DPB2012 ENTREPRENEURSHIP

INTRODUCTION TO ENTREPRENEURSHIP

LEARNING OUTCOME :

At the end of this chapter, student will be able to

1. Explain the overview of entrepreneurship.

2. Define the terms ‘entrepreneur’ and ‘entrepreneurship’.

3. Explain the differences between an entrepreneur and a small businessman.

4. Describe the competencies of successful entrepreneurs.

5. Explain the concept of e-business.

6. Explain the overview of business plan.

OVERVIEW OF

ENTREPRENEURSHIP

ENTREPRENEUR

The word ‘entrepreneur’ is derived from the French word entreprendre which means ‘to undertake’ or ‘to try’.

A person who undertakes and operates a new enterprise or venture, and assumes accountability for the inherent risks.

An entrepreneur is an individual who organizes, manages, and assumes the risks of a business (Kuratko and Hodgetts, 2001).

Someone who establishes a new entity to offer a new or existing product or service into a new or existing market, whether it is for a profitable or non-profitable outcome.

ENTREPRENEURSHIP

The process of seeking businesses opportunities under conditions of risk.

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

Entrepreneurship is the process, and the entrepreneur is an innovator who uses the process to challenge existing norms via combinations of new resources and methods in commerce.

DIFFERENCES BETWEEN AN ENTREPRENEUR AND A SMALL BUSINESSMAN

Characteristics

Entrepreneur Small Businessman

TIME Unlimited Limited

NATURE OF JOB Flexible Rigid in adapting to changes

DECISION MAKING Makes own decisions Follows decisions made by others

EFFORT AND COMMITMENT

Continuous Low

RISK TAKING Moderate Low

GOAL Maximizes self-potential by utilizing available opportunities

Solely for profit maximization

THEORIES OF ENTREPRENEURSHIP

Economic Perspective Psychological Perspective Sociological Perspective Management Perspective

ROLES AND SOCIAL RESPONSIBILITIES

Customers Society/community Suppliers Staff Competitors Country

COMPETENCIES OF ENTREPRENEURSHIP

POWER AND

AUTHORITYPERSUASIO

N

ASSERTION

SELF-CONFIDEN

CECREATIVE PROBLEM SOLVING

SYSTEMATIC

PLANNING

EFFICIENT

COMMITMENT TOWARDS

WORK AGREEMENT

S

HIGH WORK

QUALITYINFORMATION SEEKER

ENDURANCESEIZE

OPPORTUNITIES

PERSONAL

INITIATIVE

CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS Able to identify opportunities

Action-oriented

Always seeking to improve

Orient themselves to customers needs

Value their employees

Able to face reality

Able to tolerate tedium

Able to rebound from disappointments

Risk takers

Locus of control

Independent and in control

E-BUSINESS

E-BUSINESS (electronic business)

Buying and selling of goods and services, serving customers, collaborating with business partners, conducting e-learning, and processing electronic transactions within an organization.

Comprises of : e-marketing, e-commerce, e-operation.

E-BUSINESS

Customers Managemen

tOn-line

Store Set-up

Marketing

Payments Option

Shipping

Invoicing and

Packaging

Pricing Manipulatio

ns

Order Managemen

t

Global Trading

Digitised Product

THE IMPORTANCE E-BUSINESS TO ENTREPRENEURS

Allows companies to reach more consumers in a much broader economic market.

Companies can use e-business to lower some business costs.

Easily do marketing and advertising

ADVANTAGES AND DISADVANTAGES OF E-BUSINESS

BUSINESS PLAN

BUSINESS PLAN

A business plan is known as a venture plan, entrepreneur’s plan, working paper, project paper, or prospectus.

Between 25 to 40 pages describing the overall plans of a business in detail, that is what the entrepreneur plans to do and how he plans to do it.

INDIVIDUALS WHO NEED A BUSINESS

PLAN

Entrepreneurs

Stakeholders

Bankers

Investors

Management / employees

Customers

Suppliers

IMPORTANCE OF A BUSINESS PLAN

Determines the right way of managing a business Increases the stakeholders confidence Determines barriers to the venture Determines the company’s performance Determines the company’s main competitors Sets the business mission Creates the opportunity for success

CHARACTERISTICS OF A GOOD BUSINESS PLAN

Simple/Specific

Measurable

Attainable/Achievable

Realistic/Relevant

Time-bound

FORMAT OF BUSINESS PLAN

Table of content

Execute summary/business plan synopsis

Introduction

Purpose of preparing a business plan

Business/company background

Background of owner/partners/directors

Organization/management/administration plan

Marketing plan

Operational plan

Financial plan

Project implementation schedule

Conclusion