University of Dar es Salaam

Department of Mechanical and Industrial

Engineering

IE 445: Entrepreneurship for Engineers

Entrepreneurship And
Business Start Up

2
 CONTENTS
1. Entrepreneurship: Social, Corporate
and Business
2. How to generate business ideas
3. Assessment of individual capacity
using IMAR Framework
4. Developing business concept using
Business Model Canvas (BMC)
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 ENTREPRENEURSHIP: SOCIAL,
CORPORATE/INTRAPRENEURSHIP AND
BUSINESS

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 Social Entrepreneurship
▪ Social entrepreneurship is the process of
recognizing and resourcefully pursuing
opportunities to create social value.

▪ Social entrepreneurs are innovative,

resourceful, and results oriented.

▪ “What business entrepreneurs are to the

economy, social entrepreneurs are to social
change.
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Entrepreneurship: Social, Corporate and Business

▪ Social entrepreneurship is an approach

by individuals, groups, start-up
companies or entrepreneurs, in which
they develop, fund and implement
solutions to social, cultural, or
environmental issues.

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 Corporate Entrepreneurship
▪ Corporate Entrepreneurship (Intrapreneurship)
is a process used to develop new businesses,
products, services or processes inside of an
existing organization to create value and
generate new revenue growth through
entrepreneurial thought and action.

▪ Intrapreneurship is the act of behaving like an

entrepreneur while working within a large
organization.
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 Business Entrepreneurship
▪ Business entrepreneurship refers to
the concept of developing and managing a
business venture in order to gain profit by
taking several risks in the corporate world.

▪ Simply put, entrepreneurship is the

willingness to start a new business.

▪ An entrepreneur is a person who starts a new

business and usually risks his own money to
start the venture.
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 BUSINESS IDEAS
▪ A business idea is a concept which can be used
for commercial purposes

▪ An idea can be transformed into a viable

business, when supported by feasibility and a
business plan, ideas can then be sold to
interested investors, firms, and other interested
parties.

▪ Business ideas are all around you. Some

business ideas come from a careful analysis of
market trends and consumer needs; others come
from coincidence or fortune or by chance.
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 BUSINESS IDEAS…

• Remember: What separates the

successful entrepreneur from others is
his or her ability to see, seize, and even
invent opportunities.

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 Finding an idea
1.Examine your own skill set for business ideas.
– to find a viable business idea, ask yourself,
"What have I done? What can I do? Will
people be willing to pay for my products or
services?”

2. Copying existing activities/ business and do

it somewhere else where such business is not
yet introduced
– be ready to take advantage of business
opportunities.
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 Finding an Idea............
3. Add value to an existing product. This is
modifying existing businesses by coming up
with different concepts (e.g., customized
software to SMEs, e-dairy etc.
– to identify a market need that's not being met.

4. Completely new (novel) concepts,

– IT solution

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 Sources of business ideas
• There are thousands of ideas out there
• We know what makes a good one
• Where do we find them?
• Look for needs, watch trends, listen for
complaints, problems or pains…. Then
get creative about building a business
around them

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Generating an Idea............KEY ISSUE

Find a trend, complaint,

problem or pain

Get creative on how to

capitalise on it
 Low Cost Convenience Wellbeing

Female
Environment
Fever
Trends?
Grey Power
 Convenience…
• Online shopping

• Open market

• Matching guys
 Wellbeing…
iTunes Health & Fitness or Medical categories
now contain more than 7,000 apps for iPhones
Health related apps for Android phones have
so far achieved more than three million
downloads
Environment Ubeauty Pots &
Plants

“30% of US consumers for example are willing

Nokia Phone Dynamo to pay up to a 20% premium on clean, green
products over non-sustainable alternatives.”
https://www.bikeradar.com/news/nokia-
launches-phone-charging-bicycle-dynamo/ SOURCE: Mintel 2010
 Female Fever

“women are responsible for majority of all

consumer purchases ......................

Grey Power

What can you offer the middle aged?

What can you offer the retirees?
Online!!!!! Emerging opportunity!!!
• Over 4.72 billion people are online, which is 60% of
World population.
• Consumers are building their own personal brands
online
• If Facebook were a country, it would be amongst
thetop three world’s largest (How many users does
Facebook have? With roughly 2.91 billion monthly
active users as of the fourth quarter of 2021, Facebook
is the most used online social network worldwide)
• 1 out of 8 marriages in the US began online
• The number of iPhone apps hit 1 billion in 9 months
• eMail is “old-fashioned” – Facebook and Twitter are
“in”
 SCREENING BUSINESS IDEAS
• Are you convinced that there is a ready market for
the product/service. Do you have some indications?
• Do you have, or can you quickly acquire the key
success factor (KSF) for the business?
• Is the idea compatible to legal requirements and
moral/ethic?
• Is the market saturated?. If yes, think twice
• Is the idea compatible with promoter’s values and
life style?
• Does it have growth potential? – is the industry
declining/stable/growing?

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 SCREENING BUSINESS IDEAS (Cont..)
 Does the promoter have, or can she/he develop Sources of
Competitive Advantage (SCA) quickly?

 Is it apparently more attractive than any other alternatives?

 Have enough alternatives been considered? The first idea is

not necessarily the best

 Avoid concentrated industries unless you have a unique

product concept

 Can you possibly raise the investment capital required?. If

not, don’t waste your time and energy on developing a
business concept and then a plan which will not be
implemented

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Asessment of individual
capacity using IMAR
framework

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Homework Activity and Discussion

Take a few minutes to personally reflect

on the most important factors/issues to
consider when assessing whether the
enterprise you intend to establish will be
successful or not. Then list them in the
order of importance/priority.

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 Developing the IMAR framework

Idea/Wazo Motivation/Tabia
(Msukumo)

Ability/Uwezo Resources/Rasilimali

IMAR / WATAURA
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 INGREDIENTS FOR A SUCCESSFUL BUSINESS

Successful businesses seem to be related to a combination of

these four basic pillars/factors:

IDEA MOTIVATION

ABILITY RESOURCES

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 1. Idea

What you can do:

• Scanning the environment to identify GAPS.
• Identifying and evaluating OPPORTUNITIES.
• Finding an IDEA that is sufficiently attractive to
merit serious consideration.
• Assessing and confirming its FEASIBILITY.

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 2. Motivation
What you can do:

The man is too big to miss! 28

 3. Ability

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 4. Resources

What you can do:

• Identifying the volumes and COSTS OF
RESOURCES required. Contacting suppliers,
confirming availability of quantitand quality,
costs and delivery.
• Planning the required SCALE OF ENTRY into
the market.
• Identifying SUPPORT SERVICES and assistance.

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 IMAR MODEL
o Before you start any business; the following model
aids the final decision:
✓I – Idea; should be thoroughly assessed!

✓M- Motivation; you should be motivated and ready

to commit / face any ambiguities.

✓A – Ability – knowledge and skills should be related

to the ideal business

✓R – Resources – Physical, Financial, Human,

information etc should be adequately available.
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 The IMAR framework
Conclusion:
• The Idea, Motivation, Ability and Resources
(IMAR) framework enables you to logically
reflect upon all important aspects of the
intended venture.
• It helps in enhancing the chances of success
and minimizing the risks of failure.
• Moreover, it enables you to look at your
intended venture on a long term perspective.
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BUSINESS MODEL CANVAS

(Muundo wa biashara)
 INTRODUCTION
• A business model describes the rationale of how
an organization creates, delivers and captures
value”

• A Business Model Canvas is one of the methods

used to generate or describe the business model.
This one is very visually understandable.

• The Business Model Canvas has 9 building blocks,

the numbers indicate a fluent and logical flow
through the diagram.
 The business – idea TEMPLATE
Write a Business Concept after being convinced of the viability of your idea
and committed to the idea.
The Business Concept should be precise and simple presentation, just
communicate the following:-
❖The broad Idea - What is the business?
❖What is the customer need and how does the product meet this need?
❖How your idea is better than the competition, if it exists?
❖Who will be your target market - Who are the customers?
❖How will you make it?
❖The location of the business?
❖How it will make profit?
❖What amount/funding is needed, what for and what has already been
acquired?
❖Future prospects, ideas for growth. ?
❖Why are you the one(s) most appropriate to realise this business?

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 Business Model Canvas

Key Key Value Customer Customer

Partners Activities Proposition Relationships Segments

Key Channels
Resources

Cost Structure Revenue Streams

 BMC including the Sustainability blocks

8 7 4 1
2

6 3

9
5
Business Model Canvas
 1. CUSTOMER SEGMENTS
• The different groups of people, businesses or
organizations an enterprise aims to reach and
serve.

• For whom are you creating value?

• Who are your most important customers and
how many are you targetting?
• To which market segments do they belong?
 1. CUSTOMER SEGMENTS (Cont..)

• Different types of Customer Segments:

– Mass market
– Niche market
– Segmented market
Segmentation is needed if customers:
➢ Needs require/ justify a distinct offer.
➢ Are reached through different distribution
channels.
➢Require different types of relationships.
➢Have substantially different profitabilities.
➢Are willing to pay for different aspects of the
offer.
 Who is your customer?
Are they also your target group? Who
pays?

DONORS REFUGEES
Business Model Canvas
 2. VALUE PROPOSITION
The bundle of products and services that create value for
a specific customer segment.
 Solves a customer problem; or
 Satisfies a customer need.
 What is your unique selling proposition?
 What value do you have to offer? / What is the value
for the customer?
 What do you do?
 How does your product or service differ from others ?
(your competitors)
 Value Proposition is the reason why customers turn to
one company over another.
Practice with Value Propositions
Business Model Canvas
 3. CHANNELS

How a company communicates with and reaches out

to its Customer Segments to deliver a Value
Proposition.

– How do you reach your customers?

– Through which channels do you reach your
customer segments?

• Think of all is needed to make possible: awareness,

purchase, delivery and aftersales.
Physical versus virtual channels
Business Model Canvas
 4. CUSTOMER RELATIONSHIPS
Types of relationships a business establishes with specific
customers.

Goals are to:

 Get new customers
 Keep existing customers
 Boosting sales/ upselling

 How do you interact with each of your customer segments ?

 You can have relationship that are:

 Personal, short term
 Personal, long term
 Self service / automated services
 Community based
 Co-creation
Business Model Canvas
 5. REVENUE STREAMS
 The money a business generates from each
Customer Segment is called Revenue
 How do you generate money?

 Two types of Revenue Streams:

 One-time customer payments
 Ongoing payments
Questions:
➢For which value are our customers really willing to pay?
➢For what are they currently paying?
➢How are they currently paying?
➢How would they prefer to pay?
 5. REVENUE STREAMS (Cont..)
Revenues can be generated in many different ways:
 Direct sales of products/ services
 Users ‘fee’ (rent, lease, lend)
 Subscriptions
 Donations, funds
 In kind contributions like hours (volunteers)
 Stocks (bonds)
 Royalties
 Advertisement (by others like Google)
 Crowd-funding
 Using micro-credit, Saccos, mortgages or other financial
schemes
Be creative !!!!!!
Business Model Canvas
 6. Key Resources

• The important assets which you need in order

to realize your value proposition (and the
customer relationships and channels).

• Types of resources:
– Physical, e.g. machines, buildings, vehicles
– Financial, e.g. cash, lines of credit
– Human, e.g. employees
– Intellectual, e.g. patents, copyrights, databases
Business Model Canvas
 7. Key activities

• What do you need to do to realize your

value proposition?
• Examples of key activities:
–Production
–Solving the customer problem
–Networking
Business Model Canvas
 8. Key partnership
 Who are the most important partners ?
 What’s in it for every partner?
Which Key Resources are we acquiring from
partners?
Which Key Activities do partners carry out for
us?
 Motivations to start key partnerships:
•Acquisition of particular resources and activities
•Reduction of risk and uncertainty
•Optimization and economy of scale
 8. Key partnership (Cont..)

• Examples of partners: The network of suppliers

of raw materials, manufacturers, distributors,
local stores,etc, that is needed to make your
business keep running!!!!

• Any specific agreements between you and the

partners? Think about on how will you formalize
these partnerships, if necessary
Business Model Canvas
 9. Cost Structure (Financial)
• Overview of all costs incurred to operate a
business model.
• Costs incurred by:
– Value creation (Value Propositions)
– Getting value across to customers (Channels)
– Building relationships (Customer Relations,
Key partnerships)
– Purchase/repairing goods (Key Resources)
– Executing tasks (Key Activities)
• Fixed costs and variable costs
Revenue Streams – Social & Ecological
Cost Structure: Social & Ecological costs
 Wrap-Up
• Business Model Canvas shows the most
important features of the startup business model.
• Right-hand side is all about customers: who they
are, what you offer them, how you reach them,
how you retain them, how they pay.
• Left-hand side of the business model canvas has
to do with how you do it: What do you need to
get the product or service built/delivered?, What
do you do yourself?, What do you have others
do?, What does it all cost?
 Business Model Canvas

Key Key Value Customer Customer

Partners Activities Proposition Relationships Segments
8. 7.
what do what you do 2.What value 4. Types of 1. Create
others do do you create relationship value
Key Channels for whom
Resources
6. 3. Deliver
which assets, via which
infrastructure channels
Cost Structure Revenue Streams
9. 5.
your costs, based on how you capture value,
activities and infrastructure your pricing system
BM including Sustainability blocks (By Esther and Boukje)
 Wrap up
• What are the components of a business model
canvas?
• What is a business model canvas template?
• How to integrate business model canvas
with Industry 4.0?