This chapter provides an overview of entrepreneurship and entrepreneurial history. It discusses how the concept of entrepreneurship has evolved over time from merchant adventurers to risk-taking innovators. The chapter defines entrepreneurship as identifying opportunities, arranging resources to exploit opportunities, and taking appropriate action. It also examines the relationship between entrepreneurs, entrepreneurship, and enterprises. The chapter outlines the characteristics and types of entrepreneurs as well as the motivation and success factors for starting businesses. Finally, it discusses the role of entrepreneurship in economic development and potential opportunities and scopes for entrepreneurial activities.
This chapter provides an overview of entrepreneurship and entrepreneurial history. It discusses how the concept of entrepreneurship has evolved over time from merchant adventurers to risk-taking innovators. The chapter defines entrepreneurship as identifying opportunities, arranging resources to exploit opportunities, and taking appropriate action. It also examines the relationship between entrepreneurs, entrepreneurship, and enterprises. The chapter outlines the characteristics and types of entrepreneurs as well as the motivation and success factors for starting businesses. Finally, it discusses the role of entrepreneurship in economic development and potential opportunities and scopes for entrepreneurial activities.
This chapter provides an overview of entrepreneurship and entrepreneurial history. It discusses how the concept of entrepreneurship has evolved over time from merchant adventurers to risk-taking innovators. The chapter defines entrepreneurship as identifying opportunities, arranging resources to exploit opportunities, and taking appropriate action. It also examines the relationship between entrepreneurs, entrepreneurship, and enterprises. The chapter outlines the characteristics and types of entrepreneurs as well as the motivation and success factors for starting businesses. Finally, it discusses the role of entrepreneurship in economic development and potential opportunities and scopes for entrepreneurial activities.
Enterprise A Historical Perspective of Entrepreneurship A French word ‘entreprendre’, which means “to undertake.” The concept varies from period to period . Through the ages, the concept of entrepreneurship has shown significant development. 1. Earliest Period An ‘entrepreneur’ was a merchant adventurer who signs a contract with a form of venture capitalist to sell his goods. 2. Middle Ages
The term entrepreneur was given to both an actor
and a person who run large production projects. 3. 17th and 18th Century: The view of an entrepreneur as a risk taker was developed. 4. 19th and 20th Century: Entrepreneurs were often viewed as managers and from an economic point of view. The connection of innovation with entrepreneur emerged. Definition of Entrepreneurship It is the process of identifying opportunities in the market place, arranging resources to exploit opportunities for long term gains. Is the process of designing, launching and running a new business. It is the process of operating and assuming the risk of a business venture. It is the ability to take risk independently to make more earnings in the market oriented economy. Four Perspectives 1. To economist an entrepreneur is one who brings resource, labor, materials into combination that makes their value greater than before. 2. To psychologist an entrepreneur is a person typically driven by certain forces to attain something. Cont’d… 3. For a business man entrepreneur is either a threat (aggressive competitor) or supporter (source of supply, consumer, etc). 4. For capitalist philosopher an entrepreneur is one who creates wealth for others. Entrepreneurs Are action-oriented, highly motivated individuals who take risks to achieve goals. Entrepreneurs are people who have the ability to: – see and evaluate business opportunities – gather the necessary resources to take advantage of opportunities. – initiate appropriate action to ensure success. a person who tries to create something new and undertake risks. The relationship among an entrepreneur, entrepreneurship and enterprise
A person who establish and manage their own
business. entrepreneurs The process involved in creating and starting an enterprise. entrepreneurship The business organization that is formed & provides goods & services, creates jobs, contributes to national income, & overall economic development. enterprise Entrepreneur vs. Intrapreneur Intrapreneur: It is the practice of beginning and developing new business ventures within the structure of an existing organization. Intrapreneur is an employee who commits time & energy to create innovative new products/ services by using company resources, without much personal investment, risks. Cont’d… Operations and decisions of entrepreneur is independent as he is not answerable directly to someone where as intrapreneur is bounded with his line of authority and is dependent on the organizational systems. Entrepreneur Vs. Manager Innovation, organizing, motivating, risk taking are functions of entrepreneur where as managers planning, organizing, staffing, directing & controlling. As manager is a salaried employee he does not assumes much risk of business while entrepreneur taken financial & social risk. Strategic view of entrepreneur is driven by perception of opportunity where as manager is driven by organizational resources currently available & controlled. Characteristics of Entrepreneurs Need for Achievement- a desire to succeed. Willingness to Take Risks- financial risk, they risk their careers, place their families at risk. Self-Confidence- they can meet the challenges that confront them. Believe in their own ability. Innovation- Constantly looking for innovations through continuous search for new ideas. Types of Entrepreneurs Pure Entrepreneur: motivated by psychological and economic rewards. He starts activities for his personal satisfaction, status. Artisan Entrepreneur: is a person who starts a business with primarily technical skills and little business knowledge. They lack good communication skills. Induced Entrepreneur: is induced to take up an entrepreneurial task due to the policy measures of the government. Cont’d… Copreneurs: It is related to the married couples working together in a business. Fabian: they are lazy and shy. They lack the will to adopt new methods of production. Drone: is one who follows the traditional methods of production. Imitative Entrepreneurs: They Copy (imitate) techniques and technology innovated by others. Forced Entrepreneurs: circumstances made many persons to become entrepreneurs. They do not have any plan, forward looking and business aptitude. Motivation for Starting a Business Pull Influences 1. Desire for Independence 2. Desire to Exploit an Opportunity 3. Turning a Hobby or Previous Work Experience into a Business 4. Financial Incentive 2. Push Influences 1. Unemployment (or threat of unemployment)- Job insecurity 2. Disagreement With Previous Employer- Uncomfortable relations at work. Success Factors for Entrepreneurs
The Entrepreneurial Team – it refers to two or more
people who work together as entrepreneurs. They do not start business by themselves; they have teams, partners. Venture Product or Services- Incremental expansion of products and services, Products have strong profit potential, high initial margins, substantial volume of sales. Markets and Timing - well-documented forecast of sales. when products or services are introduced? Business Ideology- a system of beliefs about how one conducts an enterprise. The Role of Entrepreneurship in the Economy 1. Promotes Capital Formation: By mobilizing the idle savings of public. They employ their own as well as borrowed resources for setting up their enterprises. It lead to value addition and creation of wealth. 2. Creates Large-Scale Employment Opportunities: Entrepreneurs play an effective role in reducing the problem of unemployment in the country. 3. Promotes Balanced Regional Development: They help to remove regional disparities through setting up of industries in less developed and backward areas. Cont’d… 4. Reduces Concentration of Economic Power: Concentration of economic power in the hands of a few individuals which results in the growth of monopolies. In order to re address this problem a large number of entrepreneurs need to be developed. 5. Wealth Creation and Distribution: 6. Improvement in the Standard of Living: 7. Promotes Country's Export Trade: Opportunities and Scope of Entrepreneur The Scope of activities of entrepreneur is very wide in Ethiopia as well as abroad. 1. Genetic Industries- breeding or reproduction of plants and animals. 2. Extractive Industries- extract d/nt materials from natural resources. 3. Manufacturing Industries- conversion or transformation of raw materials and semi-finish products into finished products or goods. Cont’d… 4. Construction Industries –construction of buildings, bridges, roads, dams, canals, etc Commerce or Trade a. Internal Trade or Home Trade Wholesale and retail Trade b. International or Foreign Trade Import and export trade Services 1. Professional Services- keeping and preparing accounts, providing medical counseling, and economic consultancy, legal service. 2. Commercial Services - Warehousing or Storage , transportation, Advertising, banking, insurance Services. 3. Personal Service- beauty parlous, laundries, restaurants, etc. Woman as Entrepreneur
Problems faced by Woman as Entrepreneur:
Male dominance Family issues Lack of education Financial problems Stiff competition conditions Limited marketing and sales force Role conflicts Societal pressure Entrepreneurship, creativity and Innovation Creativity is the ability to develop new ideas and to discover new ways of looking at problems and opportunities. Innovation is the ability to apply creative solutions to those problems and opportunities. In other words, creativity is thinking new things, and innovation is doing new things. Cont’d… Creativity emphasizes the “ability” not the “activity” of bringing something new in to existence. Invention is the creation of something that has never been made before. Entrepreneurship = creativity + innovation The Process of Entrepreneurship I. Identifying and evaluating business opportunity Business opportunities sources- customers, business associates, channel member, and technical people. It allows the entrepreneur to assess whether the specific product or service has needed. II. Develop a business plan BP is a document the entrepreneur prepares before going to the implementation stage. III. Determining the Resources required Assessing the resource needed for the opportunity. More funds will be needed to finance the growth of the venture. IV. Managing the enterprise A control system must be identified. Implementing a management style & structure. Determining the key variable for success. .