Lecture Notes BENTR 2101BBE 2213BBE 2114 Fundamental of

Lecture Notes BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship Prepared Norhaniza Abdul Latiff

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship Chapter 1 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • At the end of the lecture students should be able to: – Define the role of the entrepreneur in the U. S. economy. – Describe the entrepreneurial profile. – Describe the benefits of owning a small business. – Describe the potential drawbacks of owning a small business. – Explain the forces that are driving the growth in entrepreneurship. BENTR 2101 Fundamental of 3 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship – Discuss the role of diversity in small business and entrepreneurship. – Describe the contributions small businesses make to the U. S. economy. – Explain the reasons small businesses fail. – Put business failure into the proper perspective. – Explain how small business owners can avoid the major pitfalls of running a business. BENTR 2101 Fundamental of 4 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • Introduction To Entrepreneurship • Characteristic Of Successful Entrepreneur • The Cultural Diversity Of Entrepreneurship • Eleven Deadly Mistakes of Entrepreneurship BENTR 2101 Fundamental of 5 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • In the U. S. , entrepreneurs start nearly 6 million businesses a year! • Global Entrepreneurship Monitor (GEM) – Approximately 10. 5% of U. S. population is actively involved in trying to start a new business. – Approximately 12% of people in 37 GEM countries studied are involved in starting a new business. BENTR 2101 Fundamental of 6 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship BENTR 2101 ALL RIGHTS RESERVED Fundamental of 7 Source: 2002 Global. No Entrepreneurship Monitor. part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship E § The process of uncovering and developing an opportunity to create value through innovation and seizing that opportunity without regard to either resources (human and capital) or the location of the entrepreneur—in a new or existing company (Churchill, 1992: 586). ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them. BENTR 2101 Fundamental of 9 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship BENTR 2101 Fundamental of 10 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship Characteristics of Entrepreneurs Describe the entrepreneurial profile • Desire to take initiative • Preference for moderate risk • Confidence in their ability to succeed • Self-reliance • Perseverance • Desire for immediate feedback BENTR 2101 Fundamental of 11 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • High level of energy • Competitiveness • Future orientation – Serial entrepreneurs • Skilled at organizing • Value achievement over money BENTR 2101 Fundamental of 12 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • One characteristic of entrepreneurs stands out: Diversity! • Anyone – regardless of age, race, gender, color, national origin, or any other characteristic – can become an entrepreneur (although not everyone should). BENTR 2101 Fundamental of 13 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship The opportunity to: • Create your own destiny • Make a difference • Reach your full potential • Reap impressive profits • Contribute to society and to be recognized for your efforts • Do what you enjoy and to have fun at it BENTR 2101 Fundamental of 14 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • Uncertainty of income • Risk of losing your entire investment • Long hours and hard work BENTR 2101 Fundamental of 15 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship BENTR 2101 Fundamental of 16 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • Uncertainty of income • Risk of losing your entire investment • Long hours and hard work n Lower quality of life until the business gets established BENTR 2101 Fundamental of 17 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship BENTR 2101 Fundamental of 18 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • • Uncertainty of income Risk of losing your entire investment Long hours and hard work Lower quality of life until the business gets established n n n High levels of stress Complete responsibility Discouragement BENTR 2101 Fundamental of 19 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • • Entrepreneurs as heroes Entrepreneurial education Demographic and economic factors Shift to a service economy Technological advancements Independent lifestyles E-Commerce and the World Wide Web BENTR 2101 Fundamental of 20 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • • Entrepreneurs as heroes Entrepreneurial education Demographic and economic factors Shift to a service economy Technological advancements Independent lifestyles E-Commerce and the World Wide Web n International opportunities BENTR 2101 Fundamental of 21 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • Young entrepreneurs BENTR 2101 Fundamental of 22 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship BENTR 2101 Fundamental of 23 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • Young entrepreneurs • Women entrepreneurs BENTR 2101 Fundamental of 24 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship BENTR 2101 Fundamental of 25 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • • • Young entrepreneurs Women entrepreneurs Minority-owned enterprises Immigrant entrepreneurs Part-time entrepreneurs BENTR 2101 Fundamental of 26 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • • • Home-based business owners Family business owners Copreneurs Corporate castoffs Corporate dropouts BENTR 2101 Fundamental of 27 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship BENTR 2101 Fundamental of 28 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship Small Businesses. . . • Make up 98. 5% of all the businesses in the U. S. • Employ 52% of the nation’s private sector workforce. • Pay 45 % of total private payroll. • Create more jobs than big businesses. • Are leaders in offering training and advancement opportunities to workers. BENTR 2101 Fundamental of 29 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship Small Businesses. . . • Produce 51% of the nation’s private GDP. • Account for 47% of business sales. • Create 4 X more innovations per R & D dollar spent than medium-sized firms and 24 X as many as large companies. – Create two-thirds of all new inventions. – Produce 13 X to 14 X more patents per employees than large companies. BENTR 2101 Fundamental of 30 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship BENTR 2101 Fundamental of 31 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship 1. 2. 3. 4. 5. 6. Management incompetence Lack of experience Forcing a flawed idea Undercapitalization Poor cash management Failure to develop a strategic plan BENTR 2101 Fundamental of 32 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship 7. Weak marketing effort 8. Uncontrolled growth 9. Poor location 10. Lack of inventory control 11. Inability to make the “entrepreneurial transition” BENTR 2101 Fundamental of 33 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • Entrepreneurs are not paralyzed by the prospect of failure. • Failure – a natural part of the creative process. • Successful entrepreneurs learn to fail intelligently. BENTR 2101 Fundamental of 34 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • • Know your business in depth Prepare a solid business plan Manage financial resources Understand financial statements BENTR 2101 Fundamental of 35 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

Faculty of Business Management and Globalization BENTR 2101/BBE 2213/BBE 2114| Fundamental of Entrepreneurship • Learn to manage people effectively • Set your business apart from the competition • Keep in tune with yourself BENTR 2101 Fundamental of 36 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide