Menschen Fur Menschen Foundation

Agro Technical and Technology College

Manufacturing Technology Department
Individual Assignment

Course Tittle: Entrepreneurship

Course Code: Entr 5012

Prepared by: BINIYAM ABEBE

ID no: ATTC/058/19

Summited date: 10-05-24 G.C.

HARAR, Ethiopia
1. Briefly explain the differences, between an entrepreneur who has just launched an engineering
company and an individual who has recently been employed as the general manager of an
engineering company. Who do you think is better and why?

The differences between an entrepreneur who has just launched an engineering company and an
individual who has recently been employed as the general manager of an engineering company
can be summarized as follows:

 Role and Responsibility: The entrepreneur is the founder and owner of the company.
They are responsible for the overall vision, strategy, and direction of the company. They
typically take on multiple roles, including business development, sales, finance, and
operations. In contrast, the general manager is an employee who is responsible for
managing the day-to-day operations of the company, implementing the entrepreneur's
vision, and ensuring the company's goals and objectives are met.

 Experience and Expertise: The entrepreneur may have a strong technical background in
engineering, but they may have limited experience in managing a company. They rely on
their entrepreneurial skills, creativity, and business acumen to navigate the challenges of
starting and growing a company. The general manager, on the other hand, is typically
hired for their managerial experience and expertise. They may have a track record of
successfully managing engineering companies and possess a deeper understanding of
operational aspects, team management, and industry-specific knowledge.

 Risk and Ownership: The entrepreneur takes on a higher level of risk and ownership.
They invest their own capital, secure funding, and bear the financial risks associated with
running the company. They have the potential for higher rewards if the company
succeeds but also face the possibility of financial loss if the venture fails. The general
manager, as an employee, has less personal financial risk and typically receives a fixed
salary or compensation package.
 As for who is better, it depends on the specific circumstances and requirements of the company.
Both the entrepreneur and the general manager bring unique skills and perspectives to the table.

An entrepreneur's passion, drive, and innovative thinking can be valuable in the early stages of a
company, where adaptability and risk-taking are crucial. They have the ability to shape the
company's culture, make quick decisions, and pivot strategies based on market feedback.

On the other hand, a skilled general manager brings a wealth of experience in managing
operations, leading teams, and implementing efficient processes. They can provide stability,
structure, and expertise in scaling the company, managing resources, and optimizing day-to-day
operations.

Ultimately, the success of the company depends on a combination of factors, including the
market conditions, the entrepreneur's leadership abilities, the general manager's managerial
skills, and the synergy between the two. A strong partnership and collaboration between an
entrepreneur and a competent general manager can often yield the best results, as they
complement each other's strengths and compensate for their respective weaknesses.

2. List and explain the reasons why people become entrepreneurs.

People become entrepreneurs for a variety of reasons. Here are some common motivations:

Pursuing Passion and Purpose: Many entrepreneurs start businesses based on their
passions, interests, and personal values. They want to build something meaningful and
align their work with their purpose in life.
Independence and Autonomy: Entrepreneurship offers the opportunity to be your own
boss and have control over your work. By starting a business, individuals can set their
own goals, make decisions independently, and create their own work environment.
Financial Potential: The potential for financial success is often a driving factor for
entrepreneurs. They see entrepreneurship as a path to financial freedom, wealth creation,
and the ability to reap the rewards of their hard work.
Innovation and Creativity: Entrepreneurs are often driven by a desire to bring new ideas,
products, or services to the market. They enjoy the process of innovation, problem-
 solving, and creating something unique that can disrupt industries or improve people's
lives.
Flexibility and Work-Life Balance: Entrepreneurship can provide greater flexibility and
the ability to create a work-life balance that suits individual preferences. Entrepreneurs
can design their work schedules, allocate time for personal priorities, and have more
control over their time and lifestyle.
Personal Growth and Challenge: Some individuals are motivated by the personal growth
and learning opportunities that entrepreneurship offers. Building and running a business
requires individuals to step out of their comfort zones, develop new skills, and overcome
challenges, which can lead to personal and professional development.
Impact and Influence: Entrepreneurs often have a desire to make a positive impact on
society. They may be driven by a mission to solve a specific problem, address social
issues, or contribute to the betterment of their community or the world.
Job Security and Stability: In some cases, individuals may choose entrepreneurship as a
response to job insecurity or lack of employment opportunities. By starting their own
business, they create a sense of security and stability by taking control of their financial
future.

It's important to note that these motivations can vary from person to person, and many
entrepreneurs are influenced by a combination of factors. Additionally, motivations may evolve
over time as entrepreneurs gain experience and their businesses grow.

3. Briefly explain the characteristics of successful entrepreneurs.

Successful entrepreneurs often possess a combination of personal characteristics and traits that
contribute to their achievements. While individual characteristics can vary, here are some
common traits found in successful entrepreneurs:
 Passion and Drive: Successful entrepreneurs are often deeply passionate about their ideas,
products, or services. They have a strong internal motivation and a relentless drive to
pursue their goals, even in the face of challenges.

 Visionary Thinking: Entrepreneurs have the ability to think beyond the present and
envision possibilities for the future. They can identify market gaps, anticipate trends, and
develop innovative solutions that meet customer needs.
  Creativity and Innovation: Successful entrepreneurs are often creative thinkers who can
generate unique ideas and approaches. They are willing to challenge the status quo, think
outside the box, and find unconventional solutions to problems.

 Risk-Taking and Resilience: Entrepreneurs are comfortable with taking calculated risks
and stepping out of their comfort zones. They understand that failure and setbacks are
part of the entrepreneurial journey and are resilient in bouncing back from challenges.

 Self-Confidence: Successful entrepreneurs have confidence in their abilities and

decisions. They believe in themselves and their vision even when faced with skepticism
or criticism. This self-confidence helps them persevere and convince others to support
their ventures.
 Strong Work Ethic: Entrepreneurs are typically hardworking individuals who are willing
to put in the time and effort required to build their businesses. They are persistent,
dedicated, and willing to go the extra mile to achieve their goals.

 Adaptability and Learning Orientation: Entrepreneurs need to adapt to changing

circumstances and learn from their experiences. They embrace a growth mindset,
constantly seek knowledge, and are open to feedback and new ideas.

 Effective Communication and Leadership: Successful entrepreneurs possess strong

communication skills, enabling them to articulate their vision, persuade stakeholders, and
build relationships. They also have leadership qualities that inspire and motivate others to
contribute to their vision.

 Networking and Relationship-Building: Entrepreneurs understand the importance of

building a strong network of connections. They actively seek opportunities to network,
collaborate, and surround themselves with mentors, advisors, and like-minded
individuals.

 Financial Management: Entrepreneurs understand the financial aspects of their

businesses. They possess basic financial literacy, including budgeting, cash flow
management, and financial forecasting.
4. What are the benefits of preparing a business plan while launching a company? List the
advantages that will be obtained by entrepreneurs who prepared their Business plan
compared to others who do not have a business plan.
Preparing a business plan provides several benefits for entrepreneurs when launching a company.
Here are some advantages that entrepreneurs who have a business plan can gain compared to
those who do not:

o Strategic Direction: A business plan helps entrepreneurs define their business's mission,
vision, and core values. It provides a roadmap for the company's future, outlining the
goals, objectives, and strategies to achieve them. This strategic direction helps
entrepreneurs stay focused and make informed decisions aligned with their overall
business strategy.

o Market Analysis and Competitive Edge: A business plan includes a thorough analysis of
the target market, customer segments, and competition. Entrepreneurs who have
conducted this research gain a better understanding of their market niche, customer
needs, and competitive landscape. This knowledge enables them to develop unique value
propositions, differentiate their offerings, and gain a competitive edge.

o Financial Planning and Resource Management: A business plan involves financial

projections, including revenue forecasts, expense estimates, and cash flow analysis.
Entrepreneurs who have prepared a business plan can better understand their financial
needs, funding requirements, and potential profitability. This allows them to manage their
resources effectively, secure financing if needed, and make informed financial decisions.

o Risk Assessment and Mitigation: A business plan encourages entrepreneurs to assess

potential risks and challenges that their business may face. By identifying and
understanding these risks in advance, entrepreneurs can develop contingency plans and
mitigation strategies. This proactive approach helps reduce potential disruptions and
enhances the company's resilience.

o Communication and Stakeholder Engagement: A well-prepared business plan serves as a

communication tool for engaging with stakeholders such as investors, partners, and
employees. It provides a clear and concise overview of the business, its value proposition,
and growth potential. Entrepreneurs with a business plan can effectively convey their
vision and attract support from key stakeholders.

o Decision-Making and Monitoring Progress: A business plan establishes key performance

indicators (KPIs) and milestones to measure progress and success. Entrepreneurs who
have a business plan can track their performance against these metrics, identify areas for
improvement, and make data-driven decisions. This systematic approach helps them stay
accountable, adjust strategies if needed, and ensure the business stays on track.
 o Improved Funding Opportunities: Investors and lenders often require a comprehensive
business plan before considering funding opportunities. Entrepreneurs who have a well-
prepared business plan are more likely to attract external financing. The plan
demonstrates their professionalism, market understanding, and commitment to delivering
results, increasing their chances of securing funding.

o Increased Confidence and Credibility: Having a business plan instills confidence in

entrepreneurs themselves and in others who interact with the business. It demonstrates
that the entrepreneur has thoroughly thought through the business idea, understands its
feasibility, and has a clear plan for execution. This credibility can lead to increased trust
from stakeholders and potential partners.

In summary, preparing a business plan provides entrepreneurs with a structured approach to

launching their company. It helps them gain strategic clarity, make informed decisions,
communicate effectively, and enhance their chances of success compared to those who do not
have a business plan.
5. Explain the concept of risk management and its role in a newly established
Company.
Risk management is the process of identifying, assessing, and mitigating risks that may impact a
company's objectives or operations. In a newly established company, risk management plays a
crucial role in identifying potential threats and implementing strategies to minimize their impact.
Here's an overview of the concept of risk management and its role in a newly established
company:

 Risk Identification: The first step in risk management is identifying potential risks that
the company may face. This includes both internal and external risks. Internal risks can
be related to operations, finances, human resources, or technology, while external risks
can include market volatility, regulatory changes, competition, or natural disasters. By
systematically identifying risks, the company can be better prepared to address them.

 Risk Assessment: Once risks are identified, they need to be assessed in terms of their
likelihood of occurrence and potential impact on the company. This evaluation helps
prioritize risks and allocate resources accordingly. Assessing risks involves analyzing
their potential consequences and understanding the probability of their occurrence.

 Risk Mitigation: After assessing risks, the company develops strategies and measures to
mitigate or minimize their impact. This can involve implementing preventive measures,
such as internal controls, safety protocols, or redundancy plans. It may also include
transferring risks through insurance or contractual agreements, or accepting certain risks
if they are deemed reasonable and manageable.
  Risk Monitoring and Review: Risk management is an ongoing process that requires
continuous monitoring and review. Risks may change over time, and new risks may
emerge as the company evolves. Regular monitoring allows the company to detect
changes in the risk landscape and take appropriate actions to address them. Periodic
reviews of risk management strategies ensure they remain effective and aligned with the
company's objectives.

 Business Continuity Planning: Risk management also involves developing business

continuity plans to ensure the company can continue its operations in the event of a major
disruption or crisis. This includes identifying critical processes, establishing backup
systems, and creating contingency plans to minimize downtime and recover quickly.

 Compliance and Legal Considerations: Risk management also encompasses compliance

with legal and regulatory requirements. This involves understanding and adhering to
applicable laws, industry standards, and ethical guidelines. Non-compliance can expose
the company to legal and financial risks.

 Decision-Making and Resource Allocation: Risk management provides valuable insights

for decision-making and resource allocation. By understanding the risks associated with
different options, the company can make informed decisions and allocate resources
effectively. It helps the company strike a balance between risk and reward and make
strategic choices that align with its risk appetite.

Overall, risk management in a newly established company is essential to proactively identify and
address potential risks that could threaten its success. By implementing risk management
processes and strategies, the company can enhance its resilience, protect its assets, and increase
the likelihood of achieving its goals.