Entrepreneurship

MBA 206 Entrepreneurial Management and Social Responsibility --Part 1 Eli abet! "rescini Espinas

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Entrepreneurship A dynamic process of creating incremental wealth.

Thecapacity,devotionandwillingness todevelop,organizeandmanageabusiness venturealongwithanyofitsrisksinorderto makeaprofittogainpersonalsatisfaction.

Entrepreneurial Mindset
An entrepreneur is a person who has the ability to identify and evaluate business opportunities in the environment, gather resources to take advantage of opportunities and initiate appropriate actions for success
$ualities o% an Entrepreneur
"reati&e Persistent "ommitted 'ocused Ris#-ta#er (ood planner Persuasi&e "on%ident )ptimistic *ard+or#ing

S#ills Re,uired %or Entrepreneurs!ip

"reati&e S#ills Managerial #no+ledge -ec!nical #no+ledge (oal setting and planning s#ills "ommunication s#ills .et+or#ing and mar#eting s#ills Persuasi&e S#ills

EntrepreneurialMindset- in&ol&es t!e ability to rapidly sense/ act and mobili e e&en under uncertain conditions0
1ey Entrepreneurial Mindset 2

3nternal locus o% control - More in control t!an controlled0 4eaders!ip o% t!e sel%0 -olerance %or ambiguity -4eading in t!e midst o% c!aos and uncertainty and see opportunities
ot!ers don5t see0 +ea#nesses

6illingness to !ire people smarter t!an onesel% - *ire to complement sel% identi%ied "onsistent dri&e to create/ build or c!ange t!ings - Set t!e pace %or leading t!e business/
Sel% imposed momentum and t!e Energy to c!ange 7not 8ust in&ent9 t!ings2 Most entrepreneurial leaders c!ange/ not in&ent/ t!ings and "!ange re,uires moti&ation and leaders!ip

Passion %or an opportunity --energi es ot!ers +it! demonstration o% de&otion Sense o% urgency :ust do it attitude and sel% imposed deadlines Perse&erance t!is is a by product o% passion and sense o% urgency Resilience )ptimism Sense o% !umor about onesel%

Theories, Principles & Practices in Entrepreneurship

;arious +riters !a&e de&eloped di%%erent t!eories on entrepreneurs!ip and populari ed t!e concept among common people0 -!e t!eories propounded by t!em can be categori ed under2 SociologicalTheory Ma< 6eber --sociological t!eory !eld religion as t!e ma8or dri&er o% entrepreneurs!ip/ and stressed on t!e spirit o% capitalism/ +!ic! !ig!lig!ts economic %reedom and pri&ate enterprise0 "apitalism t!ri&es under t!e protestant +or# et!ic t!at !arps on t!ese &alues0 -!e rig!t combination o% discipline and an ad&enturous %ree-spirit de%ine t!e success%ul entrepreneur0 E&erett *agen -- t!eory o% social c!ange propounded !o+ a traditional society becomes one in +!ic! continuing tec!nical progress ta#es place0 -!e t!eory e<!orts t!e %ollo+ing %eature +!ic! presumes t!e entrepreneurs creati&ity as t!e #ey element o% social trans%ormation and economic gro+t!0

EconomicTheory
Entrepreneurs!ip and economic de&elopment are interdependent0
Entrepreneurs!ip and economic gro+t! ta#e place +!en t!e economic conditions are

%a&orable0
Economic incenti&es are t!e main moti&ators %or entrepreneurial acti&ities0 Economic incenti&es include ta<ation policy/ industrial policy/ sources o% %inance and ra+

material/ in%rastructure a&ailability/ in&estment and mar#eting opportunities/ access to in%ormation about mar#et conditions/ tec!nology etc :osep! Sc!umpeter5s inno&ation t!eory o% entrepreneurs!ip !olds an entrepreneur as one !a&ing t!ree ma8or c!aracteristics2 inno&ation/ %oresig!t/ and creati&ity0 Entrepreneurs!ip ta#es place +!en t!e entrepreneur creates a ne+ product/ introduces a ne+ +ay to ma#e a product/ disco&ers a ne+ mar#et %or a product/ %inds a ne+ source o% ra+ material and %inds ne+ +ay o% ma#ing t!ings or organi ation0 (i&ing emp!asis on t!e role o% entrepreneurs in economic de&elopment/ in !is &ie+ de&elopment means basic trans%ormation o% t!e economy t!at is broug!t about by entrepreneurial %unctions0 3t lays t!at entrepreneur played central part in rise o% modern capitalism0 Entrepreneurs are t!e prime mo&er o% economic de&elopment0 Mar# "asson !olds t!at entrepreneurs!ip is a result o% conduci&e economic conditions --demand %or entrepreneurs!ip arising %rom t!e demand %or c!ange0

CulturalTheory Ad&ocates o% cultural t!eories point out t!at entrepreneurs!ip is t!e product o% culture0 Entrepreneurial talents come %rom cultural &alues and system embedded into t!e cultural en&ironment0

*oselit -!eory e<plains t!at t!e supply o% entrepreneurs!ip is go&erned by cultural %actors and t!at cultural minority groups are t!e spar# plugs o% entrepreneurial and economic de&elopment in many countries0 Entrepreneurs !a&e emerged %rom a particular socio-economic class0 *e emp!asi ed t!e role o% culturally marginal groups li#e :e+s and (ree#s in medie&al Europe/ t!e "!inese in Sout! A%rica and t!e 3ndians in East A%rica in promoting economic de&elopment0 -!omas "oc!ran5s -!eory o% "ultural ;alues - Entrepreneurs are not super normal indi&idual but t!ey are society5s modal0 personality

sychologicalTheory -!ese t!eories centers around t!e psyc!ological c!aracteristics o% t!e indi&iduals in a society0 -!ese c!aracteristics a%%ects t!e supply o% t!e entrepreneur in t!e society0
Entrepreneurs!ip gets a boost +!en society !as su%%icient supply o% indi&iduals

+it! necessary psyc!ological c!aracteristics

-!e psyc!ological c!aracteristics include need %or !ig! ac!ie&ement/ a &ision or %oresig!t/

ability to %ace opposition

-!ese c!aracteristics are %ormed during t!e indi&idual5s upbringing +!ic! stress on

standards o% e<cellence/ sel% reliance and lo+ %at!er dominance Peter =ruc#er !olds inno&ation/ resources/ and an entrepreneurial be!a&ior as t!e #eys to entrepreneurs!ip0 =a&id Mc"lelland5s >Ac!ie&ement Moti&ation -!eory? considers entrepreneurs as people +!o do t!ings in a better +ay and ma#es decisions in times o% uncertainty0 -!e dream to ac!ie&e big t!ings o&erpo+ers monetary or ot!er e<ternal incenti&es0
'0A06al#er5s >-rait -!eory o% Entrepreneurs!ip? belie&ed in t!e indi&iduals traits@capacities as t!e main determinant %or entrepreneurial gro+t!

Entrepreneurial Process
A P!ases
10 3denti%ication and e&aluation o% t!e opportunity 20 =e&elopment o% t!e business plan B0 =etermination o% t!e re,uired resources A0 Management o% t!e resulting enterprise0

!dentifyand Evaluate "pportunity

)pportunity Assessment "reation C lengt! o% opportunity Real C percei&ed &alue o% opportunity Ris#s C returns o% t!e opportunity )pportunity &s0 personal s#ills and goals "ompetiti&e en&ironment

#evelopa$usiness lan
-itle page -able o% "ontents E<ecuti&e Summary Ma8or Section 10 =escription o% Business 20 =escription o% 3ndustry B0 -ec!nology Plan A0 Mar#eting Plan E0 'inancial Plan 60 Production Plan F0 )rgani ational Plan G0)perational Plan H0 Summary Appendi<es 7e<!ibits9

%esources %e&uired
=etermine Resources needed =etermine e<isting resources 3denti%y resource gaps C a&ailable suppliers =e&elop access to needed resources

Managethe Enterprise
=e&elop management style Dnderstand #ey &ariables %or success 3denti%y problems and potential problems 3mplement control systems =e&elop gro+t! strategy

Steps in Starting a usiness

'ayingtheStartup(roundwork)So +!at are all o% t!e t!ings you s!ould consider +!en launc!ing your ne+ brainc!ildI
a. b0 c0 d0 e0

-!e 3dea P!ase - ans+ering t!e ,uestions2 J*o+ can 3 impro&e on t!isIJ or J"an 3 do t!is better or di%%erently %rom t!e ot!er guy doing it o&er t!ereIJ )r simply/ J3s t!ere mar#et s!are not being ser&ed t!at ma#es room %or anot!er business in t!is categoryI> 'ind t!e Best 4ocation - "!ec# Kour =emograp!ics 'ind Product Sources - 4ocate suppliers =ecide on t!e Business Structure .ame Kour Business - -!e rig!t name can ma#e your company t!e tal# o% t!e to+n0 -!e +rong one can doom it to obscurity and %ailure0 3deally/ your name s!ould con&ey t!e e<pertise/ &alue and uni,ueness o% t!e product or ser&ice you !a&e de&eloped0 lanningforaSuccessfulStart)Kour business plan does not need to be comple< but it is necessary0

%0 g0 10 20 B0 A0 E0 60 F0

Plan your plan )Be%ore you put pen to paper/ assess %irst your businessLs goals and ob8ecti&es0 Start your Business Plan and "onduct a Mar#et Analysis %or Kour Business Plan --)ne o% t!e most critical sections o% your business plan is your mar#et analysis0 -!is +ill !elp you %ind in%ormation you need to #no+ about your potential customers0 A business plan consists o% se&en #ey components2 E<ecuti&e summary Business description Mar#et strategies "ompetiti&e analysis =esign and de&elopment plan )perations and management plan 'inancial %actors

%aisingCapital)3% you !a&e it/ you can al+ays in&est your o+n %unds/ but i% youLre li#e most/ youLll need a little !elp0 a0 Be Realistic About Startup 'inancing DS setting go&ernment %unding/ &enture capitals/ and angel in&estors0 P!ilippine setting/ personal sa&ings and@ or ban# loans0 Establishing*our!mage)Kou may !a&e a great idea/ product or superior ser&ice/ but !a&e you t!oug!t about +!at image your startup +ill ta#e onI )%ten t!e di%%erence bet+een success and %ailure is creating a brand t!at consumers +ill recogni e0 b0 =e&elop a Mar#eting Plan -- -est your mar#eting ideas in small batc!es/ 4e&erage your customersL %eedbac# and Be prepared to c!ange gears ,uic#ly0 +indingCustomers)6it!out customers/ it doesnLt matter !o+ great your product is/ !o+ +ell you branded you are/ or !o+ +ell %unded your start-up is0 4earn !o+ to get your product to mar#et/ target your audience and build a customer base0 CreateaSales lan . Sales goals2 -!ese goals s!ould be speci%ic and measurable/ not somet!ing li#e selling a million units0 Base t!em on t!e nature o% your product and try to brea# t!em do+n into manageable parts0 . Sales acti&ities2 -!ese are your tactics--!o+ you plan to ma#e t!e sale0 Kou may say youLll sell direct-to-consumer t!roug! a +ebsite or &ia cra%t s!o+s/ %or instance0 )r t!is part o% t!e plan may include acti&ities li#e de&eloping a sell s!eet to send to independent retail stores0 . -arget accounts2 Kour sales plan s!ould also include t!e accounts you +ant to sell to0 3% itLs end-users/ %or e<ample/ plan !o+ youLre going to reac! t!em t!roug! eBay/ classi%ied ads or your +ebsite0 . -imelines2 Put dates to all o% t!e abo&e elements so you can de%ine your steps +it!in a realistic timeline0 =onLt %orget t!at your timelines s!ould be %luid--i% youLre underac!ie&ing/ your sales plan can !elp you %igure out +!y and de%ine t!e correcti&e steps you need to ta#e0 $uild*ourMarket)-o learn !o+ to bring a product to mar#et/ begin by selling directly to end-users0 -!e +eb is one !ig!ly e%%ecti&e c!annel/ and you can reac! your mar#et t!roug! your o+n +ebsite or &ia a site li#e eBay0 Kou can also tap into your o+n personal net+or# as you begin0 *ost a !ome party to s!are your product +it! %riends and %riends-o%-%riends/ sell t!roug! local community groups and e-mail your net+or#0

Re%erences
Meyer / 6ally 0 >Synergies bet+een leaders!ip and entrepreneurs!ip? .o&ember 1H/ 200G *isric!/ Robert0 >Entrepreneurs!ip > Mcgra+ *ill Publication/ 2010 !ttp2@@+++0brig!t!ub0com@o%%ice@entrepreneurs@articles@FGB6A0asp< !ttp2@@+++0po+ers!o+0com@&ie+@FA%bBK-d!.@-!eMEntrepreneurialMMindsetMpo+erpointMpptMpresentation Stan%ord Business Symposium >=o Kou *a&e 6!at 3t -a#es to Be an EntrepreneurI 7Panel9? - !ttp2@@ +++0youtube0com@+atc!I&N 6GeB6bn8.# !ttp2@@entrepreneurs!ip0ber#eley0edu@resources@BPSMBusinessMModelingM12M6M110pd% !ttp2@@+++0entrepreneur0com@!o+to@startyourbi 0!tml