TERMS AND CONDITIONS These Power Point slides are

TERMS AND CONDITIONS These Power. Point slides are a tool for lecturers, and as such: • YOU MAY add content to the slides, delete content from the slides, print out the slides, and save the slides onto your computer or server. • YOU MAY NOT resell, reproduce or redistribute the content in any form whatsoever, without prior written permission from the copyright holder. © Troupant Publishers (Pty) Ltd, 2016 Selected images used under licence from Shutterstock. com Entrepreneurship and Business Management

Entrepreneurship and Business Management N 4 Entrepreneurship and Business Management

The challenges of entrepreneurship Module 1 Entrepreneurship and Business Management

Think about it • Can I be an entrepreneur? • How do I do a SWOT analysis to determine strengths, weaknesses, opportunities and threats? • Why are some entrepreneurs successful, while others fail? Entrepreneurship and Business Management

The roles of entrepreneurs and intrapreneurs Unit 1. 1 Entrepreneurship and Business Management

An entrepreneur is a person who: • Identifies a need. • Makes use of the production factors to enable him or her to develop a product or service. • Fulfils (satisfies) this identified need of a consumer. • Is willing to take a calculable risk. • Is the owner of the business. • Receives all the profit or suffers the losses. Entrepreneurship and Business Management

An intrapreneur is a person who: • Is already in an established organisation. • Realises that the business has to remain competitive and that changes therefore have to take place. • Does the same as an entrepreneur, but only as part of an existing enterprise. • Acts for the benefit of somebody else’s business • Is not carrying the risk and will receive a salary. Entrepreneurship and Business Management

Similarities between an intrapreneur and an entrepreneur: • Both identify an opportunity or need. • Both take a moderate (not very big) risk (although the risk is carried by the entrepreneur). • Both have confidence. Entrepreneurship and Business Management

Personal qualities of the entrepreneur Unit 1. 2 Entrepreneurship and Business Management

Personal qualities of entrepreneurs Table 1. 1: Generic personal qualities of entrepreneurs Personal quality A brief description Confidence in their ability to succeed • Entrepreneurs must have confidence. • They should be realistic enough to realise that it may take some time to achieve success, i. e. make a profit. Preference for moderate risk • Entrepreneurs have the ability to take risks. • This risk can be limited by doing proper market research and drawing up a business plan. Desire for responsibility • One of the main reasons for becoming an entrepreneur may be that you want to be in charge of your personal life as well as what you earn. Entrepreneurship and Business Management

Personal qualities of entrepreneurs Table 1. 1: Generic personal qualities of entrepreneurs (continued) Personal quality A brief description Energetic • Entrepreneurs have to work very hard to be successful. Ability to identify opportunities • An entrepreneur identifies an unfulfilled (unsatisfied) need and tries to satisfy this need before somebody else does. Organising skills • Entrepreneurs must therefore be able to: • Put together the natural resources that they have. • Be able to organise their staff. • Make arrangements for finance. • Ensure that all the legal aspects are in place. Entrepreneurship and Business Management

Personal qualities of entrepreneurs Table 1. 1: Generic personal qualities of entrepreneurs (continued) Personal quality A brief description The urge/need to achieve • An entrepreneur must be driven by success and realise that nobody else can be blamed for failure. • It is solely up to the entrepreneur to make a success of the business. Desire for immediate feedback • An entrepreneur must have measurements in place to evaluate (determine) how the business is doing. • This can be done by evaluating sales figures and comparing these figures with a sales forecast that has been made. • Feedback can also be obtained by, for example, providing customers with an aftersales questionnaire. Entrepreneurship and Business Management

Activity 1. 1 Test your knowledge of this section by completing Activity 1. 1 (page 3 of your Student’s Book) Entrepreneurship and Business Management

Personal resources of the successful entrepreneur Unit 1. 3 Entrepreneurship and Business Management

The three of the most important personal resources • Knowledge and skills. • Contacts and friends. • Finance. Entrepreneurship and Business Management

Knowledge and skills Knowledge • You cannot be a plumber without the proper training. Skills • You may have the knowledge to be a plumber, but you must also have the practical skills to actually do the job. • You must have: § Technical skills. § Management skills. § Conceptual skills. Entrepreneurship and Business Management

Contacts and friends • It is very important to do networking. Figure 1. 2: An entrepreneur sorting through her network of friends and clients Entrepreneurship and Business Management

Finance • Where will you get finance? There are only two possibilities: § You will either have to provide it yourself (own capital). § You will have to borrow it from a financial institution (such as a bank) or somebody else (borrowed capital). • A proper business plan is needed to try to get a loan from a financial institution. • Bear in mind the cost of interest when making use of borrowed capital. Entrepreneurship and Business Management

SWOT analysis • Entrepreneurs have to do a personal SWOT analysis to determine their strengths and weaknesses, as well as possible opportunities and threats. • They will also have to do a SWOT analysis for the business. • But what is meant by ‘a personal SWOT analysis’? Entrepreneurship and Business Management

A SWOT analysis Figure 1. 3: A SWOT analysis Entrepreneurship and Business Management

VIDEO: ASK YOURSELF THIS QUESTION Entrepreneurship and Business Management

Case study 1. 1 Test your knowledge of this section by completing Case study 1. 1 (page 5 of your Student’s Book) Entrepreneurship and Business Management

Activity 1. 2 Test your knowledge of this section by completing Activity 1. 2 (page 6 of your Student’s Book) Entrepreneurship and Business Management

Activity 1. 3 Test your knowledge of this section by completing Activity 1. 3 (page 6 of your Student’s Book) Entrepreneurship and Business Management

The economic importance of an entrepreneur Unit 1. 4 Entrepreneurship and Business Management

The economic importance of an entrepreneur • The development of natural resources. • The creation of employment opportunities. • An increase in production. • A free-market system that is dependent on the entrepreneur. Entrepreneurship and Business Management

The three sectors of an economy Figure 1. 4: The three sectors of an economy Entrepreneurship and Business Management

Activity 1. 4 Test your knowledge of this section by completing Activity 1. 4 (page 7 of your Student’s Book) Entrepreneurship and Business Management

The merits/advantages of entrepreneurship Unit 1. 5 Entrepreneurship and Business Management

Advantages and disadvantages of entrepreneurship Table 1. 2: Advantages/merits and disadvantages of entrepreneurship Advantages/merits Gaining control over your own destiny (future) Disadvantages • Can control your hours of • It can be very hard to work. take full responsibility. • Can make managerial for your own destiny. decisions yourself. • You have to deal with • Can be socially responsible. uncertainty and threats • Can determine where and which you may not be with whom you want to able to control. work. • Can challenge yourself to work even harder. • You have the opportunity to make the most of your strengths and skills. Entrepreneurship and Business Management

Advantages and disadvantages of entrepreneurship Table 1. 2: Advantages/merits and disadvantages of entrepreneurship (continued) Advantages/merits Reaching your full • Shifting the borders of potential income. (what you are • Ultimately, becoming what capable of) you wish to become in life. • It entails self-actualising, • The status that you may gain. • Bettering the lives of other people by becoming involved in the community. • Contributing in general to the economy of a country. Entrepreneurship and Business Management Disadvantages • There is no guarantee that you will be successful. • You can reach your full potential when successful, but the opposite may also happen.

Advantages and disadvantages of entrepreneurship Table 1. 2: Advantages/merits and disadvantages of entrepreneurship (continued) Advantages/merits Reaping unlimited • You can shift the border profits of your income. • When you work for someone else, you are contributing to their financial future all the time, and to your own financial future to the extent to which they decide. Entrepreneurship and Business Management Disadvantages • There is no secured income. • For instance, you may have a low or no income at the beginning owing to the costs of starting your business. • As an entrepreneur, your income is directly related to your efforts and the success of your business.

Advantages and disadvantages of entrepreneurship Table 1. 2: Advantages/merits and disadvantages of entrepreneurship (continued) Advantages/merits Contributing to society and getting recognition for your efforts Disadvantages • Entrepreneurs create • It may be hard to keep up wealth and job with changes in society opportunities for others. and to carry full social • This can therefore responsibility. improve the life of • Also, new legislation may societies. impose extra duties on the • Government also entrepreneur. provides incentives to reward entrepreneurs for their efforts. Entrepreneurship and Business Management

Why entrepreneurs fail Unit 1. 6 Entrepreneurship and Business Management

Why entrepreneurs fail • • • Management incompetence. Lack of experience. Poor financial control. Figure 1. 5: Entrepreneurs can fail for a variety of reasons Entrepreneurship and Business Management

Figure 1. 6: Key factors, such as a business plan, have to be kept in mind so as to be successful Entrepreneurship and Business Management

How to avoid pitfalls Unit 1. 7 Entrepreneurship and Business Management

Keys to a successful business Table 1. 3: Keys to a successful business Key to success A short description Prepare a business plan A business plan should contain at least the following elements: • A brief description of the business. • A marketing plan. • A financial plan. • A management plan. • A SWOT analysis. Know your business • • • Do you know your product? Do you know who your competitors are? Do you know how to market your product? Do you know your target market? Do you know the strengths and weaknesses of your business? • Have you identified the opportunities and threats? Entrepreneurship and Business Management

Keys to a successful business Table 1. 3: Keys to a successful business (continued) Key to success A short description Understand financial • Do you have knowledge of the: statements § Income Statement? § Cash Flow Statement? § Balance Sheet? Learn to manage people effectively • It is said that people are the most important ‘asset’ of a business. • Know your employees by knowing their skills and what they need (want) to achieve. • Motivate (encourage) and train your staff. • Have proper rules and regulations in place. • Let them sign a code of conduct. • Have clear disciplinary and grievance procedures in place. Entrepreneurship and Business Management

Keys to a successful business Table 1. 3: Keys to a successful business (continued) Key to success A short description Understand entrepreneurial transition • Focus on the unique needs of entrepreneurs so that you understand the difference between leadership and management. • Recognise entrepreneurial behaviours and how they impact on (affect) organisations. • Realise why changes in this behaviour are very important to the long-term viability of the business. • Acquire powerful skills to enhance (improve) entrepreneurial traits and the transition to visionary leadership. Entrepreneurship and Business Management

Case study 1. 2 Test your knowledge of this section by completing Case study 1. 2 (page 10 of your Student’s Book) Entrepreneurship and Business Management

Self-analysis Unit 1. 8 Entrepreneurship and Business Management

Do you see yourself as an entrepreneur? Figure 1. 7: Signs that you might be an entrepreneur! Entrepreneurship and Business Management

VIDEO: ARE YOU A LOGICAL THINKER WITH AN APPETITE FOR RISK? Entrepreneurship and Business Management

Activity 1. 6 – 1. 7 Test your knowledge of this section by completing Activity 1. 6 – 1. 7 (page 12 of your Student’s Book) Entrepreneurship and Business Management

Summative assessment Test your knowledge of this section by completing the Summative assessment (page 12 – 13 of your Student’s Book) Entrepreneurship and Business Management