Introduction to Entrepreneurship

Introduction to Entrepreneurship

• Entrepreneurs are major drivers behind business organizations.
• Entrepreneurs decide which products and services should be produced, including how, by whom, and for whom.
• Starting a business often includes the intention of making a profit.
• Entrepreneurship involves assuming the risk of losing resources.
• Entrepreneurs mobilize land, labor, and capital.

Concepts of an Entrepreneur

• Entrepreneurs are considered creative individuals.
• Entrepreneurs have innovative ideas and identify opportunities.
• Entrepreneurs find resources to pursue opportunities for financial gain.
• Entrepreneurs take financial risks
• Entrepreneurs instigate change, growth, and wealth in the economy.
• Entrepreneurs re-energize economies and create jobs.
• Entrepreneurs start and manage small businesses.

Renaissance of Entrepreneurship

• The entrepreneurial revolution has led to the emergence of life-changing new businesses.
• In South Africa, entrepreneurship has contributed to a decline in unemployment.
• Entrepreneurship is the driving force that puts other production factors into action.

Entrepreneurship in South Africa

• South Africa's economic growth has declined over the past few decades.
• A 6% GDP growth rate is needed to improve economic growth.
• Achieving this goal relies on the contribution of entrepreneurs.
• Entrepreneurs focus on expanding their businesses.
• The current interest in entrepreneurship is understandable given the economic needs.
• South Africa's rate of entrepreneurial activity is unexpectedly low.

Roles of Entrepreneurs and Small Business Owners

• Entrepreneurs mobilize natural, human, and financial resources.
• Entrepreneurs create wealth for society and themselves.
• Entrepreneurs put other factors of production into motion.
• Small-business owners are satisfied with some autonomy.
• Small-business owners earn reasonable income.
• Small-business owners have no intention of growing and developing the business.

Motivation for Entrepreneurs

• Individuals initiate ventures based on their traits and characteristics.
• Individuals initiate ventures based on their skills and industry experience.
• Individuals initiate ventures based on the opportunities that outsourcing offers.

Entrepreneurial Traits and Characteristics

• Achievement motivation drives entrepreneurs.
• Entrepreneurs exhibit an internal locus of control.
• Entrepreneurs display innovation and creativity.
• Entrepreneurs are inclined to take risks.
• Entrepreneurs exhibit high levels of energy, confidence, and optimism.
• Entrepreneurs desires feedback and shows high tolerance for ambiguity.
• Entrepreneurs are flexible and adaptable, with passion, commitment, and determination.
• Entrepreneurs have opportunity orientation and motivation to excel.

Entrepreneurial Skills and Industry Experience

• Experience contributes to identifying opportunities.
• Training contributes to establishing a business.
• Education contributes to managing a business.

Opportunities Arising from Outsourcing

• Organizations are outsourcing various services and components.
• The most frequently outsourced services include architectural design.
• The most frequently outsourced services include trash and waste removal.
• The most frequently outsourced services include housekeeping.
• The most frequently outsourced services include landscape maintenance.
• The most frequently outsourced services include property appraisals.
• The most frequently outsourced services include major moves.
• Services most often outsourced also include hazardous-materials removal.
• Services most often outsourced also include major redesigns.
• Services most often outsourced also include furniture moves.
• Services most often outsourced also include food services.

Small Businesses

• Small businesses are difficult to define.
• Defining criteria includes number of employees.
• Defining criteria includes sales volume.
• Defining criteria includes the value of assets.
• Defining criteria includes market share.

The Role of Small Businesses in the Economy

• Strategic roles involve the production of products and services.
• Strategic roles involve innovation.
• Strategic roles involve aiding big businesses.
• Strategic roles involve job creation.

The Entrepreneurial Process

• Entrepreneurs face a range of choices in the entrepreneurial process.
• Choices include possession of personal characteristics, abilities, and skills.
• Choices include access to resources.
• Choices include the evaluation of opportunities and ideas.
• Choices include the completion of a feasibility study.
• Choices include the compilation of a business plan.
• Choices include the launch and management of the new business.

Skills Required for Entrepreneurship

• Skills include strategy skills.
• Skills include planning skills.
• Skills include marketing skills.
• Skills include financial skills.
• Skills include project management skills.
• Skills include human relations skills.

Resources Needed to Start a Business

• Financial resources is needed.
• Human resources is needed.
• Operating resources or physical resources is needed.
• The acquisition of resources implies a risk.

New Venture Ideas

• Trends to consider include: economic trends, political trends, and social trends.
• Growth industries to consider include education, health care, tourism, and privatization of government and semi-government services.

New Venture Opportunities

• A clearly defined market need for the product is important.
• A sustainable competitive advantage is important.
• Growth potential is important.
• The business should be rewarding to the investor and/or entrepreneur.
• The timing of the opportunity must be right.

Franchising

• Entrepreneurs may acquire a franchise
• Franchising makes it possible to start a business that has been proven in the market
• When franchising, the entrepreneur becomes a franchisee
• The franchisor allows the franchisee the right to operate a business, using a franchise name, products, and systems.
• The franchisor is an entrepreneur.
• Franchisee is viewed as an intrapreneur who initiates ideas in the franchise system.

Corporate Entrepreneurship (Intrapreneurship)

• Corporate entrepreneurship is entrepreneurship within an existing business.
• Corporate entrepreneurship includes the development of a new corporate business within a business through the identification of a new opportunity.
• Corporate entrepreneurship is a method by which a corporation introduces new and diversified products or services.
• Corporate entrepreneurship is done through internal processes and a corporation’s resources.
• Corporate entrepreneurship enables investment and profits through establishment of business within a business.

Feasibility of the Business Idea

• It takes analysis to ensure ideas can be converted into successful ventures.
• Entrepreneurs should conduct a feasibility study to determine if a venture/opportunity will survive.
• A business plan can be drawn up after feasibility has been established.

Summary

• Entrepreneurship is the driving force behind business organizations.
• Entrepreneurs play a specific role in the economy.
• Assessment of the entrepreneur's unique abilities and skills, access to resources, search for opportunities and feasibility study are essential for success.