Table of Contents

Course Guide xi-xvi

Topic 1 Introduction to Entrepreneurship 1

1.1 The Evolution of Entrepreneurship 2
1.2 Concepts of Entrepreneurship 3
1.2.1 Entrepreneurship 3
1.2.2 Who are Entrepreneurs? 5
1.3 The Importance of Entrepreneurship 7
1.4 The Myth of Entrepreneurship 8
1.5 Development of Entrepreneurship in Malaysia 10
Summary 11
Key Terms 11

Topic 2 Identifying Entrepreneurial Characteristics 12

2.1 Characteristics of Successful Entrepreneurs 13
2.2 Self-assessment for Entrepreneurs 16
2.3 The Differences Amongst Businessmen, Managers and
Entrepreneurs 17
2.3.1 The Differences between a Businessman and an
Entrepreneur 17
2.3.2 The Differences between a Conventional Manager
and an Entrepreneur 18
Summary 19
Key Terms 20

Topic 3 Developing Entrepreneurial Creativity and Innovation 21

3.1 What is Creativity? 22
3.2 The Process of Creativity 23
3.3 Barriers to Creativity 25
3.4 How to Generate Creative Ideas 26
3.5 Characteristics of Creative Individuals 28
3.6 What is Innovation? 30
3.6.1 Types of Innovation 30
3.6.2 Sources of Innovation 31
3.6.3 Barriers to Innovation 33

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3.7 The Importance of Creativity and Innovation for

Entrepreneurs 34
3.8 Strategies to Encourage Creativity and Innovation 35
Summary 36
Key Terms 37

Topic 4 Ventures Environment Assessment 38

4.1 The Components of Ventures Environment 39
4.2 Macro Environment 41
4.2.1 Political and Legislation 42
4.2.2 Economy 44
4.2.3 Socio-cultural 45
4.2.4 Technology 46
4.3 Micro Environment 47
4.4 An Organisations Internal Environment 50
4.5 Identification of Business Opportunity 51
4.5.1 Recognition of an Opportunity: Phase of a Process
Perspective on Entrepreneurship 51
4.5.2 E-commerce as a New Opportunity 54
4.6 Evaluation of a Business Opportunity 54
4.6.1 The Magnitude of the Opportunity 56
4.6.2 Sources of Opportunities: The Origins of New
Ventures 57
4.6.3 Opportunities and New Firms 58
Summary 59
Key Terms 60

Topic 5 Business Plan 61

5.1 What is a Business Plan? 62
5.2 Importance of Business Plans 63
5.3 Who Needs Business Plans? 65
5.4 Essential Elements of Good Business Plans 67
5.5 Guidelines in Preparing Business Plans 70
5.6 Pitfalls to Avoid in Planning 71
Summary 72
Key Terms 72

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Topic 6 Starting a New Entrepreneurial Venture 73

6.1 Types of Business 74
6.2 Start-up 74
6.2.1 Definition of Start-up 74
6.2.2 Phases in Start-up 75
6.2.3 Advantages and Disadvantages of Start-up 76
6.3 Buying an Existing Business 77
6.3.1 Definition of Buying an Existing Business 77
6.3.2 Steps and Processes in Buying an Existing Business 78
6.3.3 Advantages of Buying an Existing Business 82
6.3.4 Disadvantages of Buying an Existing Business 83
6.4 Franchising 84
6.4.1 Definition of Franchising 84
6.4.2 Advantages of Franchising 85
6.4.3 Disadvantages of Franchising 86
6.5 Legal Structures for New Business 88
6.5.1 Sole Proprietorship 88
6.5.2 Partnership 90
6.5.3 Corporation 92
6.6 Sources of Capital for Business Activities 94
Summary 96
Key Terms 97

Topic 7 Entrepreneurial Networking 98

7.1 What is Networking? 98
7.2 Advantages of Having Good Networking 99
7.3 What is Strategic Networking? 99
7.4 Types of Networking 100
7.5 The Importance of Networking 101
7.6 How to Establish Strategic Networking for
Entrepreneurs 103
7.7 Entrepreneurs and Networking 104
7.8 Strategic Networking Consolidation 104
7.9 Techniques for Developing Confidence Among
Entrepreneurs 106
7.10 Barriers in Building Strategic Networks 108
Summary 112
Key Terms 113

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Topic 8 Evaluation of Entrepreneurial Opportunities 114

8.1 Pitfalls in Selecting New Ventures 115
8.2 Critical Factors for New Venture Development 117
8.3 Why New Ventures Fail 119
8.4 The Evaluation Process 120
Summary 123
Key Terms 124

Topic 9 Entrepreneur and Personal Financial Planning 125

9.1 Need for Personal Financial Planning 126
9.1.1 Steps in Financial Planning 126
9.1.2 Benefits of Financial Planning 127
9.1.3 Life Stages and Financial Goals 128
9.2 The Power of Money 129
9.2.1 How to Set Your Goals 129
9.2.2 An Important Goal Saving for Emergencies 131
9.2.3 Assets and Liabilities: What You Own and Owe 132
9.2.4 Knowing Your Net Worth 134
9.2.5 Deriving Your Net Worth 135
9.3 The Basics of Budgeting 136
9.3.1 Budgeting and Spending Plan 136
9.3.2 Tracking Your Cash Flow 138
9.4 Living Within Your Means 140
9.4.1 Knowing Your Needs and Wants 141
9.4.2 Spending Wisely 141
9.4.3 Delaying Gratification 142
9.5 Early Sign of Financial Trouble 142
9.6 Getting Out of Financial Trouble 144
9.6.1 Your Creditworthiness 144
9.6.2 What Can Happen 145
Summary 146
Key Terms 146

Topic 10 Achieving an Entrepreneur's Personal Financial Dreams 147

10.1 Entrepreneur Wealth Building 148
10.1.1 The Saving Habit 148
10.1.2 Increasing Net Worth via Saving and Investments 149
10.1.3 Types of Investment 152
10.2 Planning for Uncertainties 155
10.2.1 The Need of Getting Insured 156
10.2.2 Types of Insurance 157
10.2.3 Takaful 161

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10.3 Managing Debt: Borrowing Basics 164

10.3.1 Loans and Credit 164
10.3.2 Types of Loan 165
10.3.3 Types of Cards, Credit Trap and Tips on Using 171
Credit Card
10.3.4 Repayment and Default 174
Summary 176
Key Terms 177

Answers 178
References 196

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