Theorie & Concept of Entrepreneurship PDF

# Theorie & Concept of Entrepreneurship ## Entrepreneurs - A person who undertakes to do a job. - A person who acts as a game in transforming demand into supply. ## Entrepreneurship - Involves not only the process that leads to the setting up of a business entity but also the expansion and develop...

# Theorie & Concept of Entrepreneurship ## Entrepreneurs - A person who undertakes to do a job. - A person who acts as a game in transforming demand into supply. ## Entrepreneurship - Involves not only the process that leads to the setting up of a business entity but also the expansion and development of an ongoing concern. ## Importance of entrepreneurship - The symbol of business steadfastness. - Create job opportunities. - Creation of new venture and small businesses. ## Islamic entrepreneurship The entrepreneurs are "khalifah" and have the responsibilities to develop prosperity and see businesses as part of "ibadah" or "good deed". Business activity is part of "ibadah" or "good deed". One should search for God's blessings above all others where business not solely for profit but above all, to fulfill the "forthe thipayah". ## Personal Entrepreneurial Competencies (PEC) - Refers to the key characteristics that should be possessed by entrepreneurs in order to perform entrepreneurship in order to perform entrepreneurial functions effectively. ## Entrepreneurial Competencies - **Initiative**: The entrepreneur should be able to take actions that go beyond his job requirements and to act faster. - **Sees and acts on opportunities**: An entrepreneur always looks for and takes action on opportunities - **Persistence**: Able to make repeated efforts or to take different actions to overcome obstacles in the way of reaching goals - **Information-seeking**: Able to act on how to seek information to help achieve business objectives or clarify business problems. - **Concern for high-quality of work**: An entrepreneur acts to do things that meet certain standards of excellence which gives him greater satisfaction. # Chapter 7: Business Regulations & Support System ## Approval and Licensing - Entrepreneur are required to have approval and licensing from relevant government agencies in setting up manufacturing business. - Manufacturing license or engaging 15 or more full-time employees. - No-objection letter for the location of business. - Approval for planning permission. - Approval for building plan. - Approval for certificates of fitness for occupation. - Approval for environmental control. - Sales tax license. - Approval for safety and health license, business and value license. ## Other Business Support system ### Technical assistance - Malaysian Agricultural Research and Development Institute (MARDI) - Malaysian Palm Oil Board (MPOB) - FRI Berhad Research Institute (FRI) - SIRIM Berhad - NATOS Berhad ### Marketing Assistance - *Support Services ## Infrastructure facilities - Industrial estates - Free industrial zones (FIZ) - Licensed manufacturing warehouses (LMW) - Electricity and water supply - Telecommunication services - Sea port, cargo transportation, highway and railways services. - Multimedia Super Corridor (MSC) ## Financial Assistance for Entrepreneurs - Needed by entrepreneurs for sustainability and development of business. - Types of Financing: - Soft loan - Grants - Venture capital - Leasing financing - Tax incentives - Two main providers: - Co-operative Development (MECD) - Ministry of Entrepreneurship and Industry of Science, Technology and Innovation (MOSTI) - Agencies: - National Vocational Training Council - Ministry of Human Resource - Bank such as Bank Kerjasama Rakyat Malaysia, Bank Negara Malaysia, Perbadanan Perusahaan Kecil & Sederhana Berhad and Bank Pertanian Malaysia Berhad - Non-banks such as Perbadanan Nasional Berhad, small and medium Industries Development Corporation, Multimedia Development Corporations. ## Manpower development and training facilities - National vocational training council. - Ministry of human resource. - Human resource development fund. - Malaysian Productivity Corporation. - Malaysian Entrepreneurship Development (MEDEC) / Malaysian Academy of SME & Entrepreneurship Development (MASRED) - Perbadanan Usahawan Nasional Berhad - Majlis Amanah Rakyat. ## Employment Policies & Legislation - Employment Act 1955 - Employer Provident Fund - Social Security Organisation - Occupational Safety and Health # Chapter 4: Business Opportunity ## Introduction - The main function of the entrepreneur is to discover, screen and implement business ideas/opportunities. - Opportunity is the situation that enables an entrepreneur to offer marketable products or services to interested buyers or end users. ## Emergence of opportunity - Product or service is not in existence. - Product or service is already in the market but failed to satisfy the customers (need to improve). - The presence of unfulfilled needs and want and/or problems alerts the entrepreneur to the potential opportunity. ## Attractive opportunity - **Solvable**: A problem that can be solved in the near future with accessible resources (cure for cancerous diseases, an efficient public transport to reduce congestion). - **Timely**: A current need and immediate demand or problem (vaccine for bird flu, drugs to prevent obesity). - **Important**: Customers deems their problem or need important to them (energy-saving air conditioner, petrol-saving devices that work). - **Profitable**: Willingness of customers to pay for the solution and allow the enterprise to profit (selling security products). - **Contextual**: A favorable regulatory and industry situation (e.g. online business transaction). ## Opportunity Analysis Process - A process that involves the search for and discovery of business opportunities. - The process involves: - Observing changes in the environment. - Give rise to needs and wants and/or problems and an opportunity emerge. - Recognize needs & wants then find solutions. - Opportunity occurs whenever there is a need and want to fulfill. - Problems can be recognized by people observing the challenges that they encounter in their daily lives. - Search & discover business opportunities. - How to search? - Experience and exposure - Knowledge and skills - Special alertness - Social networks - Creativity - Vigilant # Chapter 5: Business Formation ## 4. Acquiring a Franchise - **Advantages**: - **To Franchisee**: Lower business risks as franchisee shares the business risks with the franchisor. Benefit of economics of scale. - **To Franchisor**: The franchisor's business expansion can be done through recruitment of new franchisee. Benefit of economics of scale. - **Disadvantages**: - **To Franchisee**: Limited freedom and flexibility to manage the business according to franchisee's desire. - **To Franchisor**: Competition through imitation of business concept and model. ## 3. Family Business Succession - **Advantages**: - Freedom and flexibility in decision making. - High possibility of achieving great monetary success due to high commitment. - Family members have good exposure to business environment. - **Disadvantages**: - Unstructured early-stage business organization. - Early-stage limited financial resources. - Difficulty in getting the right successor. ## 1. Starting from scratch - **Advantages**: - Entrepreneurs are free to make his/her own decisions. - Entrepreneurs have the opportunities to try and practice his/her own ideas. - Entrepreneurs are free to choose suitable business location and premise, and acquiring appropriate machines and equipments for the business. - **Disadvantages**: - Entrepreneurs need to put in a lot of efforts. It requires more time, energy and money in ensuring the business kick off. - Higher chances of losses due to high project implementation cost. ## 2. Buying an existing business - **Advantages**: - The probability of getting the financing is greater if the existing business has a good track record. - Existing market and loyal customers of existing business. - Established networking with suppliers, supporting agencies and communities. - **Disadvantages**: - Buying existing business requires larger amount of capital either to buy the whole business or part of the business. - Conflicts could arise between the new owner and existing employees. # Chapter 2: Business Tools ## SWOT analysis - An analysis of an organization's strengths (S) and weaknesses (W) and the opportunities (O) and threats(T) in the external environment. - SWOT enables the firm to develop strategies that maximize strengths and capitalize upon opportunities. ### Internal environment - Controllable elements inside a firm that influence how well the firm operates. ### External Environment - Elements outside the firm that may affect it either positively or negatively. - Legal/political/ethical trends - Economic trends - Competitive trends - Technological trends - Sociocultural trends - Demographical trends - **Example**: Starbucks SWOT analysis: - **Strengths**: Valued at $4 billion, good track record, largest coffee house chain in the world. - **Weaknesses**: Bad publicity, expensive coffee, coffee bean price fluctuations. - **Opportunities**: Market expansion in south Asian markets, rising coffee demand, extended supply range. - **Threats**: Rising coffee bean prices, trademark infringement, imitation goods, weak patent rights in some countries. ## Business Model Canvas - The 9 building blocks: The Business Model Canvas: - **Customer segments**: Make a conscious decision about which segments to serve and which segments to ignore. - **Value propositions**: Summarize why a consumer should buy a product or use a service. - **Channels**: Describes how a company communicates with and reaches its customer segments to deliver its value proposition. - **Customer relationships**: Personal, dedicated personal assistant - automated services. - **Revenue streams**: Represents the cash a company generates from each customer segment. - **Key activities**: Lists a company must carry out in order to fulfil its business purpose. - **Key partners**: Relationships that help your business model work. - **Key resources**: - **Cost structure**.