Entrepreneurship

Introduction to Entrepreneurship and Small firms

Topics
Introduction of Entrepreneurship

History of Entrepreneurship
Importance of Entrepreneurship Definitions of Entrepreneurship Characteristics of Entrepreneurship Defining small firms why these firms

are

different?

Learning objectives
To give the introduction of Entrepreneurship.
To understand the term Entrepreneurship through

definitions. To explain the history of Entrepreneurship. To give brief importance of Entrepreneurship. To explain the different characteristics of successful Entrepreneurs. To give overview of small firms and why small firms are different.

Ask your self

Who are they?
Are they born or made? What is their link to the process of innovation? Can entrepreneurs manage large firms or do they have

to change as business grows Are entrepreneurs any different than managers? Are they any different from owner manager? Can entrepreneurship be engendered in large companies or other sorts of organizations

Entrepreneurship
Most of what you hear about entrepreneurship is all wrong. Its not magic; its not mysterious; and it has nothing to do with genes. Its a discipline and, like any discipline, it can be learned.

Peter F. Drucker

Introduction Of Entrepreneur
The Entrepreneur is one who is willing to bear the risk of a new

venture if there is a significant chance for profit. An Entrepreneur is being called so when he initiates, conceptualize and materialize a business process which is entirely unique. An Entrepreneur is someone who starts a business from a fresh idea and makes it work.

History of Entrepreneurship
The word Entrepreneurship is derived from the French verb ENTERPRENDRE- to undertake . The French men who organized and led military expeditions in the early 16th Century were referred to as Entrepreneurs. 17th Century Developed in 17th century Being a person who entered into contractual arrangement with the Government to perform a service or to supply stipulated products Contract prices was fixed, any resulting profits or losses were entrepreneurs 18th Century Person with capital was differentiated from who needed capital Industrialization occurring throughout the world Eg. Thomas Edison (Electronics)

19th and 20th Century In late 19th & early 20th centuries entrepreneurs were frequently not distinguished from managers and were reviewed mostly from an economic perspective Entrepreneur organizes and operates an enterprise for personal gain He pays current price for the material consumed in the business He contributes his own initiative, skills and ingenuity in planning, organizing and administering the enterprise He also assumes the chances of loss and gain consequent to unforeseen and uncontrollable circumstances

Importance of Entrepreneur
Entrepreneur role as a innovator who market his Innovation. Entrepreneurs are those individuals who takes the risks and start something new. Entrepreneur develop new goods or processes that the market demands are not currently being supplied.

Definitions of Entrepreneurship
Entrepreneurship is an individual that organize, operates and takes on the risks of business. OR Process of creating something new value by devoting the necessary time assuming the accompanying financial psychic and social risks and receiving the resulting rewards of monetary and personal satisfaction and independence.

Entrepreneurs
Entrepreneurs use innovation to exploit or create change and opportunity for the purpose of making profit. They do this by shifting economic resources from an area of lower productivity into an area of higher productivity and greater yield, accepting a high degree of risk and uncertainty in doing so.

Entrepreneur ,owner manager and manager

Entrepreneur who starts the business from scratch. for

example, initiating the plan , materializing and implementing and also creating brand for his products and services. in simple words entrepreneur who run the business in a unique form Owner-manager who follow up the market trying to capture the existing customers by doing some additional or value added services in the existing products and services category. Managers of firms do not own or control the firm they are employed by. The firm is controlled by its larger, parent company.

 Managers are different people from owner-managers,

but both can be entrepreneurs. Figure below shows these relationships. Managers are different people from owner-managers, but both can be entrepreneurs
Ownermanagers
Managers

Entrepreneurs

Characteristics of successful Entrepreneur

Mental Ability Entrepreneur must have creative thinking and must be

able to analyze problems and situations. He should be able to anticipate changes. Business Secrecy He should guard his business secrets from his competitors. Clear Objectives He must have clear objectives as to the exact nature of business or the nature of goods to be produced. Human Relations He must maintain good relation with his customers, employees, etc. To maintain good relationship he should have emotional stability, personal relations, tactfulness and consideration. Communication Ability He should have good communication skills means both the sender and the receiver should understand each others message. Technical Knowledge He should have sufficient technical knowledge.

Cont.
Long term involvement An entrepreneur must be committed

to the project. Motivator Moderate risk taker Initiative High energy level He should be able to work for long hours, for which his energy level should be high. Goal setter Self confidence

Entrepreneurial Enterprises
Many entrepreneur want to start and run their own

enterprise, make it successful and stick with it for life. Other want to become a serial entrepreneur-those are the people who understand that their forte is starting businesses.

Types of Entrepreneurs
Serial Entrepreneurs
Opportunity Entrepreneurs Necessity Entrepreneurs Social Entrepreneurs

Intrapreneur A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation. Intrapreneurs have entrepreneurial skills blended with managerial skills but operate within the confines of an organization. Intrepreneur One who sets up, maintains and assumes the financial risks of an Internet business venture not to be confused with intrapreneur or the more traditional entrepreneur.

What keeps most people away from becoming entrepreneurs?

 Funding
Manpower Strong backing Branding/Marketing Fear

Failures of Entrepreneurial Ventures

Multiple factors involved in the failure of entrepreneurial ventures: Bad Management Technical difficulty/ failure Insufficient fund Too much competition Research gap

Defining small firms

A small firms is not just about size, its in simple statistical terms. These firms have some important characteristics: ( Less than 500 employees) Market influence Independence Personal influence

The rise of Small Firms

People expect companies to address their particular

needs. People want to control their own destinies Market niches are becoming slimmer and markets more competitive.

Important Statistics
In Italy 79% of employment in generated by small

firms In France 63% In UK 62% In Germany 60% Over all in the EU they generate 66% of employment.

Why small firms are different.

The small firms are distinguish between two categories: Life style firms Growth firms

Eight reasons why many small businesses fail

26

How to become a Successful Entrepreneurship

Find a simple solution to a big problem
Take your hobby as a business Always find a cheaper way to do something Have a personal blog to bran yourself and your

business.

Definition

Importance

SESSION: 1

History

16th century

17th century

18th

century

19th & 20th century

Introduction to Entrepreneurship

Entrepreneur

Owner Manager

Manager

Characteristi cs of Entrepreneur s

Mental Ability Long term involvement

Business Secrecy

Clear Objectives Moderate risk taker

Human Relations

Communicat Technical ion Ability Knowledge High energy level

Motivator

Initiative

Goal setter

How to Become Successful Entrepreneur