BUS 311 Introduction to Entrepreneurship PDF

BUS 311 INTRODUCTION TO ENTREPRENEURSHIP 1.0: Introduction: Entrepreneurship, creativity and innovation are the most fundamental and enduring engine of growth in a fast paced knowledge-driven global economy of the 21st century. Entrepreneurship is the soul of business. The more enterprising and...

BUS 311 INTRODUCTION TO ENTREPRENEURSHIP 1.0: Introduction: Entrepreneurship, creativity and innovation are the most fundamental and enduring engine of growth in a fast paced knowledge-driven global economy of the 21st century. Entrepreneurship is the soul of business. The more enterprising and innovative a person is the more motivated he is to be self reliant to improve the quality of life of his family, society and the economy at large (Akinboye,2003). Entrepreneurs are catalyst fee economic change and most researchers opine that entrepreneurs are highly creative individuals with complex cognitive operation, ability to be fluent, original and flexible in imagining new solutions to problems and hence create opportunities for profit or reward. 1.1Who is an entrepreneur? The entrepreneur is generally viewed as a business leader and innovator of new ideas and business processes. Cantillion (1734) describes entrepreneurs as a non-fixed income earners who pay all known costs of production bur earn uncertain income. Say (1830) sees an entrepreneur as an economic agent who unites all means of production- land of one, labour of another, and the capital of yet another and thus produces a product. By selling the product in the market he pays rent of land, wages of labour, interest on capital an the remains is his profit. Knight (1821) views the entrepreneur as an economic economic pioneer who initiates change or innovation by managing risk and uncertainty. McClellan (1961) describes an entrepreneur as a person with a high need for achievement (N-Ach), he is energetic, and a moderate risk taker. Drucker (1964) views an entrepreneur as someone who searches for change, responds to it, and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource. Gartner (1985) describes entrepreneur as a person who starts a new business where there was none before. Bygrave and Zacharaka (2011) describe an entrepreneur as somebody who creates a new business in the face of risk and uncertainty, for the purpose of achieving profit and growth, by identifying significant opportunities and assembling the necessary resources to capitalise on them. In summary an entrepreneur can be describe as follows:  ✓ An entrepreneur is a person who organizes the means of production to engage in entrepreneurship, often under considerable uncertainty and financial risk. Entrepreneurs may partner with other entrepreneurs to jointly found companies (co-founders), or with an existing organization ✓ The entrepreneur is defined as someone who has the ability and desire to establish, administer and succeed in a start-up venture along with risk entitled to it, to make profits. The best example of entrepreneurship is the starting of a new business venture ✓ Entrepreneurs are highly motivated risk-takers that have a vision and sacrifice a lot to achieve that vision. ✓ Entrepreneurs enter the market because they love what they do, believe their product will have a positive impact, and hope to make profits from their efforts. Characteristics of Entrepreneurs ✓ Versatility ✓ Risk taker ✓ Decisiveness ✓ Confidence ✓ Innovativeness ✓ Accountability ✓ Flexibility ✓ Money Savvy ✓ Resilient ✓ Focused ✓ Business Smart ✓ Creativity ✓ Proactivity ✓ Communicators ✓ Humility ✓ Integrity. What is Entrepreneurship? Although many people come up with great business ideas, most people do not act on their ideas.. In is 1911 book ‘’ The theory of Economic Development, economist Joseph Schumpeter wrote that entrepreneur are more than just business creators; they are change agents. Entrepreneurship can be conceptualise as a process through which individuals identify opportunities, allocate resources and create value. Value creation is often achieved through identification of needs and/ or opportunities for change. The following captures the key essence of entrepreneurship: ✓ The activity of setting up a business or businesses, taking on financial risks in the hope of making profit. ✓ The more modern entrepreneurship definition is also about transforming the world by solving big problems ✓ Entrepreneurship is the process of starting and developing a company, with the aim of delivering something new or improved to the market, or by organizing the means of production in a superior way ✓ it is a process by which individuals or a group of individuals (entrepreneurs) exploit a commercial opportunity, either by bringing a new product or process to the market, or by substantially improving an existing good, service, or method of production. This process is generally organized through a new organization (a start-up company), but may also occur in an established small business that undergoes a significant change in product or strategy ✓ Entrepreneurship is the creation or extraction of value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values than simply economic ones ✓ Entrepreneurship is characterized by the process of recognizing opportunities to build a new product, service, or process and finding necessary resources to exploit the opportunity and improving the lifestyle of people. ✓ Entrepreneurship can be broadly defined as the identification and organized exploitation of novel opportunities for value creation and capture, where the value outcomes may be commercial, social, institutional, or cultural in nature. ✓ Joseph Alois Schumpeter is regarded as the father of entrepreneurship. He introduced the concept of entrepreneurship Entrepreneurial mindset ✓ Entrepreneurial mindset is a way of thinking that enables you to overcome challenges, be decisive, and accept responsibility for your outcomes. It is a constant need to improve your skills, learn from your mistakes, and take continuous action on your ideas. ✓ Entrepreneurial mindset can be defined along three components: curiosity, creating value, and connections. These components are referred to as the “3 C's” and they guide the network's activity including curricular development, faculty workshops, student engagement Difference between intrapreneur and entrepreneur An intrapreneur is an employee who is tasked with developing an innovative idea or project within a company.  The difference between entrepreneurs and intrapreneurs is the setting in which they work. An intrapreneur is an inside entrepreneur, or an entrepreneur within a large firm, who uses entrepreneurial skills without incurring the risks associated with those activities Questions for Entrepreneurs Embarking on the entrepreneurial career path to “being your own boss” is exciting. But along with all your research, make sure to do your homework about yourself and your situation. A Few Questions to Ask Yourself: Do I have the personality, temperament, and mindset of taking on the world on my own terms? Do I have the required ambiance and resources to devote all my time to my venture? Do I have an exit plan ready with a clearly defined timeline in case my venture does not work? Do I have a concrete plan for the next "x" number of months or will I face challenges midway due to family, financial, or other commitments? Do I have a mitigation plan for those challenges? Do I have the required network to seek help and advice as needed? Have I identified and built bridges with experienced mentors to learn from their expertise? Have I prepared the rough draft of a complete risk assessment, including dependencies on external factors? Have I realistically assessed the potential of my offering and how it will figure in the existing market? If my offering is going to replace an existing product in the market, how will my competitors react? To keep my offering secure, will it make sense to get a patent? Do I have the capacity to wait that long? Have I identified my target customer base for the initial phase? Do I have scalability plans ready for larger markets? Have I identified sales and distribution channels? Questions That Delve into External Factors: Does my entrepreneurial venture meet local regulations and laws? If not feasible locally, can I and should I relocate to another region? How long does it take to get the necessary license or permissions from concerned authorities? Can I survive that long? Do I have a plan about getting the necessary resources and skilled employees, and have I made cost considerations for the same? What are the tentative timelines for bringing the first prototype to market or for services to be operational? Who are my primary customers? Who are the funding sources I may need to approach to make this big? Is my venture good enough to convince potential stakeholders? What technical infrastructure do I need?  Once the business is established, will I have sufficient funds to get resources and take it to the next level? Will other big firms copy my model and kill my operation?