ENTREP080 Notes PDF

ENTREP080 NOTES LESSON 1: INTRODUCTION TO ENTREPRENEURSHIP Entrepreneurship- a science of converting processed ideas into a remarkable business venture. Entrepreneur- derived from the French verb enterprendre, which means “to undertake” Relevance of Entrepreneurship to an Organization 1. Developm...

ENTREP080 NOTES LESSON 1: INTRODUCTION TO ENTREPRENEURSHIP Entrepreneurship- a science of converting processed ideas into a remarkable business venture. Entrepreneur- derived from the French verb enterprendre, which means “to undertake” Relevance of Entrepreneurship to an Organization 1. Development of managerial capabilities 2. Creation of organizations 3. Improving standard of living 4. Means of economic development Factors Affecting Entrepreneurship 1. Personality Factors (entrepreneur core personalities) A. Initiative- does things before being asked B. Proactive- identifies and utilizes opportunities C. Perseverance- works against all odds to overcome obstacles and is never complacent with success D. Problem-solver- develops and maintain relationships with customers and financers E. Persuasion- convinces customers and financers to patronize his business F. Self-confidence- makes decisions and sticks to his decisions G. Self-critical- learns from his mistakes and from experiences of others H. A planner-collects information, prepares plan, and monitors performance I. Risk-taker- is willing to take calculated risks 2. Environmental Factors- relate to the conditions in which an entrepreneur has to work. A. Political climate-It is concerned with general stability of the country in which an enterprise is expected to perform and the political philosophy of party in power towards business. B. Legal system- It refers to the regulatory framework within which an enterprise operates.Legal environment includes flexibility and adaptability of the law and other legal rules governing the business activities in a country. C. Economic and social conditions- condition of the economy where the business primarily operates. Social conditions is the social setting in which the people grow, shapes their basic believes, values and norms. D. Market situations- The market plays an important role in ensuring the growth of your business. The size of the market, as well as the marketing techniques used, are both important. A market is a place where entrepreneurs and consumers interact. It is a place where buying and selling take place. With the advanced technology available today, the world has become one big market. You can market your product to any part of the world using the internet and shipping facilities. This improves your chances of increasing profit and sales. It expands your market beyond the immediate location of your company. Core Competencies in Entrepreneurship 1.Economic and Dynamic Society 2.Innovation 3.Profit Potential 4.Risk Bearing LESSON 2: ENTREPRENEUR Types of Entrepreneur 1. Innovative entrepreneurs- These entrepreneurs has the ability to think newer, better and more economical ideas of business organization and management. 2. Imitating entrepreneurs- These entrepreneurs are people who follow the path shown by innovative entrepreneurs. 3. Fabian entrepreneurs- These entrepreneurs are skeptical about the changes to be made in the organization. 4. Drone entrepreneurs- These entrepreneurs are those individuals who are satisfied with the existing mode and speed of business activity and show no inclination in gaining market leadership. 5. Social entrepreneurs- Social entrepreneurs drive social innovation and transformation in various fields including education, health, human rights, environment and enterprise development. Functions of Entrepreneur 1. Innovation- An entrepreneur is basically an innovator who tries to develop new technology, products and markets. 2. Assumption of risk- An entrepreneur is always prepared for assuming losses that may arise on account of new ideas and projects undertaken by him/her. 3. Research- An entrepreneur is a practical dreamer and does a lot of ground-work before taking a leap in his/her ventures. 4. Development of managerial skills- The managerial skills of an entrepreneur get further strengthened when he/she engages himself/herself in establishing equilibrium between his/her organization and its organization. 5. Overcoming resistance to change- An entrepreneur always first tries new ideas at his/her level. 6. Catalyst of economic development- An entrepreneur plays an important role in accelerating the pace of economic development of a country by discovering new uses of available resources and maximizing their utilization. Risks of an Entrepreneur 1. Potential business failure- Being fully responsible means the success or failure of your business rests on you. 2. Unexpected obstacles- Problems happen that you don’t expect. 3. Financial insecurity-An entrepreneur will need funds to launch a business either in the form of loans from investors, their own savings, or funds from family. The founder will have to put their own "skin in the game." Any new business should have a financial plan within the overall business plan showing income projections, how much cash will be required to break even, and the expected return for investors in the first five-year time frame. Failure to accurately plan could mean that the entrepreneur risks bankruptcy, and investors get nothing. 4. Long hours and hard work- It’s not usual for entrepreneurs to work a lot of extra hours to make their business successful. This is especially true during the initial start- up process.