Entrepreneurship

Before discussing entrepreneurship lets see how academicians define "entrepreneur" (ahntra pra nur) a French origin word . The basic dictionary definition of an entrepreneur is a person who organizes and manages any enterprise, esp. a business, usually with considerable initiative and risk" Entrepreneurs are risk takers, willing to roll the dice with their money or reputation on the line in support of an idea.They willingly assume responsibility for the success or failure of a venture. While studying the phenomenon of Entrepreneurship different researchers and scholars has described it differently according to there knowledge and understandings. 1. Transformation of demand into supply for profits. ( Smith 1776) 2. Bringing together factors of production (Say, 1803) 3. Founding a private enterprise (Mill 1848) 4. Creation of organizations (Gartner,1888) 5. Ownership (Hawley,1892) 6. Responsible decision making (Knight,1921) 7. Carrying out new combinations: later on termed innovation through the process of creative destruction i.e. old being washed away by the new. (Schumpeter, 1934) 8. Bearing Uncertainty (Knight,1921 Cantillon 1755) 9. Exploration of opportunities- being an arbitrageur and an equilibrating agent. (Kirzner, 1973) Exploiting the opportunities that changes in technology, consumer preferences, social norms, etc. and Undertaking innovation and bearing risk.

Entrepreneur Traits: Here are some of traits you might be interested in:
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Self confident and optimistic Able to take calculated risk Respond positively to changes Flexible and able to adapt knowledge of Markets Able to get along well with others Independent minded Energetic and Diligent Creative, need to Achieve targets Dynamic leader Responsive to suggestions Take initiatives Resourceful and persevering Perceptive with foresight

Entrepreneurship is a dynamic process of creating incremental wealth. This wealth is created in terms of equity, time and career commitment of providing value for some products or services. the entrepreneur must infuse value to the product or service.

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Entrepreneur vs. Innovator

Invention: "a creation of new products, processes and technologies not previously known to exist" Innovation: " is the transformation of creative ideas into useful applications by combining resources in new or unusual ways to provide value to society for or improved products, technology or services" An entrepreneur and an inventor both have their own financial rewards. Being an inventor takes a lot of creativity and innovation to be able to come up with an idea that no one has thought of yet; a unique idea for a product or service that has never been introduced in the market; an idea that could be the next big thing. An entrepreneur, meanwhile, is a business-minded person that can use existing products and services and customize them according to the specific needs of target market of his business. The entrepreneur will put his own brand onto the product or service and make it uniquely his own. Being an inventor, your ideas could be of use to consumers in the commercial market. Companies would be willing to buy that idea and make it their own for reproduction. Ideas can be licensed or be rented by many companies. When you come up with novel idea, protection for the idea can then be filed in the right government agency. You can then look for a company that will be interested in your idea and will greatly benefit from it. If a certain company has shown interest, the inventor can then personally contact that company and set up a meeting. If the inventor feels that the relationship with the company is comfortable enough and the product idea will satisfy a need that has been identified in the market, the idea will then be under license to that company. The inventor can just a collect a royalty from that idea every quarter of the year. There are some licensed ideas that lasted for many years with the same company while others can be short-lived. Licensing product ideas just deal with the numbers. There is not a single company or person that can have all the ideas. Coming up with an idea or inventing is a limitless activity. The trend for many companies have been to look for licensed product ideas from inventors that are not employed by their company. Being an entrepreneur can also be very lucrative. An inventor can decide to market his own idea if he has the resources to do so. Turning that idea into a reality and a business can be certainly a challenge. For the first time entrepreneur, a simple idea might be a good way to start because this would not cost that much money to create. An entrepreneur is in control of all his ideas and the way in which he brings those ideas to life and markets them. An inventor, however, surrenders much of the control of the idea when it is under license to a company. Running your own business requires complete control. You are in charge of every aspect of the product, from production, marketing to distribution. There are financial risks involved in venturing into a business. There is little risk in the licensing of an idea. One can only gain from it. There is no big investment required in being an inventor.

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It is really up to you if you will consider being an inventor or an entrepreneur. You have to weigh all the advantages and disadvantages before you decide on the path to take. What is important is that you will be able to convert your idea into something useful and at the same time reap financial rewards for it. Entrepreneurs are not equal to inventors because inventor might only create a new product, whereas entrepreneur will gather resources, organize talent and provide leadership to make it a commercial success.

The Stages in the Entrepreneurial Cycle 1. Resources this refers to a new or reserve source of supply of something. From the viewpoint of society, an enterprise justifies its existence by converting resources into desired outputs. Resource inputs of labor, materials, ideas, government support, capital, and the like are converted by a firm into outputs of goods, services, employment, stimulating experiences, markets, and other things desired by those who provide the inputs. 2. Process determines how the product or service will be produced. There are phases to be followed in the process selection.'' a. Major technological choice Does technology exist to produce the product? b. Minor technological choice What transformation processes will be used? c. Specific component choice What type of equipment (and degree of automation) should be used? d. Process flow choice How should the product or service flow through the operation system? The final process-selection step determines how materials and products will move through the system. The phases in process selection are closely interrelated. In each phase, choices should be made to minimize the process operations cost. 3. Product/Service refers to the output of the enterprise. This is influenced by the technology available and the operations structure within the organization. It is a strategic task involving marketing, finance, and operations. Processes involved to determine the product or service to be produced are: a. Research generate the product/service idea b. Selection choose those that are technologically feasible, marketable, and compatible with organizational strategy

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c. Design develop design specifications for the product or service d. Product it may be a tangible object, a service, or an idea that is offered by one party in exchange for something money, patronage, moral support, votes, and the like.

Entrepreneurial Cycle

Click here to download a diagram of the The entrepreneurial cycle. (54k) Step 1 This step helps you to find the overlap between what you can do and like to do, and what your potential customers need and want. It also helps you to test how these overlap with Gods will for your life. When you have found this overlap you have your first business idea! Step 2 This step helps you to explore your own buying behaviours, and more importantly the buying behaviours of your potential customers. If you know what your customers are looking for in terms of quality, timeliness, relationship and cost, you can make sure that you provide something that will be bought. Step 3 This step helps you to think through how you need to structure your activities to provide what the customer needs, when the customer needs it and in the way that the customer would like it done. Step 4 This step helps you to work out whether you can make a workable business out of this idea. It helps you to ensure that what you will be paid will cover your costs adequately and provide you with enough income to keep the business going. In this part of the diagram, you get
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a chance to adjust your ideas and see whether you are able to make a profit. If you cannot, then you have only lost money on paper, and you can return to step 1 and move on to your next business idea. Step 5 If you think you can make a profit, you are ready to move into the inner cycle and put your ideas into practice:
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Seeking the loan that you need. Putting your plans into action. Attracting and serving your customers. Stewarding your money and resources prayerfully so that you can begin to repay your loan and continue round the inner cycle with your successful new business.

Pinchots Famous 10 Questions

Here are the ten common questions that you have to answer to insure the level of support and tendencies towards the intrapreneurs. Does your company encourage self-appointed intrapreneurs? Does your company provide ways for intrapreneurs to stay with their enterprises? Are people permitted to do the job in their own way, or are they constantly stopping to explain their actions and ask for permission? Has your company evolved quick and informal ways to access the resources to try new ideas? Has your company developed ways to manage many small and experimental products and businesses? Is your system set up to encourage risktaking and to tolerate mistakes? Can your company decide to try something and stick with the experiment long enough to see if it will work, even when that may take years and several false starts? Are people in your company more concerned with new ideas or with defending their turf? How easy is it to form functionally complete, autonomous teams in your corporate environment? Do intrapreneurs in your company face monopolies, or are they free to use the resources of other divisions and outside vendors if they choose?

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Sources of new ideas

Entrepreneurs frequently use the following sources of ideas: 1. Consumers the potential consumer should be the final focal point of ideas for the entrepreneurs. The attention to inputs from potential consumers can take the form of informally monitoring potential ideas or needs or formally arranging for consumers to have an opportunity to express their concerns. Care needs to be taken to ensure that the new idea or the needs represents a large enough market to support a new venture. 2. Existing Companies with the help of an established formal methods potential entrepreneurs and intrapreneurs can evaluate competitive products & services on the market which may result in new and more market appealing products and services. 3. Distribution channels members of the distribution channels are familiar with the needs of the market and hence can prove to be excellent sources of new ideas. Not only do the channel members help in finding out unmet or partially met demands leading to new products and services, they also help in marketing the offerings so developed. 4. Government it can be a source of new product ideas in two ways firstly, the patent office files contain numerous product possibilities that can assist entrepreneurs in obtaining specific product information, and secondly, response to government regulations can come in the form of new product ideas. 5. Research & development Entrepreneurs own R&D is the largest source of new idea. A formal and well-equipped research and development department enables the entrepreneur to conceive and develop successful new product ideas.

Methods of Generating New Ideas for Entrepreneurs

Even with a wide variety of sources available, coming up with an idea as the basis for a new venture can still be a difficult problem. The entrepreneur can use several methods to help generate and test new ideas including focus groups, brainstorming and problem inventory analysis . The following are some of the key methods to help generate end test new ideas: 1. Focus Groups these are the groups of individuals providing information in a structural format. A moderator leads a group of people through an open, in-depth discussion rather than simply asking questions to solicit participant response. Such groups form comments in open-end in-depth discussions for a new product area that can result in market success. In addition to generating new ideas, the focus group is an excellent source for initially screening ideas and concept. 2. Brainstorming it is a group method for obtaining new ideas and solutions. It is based on the fact that people can be stimulated to greater creativity by meeting with others and participating in organized group experiences. The characteristics of this method are keeping criticism away; free wheeling of idea, high quantity of ideas, combination and improvements

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of ideas. Such type of session should be fun with no scope for domination and inhibition. Brainstorming has a greater probability of success when the effort focuses on specific product or market area. 3. Problem inventory analysis it is a method for obtaining new ideas and solutions by focusing on problems. This analysis uses individuals in a manner that is analogous to focus groups to generate new product areas. However, instead of generating new ideas, the consumers are provided with list of problems and then asked to have discussion over it and it ultimately results in an entirely new product idea. The entrepreneur is not limited by only the three methods presented in this article

Principles of Innovation
There are five principles that give life to the process of innovation: 1. Innovation starts when people convert problems to ideas. New ideas are born through questions, problems and obstacles. The process of innovation is indebted to the trouble that comes about when we are surrounded by that which is not solved, not smooth and not simple. Therefore, in order for the innovation process to flourish, it needs a climate that encourages inquiry and welcomes problems. 2. Innovation needs a system. All organizations have innovation systems. Some are formal, designed by the leadership, and some are informal, taking place outside established channels. Informal channels are untidy and inefficient, yet innovation is always associated with them. 3. Passion is the fuel, and pain is the hidden ingredient. Ideas do not propel themselves; passion makes them go. Passion, in addition to talent and skill, is a valuable company asset. Passion is what transforms other resources into profits, but it never shows up on a balance sheet. Unfortunately, there seems to be some universal law that says when pursuing a passion or following a dream, pain is part of the process. Innovation leaders need to take the pain with the passion and learn to manage both effectively. 4. Co-locating drives effective exchange. Co-location refers to physical proximity between people. It is a key for building the trust that is essential to the innovation process. It also increases the possibility for greater exchange of information, cross-fertilization of ideas, stimulation of creative thinking in one another and critique of ideas during their formative stage. 5. Differences should be leveraged. The differences that normally divide people such as language, culture, race, gender and thinking and problem solving styles can be a boon to innovation. When differences are used constructively and people move beyond fear, suspicion, mistrust and prejudice, differences can be leveraged to enhance and sustain the innovation process.

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