Entrepreneurship: A Mindset PDF

Entrepreneurship: a mindset  Misconception Entrepreneurship involves significant risks, hard work, and often long hours. Many entrepreneurs face financial challenges and failures before achieving success Entrepreneurship is an Easy Way to Get Rich  The charact...

Entrepreneurship: a mindset  Misconception Entrepreneurship involves significant risks, hard work, and often long hours. Many entrepreneurs face financial challenges and failures before achieving success Entrepreneurship is an Easy Way to Get Rich  The characteristics of seeking opportunities, taking risks beyond security and having tenacity to push an idea through to reality combine into a special perspective that permeates entrepreneurs 1. Represents cognition and commitment to view the world with and innovative perspective 2. The mindset can be exhibited inside or outside an organization, in for profit or not for profit enterprises and in business activities for the purpose of bringing forth Entrepreneurship: a mindset The evolution of Entrepreneurshi p Entrepreneurship: a mindset  “Entreprende”–French- to undertake. The entrepreneur is one who undertakes to organize, manage, and assume the risks of aEntrepreneurship: business. a mindset Today an entrepreneur is an; 1. Innovator or developer who recognizes and seizes opportunities; 2. Converts those opportunities into workable/marketable ideas 3. Adds value through time, effort, money, or skills 4. Assumes the risks of the competitive marketplace to implement these ideas 5. realizes the rewards from these efforts Entrepreneurship: a mindset 1.The aggressive catalyst for change the world of business 2.Independent thinker Entrepreneurship: a mindset CHARACTERISTICS OF ENTREPRENEUR PERSONAL INITIATIVE ABILITY TO CONSOLIDATE RESOURCES MANAGEMENT SKILLS DESIRE FOR AUTONOMY RISK TAKING Entrepreneurship: a mindset  OTHER CHARACTERISTICS Aggressiveness Intuitiveness Competitiveness Reality-based Goal-oriented behavior actions Confidence Ability to learn Opportunistic mistakes behavior Ability to employ human relations Entrepreneurship: a mindset  Introduce by the Economists 18th century Continued to attract on the 19th century In the 20th century the word entrepreneurship became synonymous at least closely related with “FREE ENTERPRISE AND CAPITALISM” Entrepreneurs serves as agents of change; provide creative, innovative ideas for business enterprise and help business grow and become profitable In the 21st century, entrepreneurs are considered the heroes of free enterprise Entrepreneurship: a mindset  The Myths of Entrepreneurship Entrepreneurship: a mindset  1. Entrepreneurs are doers not thinkers l. Entrepreneurs have a tendency toward action, but they are also thinkers. 2. Emphasis today is on the creation of clear and complete MYTHS  Entrepreneurship has models, processes, and case studies that 2. Entrepreneurs allow the traits are born, not to be acquired. made MYTHS  3. Entrepreneurs are always inventors l. This is a result of misunderstanding and tunnel vision. 2. Many inventors or innovators are also entrepreneurs. 3. Numerous entrepreneurs encompass all sorts of innovative activities. MYTHS  3. Entrepreneurs are always inventors His innovative ideas made McDonalds THE LARGEST FAST FOOD Ray Kroc did not invent Fast INTERPRISE food franchise MYTHS  4. ENTREPRENEURS ARE ACADEMIC AND SOCIAL MISTFITS l. This myth results from people who have started successful enterprises after dropping out of school or quitting a job. 2. Historically, education and social organizations did not recognize the entrepreneur. 3. The entrepreneur is now viewed as a professional. MYTHS 5. All entrepreneurs need money 1)Venture needs capital to survive. 2)A large number of business failures occur because of lack of adequate financing. 3)Failure due to lack of financing indicates other problems. a)Managerial incompetence b)Lack of financial understanding c)PoorEntrepreneurship: investments a mindset 6. All entrepreneurs need is luck 1. Being in the right place at the right time is always an advantage. 2. “Luck” happens when preparation meets opportunity. 3. What appears to be luck could really be several factors. a. Preparation b. Determination c. Desire d. Knowledge e. Innovativeness MYTHS 7. Entrepreneurs are extreme risk takers (gamblers). While it may appear that an entrepreneur is “gambling” on a wild chance, the fact is that the entrepreneur is usually working on a moderate or “calculated” risk. MYTHS  8. Ignorance is bliss for an entrepreneur. 1. Key factors in successful entrepreneurship a) Identifying the strengths and weakness of a venture b) Setting up clear timetables with contingencies for handling problems c) Minimizing problems through careful strategy formulation 2. Careful planning is the mark of an accomplished entrepreneur. MYTHS  9. Entrepreneurs seek success but experience high failure rates. 1.Many entrepreneurs suffer a number of failures before they are successful. 2.Failure can teach many lessons to those willing to learn and often leads to future success. MYTHS 10. Entrepreneurs must fit the “profile.” l. Many books and articles have presented checklists of characteristics of the successful entrepreneur. 2. The environment, the venture itself, and the entrepreneur have interactive effects, which result in many different profiles. MYTHS  Approaches to entrepreneurship 1.Schools of thoughts approaches to entrepreneurships 2.Process approach Entrepreneurship: a mindset Schools of thoughts approaches to entrepreneurships Entrepreneurship: a mindset  Environmental school of thought Deals with external factors that affect a potential entrepreneur’s lifestyle The focus is on institutions, values and mores that –grouped together – form a sociopolitical environmental framework that strongly influences the development of entrepreneurs Approaches to entrepreneurship  ANALYZE THIS STATEMENT OR EXAMPLE Approaches to entrepreneurship  If the middle manager experiences the freedom and support to develop ideas, initiate contracts or create and institute new methods, the work environment will serve to promote that person’s desire to pursue an entrepreneurial career. Approaches to entrepreneurship An environmental factor that often affects potential development of entrepreneurs is their social group Approaches to entrepreneurship Financial/capital school of thoughts Based on the capital-seeking process – the search for seed and growth capital Business planning guides and texts for entrepreneurs emphasize this phase and development seminars that focus on the funds application process offered throughout the country on a continuous basis. Approaches to entrepreneurship  Displacement school of thought Focuses on the negative side of group phenomena, which someone is displaced or out of place – from the group. Holds that the group hinders a person from advancing or eliminates certain factors needed to advance; the individual is projected into entrepreneurship in order to succeed 3 major types. 1. Political displacement- caused by factors ranging from an entire political regime that rejects free enterprise to governmental regulations and policies that limit or redirect certain industries 2. Cultural displacement- deals with social groups precluded from professional fields. Ethnic background, religion, race, and sex are examples of factors that figure in minority experience Approaches to entrepreneurship 3. Economic displacement- concerned with the economic variations pf recession and depression. Job loss Capital shrinkage Or simply “bad times” can create the foundation for entrepreneurial pursuits, just as it can affect venture development and reduction. Approaches to entrepreneurship  MICRO VIEW 1.The entrepreneurial trait school of thought 2.The venture opportunity school of thought 3.The strategic formulation school of thought Approaches to entrepreneurship 1. The entrepreneurial trait school of thought Is grounded in the study of successful people who tends to exhibit similar characteristics that, if copied, would increase successful opportunities for the emulators. Four factors usually exhibited by successful entrepreneurs Achievement Creativity Determination And technical knowledge Deals with the family development idea Focuses on the nurturing and support that exists within the home atmosphere Approaches to entrepreneurship  2. The venture opportunity school of thought Focuses on the opportunity aspect of venture development. The search for idea sources, the development of concepts and the implementation of venture opportunities are the important interest areas for this school. Creativity and market awareness are essential Approaches to entrepreneurship  3. The strategic formulation school of thought Leveraging of unique elements. Four major factors in considering the strategic formulation 1. Unique markets, 2. people, 3. products 4. unique resources are identified, used or constructed into effective venture formations Approaches to entrepreneurship  Characteristics elements 1. Unique markets. Mountain versus mountain gap strategies, which refers to identifying major market segments as well as interstice markets that arise from larger markets. 2. Unique people. Great chef strategies, which refers to the skills or special talents of one or more individuals around whom the venture is built. 3. Unique products. Better widget strategies, which refers to innovations that encompass new or existing markets 4. Unique resources. Water well strategies, which refers to the ability to gather or harness special resources (land, labor, capital, raw materials) over the long term Entrepreneurship: a mindset  2. Process approaches to entrepreneurship Process approaches to entrepreneurship  1. Integrative approach Focuses on and includes three factors 1.Inputs 2.Outputs 3.Entrepren eurial Process approaches to entrepreneurship  5 key elements Process approaches to entrepreneurship  1. Environmental opportunities Demographic change, the development of a new technology or a modification to current as a demographic change, the development of new technology or a modifications to current regulations. Process approaches to entrepreneurship  2. Individual entrepreneurship The person who assumes personal responsibility for conceptualizing and implementing a new venture. Process approaches to entrepreneurship  3. Business concept The entrepreneur develops type of business concept to capitalize on the opportunity. Process approaches to entrepreneurship 4. Organizational context Implementing this business concept typically requires some type of organizational context, which could range from a sole proprietorship run out of the entrepreneur’s home or a franchise of some national chain to an autonomous business unit within a large corporations Entrepreneurship: a mindset  5. Resources Financial and non financial resources are required on an ongoing basis. Entrepreneurship: a mindset  2. Entrepreneurial assessment approach a. Focuses on the entrepreneur, the venture, and environment b. Assessments are made qualitatively, quantitatively, strategically, and ethically c. Career stageearly, middle, or lateis also considered  3. Multidimensional approach a. Emphasizes the individual, the environment, the organization, and the venture process b. Dimensions that relate 1. The individual 2. The environment 3. The organization 4. The process c. Moves entrepreneurship from a segmented school of thought to a dynamic, interactive process approach