Entrepreneurship: Starting a New Business

• Entrepreneurship involves designing, launching, and running a new business.
• It typically starts with a small business, offering a product, process, or service for sale or hire.
• Entrepreneurs are the individuals who create these businesses.
• The term "entrepreneur" comes from the French word "entreprendre," meaning "to undertake".

Features of Entrepreneurship

• Entrepreneurship is an art, not a science, characterized by constant change, movement, and innovation rather than a fixed set of rules.
• It continuously grows, develops, improves, and expands.
• Entrepreneurship operates within the concept of wealth creation.
• Profit is more applicable in accounting for measuring a business's operating performance.
• Wealth is defined as an abundance of money, property, or possession.
• Entrepreneurship creates economic wealth by providing valuable goods and services to consumers.
• It involves opening and managing a self-owned enterprise, where the person managing the daily activities is also the owner.
• Businesses managed by others for the owners' benefit operate under the concept of intrapreneurship, not entrepreneurship.
• The basic concept of risk is inherent in entrepreneurial ventures.
• Entrepreneurs should face business risks intelligently and find ways to minimize the effects of risk.

Theories of Entrepreneurship

• Innovation Theory suggests innovation is the primary factor affecting development.
• Keynesian Theory attributes economic growth, especially during depression, to the government.
• Alfred Marshall Theory generalizes that the organization plays the most significant role among the different factors of production.
• Risk and Uncertainty-bearing theory states that an entrepreneur faces the risk of uncertainty in connecting the supplier and the buyer.
• Weber's sociological theory asserts that social cultures have significant contributions to entrepreneurship.
• Kaldor's technological theory emphasizes the advancement of technology as an element of production.
• Leibenstein's gap-filling theory advocates that entrepreneurship fills the gap in any economic activity.
• Kirzner's learning-alertness theory focuses on learning and alertness as the primary attributes of entrepreneurship.

Core Competencies Defining Competitive Advantage

• There are ten entrepreneurial characteristics grouped into three major clusters.

Achievement Cluster

• Consists of entrepreneurial character traits directly related to the entrepreneur's desire to be an achiever.
• The entrepreneur is an opportunity-seeker, committed, persistent, a risk-taker, and efficient and quality-oriented.

Planning Cluster

• A set of characteristics that supports the character traits in the Achievement Cluster.
• Entrepreneurs in this cluster often begin the day with a specific plan and end it with a review of their progress, using the plan as a blueprint.
• The entrepreneur is a goal-setter, an information-seeker, and systematic in planning and monitoring.

Power Cluster

• Consists of character traits that reflect the degree of interpersonal relations maintained by successful entrepreneurs.
• The entrepreneur is a persuasive and positive networker and is self-confident.

Entrepreneurial Skills

• Cognitive Skills refer to the entrepreneur's mental ability to learn new things, generate new ideas, and express knowledge.
• Problem-Solving Skills entail facing, solving, and making decisions regarding business problems.
• Technical Skills relate to knowledge and proficiency in fields like computer technology, accounting, marketing, and engineering.
• Interpersonal Skills involve the relationship and interaction of the entrepreneur with workers, suppliers, creditors, customers, and other members of the business community.