ENTREPRENEURSHIP

TOPIC 1 : INTRODUCTION TO ENTREPRENEURSHIP

PREPARED BY:

ABD RAHMAN AHMAD FACULTY OF TECHNOLOGY MANAGEMENT

Entrepreneur Vs. Inventor

An inventor creates something for the first time. While the entrepreneur falls in love with the new venture, the inventor falls in love with the invention and often requires the expertise of an entrepreneur to launch a new venture.

Historians classify Albert Einstein as an inventive genius and Henry Ford as an entrepreneurial genius. Do you agree or disagree? Why?

Entrepreneurship Definition

French word entreprende meaning go between or enter to undertake. A person who undertakes to organize, manage and assume risks of business Our definition involves four aspects:
The creation process. The devotion of time and effort. The assumption of risk. Rewards of independence, satisfaction, money.

ENTREPRENEURSHIP DEFINITION

Entrepreneurship is the ability to create and build a vision from practically nothing: fundamentally it is a human, creative act. It is the application of energy to initiating and building an enterprise or organization, rather than just watching or analyzing. This vision requires a willingness to take calculated risks both personal and financial, and then to do everything possible to reduce the chances of failure.

Entrepreneurship also includes the ability to build an entrepreneurial or venture team to complement your own skills and talents. It is the knack for sensing an opportunity where others see chaos, contradiction, and confusion. It is possessing the know-how to find, marshal and control resources, often owned by others.

Timmons (1990)

Entrepreneurship Definition

Entrepreneurship:

is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence.

ENTREPRENEURSHIP DEFINITION Nature of Entrepreneurship

It is a socio-economic phenomenon.
Engine of economic growth Creator of wealth and employment.

What is entrepreneurship?

It is a creative and innovative human act. Ability to create and build a vision from practically nothing.

Vision requires willingness to take calculated risks.

It is a discipline, hence it can be learned Peter Drucker

Entrepreneurship Definition

Entrepreneurs: are individuals who actively form or lead their own business and nurture them for growth and prosperity (MEDEC,2004). Individual my be single or team of individuals or group. Entrepreneurship

is a process of creating and expanding business that collectively form a force for national development and societal prosperity (MEDEC, 2004).

Earlier Views on Entrepreneurship ( 1700-1950 an)

1776 Adam Smith (Theory:Wealth of Nations); enterprize as an individual who form an organization(s) for commercial purposes. 1803 Jean Babtiste Say (France); Entrepreneur is the organizer for the firm for investment purposes. 1848- Jhon Stuart Mill (England), Entrrepreneur as the founder of business or enterprize. 1871 Carl Menger (Austria); Entrepreneur as an agent of economic who transforms resources into products and services to be consumed by public.

Entrepreneur Attitudes and Discipline

1.

2.
3. 4. 5.

6.

1848 Mill 1934- Schumpeter 1954- Sutton 1961-Mc Clelland 1974- Borland 1978- Timmons

1. 2. 3. 4. 5. 6.

Risks taker Innovative, initiative Responsibilities Risks taker and look for achievement, Self Control Efforts, confident, objective, result oriented, risks taker, creative, innovative.

Difference Between Entrepreneurs and Employees Entrepreneurs Founder & Owner Take calculated risk All to gain & all to lose

Entrepreneurial Accountability for final outcome 3-M based Vision driven

Employees Worker & Employee Dont take much risk Gains through salary increment Managerial Accountability for all defined operations Time based Profession driven

DIFFERENCE BETWEEN ENTREPRENEURSHIP AND SMALL BUSINESS Entrepreneurship

Small Business

Innovation
Fast growth Vision

Little innovation
Static growth Little vision

Employment creation
Money making machine Higher risk

Family business
Earning a livelihood Low or minimum risk

WHY BECOME ENTREPRENEURS?

by design and default (inherited). Expected reward Deep interest Entrepreneurs are created in good and bad economic times - Creative Destruction. Challenges

Independence

Many begins but few make it big.

ENTREPRENEURSHIP STATISTICS Did You Know?

US Situation

About 1 million businesses are formed each year in the US Between 70 to 80% failed the first year of start-up

10% to 20% last through the next 5 years

Venture investment 1:10 success rate

Source : US Statistics

Types of Skills Required in Entrepreneurship

Technical
Writing Oral Communication Monitoring the Environment

Business Management
Planning Decision Making Human Relations

Personal
Inner Control Risk Taking Innovative

Using Technology

Marketing (Selling)

Changeoriented visionary

ENTREPRENEUR ARE MADE AND NOT BORN

The entrepreneurial mystique?

Its not magic, its not mysterious and it has nothing to do with the genes. It is a discipline. And like any discipline, it can be learned.

Peter Drucker

MALAYSIA: A MOST ENTERPRISING CULTURE AND NATION

Economic Paradigm Shifts 1950s to 2000s.

Wawasan 2020.
Ministry for Entrepreneurs Development. Multimedia Super Corridor 7 Flagships. MSC Status Privileges & Incentives. Economic Growth & Social Innovation Infrastructure Development. Kementerian Pembangunan Usahawan dan Koperasi

Islam & Entrepreneurship

Entrepreneurship is not against the teaching of islam. Islam is a way of life . Muamalat is included.. Business guidelines in Islam ( Al-Quran & Hadith) Business transactions guidelines ( muamalat) Permissible and Prohibited (halal & haram) Al-Baqarah vers:275 ( Allah allowed muslim to perfrom

business transactions but disallowed on riba)

The concept of qadha dan qadar

Islam encourage business 9/10 of the sources of wealth (rezeki) is from entrepreneurship.

Islam and Entrepreneurship

An Nisa : verse ,29

Wahai orang-orang yg beriman, janganlah kamu makan (gunakan) harta-harta kamu sesama kamu dengan jalan yang salah (tipu ,judi dan maksiat), kecuali dengan jalan perniagaan yang dilakukan cara suka sama suka dianara kamu, dan janganlah kamu berbunuh-bunuhan sesama sendiri; Kerana Allah sentiasa mengasihani kamu.

Al-Anam : verse, 152

Dan sempurnakanlah takaran dan timbangan dengan adil. Kami tidak memikul beban kepada sesorang melainkan sekadar kesanggupannya. Dan apabila kamu berkata, maka hendaklah kamu berlaku adil mesikipun dia adalah kerabat, dan penuhilah janji Allah.

Islam mengalakan penganutnya ber muamalat mengikut peratruran yang telah ditetapkan oleh Allah melalui Al-Quran dan Hadith nabi Muhammad S.A.W ( p.b.u.y)

MALAYSIA: A MOST ENTERPRISING CULTURE AND NATION

Knowledgebased goods & services

Agriculture-based led by Government Export textile & electronic goods

Export of rubber, tin, palm oil & timber

Manufacture of import substitution goods

Export high value added electrical & electronic goods

Knowledge Era Technology Era Industrial Era

1980s 1990s 2000s

Knowledge Driven

Agriculture Era
1960s

1970s

Labor Driven

Labor Driven

Investment Driven

Productivity Driven
Knowledge-based led by Private Enterprises

Entrepreneurial Decision Process refers to the decision to leave a present career or lifestyle (to pursue that big idea) due to:

Unpleasant work environment Disruption Completion of educational degree.

How will the completion of your educational program influence your entrepreneurial decision process? Got any big ideas?