The Entrepreneur And His Journey PDF (2020)

Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management WHAT IS THE ENTREPRENUERIAL MIND? Welcome to the subject Entrepreneurial Mind. This subject will introduce to the concept...

Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management WHAT IS THE ENTREPRENUERIAL MIND? Welcome to the subject Entrepreneurial Mind. This subject will introduce to the concept of entrepreneurship and how entrepreneurs think, make decisions, and take actions. We will also learn about the importance of entrepreneurship not only for the economy and society but also how it can be used as a way of thinking and looking at things from a different perspective. So, whether you are an engineering student, a soon to be programmer, a student of the arts, there is much to be learned from this class. The Entrepreneurial Mind Modules will allow us to discover what entrepreneurship is and who the entrepreneur is. We will have a look into the history of entrepreneurship as a school of thought as a means of understanding what entrepreneurship is. What better way to understand something than to learn about its origins, right? We will also be introduced to how entrepreneurs think. It has been said that entrepreneurs are a class of their own. They are known to be risk-takers and innovators. They are also known to have better focus and persistence than others. What exactly drives entrepreneurs to be that way? These modules will help us achieve better understanding of that not only by learning about the distinct characteristics of entrepreneurs but also, undertaking practical activities that will allow us to put ourselves in the entrepreneur’s shoes. We will learn all this throughout four modules namely: Module on the Entrepreneur and His Roots, Module on the Entrepreneur and His Social Impact, Module on The Entrepreneur and his Journey and Module on The Entrepreneur and his Personal Initiative. WHAT WILL YOU LEARN? At the end of these modules, you will acquire the following essential knowledge and skills on how to: Discuss the different characteristics of entrepreneurs, Discuss the different types of innovation, Identify, screen, and evaluate opportunities, and Distinguish pro-active and reactive behaviors of entrepreneurs. With that dear learner, welcome to the Module on the Entrepreneur and His Journey! Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management What Is This Module About? Welcome to the Module on the Entrepreneur and His Journey. This session will allow us to put ourselves in the shoes of the entrepreneur and begin to understand what the entrepreneur begins his journey, and that is identifying opportunities to exploit and turn into an entrepreneurial venture. This will be done by discussing your personal strengths, abilities and talents that you can build on to identify business opportunities. We will also be using metaphors and brain-writing as techniques to “think outside the box”. Towards the end of this session, we will learn how to evaluate the opportunities that we have identified on the basis of criteria considered to be important by successful entrepreneurs. What Will You Learn? At the end of this session, we will have identified abilities useful for opportunity identification. We will also have learned creativity techniques to come up with original ideas as well as learned basic criteria to evaluate business opportunities What Do You Already Know? Let’s begin this session, by looking at and reflecting on the quote below: Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management Let’s Reflect: Why do you think that identifying and evaluating business opportunities is the basis and starting point for entrepreneurship? _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ ____________________________________________________________________________ Let’s Study: Opportunity has been acknowledged as the key component of entrepreneurship. This partially explains the growing interest in opportunity identification, which resulted into well thought out definitions, processes and evaluations of opportunities (Alsos & Rasmussen, 2007; Fiet, 1996; Gartner et al., 2003; Shane & Venkatara- man, 2000). The growing interest in entrepreneurial opportunity has lead to the emergence of several definitions of the concept, which are to a high degree similar. Scholars defined it as situations in which new goods, services, raw materials, markets, and organizing methods can be introduced through the formation of new means, ends, or means-ends relationships (cf., Alsos & Rasmussen, 2007; Casson, 1982; Eckhardt & Shane, 2003). Opportunities vary largely in complexity and characteristics and so do the processes through which they are identified (Alsos & Ras- mussen, 2007). Other researchers like Smith, Matthews and Schenkel (2006) were more specific by identifying two types of opportunities that is tacit and codified, they defined a codified opportunity as a situation that is well-documented, articulated or communicated, in which a person can create a new means-ends framework for recombining resources. As pointed out by other researches, this recombination can include new goods, services, raw materials, markets and organizing methods. For example, a codified opportunity may be illustrated by a franchise in which the opportunity is clearly documented. By comparison, a tacit opportunity is a situation that is difficult to codify, articulate or communicate, in which a person can create a new means- ends framework for recombining resources. Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management  In broad terms, an opportunity may be the chance to meet a market need (or interest or want) through a creative combination of resources to deliver superior value (Casson, 1982; Kirzner, 1973; Schumpeter, 1934). Hansen (2006) points out that what most literature in entrepreneurship calls “opportunity recognition” appears to include three distinct processes: (1) sensing or perceiving market needs and/or underemployed resources, (2) recognizing or discovering a “fit” between particular market needs and specified resources, and (3) creating a new “fit” between heretofore separate needs and resources in the form of a business concept (De Koning, 1999; Hills,1995). The identification of opportunities that initiate entrepreneurial ventures is the key to the engine that starts new businesses; opportunity recognition is the progenitor of both personal and societal wealth (Venkataraman, 1997). Venkataraman (1997) and Gaglio and Katz (2001) argue that understanding the opportunity identification process is one of the primary questions within the province of entrepreneurship. This awareness of the importance of opportunity to entrepreneurship has spurred numerous investigations of one's ability to identify opportunities. It is important to emphasize during the training that opportunity Identification is a continuous process throughout the entrepreneurial process. Personal Evaluation Smith, Matthews and Schenkel (2006) and Shane (2003) realized in their work that if different types of opportunities are identified, it is necessary to bring the entrepreneur back into the picture to understand the relationship between the type of opportunity and the entrepreneurial process. Other researcher like Baum, Locke, and Smith (2001) and Rauch and Frese (2000) have pointed out that personality remains an important general predictor of entrepreneurial behavior, once specific mediating factors are considered. This can be achieved by people evaluating themselves thus knowing what they are good at that is their strength and for them to think around these strengths (personal abilities) and also what they love doing, likes, interests and hobbies. Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management Let’s Think About This: This exercise is important because you get a good rate of one’s strength and this helps you to achieve your goals and also excel in whatever you decide to do. With this, answer the following questions: 1. How can you use your personal abilities in entrepreneurship? 2. Can hobbies be turned into a business venture? 3. Do you know anyone who has started a business out of their talents, skills, hobbies or interests? Let’s Try This: Write down your personal strengths, hobbies and interests: What am I good at: What are my hobbies: What are my interests: Understanding your hobbies, and interest well will allow you to know the business ideas that you can pursue. Always focus on your strength because they help you know which business ideas to pursue to achieve your goals. This is the starting point on how to get a good business idea. Now, list down all the possible business ideas that come to mind based on your strengths, hobbies and interests. 1. _________________________________________________________ 2. _________________________________________________________ 3. _________________________________________________________ 4. _________________________________________________________ 5. _________________________________________________________ Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management Personal Goals Brunstein and Gollwitzer (1996), in their research pointed out the importance of self-defining goals as they do motivate some people. That is why it is important for any entrepreneur to set goals that may act as motivators in the opportunity identification process and their businesses. It is important to differentiate between wishes and goals. Wishes are imagined future states. In contrast to wishes, goals are objects or aims of actions (Locke & Latham, 2002). So, goals indicate the steps to take to make the wishes come true. A goal is something that we want to achieve. It is also a specific, measurable occurrence, object, or accomplishment that one would like to achieve, or obtain in the future. One where you develop concrete action plans to take you to where and what you want in the future. A goal statement is an investment in yourself; it clearly identifies what you want, how you will get it, and when you will get it. The goal should be SMART (Specific, Measurable, Achievable, Realistic, Time bound). Let’s Think About This: While looking at your strengths, hobbies and interests as a source of ideas for business opportunities, it is equally important to check if the opportunities identified are in line your personal goals. Now that we understand that setting goals is also important, answer these questions: 1. What kind of goals should we make? 2. Is it important that our business ideas are in line with the goals we want to achieve in life? Let’s Try This: Write down your personal goals and categorized them into short (up to one year), medium (1-3 years) and long term (3 years plus). The goals should be achievable and realistic in comparison with the resources you have and type of business. They should be easy to assess within a given time period. Short term Goals: 1. ___________________________________________________________________________. 2. ___________________________________________________________________________. 3. ___________________________________________________________________________. Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management Medium term Goals: 1. ___________________________________________________________________________. 2. ___________________________________________________________________________. 3. ___________________________________________________________________________. Long term Goals: 1. ___________________________________________________________________________. 2. ___________________________________________________________________________. 3. ___________________________________________________________________________. One of the secrets to achieving your goals is knowing how to ask for help from people who have those skills you don’t possess. In return, you offer them the skills you have, which will often turn out to be just what they need to achieve their goals. Complementary skills serve everyone involved. Goals motivate you to turn your vision of the future into reality. Creativity Creativity is a key to the development of both new and existing businesses, especially for those who want to grow to- wards a profitable business. Creativity is typically used to refer to the act of producing new ideas, approaches or actions, while innovation is the process of both generating and applying such creative ideas in some specific context. Definitions of creativity are typically descriptive of activity that results in: producing or bringing about something partly or wholly new; investing an existing object with new properties or characteristics; imagining new possibilities that were not conceived of before and; seeing or performing something in a manner different from what was thought possible or normal previously. Including creativity skills in venture development team allowing for creativity to emerge in both the early and later stages of the development process would likely contribute to more effective opportunity recognition and successful launches of new ventures. Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management Let’s Think About This: We now understand that creativity plays an extremely important part in entrepreneurship. In fact, it comes hand in hand with innovation. With this, answer the following questions: 1. Do you think that it is important for entrepreneurs to be creative? 2. Can an entrepreneur succeed even without creativity? 3. Is creativity needed only in the beginning of a business venture or should it be maintained all throughout the entrepreneurial journey. Let’s Try This: Let’s play a game! The rule is to connect the three dots with three straight lines in as many ways as you can. Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management Did you do this? What about this? The thing is, there are numerous ways to connect the dots, but the way the dots were arranged compelled us to connect them in a certain way. However, if you look at it from another angle, you figure it can be connected in many other different ways. Remember the movie Big Hero Six - when Hero was stuck in trying to look for an idea for the competition he was joining? He only got out of his mental block when his big brother carried him upside down and he saw his robot from a different angle. Creativity allows us to look at things from a different perspective. In the same way using creativity in identifying opportunities compels us to look at things from a different angle. Keep this in mind! Always look at things from several angles and you never know that a negative situation may turn out to be an opportunity. Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management Brainwriting Another technique that entrepreneurs use is brainwriting. It is a method where a person writes whatever comes to mind. At times, metaphors can also be in the process. When doing brainwriting the rules are ideas should not be evaluated. You should not be too critical, all ideas are allowed, even absurd or foolish ones. Come up with ideas that are as funny or as silly as possible as all ideas will not be evaluated. Do not judge any idea and you should not be too detailed or complicated. Brainwriting literally involves writing what comes to mind. Let’s Try This: Let’s practice a bit of brainwriting, shall we? Write the first thing that comes to mind after each question. In this exercise, use as many metaphors as you can because that is what makes you most creative. 1. If you were a foreigner in your country, what would you need? _______________________________________________________________________ 2. If you were a baby, what would you need? _______________________________________________________________________ 3. If you were an old man, what would you need? _______________________________________________________________________ 4. If you were a street kid, what would you need? _______________________________________________________________________ 5. If you were a fish, what would you need? _______________________________________________________________________ 6. If you were living on the moon, what would you need? _______________________________________________________________________ Problem Solving The role of prior knowledge has been identified as an important individual difference in the identification of entrepreneurial opportunities. Prior knowledge creates a knowledge corridor that allows people to recognize certain opportunities (Venkataraman, 1997; Hayek, 1945). Through qualitative research, Shane (2000) provided evidence that people’s prior knowledge of markets, how to serve markets and customer problems were related to their prior knowledge. It was argued, however, that in the case when the opportunity is tacit, and no prior knowledge existed, the opportunity Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management would tend to be overlooked as suggested by Austrian economists (Kirzner, 1997). Without the prior knowledge and associated knowledge corridor, the potential entrepreneur would not recognize the opportunity. In the case when prior knowledge existed and the opportunity was codified, the search could be more focused on opportunities within the field of experience. Needs People will always have needs; a human need is a basic requirement that a person wishes to satisfy. Needs are basic parts of human life, and are therefore not created by businesses. Businesses only try to influence demand by designing products and services that are attractive, affordable, available and work well for the customer. Identifying people’s needs is one of the better strategies that entrepreneurs use when looking out for opportunities. To do this, look out for peoples’ needs like; what exists is too ex- pensive need something cheaper, what exists is not easy to use so need a user friendly one, quality of existing product or service is not good enough and many others. Opportunities can be identified through other ways like; Existing product/service provider weaknesses Application of existing products or new functions Cross-border limitations Let’s Think About This: Identifying problems and figuring out how to turn that into opportunities is a good entrepreneurial practice. In the same manner, so is identifying what people need, even if they haven’t figured it out themselves. With this, answer the following questions: 1. How can identifying problems lead to entrepreneurship? 2. Can problems be turned into a business venture? 3. Do you know anyone who has started a business out of a problem they identified? Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management Let’s Try This: Case Study: Mrs. Grace Casitas of Malinao Albay has been in business for over 20 years. She sews uniform jackets from organic wool thread for over 10 primary and secondary schools in Albay. During the production process of these jackets there are off-cuts (waste material). These off cuts have accumulated over the years. Presently, she has no more space for these off cuts. What would you advise Mrs. Casitas to do with these sweaters’ off cuts? Come up with ideas that are viable and feasible in the community that you live in. 1. ______________________________________________________________________ 2. ______________________________________________________________________ 3. ______________________________________________________________________ 4. ______________________________________________________________________ 5. ______________________________________________________________________ Let’s Reflect: Now that we’ve learned all the many ways to identify opportunities, are you surprised at how many ideas you can come up with? These ideas are starting points of any business and all these ideas that you have come up with can be designed into a business that you can pursue. However, it would be quite difficult to pursue all these opportunities that you have identified so the ideal thing to do would be to screen and evaluate which ones are most appropriate for you! This can be done by evaluating each identified opportunity based on what you presently know (skills and knowledge), your interests and your passion, your personal experience, and your strengths and most importantly your willingness to pursue the business. Using the matrix, list down at least five of the business opportunities you have identified from the activities that we did. Rate each of the factor 1 to 5, with 1 being the lowest score and 5 being the highest. Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management Using a scale of 1 to 5 evaluate at least five of the business ideas that you have generated using the evaluation process below. Business Idea Skills and Experience Personal Strength Passion Knowledge Goals 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 2 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 3 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 4 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 5 The final score for the business idea on the scale is the sum of their ratings divided by the number of all the items that is, if the respondent gave a 1, 4, 3, 5, and 2 for the items in the illustration no.3. Then the Final score will be 1+4+3+5+2 = 15/5 = 3. Did your favorite business idea get the highest score? If it did not, that is totally ok. Perhaps you scored too low on the skills and knowledge as well as the experience. This doesn’t necessarily mean that this business idea is not for you. It could simply mean that you need to acquire more skills and knowledge so that you’ll be better prepared once you set out to start this business idea of yours. The most important thing to note at this point is that, you have now learned how to identify opportunities! Not only that, you have also learned how to evaluate them. Ma. Crestia Banares (2020). Module on The Entrepreneur and His Journey. Department of Entrepreneurship, Bicol University College of Business Economics and Management