Module 1

ntrepreneurship
ntroduction to Entrepreneurship

Simple Definition
–Process of creating
something new and
assuming the risks and
rewards.
Robert D.Hisrich, M.P.Peters &
D.A.Shepherd
What are the different outcomes of engaging in
Entrepreneurship?

– Innovation or newness – product or service.

– Organizing resources – finance, people, physical and

information resource.

– Creating new product or service.

– Generating wealth

– Taking risk in a business venture.

– Prepared to face uncertainty.

– Create job opportunity

– Increase the abundance of wealth generation for the

The Role of Entrepreneurship in
Economic Growth.

In order for Entrepreneurs to

thrive in a nation, the
Government must play important
role in creating the kind of
business environment that create
the basis for growth, stability and
future success of entrepreneurs.
The Role of Entrepreneurship in
Economic Growth.
•Increasing the per capita output and income of the people of
the country.
•Initiating and creating change in the structure of business
and society. Further growth and increased output arises, thus
to enable more wealth to be divided among the various
participants ( stakeholders).
•Generation of innovation that leads to the creation of new
product and service.
•Improvisation and modification on existing product to better
suit market and customers’ needs.
•Creation of self employment and to cut back the dependency
of potential employment of new workers in government
sectors.
•Streamline of the private sector and encourage the inclusion
of new technology that is less labour dependent.
•Increase in the national output which in turn lead to greater
and stronger economic growth.
The Role of Entrepreneurship in
Economic Growth.
•Acting as a catalyst to nurture intrapreneurs and corporate
entrepreneurs in a business organization.
•Providing Government grant and subsidy to existing and would be
entrepreneurs to aid their business development.
•Providing Entrepreneurs in the SMI/SME various types of business
loans to act as an impetus for business and economic growth in the
nation. To facilitate this various business developments of
entrepreneurs, Commercial Banks, SME Bank, EXIM Bank, and many
more provide the support.
•Government decision to engage both would be bumiputra and non-
bumiputra in various entrepreneurship development schemes.
•Providing knowledge and information through seminars, conferences,
exhibitions, various business, small business and entrepreneurial
business e-portals.
•Providing of various financial, information resources support from
various government agencies and national corporations
The Entrepreneurial Process

•The process of pursuing (going

after) a new venture or
business,
•Whether it is a new product
going into an existing market
(or)
•Existing product going into a
new markets (or)
•The creation of a totally new
First Entrepreneurial Process:
– Creation Process – creating something new of
value.

Second Entrepreneurial Process:

– Requires the commitment of the necessary
time and effort. Appreciate and understand the
importance of time and effort devoted to create
something new and make it workable.

Third Entrepreneurial Process:

– Involves the enjoyment of the rewards
(Freedom, monetary) after the effort, followed
 Four distinct process of
Entrepreneurial Process
– Identification and evaluation of the
opportunity.

–Development of the Business Plan.

–Determination of the required resources

–Management of the resulting enterprise.

Benefits of Entrepreneurship
1. Opportunity to create your own destiny
1. Owning a business provides an entrepreneurs the
independence and the opportunity to achieve what is
important to them.
2. Entrepreneurs want to decide what they want in their
lives, and they use their businesses to make their desire a
reality (come true).
2. Opportunity to make a Difference
1. More and more entrepreneurs are starting businesses
because they see this as an opportunity to make a
difference in a route or way that is personally important
to them.
3. Opportunity to reach your full potential
1. Many people find their work not challenging and not
exciting.
2. For entrepreneurs there is little difference between work
and play.
Benefits of Entrepreneurship
1. Opportunity to reap extraordinary profits.
1. The profit earned by an entrepreneur are an important
motivation and indication factor for further increased
performance. Thus these could spur them to greater
achievement and success.
2. Societal Responsibility and Recognition
1. Small business owners are among the most admired, respected
and trusted individuals of society.
2. Customers have shown their trust and faithfulness over their
years for their business.
3. Help to contribute employment, business opportunity in a
particular locality or area
3. Opportunity to engage in work of their choice
1. Small business owners tend to engage in business that gives
them personal satisfaction.
2. Though they may work long hours and engage in very
industrious work that is beneficial to their organization and
themselves.
The Drawbacks of Entrepreneurship

1. Uncertainty of Income
1. Opening and a running a business provides no guarantee that
an entrepreneur will earn enough money and survive.
2. Engaging in the wrong business and not able gain an
advantage in the short run and eventually in the long run can
be disastrous.
3. Great effort and proper and effective management need to
used in beginning to ensure the organization success

2. Risk of losing your entire Investment

1. Small business have a high failure rate.
2. Though is successful initially it faces financial difficulty within
the next five years.
3. Entrepreneurs must be prepared to face the consequence of
failure.
4. Entrepreneurs must have acute sense of observation and be
able to detect the early signs of failure.
5. If a business fails the entrepreneur must have a contingency
plan to overcome a bankruptcy or personal failure
The Drawbacks of
1. Long Hours and Hard Work
Entrepreneurship
1. Entrepreneurs tend to be generally workaholic, and under
tremendous pressure to produce the result they expect.
2. Entrepreneurs seldom find time to be away from the business but
tend to pour all their effort and resources to achieve their personal
entrepreneurial objective.
3. Some even go to extent of making big sacrifice and deprive
themselves of a personal life, wife and children and social and
family associates.
2. Lower Quality of Life until the business get established
1. In order for the business to be successful the entrepreneur must
engage himself to produce the kind of result he expects.
2. He cannot rest on his laurels (take it easy) until and certain the
business has stabilized and established
3. High level of stress
1. Starting the business can be very rewarding experience, but it can
be stressful.
2. An entrepreneur have left the comfort and security of secured job
to venture into their own business.
3. Failure can bring about tremendous personal failure, and in turn
creates intense levels of anxiety and stress.
4. Financial burden may increase and the entrepreneur may face
The Drawbacks of Entrepreneurship
1. Complete Responsibility
1. Must be prepared to make decision that are unfavourable
(swallow the bitter pill).
2. Must make decision in areas that the entrepreneur is not
familiar at all.
3. Fear of making decision that can have a devastating effect
on the business and its people.
4. Tremendous pressure to perform as the entrepreneur is too
deeply engaged in the business
2. Discouragement
3. To undertake a business requires a lot of dedication, discipline
and tenacity.
4. During running the business they will face many difficulties,
obstacles which may difficult to overcome.
5. Further difficulties, discouragement and disillusionment are
common emotions.
6. Successful entrepreneurs escape through rough times or
difficult times through sheer hard work, self confidence and full
en Deadly Mistakes of Entrepreneurship

1.Management Mistakes
2.Lack of Experience
3.Poor financial control
4.Weak marketing efforts
5.Failure to develop a strategic and
effective plan
6.Uncontrolled Growth
7.Poor location
8.Improper inventory control
9.Incorrect or unsuitable pricing
10.The inability of to move into
entrepreneurial thinking mindset
 How to avoid failure in a Entrepreneurial
business.
1.Know your business in depth.
2.Develop a good, effective and solid
Business Plan.
3.Manage your financial resources
effectively.
4.Have a thorough and complete
financial statement.
5.Learn hire and manage people
effectively.
6.Keep physically fit, consume healthy
foods, and avoid addictive
Main features of entrepreneurship

1.An economic activity

2.A Creative activity
3.An innovative function
4.A dynamic process
5.An organizing function
6.A risk bearing function
7.A gap filling function
8.A goal oriented activity
Basic components of entrepreneurship

1.Technology ( men, management,

methods)

2.Finance ( money, material,

machine)

3.Sales and marketing ( market)

aracteristics of Entrepreneurs

1.Economic and dynamic

activity

2.Related to innovation

3.Profit potential

4.Risk bearing
Entrepreneurial Process
hallenges of Entrepreneurship
1.Insufficient Capital
2.Weak Management
3.Ineffective Marketing
4.Addressing the Problems
5.Policy Challenges
6.Technological challenges
7.Socio-cultural challenges
Who is an Entrepreneur?

One who creates a new

business in the face of risk and
uncertainty for the purpose of
achieving profit and growth by
identifying and assembling the
necessary resources to capitalize
on them.
Characteristics of Entrepreneu

1. Desire for responsibility

2. Preference for moderate risk
3. Confidence in their ability to
succeed
4. Desire for immediate feedback
5. High level of energy
6. Future orientation
7. Skilled at organizing
8. Value achievement over
unctions of Entrepreneur

•Innovation
•Risk Taking
•Organization Building
•Absorb uncertainty
•Frame the Challenge
•Build Commitment
ntrepreneurs...Traits
•Self-confident and optimistic
•Able to take calculated risk
•Respond positively to changes
•Flexible and able to adapt
•Knowledgeable of markets
•Able to get along well with
others
•Independent minded
Entrepreneurs...Traits
(continued)
•Energetic and diligent
•Creative, need to achieve
•Dynamic Leader
•Responsive to suggestions
•Take initiatives
•Resourceful and persevering
•Perceptive with foresight
Personal traits and characteristics of
Entrepreneurs.
FACTORS RESPONSIBLE
FOR ENTREPRENEURS

1. INTERNAL
FACTORS

2. EXTERNAL
INTERNAL FACTORS

1. Desire to do something
new

2. Educational
Background

3. Experience
EXTERNAL FACORS

1.Govt. assistance and

support
2.Availability of labor and
raw material
3.Encouragement from big
business houses
4.Promising demand for the
TYPES OF
ENTREPRENEUR
•According to the type of
business
•According to the use of
technology
•According to the motivation
•According to the growth
•According to the area
•According to the gender &
ype of Business
1.Business Entrepreneur (individuals who conceive an
idea for a new product or service & then create a
business to materialize their idea.)
2.Trading Entrepreneur (Is one who undertakes trading
activities & is not concerned with the manufacturing
work)
3.Industrial Entrepreneur (a manufacturer who
identifies the potential needs of customers & tailors a
product to meet the marketing needs)
4.Corporate Entrepreneur (Is a person who
demonstrates his innovative skill in organizing &
managing corporate undertaking)
5.Agricultural Entrepreneur (Is one who undertake
agricultural activities as raising & marketing of crops,
fertilizers & other input.)
Use of Technology

1. Technical Entrepreneur (he

demonstrates his innovative capabilities
in matter of production of goods &
rendering services)
2. Non- Technical Entrepreneur
(concerned only with developing
alternatives marketing & distribution
strategies to promote their business)
3. Professional Entrepreneur (a person
who is interested in establishing the
business but does not have interest in
According to
Motivation
1.Pure Entrepreneur (an individual who
is motivated by psychological & economic
rewards)
2.Induced Entrepreneur (is one who
induced to take up entrepreneurial task
due to the policy measures of the Govt.)
3.Motivated Entrepreneur (they are
motivated by the desire of self fulfilment)
4.Spontaneous Entrepreneur (those
who start their business their by natural
talents
According to area
1.Urban Entrepreneur

2.Rural Entrepreneur

According to gender &

age
1. Men Entrepreneur
According to scale of
operation

1.Small scale
Entrepreneur

2.Large scale
Entrepreneur
Classification of
Entrepreneurs
1.Innovating Entrepreneurs
2.Imitative Entrepreneurs

3.Fabian Entrepreneurs

4.Drone Entrepreneurs

5.Social Entrepreneurs
Differences Between ‘Entrepreneurs’and
‘Employees’
1.Entrepreneurs improve their skills; employees
improve their weaknesses
2.Entrepreneurs say 'no' to opportunities;
employees embrace them
3.Entrepreneurs delegate; employees practice
'DIY
4.Entrepreneurs may produce lousy work;
employees are perfectionists
5.Entrepreneurs mono-task; employees (try to)
multitask.
6.Entrepreneurs thrive on risk; employees avoid it
7.Entrepreneurs believe in seasons; employees
believe in balance
 12 Important Differences Between
Employees and Entrepreneurs
1. Employees think without starting. Entrepreneurs start without
thinking.
2. Employees wait for the right time. Entrepreneurs make without
thinking about the right time.
3. Employees aim for the promotion in their company. Entrepreneurs
aim for the promotion in their business.
4. Employees dream their plans. Entrepreneur plan their dreams.
5. Employees think ‘Money is everything’. Entrepreneurs know ‘Time
is everything’.
6. With Employees, frustration is permanent. With Entrepreneurs,
frustration is temporary.
7. Employees are insecure about their freedom. Entrepreneurs free
themselves from all their insecurities. 
8. Employees work hard. Entrepreneurs work smartly.
9. Employees fall under a particular job category. Entrepreneurs
create their own profile.
10.Employees blame others. Entrepreneurs correct themselves.
11.Employees look holidays as a relief. Entrepreneurs look holidays
ntrepreneur Vs. Entrepreneurshi
Entrepreneur Entrepreneurship
Entrepreneur is a person. Entrepreneurship is a process.

Entrepreneur is an organizer. Entrepreneurship is an organization.

Entrepreneur is an innovator. Entrepreneurship is an innovation.

Entrepreneur is a risk bearer. Entrepreneurship is risk bearing.

Entrepreneur is a motivator. Entrepreneurship is motivation.

Entrepreneur is a creator. Entrepreneurship is a creation.

Entrepreneur is a visualizer. Entrepreneurship is a vision.

Entrepreneur is a leader. Entrepreneurship is leadership.

Entrepreneur is an imitator. Entrepreneurship is an imitation.