Entrepreneurship: Terms and Small Business Defined

Entrepreneurship Terms

• Entrepreneur is derived from the French word "entreprendre" for undertaking ventures.
• An entrepreneur is someone who champions and applies entrepreneurship concepts to manage their own business.
• Entrepreneurship origins trace back to the word entrepreneur.
• Entrepreneurship means observing strategies to manage a business that creates wealth through valuable goods and services.
• Joseph Schumpeter emphasized product innovation, marketing, and production methods.
• Schumpeter viewed entrepreneurs as individuals that possess unique social characteristics.

Small Business Defined

• A small business embraces the principles of entrepreneurship.
• A small business is owned by one person.
• A small business has a workforce of no more than 20 people.

Entrepreneurship Features

• It is an art of correct practices
• A wealth-creating venture
• Provides valuable goods and services
• It involves opening and managing a self-owned enterprise
• A risk-taking venture

Entrepreneurial Ideas

• Changes in the environment
• Technological discovery and advancement
• Government thrust, programs, and policies
• People's interests
• Past experiences

Business Ventures

• Business ventures are created based on existing business opportunities and business ideas.

Entrepreneurial Skills

• Skills are crucial for success in business and entrepreneurship.
• Skills are personal abilities derived from knowledge, practice, experience, and aptitude.

Problem-Solving Skill

• Problems are common in business.
• Problems can vary in size and frequency.

Cognitive Skills

• Cognitive skills include the mental ability to learn new things, generate ideas, and express knowledge.
• Cognitive skills are essential for effective planning and monitoring.

Cognitive Skills of an Entrepreneur

• Ability to understand written materials.
• Ability to learn and apply new information.
• Ability to solve problems systematically.
• Ability to create new ideas.

Technical & Interpersonal Skills

• Technical skills include specialized knowledge of technology, accounting, marketing, engineering, etc.
• Interpersonal skills deal with relationships with workers, suppliers, customers, and the business community.

Entrepreneurial Core Competency

• It is a mix of entrepreneurial concepts, qualities, and talents.
• This mix provides a primary source of competitive advantage.

Achievement Cluster

• It comprises personality traits linked to the desire for success.
• Entrepreneurs do not settle for mediocrity and strive for excellence.

Opportunity-Seeker

• An opportunity-seeker recognizes and acts on new business chances.
• An opportunity-seeker seizes opportunities for funding, equipment, land, or support.

Business Opportunities

• Changes in the environment are a source of business opportunities.

Committed Entrepreneurs

• A dedicated entrepreneur is completely devoted and avoids pessimism.
• They accept responsibility, coordinate effectively, and prioritize customer satisfaction.
• Interest and commitment are linked.

Persistent Entrepreneurs

• They overcome difficulties through repeated actions.
• They make personal sacrifices.
• They trust their judgment in the face of opposition.
• Persistence is a cornerstone of dedication.

Risk-Taker

• Risk-taking is essential for entrepreneurial success.
• An aggressive risk-taker does not take risks
• A calculated risk-taker is a moderate risk-taker and assesses the scenario.
• A cautious risk-taker is risk-averse.
• A risk-taking entrepreneur's approach to risk differs from a typical small business owner.

Efficient and Quality-Oriented Entrepreneurs

• They prioritize efficiency and quality.
• They consistently improve performance.
• They seek to do things better, faster, and cheaper.
• Cost of goods and services relates to efficiency.
• Competitive advantage comes from low production costs and uncompromised quality.

Planning Cluster

• It is a set of attributes shared by successful entrepreneurs.

Goal Setter

• Use the SMART Principles (Specific, Measurable, Achievable, Realistic, Time-bound)

Information Seeker

• Seeks and verifies pertinent information and expert opinions.

Systematic

• In Planning and Monitoring involves gathering information, step-by-step planning, and corrective actions.
• Planning is preventive, while monitoring is corrective.

Power Cluster

• It focuses on influence and self-belief.
• A persuasive worker can persuade others while maintaining respect and uses business contacts.
• A self-assured person demonstrates faith in oneself which is a gradual process.

Changes in the Environment

• Changes in the external environment, affect entrepreneurial ideas.

External Environment Includes

• Physical, Societal, and Industry environments.
• Physical environment entails climate, natural resources, wildlife
• Societal Environment includes economic, sociocultural, political, technological forces
• Industry Environment includes government, competitors, suppliers, customers, creditors, and employees

Technological Discovery

• It is a good source of entrepreneurial opportunities.

Government's Thrust

• Consists of programs, and policies can inspire entrepreneurial ideas.
• It refers to local, city, or national policies.
• Changes in policies can lead to new business opportunities.

People's Interests

• People's interests are rich sources of entrepreneurial ideas.
• Entrepreneurs need to identify market trends and adapt quickly.

Past Experiences

• These can lead to related business ventures.
• Expertise and skills developed in a particular field may also offer value in starting a related business.

Market Identification

• This is a strategic method to define a product's specific buyer.
• The three strategies are market segmentation, targeting, and positioning.

Market Segmentation Strategy

• This divides the market into segments with distinct needs or characteristics.

Market Segmentation Methods

• A. Geographic
• B. Demographic
• C. Psychological
• D. Behavioral

Individual Marketing

• It provides products suited to particular consumer needs.

Differentiated Marketing

• Differentiated marketing targets a wide range of customers.
• Numerous items from the same company will be available and competing on the market.

Concentrated Marketing

• This covers only one or a few segments.

Mass Marketing

• This targets customers with similar demands.
• The product can be used by all types of clients, regardless of location, profile, or characteristics.
• Examples includes MSG, salt and refined white sugar.

Types of Entrepreneurial Research

• Exploratory research: Preliminary research for data collection to address a problem or develop a hypothesis.
• Hypothesis: Preliminary answer about the relationship of variables.
• Descriptive research: Conducted to describe consumer buying behavior in terms of various factors.

Entrepreneurial Research

• The entrepreneur gathers data to describe consumer buying behavior.
• This identifies the present condition in the business environment.
• Causal Research: Determines if consumer behavior is caused by environmental factors.
• It identifies the cause-and-effect relationship between variables.

Research Instruments

• Research Instruments: Tools used to gather data, commonly including surveys, interviews, and focus groups.

Survey Questionnaire

• It is used to get information about client purchasing behavior.
• The questionnaire can be administered directly to customers.
• Sampling methods include simple random, cluster, stratified, and multi-stage sampling.
• Survey questions may be dichotomous, multiple-choice, or open-ended.

Personal Interview

• It involves face-to-face interaction with consumers.
• The interview schedule outlines the questions to be asked.

Focus Group Discussion

• Conducted with a moderator to gather customer views.
• The group consists of 6-12 members.
• Members share conclusions around a given issue.
• All thoughts and conclusions are recorded.

Concept of Needs and Wants

• Needs: Things required for survival (food, clothing, shelter).
• Wants: Things desired to be upbeat and fulfilled.
• Businesses must create items that fulfill both consumer needs and wants.

Hierarchy of Needs

• Abraham Maslow assumes the human needs are classified into five levels.
• This theory helps entrepreneurs determine the needs of target consumers.