Entrepreneurship

Chapter 1
 Entrepreneurship and the Entrepreneur

A.Entrepreneurship as a Self – employment Decision

Entrepreneurship is basically aimed to gear someone towards self –
employment.
It also generally pertains to engaging in small and medium – sized
business.
 Table 1.1 Age of Business Failures
Source: A.J Williams, Why Small businesses Fail, Real Estate Journal, April 1995, p18.

Age of Business( years) Failure Rate(%) Cumulative( %)

Under 1 27.6 27.6

1-2 13.8 41.4

2-3 11.2 52.6

3-4 10.1 62.7

4-5 6.4 69.1

5-10 9.3 78.4

`10-20 8.7 87.1

Over 20 12.9 100

Table 1.2 Causes of Business Failures

Neglect 3.0 %
Fraud 1.1
Lack of Technical Expertise 8.5
Lack of management expertise 17.4
Lack of Experience 21.2
Incompetence 44.9
Disaster and other reasons 3.9
100.0

Source: A.J. Williams, “ Small Business caught in squeeze’, The Sun – Herald, 8 MAY
1997. P122.

S
Entrepreneurship started in France
It was coined by Jean Baptiste Say, a renowned french economist.

ENTREPRENEURSHIP
- Is what the entrepreneur actually does; entrepreneurial is the approach
and the entrepreneurial process is where the venturers are engaged in.
 Webster Dictionary definition:

( Entrepreneur) one who organizes, manages and assumes the risk of business
or enterprise.
Enterprise:
1. a project or undertaking that is especially difficult.
2.a: unit of economic organization or activity; especially a business organization
a systematic purposeful activity
3.Readiness to engage in daring action: INITIATIVE
Economists’ description:
- consists in doing things that are not generally done in the ordinary
course of business routine; it is essentially a phenomenon that comes under a
wider aspect of leadership. ( Cantillon 1725)
 Entrepreneurship
- it is a science of converting processed ideas into a remarkable business
venture.
- it is also a capacity for innovation, investment and expansion in new
market, products and techniques.
(Fajardo, 2009)
 Who is the Entrepreneur?
 Entrepreneurs take and accept risks
 Entrepreneurs own ventures
 Entrepreneurs are Managers
 Entrepreneurs establish new ventures and develop existing ones
Entrepreneurs identify opportunities in the Market
Entrepreneurs apply their expertise
Entrepreneurs process market information
Entrepreneurs bring innovations
Entrepreneurs provide market efficiency
Entrepreneurs maximize investment returns
Entrepreneurs provide leadership
 Characteristics of the Entrepreneur

Entrepreneurs are in good physical health

Entrepreneurs have superior conceptual abilities
Entrepreneurs have the broad thinking of the generalist
Entrepreneurs have high self- confidence
Entrepreneurs have strong personal drive
Entrepreneurs need to control and direct
Entrepreneurs have moderate interpersonal skill
Entrepreneurs are moderate risk takers
Entrepreneurs have a realistic outlook
Entrepreneurs have a high degree for emotional stability
Entrepreneurs have a low need - level for status
 The Fears and Excuses
RISKS EXCUSES
• Financial risk I do not have the money, I do not know where to get the capital, I am afraid to
lose my house, car properties, etc.

• Career risk I can not risk my promotion, I can not afford not to have salary

• Family risk My kids are still young, My spouse and I are not doing well

• Social Risks What would my friends say?,, what if nobody buys it? ,

• Psychic risks I am too young, I am too old for that, I lack experience
 Factors that develop Entrepreneurial
Activities
1. The Entrepreneur takes the initiative
2. Organization of Capital Resources
3. The Development of Administrative Machinery
4. The Development of Entrepreneurial Autonomy
5. The Development of SWOT Analysis
Peculiar Characteristics of Managers in
solving problems
• He develops systems and procedures that
are precise based on current pctices in an
industry.
• The manager is interested in solving
organizational problmes rather than
finding other avenues in the solution of
the problems.
• Characteristics of an Innovator
Entrepreneur in solving problems
• He looks at the problem on different
angles and finds means to circumvent
the same.
• He discover the roots of the problem and
develops avenues to better
• The manager calibrates in the
refinement of policies and
procedure and tends to revise
them to solve existing problems .
• He develops basic assumptions
and hypothesis related to current
practices and makes innovations
based on careful analysis through
SWOT.
The Advantage of Becoming Entrepreneurs
 Have the opportunity to create your own destiny
 Have the opportunity to be financially well - off
 Have the opportunity of knowing yourself better
 Have the opportunity to excel, be recognized and contribute to society
The starting point to Entrepreneurial Success

1.Start to be on your own

2. Explore the business environment
3. Be in control
4. Have a good accountant or a trusted financial adviser