Entrepreneurship and business management

Introduction to Entrepreneurship

1

Ayesha Khalil

Entrepreneurship

Quotations“Ideas are easy. Implementation is hard.”

“Any time is a good time to start a company.”

“High expectations are the key to everything.”

When you cease to dream you cease to live

The most valuable thing you can make is a mistake – you can’t learn anything from being perfect”

What is Entrepreneurship?

Entrepreneurs:-Risk-taking individuals who take actions to pursue opportunities and situations others may fail to recognize or may view as problems or threats.

Entrepreneurship:-Strategic thinking and risk-taking behaviour that results in the creation of new opportunities for individuals &/or organizations.

Corporate Entrepreneurship

Entrepreneurial Firms

Proactive Innovative Risk taking

Conservative Firms

Take a more “wait and see”

posture Less innovative Risk averse

The Entrepreneurial Process

The Entrepreneurial Process Consists of Four Steps Step 1: Deciding to become an entrepreneur.

Step 2: Developing successful business ideas.

Step 3: Moving from an idea to an entrepreneurial firm.

Step 4: Managing and growing the entrepreneurial firm

Wh

y En

trepren

eursh

ip?

Being

your Own Boss

• Self-management is the motivation that drives many entrepreneurs.

Financial Success

• Entrepreneurs are wealth creators.

Job Security

• Over the past ten years, large companies have eliminated more jobs than they have created.

Quality of Life

• Starting a business gives the founder some choice over when, where, and how to work.

New Idea

s

• Desire to pursue their

10

Characteristics of Successful Entrepreneurs

11

Entrepreneurship Myths

Myth 1: Entrepreneurs are born, not made.

Myth 2: It is necessary to have access to money to become an entrepreneur.

Myth 3: An entrepreneur takes a large or irrational risk in starting a business.

Myth 4: Most successful entrepreneurs start with a break-through invention.

Myth 5: Entrepreneurs become successful on their first venture.

.

Common Myths About Entrepreneurs

Optimistic disposition Persuasive Promoter Resource

assembler/leverager Self-confident Self-starter Tenacious Tolerant of ambiguity Visionary

A moderate risk taker A networker Achievement motivated Alert to opportunities Creative Decisive Energetic Has a strong work ethic Lengthy attention span

12

13

Myth 1: Entrepreneurs Are Born, Not Made

This myth is based on the mistaken belief that some people are genetically predisposed to be entrepreneurs.

The consensus of many studies is that no one is “born” to be an entrepreneur; everyone has the potential to become one.

Whether someone does or doesn’t become an entrepreneur is a function of their environment, life experiences, and personal choices.

14

Myth. 2: Entrepreneurs Are Gamblers

Most entrepreneurs are moderate risk takers.

The idea that entrepreneurs are gamblers originates from two sources:

Entrepreneurs typically have jobs that are less structured, and so they face a more uncertain set of possibilities than people in traditional jobs.

Many entrepreneurs have a strong need to achieve and set challenging goals, a behaviour that is often equated with risk taking.

15

Myth 3: Entrepreneurs Are Motivated Primarily by Money

While it is naïve to think that entrepreneurs don’t seek financial rewards, money is rarely the reason entrepreneurs start new firms.

In fact, some entrepreneurs warn that the pursuit of money can be distracting.

.

16

Myth 4: Entrepreneurs Should Be Young and Energetic

Entrepreneurial activity is fairly easily spread out over age ranges.

While it is important to be energetic, investors often cite the strength of the entrepreneur as their most important criteria in making investment decisions.

What makes an entrepreneur “strong” in the eyes of an investor is experience, maturity, a solid reputation, and a track record of success.

These criteria favour older rather than younger entrepreneurs

17

Personal traits and characteristics of entrepreneurs

18

How does one start a new venture?

Life cycle of entrepreneurial firms Birth stage Breakthrough stage Maturity stage

Each stage poses different managerial challenges and requires different

managerial competencies.

19

Stages in the life cycle of an entrepreneurial firm

Basic items that should be included in a business plan:

Executive summary Industry analysis Company description Product and services

description Market description

Marketing strategy Operations description Staffing description Financial projection Capital needs Milestones

20

21

Forms of legal ownership

Sole proprietorship

Partnership

General partnership

Limited partnership

Limited liability partnership

CorporationLimited liability corporation (LLC)

.

22

Legal Forms of Entrepreneurship

Proprietorship

business owned by an individual

Partnership association of two or more persons acting as co-owners of a business

Corporation legal entity separate from the individuals who own it

Prof Parameshwar P Iyer Indian Institute of Science

23

24

Financing the new venture

Sources of outside financingDebt financing

Equity financing

Equity financing alternativesVenture capitalists

Initial public offerings

Angel investors

25

Sources of outside financing

Debt Financing obtaining a commercial loan

setting up a plan to repay the principal and interest

Equity Financing raising money by selling part

ownership of the business to investors

Why Become an Entrepreneurs?,

Any Question?

Thank You