Entrepreneurship & Creativity

Foundation for Academic Excellence Ministry
ENTREPRENEURSHIP
08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 1

Check your mindset
• Who is responsible for failure / or success in your life?
• Do you think that you are ‘In charge’?
• Your attitudes determine your altitude.

Cont’d
 Are you ‘the master of your own fate , the captain of your soul’?
 It is your choice to be:
i. your own boss
ii. The money work for you or you work for the money
 The 5 Fs a person may aspire for ?
i. Freedom
ii. Fortune
iii. Fame
iv. Family
v. Fun
 Picture yourself in terms of these 5 Fs in 3,5, 10, 15 and 20 years to
come (the power of visualization)

Entrepreneurship in the Twenty-first Century
• Is there a link between entrepreneurship and

development?
• Why entrepreneurship?
• What drives and encourages entrepreneurial

attitude, activities and aspirations?
• Who are really entrepreneurs?

Cont’d
 Necessity driven vs. opportunity driven

entrepreneurship (pulled or pushed)
 Quality of business start ups
• Entrepreneurship in:
a) Factor driven economy
b) Efficiency driven economy
c) Innovation driven economy
 ‘creative distractors’

Conceptual Overview of Entrepreneurship
• Our future rests on entrepreneurial ventures

founded by creative individuals
• Entrepreneurship is one of the four mainstream

economic factors: land, labor, capital, and
entrepreneurship

Definitions
• According to Ronstadt, “Entrepreneurship is the dynamic

process of creating incremental wealth
i. Entrepreneurship is the innovative process of identifying
opportunities in the market place, marshaling resources
required to exploit the opportunities for the long term gains
by assuming risk.
ii. It is the ability to see economic opportunities and
transform them into business and economic gains.
iii. It is a creative human act that builds something of value
in pursuit of opportunities through application of vision,
passion, and commitment. It also requires willingness to
take calculated risk.

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Personality profile of entrepreneurs
 Visionary and goal oriented

 Unusual creativeness
 Strong need for achievement
 Total commitment, determination and perseverance
 Taking initiatives and personal responsibilities
 Persistent problem solving
 Realism and sense of humor
 Seeking and using feedback
 Internal locus of control
 Calculated risk taking
 Integrity and reliability
By: Daniel Beyera Tujo (MA and MBA)

9 08/26/2021

10 08/26/2021

11 08/26/2021
Who else?

12 08/26/2021
Types of entrepreneurs
 Entrepreneurs found among different walks of life and
disciplines
 “Novice” entrepreneur (without entrepreneurial experience)
 “Habitual” entrepreneur (a person with previous
entrepreneurial experience)
 “Nascent” entrepreneur (a person who is in the process of
creating a new organization – he or she can be “novice” and
“habitual”
 “Serial” entrepreneur (a person who constantly establishes and
sells organizations)
 “Portfolio” entrepreneur ( a person who owns several
organizations at the same time)
 “Intrapreneur “(a person who acts entrepreneurially in the
context of an existing organization). By: Daniel Beyera Tujo (MA and MBA)
13 08/26/2021
Entrepreneurial Competences
 What is competence?
 It is combination of knowledge, skills, and appropriate
motives or traits that an individual must possess to
perform a given task.
 According to Management System International
categorization entrepreneurial competencies are broadly
classified:
1) Achievement competencies
2) Planning competencies
3) Implementation competencies
14 08/26/2021
Achievement motivation competencies
Risk taking propensity (extent of risk friendly, take action to control

risk and control outcomes)
Opportunity seeking and initiatives ( ability to proactively
identify opportunities and take initiatives to optimize; the acts to extend the business
to new areas, products or services)
Persistence ( the courage to face obstacles and the capacity to overcome it ;
taking personal responsibility to achieve the desired goal)
Commitment to the work and contract ( extent of exerting
personal sacrifices and extraordinary efforts to keep promises, meet datelines; extent
of concern for goodwill and reputation…)
Demand for efficiency and quality (find ways to do things better,
faster and cheaper; act to do things that meet or exceed standards of excellence;
always strive to ensure and continuously improve qualityBy:) Daniel Beyera Tujo (MA and MBA)
15 08/26/2021
Planning competencies
Goal setting ( proactive move, setting meaningful and challenging

goals; aspiration for future growth …)
 Wishful thinkers vs. achievers separated here
Information seeking ( personal seeking information from

clients, suppliers, competitors ; continuous search for market information
and openness to seek expert support and advice…)
Systematic planning and monitoring ( create time

bounded tasks ; revise plans in light of feedback on the performance or
changing circumstances; keeping accurate track records )
16 08/26/2021
Implementation competencies
 Persuasion and networking

 Use deliberate strategies to influence and persuade others
 Use key people as agents to accomplish own objectives
 Acts and develop and maintain business contacts
 Independence and self confidence:
 Seek autonomy from the rule or control of others
 Ensuring sound judgment
 Express confidence in own abilities to meet a challenge

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Avenues of Business opportunities
• What are the source of new business ideas

Some of the major/ broader sources of business ideas
• Personal interest and hobbies

• Entrepreneur's work experiences, knowledge and skills
• Assessing the existing product and market gaps
• Consumers
• Existing companies
• Distribution channels
• Assessments of larger business environment
• Research and development

???
 can you connect all these dots by using only 4
lines?
. . .
. . .
. . .

imagination is more important than knowledge

Invention, innovation, creativity

The criteria used to judge the idea
• Easiness to implement
• Originality (mere imitation vs. improved…
• User-friendliness (what value to which)
• Customer acceptance
• Easiness to finance the idea
• Profit potential (5% to 15%)
• Patent protection possibility( if innovation, brand, …)

23 08/26/2021
In entrepreneurship what is important is not unique

idea generation …
 What is important is developing idea, implementing it, and

building successful business.
 What is the prospective customer of your idea? (very
specific)
 The idea should match the market
 Make sure that the customer get better values for their
money than the existing business do

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Conducting market research

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So in brief Entrepreneurial Marketing …
 Conduct market research- identifying and assessing

opportunities
 Developing and implementing marketing strategies that best

optimize opportunities(segmenting, targeting and positioning)
 Marketing skill to support business growth

Which information ?
• Based on that, define what kind your information you

need for reaching a decision
• Are you interested in having more insight about the
market?
• Do you want to recognize a market opportunity?
• Do you want to learn more about the costumer’s profile?
• Do you need some numbers about the market size?
• Do you want to understand your competitors better?
• Do you need to try a new product before launching it to
the market?
• Do you need a distribution channel –partner?

Why market research?
• Research has shown that common marketing related

danger of entrepreneurs:
 Overestimating demand
 Underestimating competitors response
 Making uninformed distribution decisions

Market Research and Analysis Activities
Identify Evaluate Analyze Describe
Potential markets Competitors Assumptions
Customers
Demographic profile Future markets Existing Market niche for
of customers and trends or competitors with Positioning firm
characteristics of changes similar products Pricing approach
customers, age, sex, window of or services used in plan
income, etc business Future Distribution or
Buying habits and opportunity competitors and method of
relevant information Niche position ease of entry making a market
for new venture Information Industry structure
Research criteria related to market research

Business Plan
• It is a blue print of a business

• A business plan is ‘a selling document that conveys the
excitement and promise of your business to any
potential backers or stakeholders.’
• The business plan allows:

• The presentation of the opportunities and risks
• The development of the negotiating strategies
• Financial and capital planning

Benefits of Good Business Plan
 Assist in raising capital

 Help entrepreneurs gain a deeper understanding of the
opportunity they are envisioning
 Serve as a guide for entrepreneur

 Instrument to secure strategic partners
 Instrument to gain credibility in the eyes of various

stakeholders

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Format and Design of Business Plan
 Cover
 Table of contents
 Executive summary
 Enterprise description/ Legal statues
 Product/service
 Market/sector
 Marketing and distribution
 Operation plan
 Enterprise management
 Financial planning
 Capital requirment
 Appendix By: Daniel Beyera Tujo (MA and MBA)
Contents of Executive summary
 Description of the business idea (concepts)

 Short market description (industry overview,
competitive advantage, business model )
 Crucial success factors and risks
 Management
 Financial goals (financial snapshot)

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Enterprise Description
This part covers some important background information

regarding the enterprise
 Contents:
 Foundation date
 Legal form and tax aspects
 Owners distribution and structure (full address)
 Location analysis (if required)

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Industry, customer and competitors analysis (overview)
 Industry
 Describe your overall industry in terms of revenues, growth, and pertinent
future trends.
 How strong the opportunity is? Examine
 Market demand (if market is growing >20%, the opportunity is more exiting)
 Market size and structure
 Margin analysis (>40 %)
 Customer
 Who is the customer?
 What is the core customer wants?
 The competitors
 Who are the major players, their strategy, level of competition ….
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Analysis of the general conditions and the market

opportunities
 1. Analysisand identification of the essential basic conditions
 Economic development and its trends
 Technology development -state-of-the-art
 Relevant social, legal and environmental factors
 2. Description and development of the sector

 Kind of sector
 Current andfuture (3 -5 years) size, and market volume
 Segment description
 3. Profile
development of the target-market/the clients
 Who are the potential clients?
 Which service/product are these clients wishing?
 Are there specific products /service characteristics that are particularly important?...
38 08/26/2021
Cont’d
 4.Competitors analysis
 Competitors’ products/services description
 Competitors’ market positions (market share)
 Competitors’ strategies and practices (distribution
channels, price formation, advertising, service)
 Response strategies to possible new competitors
 5.
Sales-forecast presentation
 Market share

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Enterprise Management
 This part contents the description of the most important people

(founders) and the company’s structure
 Contents:
 Key people (qualification, experience in this sector, commercial

know-how)
 Company’s organization
40 08/26/2021
Financial planning
 1. Clear planning horizon

 3 to 5years
 Long-term planning are often mere speculation
 2. Monthly terms
 Inorder to identify liquidity problems during the first year, it is
important to make an income-outcome comparison on a month basis.
 3.Realistic planning
 Best Case und Worst Case Scenario
 Only integrate realistic data and assumptions
 Justify estimates
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Financial plan decisions (in brief)
 Determination of financial requirements ? (how much?)
 Identification and source of finance (source and use of

fund table)
 Choosing between debt and equity financing option
(which one is better?)
 Convincing profitability potential of new venture
( prepare pro-forma balance sheet, projection of cash
flow statements )
42 08/26/2021
Critical risk
 Every new venture faces a number of risks that may
threaten its survival
 Risksare usually associated with (market interest and

growth potential, competitor’s action and retaliation,
time and cost of development, operating expenses,
availability and timing of financing…)
 The BP should recognize potential risk, then state

contingency plan

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Conclusion
 The BP is just more than a document, it is process , a story.
 It provide the entrepreneur with keen insight needed to

marshal resources and direct growth.
 It also provides talking points so that entrepreneurs can

get feedback from a number of experts, including
investors, vendors and customers.
SMEs
 Do MSEs are playing governmentally prescribed roles?
Such as:
 Employment creation
 Pave industrialization
 Back economic growth

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Significance of SMEs
 In most Advanced nations SMEs has significant

share in employment creation, and overall
economic development
 According to Ayyagari et al. (2007), in high-income
countries formal SMEs contribute to 50 percent of
GDP on average.
 In most LDCs, SMEs ‘seems extension of trading
and informal business, usually concentrated on
saturated segments, and seemingly dominated by
necessity driven factor’
46 08/26/2021
Cont’d
 In 2000 in China SMEs created value and services of 50.

5 %, 75 % of job, 60% of china’s export, and 43.2% taxes
 In Japan SMEs account for 70% total labor force
 SMEs in South Africa contribute 56% of private sector
employment , and 36% of GDP
 Germany economy is based on strong exporting MSEs
(largely high tech)
 SMEs contribution is decisive for value generation (51
% of USA’s GDP was produced by MSEs,35% of south
Africa’s GDP as produced by SMEs.

47 08/26/2021
Small business failure factors
 Internal or competence related factors

 Incompetency
 Unbalanced experience
 Lack of experience in line
 Limitation with technical competence
 Inadequate records
 Expansion beyond resources
 Inadequate information about customer
 Failure to diversified market
 Personalized management
 Lack of innovation

48 08/26/2021
Chair for export in Nicaragua

Managing startup and growth

50 08/26/2021

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52 08/26/2021
Introduction
 Not all businesses that survive grow to be large
businesses. This is due either to the nature of their
industry or simply the personal desires or ambitions of
the owner/manager. And external factors such as (entry of
competitors , change in technology ) among others.
 Practically the stages business passes through are not

sequential
 The duration of time a business stay at certain stage varies
(depending on industry attractiveness and other factors)

53 08/26/2021
Inception stage / start up/
 The entrepreneurs may be novice or nascent

 The major challenges at this stage:
 Securing customer (limited channel and limited customers)
 How to ensure profitably path ( how positive cash flow?)
 More energy, fiancé and time is required due to increased

activity
 The marketing strategy at this stage will be educate the customer

and securing distribution

54 08/26/2021
Survival stage
 Business looks workable business entity

 At this stage requires more:
 Supervision (suppliers, banks..)
 Working capital
 Features and requirements
 increased complexity of expanded distribution
 Increasing competition challenges
 Focus on price than differentiation
 Introduce formalized cost control system

55 08/26/2021
Growth stage
 Growth in terms of (sales, profit, market share, expansion, new product

development …)
 Managing growth and ensure resources
 Develop some new product and look for new source of finance
 Ensure efficient delegation and control
 The challenges emanates from:
 Entry of larger competitors
 The demand for expansion into new market or product
 Finance the growth and maintaining control of operation
 The marketing strategy here customer loyalty must be cultivated,
band must be built
56 08/26/2021
Expansion stage
 Major features and requirements

 Decentralization
 Professional administration
 New product and innovation, market research
 Expanding outlets/ distribution options

57 08/26/2021
Maturity stage
 Major features and requirements :
 Expense control
 Productivity
 Nitch
 Decentralization
 Management’s role
 Watchdog
 Maintenance of plant and market position
 The key managerial concern expense control, productivity, and finding
growth opportunity
 Marketing strategy , differentiation

58 08/26/2021
Decline stage
 Here marketing Efficiency is important,
 Cash the cow, if not kill the dog (exit) strategy is
important

59 08/26/2021
Four domains of Managing Growth

Strategy Resources
Organization
Leadership

60 08/26/2021
Organization and Early growth challenges
o The ability to generate and maintain profitability is the

challenge
o Start-up commonly managed with few controls, very little
performance assessment and puts emphasis over sales.
o Chasing new customers will be priority
o Rapid growth overwhelms operation and result in
operational inefficiency
o The common challenges due to operation inefficiency
results due to (inventory outages, overdue collections,
diminishing cash flows, delivery restrictions by supplier)

61 08/26/2021
Cont’d
 Inadequate systems and planning leads to

inefficiency, poor control and quality problem
 Informal communication and processes create
confusion and lack of accountability
 Key imperatives
 Develop basic system to manage cash and control
receivables , inventory and payables.
 Develop simple budgets and matrices to track performance
and expenditures
62 08/26/2021
Organization and latter growth challenges

 Organization outgrows initial system and planning
structure
 Difficulties with coordination and control as
decentralization increases
 Key imperatives
 Upgrade and formalize systems for control and
planning for the future (proactive planning replaces
reactive planning )
 Maintain balance between control and creativity;
ensure processes do not constrain innovation.
63 08/26/2021
Leadership and early growth challenges
 Company outgrows entrepreneurial abilities.

 Entrepreneur unable to delegate
 Internally promoted managers may lack adequate
mangers
 What leadership skills are sought at this stage?

(reflect)
 Orchestrate change in both the organizational and

competitive environment
64 08/26/2021
Leadership and later growth challenges

 Management lacks the managerial sophistication required
for the increasing size and complexity of growing
organization
 Inadequate communication and growing tension between
management and employee groups.
 Key imperatives
 Recruit key professional management talent. Build fully
function management teams
 Ensuring leadership team shares in strategic planning and
preserves entrepreneurial capabilities
 Create decentralized reporting structure
65 08/26/2021
Strategy and early growth challenges

 Tendency to overcommit, pursue many diverse
opportunities.
 lack of clear strategy for how the venture competes
 Imperatives
 develop a focused strategy that leverages the company’s
unique value.
 (what can you do distinctly well and develop capabilities around
that)
 maintain consistency of this strategy with all company
activities such as product development, marketing,
operation
 align capabilities with opportunity
66 08/26/2021
Strategy and late growth challenges
 Original opportunity domain may provide few opportunity for

growth
 Competitive pressures and changes in the market may threaten
current business
 Imperatives
 Establish competitive uniqueness and move beyond one
product orientation (diversification + expansion)
 Expand into periphery with product and market
 Develop strategy for future that provide new momentum and
long-run effectiveness
 Anticipate / respond to changes in industry / market
environment
67 08/26/2021
Resources and growth challenges

 financial and human resources constrained as rapidly
expanding sales requires more people and financing
 generalized skills increasingly incapable of handling
increased complexity
 insufficient resources for growth
 imperatives
 get profitability and cash flow in check
 tap early financing sources
 hire people with specialized expertise
 protect intellectual property
 secure growth financing

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Tips on managing resources
 What resources are needed

 Where they will come from
 How they will be used
 How their use will be controlled and monitored

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Factors that add value to a business
the
process
entrepreneu
and facility rial team
embedded
knowledge & cash flows
intellectual
property
and profit
customer base
and market
position
70 08/26/2021

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Foundation for Academic Excellence Ministry

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 1

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 2

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 3

• Is there a link between entrepreneurship and

• What drives and encourages entrepreneurial

• Who are really entrepreneurs?

 Necessity driven vs. opportunity driven

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 5

• Our future rests on entrepreneurial ventures

• Entrepreneurship is one of the four mainstream

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 6

• According to Ronstadt, “Entrepreneurship is the dynamic

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 7

Personality profile of entrepreneurs

 Visionary and goal oriented

By: Daniel Beyera Tujo (MA and MBA)

By: Daniel Beyera Tujo (MA and MBA)

By: Daniel Beyera Tujo (MA and MBA)

By: Daniel Beyera Tujo (MA and MBA)

Achievement motivation competencies

Risk taking propensity (extent of risk friendly, take action to control

Goal setting ( proactive move, setting meaningful and challenging

Information seeking ( personal seeking information from

Systematic planning and monitoring ( create time

 Persuasion and networking

By: Daniel Beyera Tujo (MA and MBA)

By: Daniel Beyera Tujo (MA and MBA)

• What are the source of new business ideas

• Personal interest and hobbies

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 18

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 19

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 20

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 21

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 22

In entrepreneurship what is important is not unique

 What is important is developing idea, implementing it, and

By: Daniel Beyera Tujo (MA and MBA)

By: Daniel Beyera Tujo (MA and MBA)

Conducting market research

By: Daniel Beyera Tujo (MA and MBA)

So in brief Entrepreneurial Marketing …

 Conduct market research- identifying and assessing

 Developing and implementing marketing strategies that best

 Marketing skill to support business growth

By: Daniel Beyera Tujo (MA and MBA)

• Based on that, define what kind your information you

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 27

• Research has shown that common marketing related

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 28

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 30

• It is a blue print of a business

• The business plan allows:

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 31

 Assist in raising capital

 Serve as a guide for entrepreneur

 Instrument to gain credibility in the eyes of various

08/26/2021 By: Daniel Beyera Tujo (MA and MBA) 32

Format and Design of Business Plan

 Description of the business idea (concepts)

 Crucial success factors and risks

 Financial goals (financial snapshot)