. Incorrect Pricing Charge at competitors price or selling the best product at a lowest price – both are dangerous 10. Inability to Make the “Entrepreneurial Transition” Growth requires entrepreneurs to delegate authority www. Assignment. Point. com

END OF CHAPTER # 1 www. Assignment. Point. com