1-eship.ppt - Entrepreneurship 1 Why this course to Business graduates The course provides an introduction to the elements of both high an low tech

1-eship.ppt - Entrepreneurship 1 Why this course to...

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Unformatted text preview: Entrepreneurship 1 Why this course to Business graduates? The course provides an introduction to the elements of both high an low tech entrepreneurship – idea generation, business plan development, incubation, funding, venture capital, stock options etc. 2 Course Objectives At the end of the course, You should understand the various components related to entrepreneurship, such as venture capital, stock options, angel funding know how to develop a business plan for an entrepreneurial venture be familiar with the entrepreneurship environment in Pakistan be equipped to consider becoming an entrepreneur 3 Your Book 4 Are you an Entrepreneur? 1 Are you Married Single Widowed Divorced 2 Are you Male Female 4 How comfortable are you with uncertainty? 5 To become successful as an entrepreneur, what will you need? 3 Why do you want to start a business? To make a lot of money To be independent To give myself a job To gain power To become famous Very comfortable Somewhat comfortable Not comfortable Money Luck Hard work A good idea All of these 6 Concerning your willingness to take risk, are you A high risk taker A moderate risk taker One who avoids risk 5 Are you an Entrepreneur? 1 Are you Married Single Widowed Divorced 2 Are you Male Female 4 How comfortable are you with uncertainty? 5 To become successful as an entrepreneur, what will you need? 3 Why do you want to start a business? To make a lot of money To be independent To give myself a job To gain power To become famous Very comfortable Somewhat comfortable Not comfortable Money Luck Hard work A good idea All of these 6 Concerning your willingness to take risk, are you A high risk taker A moderate risk taker One who avoids risk 6 Learning Philosophy for this course We learn together! How much you get out of this depends on how much you put into it 7 Entrepreneurship Web Sites Global Entrepreneurship Monitor (GEM): Garage.com: NUS Centre for Entrepreneurship: MIT Entrepreneurship Center: MIT Enterprise Forum: University of Colorado at Boulder Centre for Entrepreneurship (Business Plan templates): The Angel Capital Electronic Network 8 Entrepreneur & Entrepreneurship An Introduction 9 What is Entrepreneurship? Entrepreneurship The process whereby an individual or group of individuals use organized efforts to pursue opportunities To create value and grow by fulfilling wants and needs through innovation and uniqueness 10 What is Entrepreneurship? Common Themes The in Definitions of Entrepreneurship role of the entrepreneur Innovation Organization Creating Profit creation value or Not-for-Profit Growth Uniqueness Process 11 Forms of Entrepreneurship A new product or Service offered. A new Method, Process, or Technology employed. A new market targeted and opened. A new source of Supply of Raw Materials & Resources used. A new form of Industrial Organization created. 12 Four Routes to Entrepreneurship Entering a family business Opening a franchised business Starting a new business Buying an existing business 13 Historical Perspectives on Entrepreneurship 14 15 Five Misconceptions About Entrepreneurship 1. Successful entrepreneurship needs only a great idea 2. Entrepreneurship is easy 3. Entrepreneurship is a risky gamble 4. Entrepreneurship is found only in small businesses 5. Entrepreneurial ventures and small businesses are the same thing 16 Now the Business An activity or a group of activities to be undertaken for the purpose of earning profit keeping in view the risk of loss. 17 The Nature of Business To create profits by: Selling products – Cars, food, clothing, computers, mobile phones etc. Providing services – Healthcare, insurance, education etc. 18 What Is Management? Managerial Concerns Efficiency “Doing things right” Getting the most output for the least inputs Effectiveness “Doing the right things” Attaining organizational goals 19 The Management Process Leading g Co nt ro lli INFORMATION RESOURCES ORGANIZATIONAL GOALS PHYSICAL RESOURC ES Or ga ni zin Planning ng HUMAN RESOURCES FINANCIA 20 L RESOURC Small Business and Entrepreneurial Ventures – The Differences Small Business Independently has fewer than 100 employees doesn’t Has owned, operated, and financed engage in new or innovative practices relatively little impact on its industry Entrepreneurial An Ventures organization pursuing opportunities Characterized Main by innovative practices goals are profitability and growth 21 Entrepreneurial Ventures Creativity - The ability to develop new ideas and to discover new ways of looking at problems and opportunities. Innovation - The ability to apply creative solutions to problems and opportunities to enhance or to enrich people’s lives. 22 The People and Activities of Business People: Activities: Owners Management Employees Marketing Customers Finance Other MIS stakeholders: Investors Regulatory Agencies 23 Current Importance of Entrepreneurship Three areas of importance 1. Innovation 2. Number of New Start-ups 3. Process of creating, changing, experimenting, transforming, and revolutionizing Important because new firms contribute to economic development through benefits such as product-process innovation Job Creation Vital to the overall long-term economic health of communities, regions, and nations 24 The Benefits of Entrepreneurship Opportunity to Create your own Destiny Opportunity to make a Difference Opportunity to Reach your Full Potential Opportunity to Reap Impressive Profits Opportunity to Contribute to Society and be Recognized for your Efforts Opportunity to do what you Enjoy and Have Fun in it. 25 Entrepreneurial Incentives 26 Hard work Drawbacks of Entrepreneurs Long hours Emotional loneliness Strong possibility of failure Disruptions to personal life 27 CREATIVITY…? Inventing the imaginative ideas 28 INNOVATION…? Bringing new changes or ideas to an existing situation 29 The Individual Entrepreneur 30 Its about… A kind of behavior that includes… 1. 2. 3. Initiative taking, The organizing and reorganizing of social and economic mechanisms to turn resources and situations to practical account The acceptance of risk or failure 32 Entrepreneur: to an economist… He is the one who brings resources, labor, materials and other assets into combinations that make their value greater than before, and also one who introduces changes, innovations, and a new order. 33 Thinking of a psychologist… Such a person is typically driven by certain forces— the need to obtain or attain something, to experiment, to accomplish, or perhaps to escape the authority of others. 34 How the businessman will think? To one businessman an entrepreneur appears as a threat, an aggressive competitor, whereas to another someone who creates wealth for others, as well as finds better ways to utilize resources, reduce waste, and produce jobs others are glad to get. 35 Is it about creating wealth? It is a dynamic process of creating incremental wealth. This wealth is created by individuals who assume the major risks in terms of equity, time, and/or career commitment or provide value for some product or service. 36 What are different Entrepreneurial Feelings? 37 Locus of Control 38 Need for independence Being one’s own boss – one of the strongest needs of an entrepreneur 39 Need for Achievement An individual's need to be recognized 40 Risk Taking Risk taking – whether financial, social, or psychological – is part of the entrepreneurial process 41 Background and Characteristics Childhood Family Environment, Education, Personal Values, Age, Work History 42 Childhood and family environment Most entrepreneurs have self-employed or entrepreneurial fathers. Parents of entrepreneurs encourage independence, achievement, and responsibility. Usually it is the Eldest child 43 Education Education is important for the upbringing of an entrepreneur. Although formal education is not necessary for starting a new business – it does provide a good background, particularly when it is related to the field of the venture. 44 Personal Values Resource Seeking Aggression Veracity / Genuineness Benevolence / Kindness Creativity Conformity / Compliance 45 Attitude about business Individuality Nature of the Enterprise Institution Opportunism 46 Age Most entrepreneurs would initiate their entrepreneurial careers between the ages of 22 and 45 As one entrepreneur succinctly stated, “I felt it was now or never in terms of starting a new venture when I approached 30” 47 Work History The past work experience of an individual Dissatisfaction Lack of Challenge Promotional Opportunities Frustration and boredom 48 Frustration and new business… A student who is not promoted after receiving an MBA degree may become frustrated and decide to leave and start a new company. 49 Motivation It is what causes people to do something. 50 Motivation: Why not business? Individuals who are comfortable and secure in a job situation, have a family to support, and prefer their present life style and reasonably predictable leisure time often do not want to take the risks associated with venturing out alone. 51 Why Business? What’s the motivation? Independence Not wanting to work for anyone else Desire to be one’s own boss For men, money is the second reason for starting a new venture For women, job satisfaction, achievement, opportunity, and money are the motivations 52 Role Models Moral Support Network Professional Support Network 53 Role Models Parents, relatives, or entrepreneurs in the community May serve as mentors / trainers 54 Moral Support Network Individuals who give psychological support to an entrepreneur. 55 Professional Support Network Individuals who help the entrepreneur in business activities. 56 Male Versus Female Entrepreneurs Most other dimensions show no differences. Male Entrepreneur motivated to control destiny. outside advisors most important supporters. more likely to start a business in manufacturing, construction or high tech. may have better access to investors and loans. Female Entrepreneur motivated to achieve. spouse first, friends second as most important supporters. more likely to start a service business 57 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? 58 Why? Minority Entrepreneurs 59 Entrepreneurs: born or made? 60 Entrepreneurs are not born: They are developed & made 61 The Entrepreneurial and Intrapreneurial Mind 62 In simple terms…. “An entrepreneur is someone who creates a new opportunity in the world of business and assembles the resources necessary to successfully exploit this opportunity – money, people and organization” - Entrepreneurship for Dummies (2001) 63 The entrepreneurial process involves finding, evaluating, and developing an opportunity by overcoming the strong forces that resist the creation of some thing new. 64 develop visions, goals and plans. suggest, try and experiment. flat organizational structure with networking and teamwork. Corporate Culture Intrapreneurial Culture Corporate Versus Intrapreneurial Culture climate & reward system favors conservative decision making. follow instructions, don’t take initiative. hierarchical lines of authority. 66 Differentiate between entrepreneurship and a business? 67 Basic characteristics of the Entrepreneurial Mindset They passionately seek new opportunities They pursue opportunities with enormous discipline They pursue only the very best opportunities and avoid exhausting themselves and their organizations by chasing after every option They focus on execution – specifically, adaptive execution They engage the energies of everyone in their domain 68 Why start a business? Consider these reasons together with some precautionary notes. 69 Why start a business… I want to be my own boss because I find it hard to work for my current boss I want to be my own boss so that I don’t have to work so hard. I don’t want to punch a clock—I want the freedom to come and go as I please I want to start the business to make a lot of money 70 Four Routes to Entrepreneurship Entering a family business Opening a franchised business Starting a new business Buying an existing business 72 What causes a person to make this difficult decision? The question can be best explored by looking at the decision process involved in becoming an entrepreneur. 73 Decisions for a potential entrepreneur Change from present lifestyle Work environment Disruption Form new enterprise Desirable 1. Cultural 2. Sub cultural 3. Family 4. Teachers 5. Peers Possible 1. Government 2. Background 3. Marketing 4. Financing 5. Role models 74 Change from Present Lifestyle Two work environments have been particularly good for spawning new enterprises: Research and development, and Marketing 75 Working in Technology (R&D) Develop… New ideas New processes When your ideas are not accepted in your own company by employers, you opt to start a new company 76 Working in Marketing (New Products) Individuals in marketing have become familiar with market and customers’ unfilled wants and needs They frequently leave to start new enterprises to fill these needs 77 The Entrepreneurial Process 78 What is Entrepreneurial Process? The process through which new venture is created by an entrepreneur is called the entrepreneurial process. An entrepreneur finds, evaluates, and develops an opportunity by overcoming the forces that resist the creation of something new. The process of starting a new venture is embodied in the entrepreneurial process, which involves more than just problem solving in a typical management position. 79 Phases of Entrepreneurial Process 1. Identification and evaluation of the opportunity 2. Development of the business plan 3. Determination of the required resources 4. Management of the resulting enterprise 80 Identify and Evaluate the Opportunity Creation and length of opportunity Real and perceived value of opportunity Risk and returns of opportunity Opportunity versus personal skills and goals Competitive situation 81 What can be cause of an opportunity? Technological changes Market shifts Government regulations, or Competition 82 Develop the Business Plan Title AAgood goodbusiness business plan planmust mustbe be developed developedin in order orderto toexploit exploit the thedefined defined opportunity. opportunity. page Table of contents Executive summary Basic Basicissues issues involved involvedin in development developmentof ofaa business businessplan planare are given givenhere. here. Description of business Description of industry Marketing plan Financial plan Production plan Organization plan Operational plan Summary Appendices (exhibits) 84 Determine the resources required Appraisal of existing resources Do not underestimate amount and variety of resources needed Strive to maintain as large an ownership position as possible 85 Manage the Enterprise Management style determines key variables for success Identification of problems and potential problems Implementation of control systems 86 ...
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