Definition of Entrepreneurship

Definition of Entrepreneurship

• Entrepreneurship: a philosophy or process where an entrepreneur seeks innovation and employment.
• Entrepreneur: a person who undertakes an enterprise with chances of profit or loss and often faces considerable risks.
• Enterprise: a bold undertaking.
• Entrepreneur (New Encyclopaedia Britannica): An individual who bears the risk of operating a business facing uncertain future conditions.
• Common Meaning: someone who starts their own, new, small business.
• Entrepreneur of the 21st Century: a customer-focused innovator using e-knowledge, speed, and global thinking.
• Standard (New) Definition: Entrepreneurship involves creating something different with value by devoting time and effort, assuming risks, and receiving rewards like independence, satisfaction, and money.
• The word "Entrepreneur" stems from the French Verb "Entreprendre," which means between; taker or go between.
• New Definition aspects: the creation process, devotion of time and efforts, assumption of risks, and rewards of independence, satisfaction, and money.

Meaning of Entrepreneurship

• Entrepreneurship: the willingness and ability of an individual or group to seek investment opportunities, establish, and run a business successfully.
• Entrepreneurship: generating ideas and venturing into business risk within a dynamic environment to maximize profit.
• Entrepreneurship connotes action rather than a static event

Who is an Entrepreneur?

• An entrepreneur is action-oriented, highly motivated, and able to see and evaluate business opportunities.
• Entrepreneurs gather necessary resources, take advantage of opportunities, initiate action, and take risks to achieve goals.
• An entrepreneur is a creative thinker and innovator who volunteers to take risks and invest money.
• Entrepreneurs create jobs, solve problems, add value, and seek excellence.
• Entrepreneurs assume responsibility and risk for a business expecting profit, decide on the product, acquire facilities, and bring together labor, capital, and production materials.
• Successful entrepreneurs reap profits, while unsuccessful ones take the loss.
• An entrepreneur creates innovative economic activity, provides services through new businesses, and revitalizes existing ones.

Factors Ensuring Entrepreneurial Success

• Being enterprising helps one stand out with a systematic approach to issues.
• Adopting an enterprising approach allows one to appreciate and translate life's challenges into positive results.
• Tools for becoming enterprising:
  • E-Energy: working hard and smart, requiring mental and physical energy.
  • N-Need to achieve: motivation to achieve success with perceptiveness.
  • T-Task-oriented: executing tasks effectively and on time with efficiency and good time management.
  • E-Empathy: mentally putting oneself in others' positions.
  • R-Resourcefulness: providing leadership and utilizing resources effectively.
  • P-Planning: seeing the total picture of an enterprise and establishing a written plan.
  • R-Risk-taking: making the decision to start an enterprise after thorough research.
  • I-Innovation: applying new ideas through initiative, imagination, and insight.
  • S-Skills: utilizing knowledge, attitudes, and practical skills.
  • E-Endurance: maintaining focus despite challenges with patience, persistence, and confidence.

Functions of Entrepreneurs

• Entrepreneurs play vital roles in any business setup, including:
  • Selecting business opportunities by identifying and exploiting unsatisfied needs.
  • Combining factors of production by gathering land, labor, and capital.
  • Establishing a business enterprise by formalizing the relationship between interacting units.
  • Managing the business enterprise through planning, organizing, and coordinating.
  • Making decisions through choosing alternative courses of action despite uncertainty,

How to Become an Entrepreneur

• Vision and focus: requires a vision, concentration, and commitment to a determined course of action.
• Goal setting: involves setting specific, measurable, and time-bound goals.
• Self-motivation: This is the internal drive that spurs an individual into action to achieve set goals or objectives.
• Sacrifice: This entails giving up something in anticipation of getting another thing in the future.
• Time management:requires judicious use of time in accomplishing tasks efficiently.
• Hard work and perseverance: continuity and consistency in effort and resolve.
• Decisiveness: reacting quickly and rightly on matters of concern without fear of failure.
• Firmness and steadfastness: sticking to decisions and being consistent.
• Human relation: potential entrepreneurs need to know how to relate with all categories of stakeholders
• Freedom and independence: Entrepreneurs should not totally rely on others on key issues.
• Emotional stability: business people need emotional stability and control over their sentiments.

Constraints/Problems of Entrepreneurship

• Financial limitations: balancing cash flow, dealing with financiers, and using credit effectively.
• Staffing problems: competing with large companies in terms of salaries and opportunities, and having little time for objectives.
• Higher direct costs: facing higher per-unit production costs due to inability to buy raw materials and machinery as cheaply as large companies.
• Lack of credibility: struggling to prove themselves compared to well-known large companies.
• Management incompetence: lacking skills in financial records, stocks, and inventory control.
• Infrastructural constraint: lacking of electricity, good road network, storage and warehouse challenges
• Foreign Business Competition
• Government Rules and Regulation: Business registration is challenging, operational permits, tax, tariffs, license are factors challenging entrepreneurs
• Technological Barrier
• Political Instability
• Unstable Business Environment

Personal Characteristics of an Entrepreneur

• Hard Working: the ability to work for long hours when necessary, to work intensely in spurts and to cope with less than a normal amount of sleep.
• Self-Confident:believing in themselves and in their ability to achieve the goals they have set for themselves.
• Builds for the Future:building a secure job and income based on their own abilities
• Profit-Oriented recognizing that the business comes first before deciding about the profits .
• Goal-Oriented:setting realistic goals or targets in business depends upon ability
• Persistent: all businesses have their problems and disappointments.
• Copes with Failure: recognizing these failures, learning from them and seeking new opportunities
• Responds to Feedback: knowing how well they are doing and to keep track of their performance.
• Demonstrates Initiative: that successful entrepreneurs take the initiative and put themselves in positions where they are personally responsible for success or failure.
• Willing to Listen: not an inward looking person that never uses outside resources
• Sets Own Standards:setting standards of performance and then working to achieve them
• Copes with Uncertainty:An ability to cope with this uncertainty without becoming too stressed is a necessary trait of being an entrepreneur.
• Committed: starting and running an enterprise demands total commitment by the entrepreneur
• Builds on: having the ability to make and use a network of contacts. Strengths: successful business people base their work upon the strength(s) they
• Reliable and Has Integrity:the qualities of honesty, fair dealing and reliability in terms

Factors Determining the Growth of Entrepreneurship

• Developed Infrastructure Facilities: Reduces cost & efforts and improves viability of projects through higher profit margins improving availability
• Financial Assistance: Easy availability of cheap funds is vital for promoting entrepreneurship
• Protective and Promotional Govt Policies: favourable Government policies shelter projects
• Growth of Education– Science, Technology & Management : Growth of education promotes entrepreneurship.
• Risk Taking Attitude :it is one of the pillars of entrepreneurial spirit
• Hunger for Success (Capitalistic View) – Dreams of riches and fire in the belly is what drives most entrepreneurs on this risky path.
• Environment/Culture Impact – Entrepreneurship is contagious. Seeking and exploiting business opportunities in most remote areas.
• Globalization – Globalization has provided another avenue for business.
• Economic Growth Rate of Country – A growing economy creates more demand and improves prospects of success.
• General Business Environment – External environmental factor i.e. political, socio cultural, technology, legal, economic affect growth of entrepreneurship.

Innovation and Entrepreneurship

• Innovation: An innovation is gainful modification to the product or process.
• Value Analysis/Value Engineering:Innovation is achieved in short
• New entrant faces Innovation is the best ally of an entrepreneur in this battle
• Innovation is needed by the entrepreneur for following reasons :1. To face competition.

Installing Attitude for innovation

• Encourage creative conflict
• Big ideas from small teams
• Learning happens from the desk
• Understand the product users
• Live in the future
• Failure sometime produces innovation
• Joint prototyping to brain storming for fast track innovation

Different Sources of Innovation

• Unexpected occurrences
• Process needs
• Incongruities
• Industry & market changes

Areas of Innovation

• New Services
• New Production Techniques
• New Way of Delivering the Product or Service to the Customer
• New Operating Practice
• New Means of Informing the Customer about the Product
• New Means of Managing Relationship within the Organization
• New Ways of Managing Relationships between Organizations

Business Opportunity

• A business opportunity -an attractive idea that provides the possibility of a return for the investor or the people taking risks.
• Returns on investment : providing durable, timely and acceptable returns or rewards for the risk

Characteristics of a good business opportunity

• Be competitive: i.e. equal to or better – from the viewpoint of the customer than available products or services
• Meet objectives: i.e meet the goals and aspirations of the person or organization taking the risk.
• Availability of resources and skills i.e. be within the reach of the entrepreneur in terms of resources -Personal goals, Do you have what it takes
• Capital, technology and other resource requirements.

Identifying and Assessing Business Opportunities.

• Industry and Market –Can you provide what they need or want
• . Can you create or seize the opportunity whilst it lasts
• . Assess Personal goals and competencies of the entrepreneur
• Assess Management team
• Assess Competition
• Can you produce or market at lower costs? . environment-Are the political, economic, geographical, legal, and regulatory contexts favourable

Entrepreneruship and Marketing Management

• Understand and develop marketing programmes for their products and services
• Satisfying and following upt the customers needs- Focus marketing efforts on;
• Aim all business policies and activities at satisfying customer needs
• Achieve a profitable sales volume goal
• What is marketing Strategy- Identifying and focusing small business activity on;
• Target customer groups
• Tailor better product offer prices and promos for target group.
• Address current unmet customer needs.
• A Small business Cannot be all things to all people
• Analyse its market
• Target a market
• Market information and understanding
• Market is a place where customers willing and able to buy product or service
• Understand customer needs and wants
• Know customer ability to buy service or product
• Know customer willingness to use product
• Competition must be considered
• Assess market , determine how product differs

What should entreprenuers Know customers

• What are customer characteristics(age segment)
• What products or services
• Customers present business activities
• Customers weekly or mothly income.

Key marketing Activities

• Target marketing segment customer needs
• Concentrate marketing segment
• Geographical segmentation i.e region
• Customer Segmentation- identifying groups of people who are most likely to buy the product before trying to attract new customers.
• Products and services:. small business may include concentrating on a narrow product line .
• Producrion : this marketing. area includes advertising, salesmanship
• Place and Distribution - the manufacturer and wholesaler must decide how to distribute their products

Managing the Marketing mix

• Understand all levels to price product or services
• Higher rates mean lower volume of sales
• Assess what product has i.e candy

Analysing competition

• Expect competition and risk
• Select business venture
• Understand both customer , competitors and what benefits are.
• Avoid unnecessary risks , what your customer needs business records.
• The best way is to know your competitors Avoid competing or bothering find competition
• Step1- List name , address of all direct firms by competitor
• • Anilyse who started a business but failed -Estimate sales turnover for competitors
• Check prices quality advertisiment sales of their products and location costs
• Determine firms having high sales methods operations
• Base on methods of high sales and revenue

Compare proposed busiy operations

• What advantages in products, or services
• Explain operating process or procedures
• Evaluting Marketing Performance
• Evaluting Marketing
• Evaluating Marketing
• Base performance vs result
• Sound on time
• Analysing quarterly base marketing

Business Environment

• Positive influences of ventures
• Ability to venture has control over and weakness #Factors
• Political environment
• Gives priority to growth of trade and industry and infrastructureal to institutions, and growth
• Technological Environment

SMALL Scale ENTERPRISE\BUSINESSES

• Small business is a business that is independent
• Size vs business that has employees and money. -small scale -Economic and control criteria -Market Share: how high is your influence in what levels
• Independence an owner has control over process.
• Personalised Management that owner participating in decision management
• Technology-labor

Economic and political aspects of small business enterprises

• Socialistic Idea
• Less Money, much labor
• Self employment created
• critical raw. materials

FAILURES OF Small SCALE BUSINESS

• Management incompetence
• Poor Financial Control
• Fixed Over investment failure
• No inventry or inadequate marketing
• Channels or weakness
• How to prevent/ solve pitfalls; Know your deep business Good Stakeholder and Good relation