Entrepreneurship lecture ii

ENTREPRENEURSHIP LECTURE II

THE EVOLUTION AND CONCEPT OF ENTREPRENEURSHIP

The word comes from the French word

“entreprendre” – “to undertake” or “go-between”

THE EVOLUTION OF ENTREPRENEURSHIP

Who is an Entrepreneur?

The earliest use of the term expressed the sense of “middlemen”

who directed the resources provided by others.

Middle age: someone who managed large projects on behalf of a

landowner or the church, such as building of a cathedral or castle.

17th century - Entrepreneurs were those who contracted with the

state to perform certain duties such as the collection of revenues or

the operation of banking and trading service.

Here the term is extended to include some elements of risk and

profit.

THE EVOLUTION OF ENTREPRENEURSHIP

Today, an Entrepreneur is an Innovator, or developer

who recognises and seizes opportunities convert

those opportunities into workable/marketable ideas;

adds values through time, effort money or skills,

assumes the risk of competitive marketplace to

implement these ideas; and realises the rewards

from the efforts. (Kuratko & Hoggetts, 1989)

Who is an Entrepreneur?

J.B. Say, sees an Entrepreneur as “someone who consciously moves

economic resources from an area of lower productivity to an area of higher

productivity and greater yield”

Thus an entrepreneurs takes existing resources

People

Materials

Buildings

Money time

Redeploys them to make them productive and give them greater value.

Who is an Entrepreneur?

There is no universally, agreed definition of Entrepreneurship

and Entrepreneur.

According to Ranstadt (1984) “Entrepreneurship is the dynamic

process of creating incremental wealth”

This wealth is created by individuals who assume the major risk

in terms of equity, time and/or career commitment of providing

value for some products or services

The product or the service itself may or may not be new or

Unique but value must somehow be infused by the

Entrepreneur by securing and locating the necessary

skills and resources

WHAT IS ENTREPRENEURSHIP

According to Joseph Schumpeter (1951)

Entrepreneurship consists of doing things that are

not generally done in the ordinary course of

business routine; it is essentially a phenomenon

that comes under the wider aspect of leadership.

WHAT IS ENTREPRENEURSHIP

However according to Shapore (1975/1987) “in

almost all of the definitions of entrepreneurship,

there is the agreement that we are talking about a

kind of behaviour that includes:

I. Initiative taking

II. The organisation or reorganisation of social

economic mechanisms to turn resources and

situation to practical account, and

III. The acceptance of risk failure.

WHAT IS ENTREPRENEURSHIP

The ambition and desire to succeed

A need for independence

Vision, flair and imagination

Creative and innovative traits

Readiness to take risks

Perseverance – they never give up

Strategic thinkers –looking to the future

Set high standards for themselves and others

KEY ENTREPRENEUR TRAITS AND CHARACTERISTICS

There seem not to be a single “entrepreneur type” but there is a great deal of consistency in the way in which successful entrepreneurs approach their task.

Some of the characteristic exhibited by successful entrepreneurs are discussed as follows

CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR

Hard work:

Successful entrepreneurs put a lot of physical and mental

effort into developing their ventures. They often work long

and antisocial hours. After all, an entrepreneur is their own

most valuable asset. Balancing the needs of the venture with

other life commitments such as family and friends is one of

the great challenges which faces the entrepreneur

CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR

Self-starting

Entrepreneurs do not need to be told what to do. They identify tasks

for themselves and then follow them through without looking for

encouragement or direction from others.

Setting of personal goals

Entrepreneurs tend to set themselves clear, and demanding goals.

The embark their achievements against these personal goals. As a

result, entrepreneurs tend to work to internal standards rather than

look to others for assessment of their performance.

CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR

Resilience

Not everything goes right all the time. In fact, failure may be

experienced more often than success.

Entrepreneurs must not only pick themselves up after things

have gone wrong but must learn positively from the

experience and that learn to increase the chances of

success the next time

CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR

Confidence

The entrepreneur must demonstrate that they not

only believe in themselves but also in the venture

they are pursuing. After all, if they don’t who will?

CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR

Receptiveness to new ideas

The entrepreneur must not be overly confident. They must recognise

their own limitations and the possibilities that they have to improve

their skills. They must be willing to revise their ideas in the light of

new experience

One of the main reasons that banks and venture capitalists give for

not supporting a business proposal is that the entrepreneur was too

sure of themselves to be receptive to good advice when it is offered

CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR

Assertiveness Entrepreneurs are usually clear as to what they

want to gain from a situation and not frightened to express their wishes.

Being assertive does not mean a commitment to outcomes, not means. True assertiveness relies on mutual understanding and is founded on good communication skills.

CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR

Information seeking

Eager to learn

Attuned to opportunity

Receptive to change

Commitment to others

Comfort with power

CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR

1. Freedom to adopt my own

approach to work

2. To take advantage of an

opportunity

3. To control my own time

4. It made sense at that time

in my life (!)

5. Security for myself and

family

6. Flexible work-life balance

7. Desire to have high

earnings

8. Challenge

9. To achieve something and

get recognition

10. To continue learning

11. Respect of friends and

family

12. Tax avoidance

REASONS FOR STARTING A BUSINESS

1. Personal Freedom: entrepreneurs are not controlled by any

other managers in their organisations.

They set their own work schedule

Make their own decisions

Try out their own new ideas

Direct their energies to into business activities they deem fit.

2. Personal Satisfaction: Personal freedom leads to personal

satisfaction of doing what you enjoy each day. They would be in

control of their lives by controlling their business and their work

ADVANTAGES OF ENTREPRENEURSHIP

3. Increased Income: personal satisfaction leads to hard work and

working hard usually results in making more money.

4. Self Esteem: freedom, satisfaction and increased income add up

to a greater feeling of self-esteem.

ADVANTAGES OF ENTREPRENEURSHIP

DISADVANTAGES OF ENTREPRENEURSHIP