Entrepreneurship Development

Course Instructor: Kidane G.

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 What is “entrepreneurship”?
 Why be an entrepreneur?
 Are you interested to learn
entrepreneurship? Why? 2
 Entrepreneurs:
Entrepreneurs:
The
The Driving
Driving Force
Force Behind
Behind
Small
Small Businesses
Businesses

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 Course objective
• The main aim of this course is to give the student a
broad understanding of the field of entrepreneurship
development, and commercialization of technology-
based innovation in existing firms
• Through the development of a business plan, evaluate
the opportunities of a selected venture idea along
with the constraints on its feasibility.
• To equip engineering students with the required
entrepreneurship tools and inspirations they need to
start and grow a successful business.

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 CHAPTR ONE
Outline
• Introduction
• Forms of Entrepreneurship
• Concepts of Entrepreneurship;
• Deconstructing Entrepreneurs: Core Competences
• Entrepreneurial Process;
• Factors affecting entrepreneurships development
• Types and Models of Entrepreneurship
• The Role of Entrepreneurship in an Economy
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 Introduction

Who is an Entrepreneur?

• What are the profiles of Entrepreneurs?

• Are Entrepreneurs Born or Made?
• What is the distinction between Entrepreneurship and
Entrepreneurs?

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 Cont…
Who is an Entrepreneur?
Entrepreneur is a person who owns, organizes, manages
and runs an enterprise assuming the risk of a business or
enterprise.
Hisrich:- “a person who estabilishes a new business
venture and is a visionary leader- a person who dreams
great dreams”

Entrepreneur is a person who has the ability to see and

evaluate business opportunities to gather the necessary
resources to take advantage of them, and to initiate
appropriate action to ensure success (Meredith, 1982).
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Cont…
• Entrepreneur is someone who is specialized in taking
judgmental decisions about the coordination of
scarce resources (Casson)
• Entrepreneur is an individual who:
– Has the ability to identify and pursue a business
opportunity
– Undertake a business venture
– Raises the capital to finance it
– Gathers the necessary resources
– Set goals for himself/herself and others
– Assumes major portion of the risk
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Cont…

A person who creates a new business in the

face of risk and uncertainty for the purpose of
achieving profit and growth by identifying
opportunities and assembling the necessary
resources to capitalize on those opportunities.

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 Cont…
 Definition: Entrepreneur
 (New Encyclopaedia Britannica) – An individual who
bears the risk of operating business in the face of
uncertainty about the future conditions
 Definition: Entrepreneurship
 It is a philosophy or process through which an
entrepreneur seeks innovation and employment.
Standard definition
 Entrepreneurship is the process of creating something
different with value by devoting the necessary time and
effort, assuming the accompanying financial, social risks
and receiving the resulting rewards of monetary and
personal satisfaction and independence. 10
 Cont…

Entrepreneur Entrepreneurship Enterprise

The person The process The outcome

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 Forms of Entrepreneurship
 Entrepreneurship can take three different forms

1. The individual entrepreneur

2. Intrapreneur: a person who does entrepreneurial
work within large organization

3. Social Entrepreneur: People who drive social

innovation and transformation in various fields
including education, health, environment and
enterprise development

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 Entrepreneurs Vs. Intrapreneurs
• Entrepreneurs are people that notice opportunities and
take the initiative to mobilize resources to make new
goods and services.

• Intrapreneurs also notice opportunities and take

initiative to mobilize resources, however they work in
large companies and contribute to the innovation of
the firm.

• Intrapreneurs often become entrepreneurs.

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 Entrepreneurial Skills
The following are foundational skills entrepreneurs
need to run and operate a successful business:
• Communication Skills
– Writing, Speaking & Listening
• Human Relations, communication and negotiation
Skills
• Math or financial Skills
• Problem Solving & Decision Making Skills
• Planning and leadership skills
• Technical Skills
• Basic Business / marketing Skills
• Project Management Skills 14
 Advantages of Entrepreneurship
 To an Individual
(a) Provides Self Employment for the entrepreneur
(b) Entrepreneur can provide employment for near & dear
one
(c) Entrepreneurship often provides an employment and
livelihood for next generations
(d) Freedom to use own ideas – Innovation and creativity
(e) Unlimited income / higher retained income
(f) Independence
(g) Satisfaction

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Cont…

To the nation

(a) Provides larger employment
(b) Results in wider distribution of wealth
(c) Mobilizes local resources, skills and savings
(d) Accelerates the speed of economic development
(e) Stimulates innovation & efficiency

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 Wage Employment Vs Entrepreneurship
 Wage Employment • Entrepreneurship
 Work for Others  Own Boss
 Follow Instructions  Make own plans
 Routine Job  Creative activity
 Earning is fixed, never  Can be negative sometimes,
negative generally surplus
 Does not create wealth  Creates Wealth, contributes
to GDP
 Can choose from-  Can choose from-
 Government service  Industry
 Public Sector  Trade or Service Enterprise
 Private Sector

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 Entrepreneurial Process
• Income generation is the initial stage in the entrepreneurial
process in which one tries to generate surplus or profit.
They are often taken on part- time or casual/informal
• Self-employment is the 2nd stage in the entrepreneurial
process and refers to an individual’s fulltime involvement in
his own occupation.
• Entrepreneurship is the terminal stage of the
entrepreneurial process wherein after setting up a venture
one looks for diversification and growth

Income Generation Self Employment Entrepreneurship

Initial stage Middle stage Final stage

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 Deconstructing Entrepreneurs: Core Competences
• A competence refers to the fundamental characteristics of
a person which results in effective/ superior performances
in a job.
• Entrepreneurs have some competences, which distinguish
them from the general population and even from hired
professional manager. Some of the characteristics that can
be easily perceived are the following:
Commitment and Determination: Entrepreneurs are highly
committed in that they exert their utmost effort to make
their venture a reality. They often immerse themselves
completely in their businesses. It is often suggested that
many entrepreneurs are workaholics. Most entrepreneurs
have a strong appetite for hard work.
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Cont…
Derive to achieve: Entrepreneurs are internally driven
by a strong desire to compete, to excel against self
imposed standards.
 Besides, they have the desire to achieve something
that they can be proud of.
 Individuals with a low need for achievement are those
who seem to be contented with their present status.
 On the other hand, individuals with the high need for
achievement like to compete with some standard of
excellence and prefer to be personally responsible to
their own assigned tasks.

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Cont…
Information Seeking: Entrepreneurs take action on
own to get information to help reach objectives or
clarify problems. They does personal research, consult
experts for business and technical advices and use
their personal networks for the same.

Opportunity Oriented: Entrepreneurs start by finding a

need and quickly satisfying it. Successful growth
minded entrepreneurs focus on opportunities rather
than on resources, structure, and strategy. They look
for and take action on opportunities.

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Cont…

Initiative and Responsibility: entrepreneurs take action

that goes beyond job requirement. They do things
before being asked or forced by others/ events. They
morally, legally and mentally accountable for their
ventures.
Persistence Problem Solving: entrepreneurs are not
intimidated by difficult situations. They attack
problems/ obstacles that are impeding to business
operations. They take repeated action to overcome
obstacles. If tasks are extremely easy/ unsolvable ones,
they don’t warrant their time.
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Cont…
Seeking Feedback: “How are we doing?” The
question is ever present in the entrepreneurs mind.
Unlike other people, entrepreneurs have a strong
desire to know how well they are doing and how they
are going to improve.
Internal Locus of Control: Successful entrepreneurs
believe success and failure of their venture will be
controlled and governed by their accomplishment and
they believe that they can influence their outcomes
and actions.

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Cont…
Calculated Risk Taking: Entrepreneurs are
calculated/moderate risk-takers.
 Risk taking is an inherent part of business
ownership. Staying safe rarely pays of in the long
run.
 Risks are not taken blindly, careful research and
previous are taken into account.
 With this in concern, they carefully think about
these four forms of risks: Financial risk, career risk,
family risk, and psychic risk.

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Cont…
Creativity and Innovation: The ability to create new
ideas, new concepts, and new ways of viewing
problems is at the heart of successful entrepreneurs.
The ability to see an opportunity instead of a
problem and a solution instead of a dilemma is a
fundamental skill associated with many
entrepreneurs.
Tolerance for Failure: Entrepreneurs do not get
disappointed, distressed or discouraged by failures.
Rather, they use failure as a learning experience.
Entrepreneurs learn more from their failures than
their successes. They use their willpower to conquer
the barriers that stand in their way. Japanese
proverb, “Fall seven times; stand up eight.” 25
Cont…
Independence: Entrepreneurs want to be their own
bosses. They don’t wish to be commanded by others.
They don’t like to be ordered by others. They have a
high need for autonomy.
Persuasion: Successful entrepreneurs persuade
others. They are good at convincing others.
 Convinces someone to buy a product
 Convinces someone to provide financing
 Convinces someone to do something else that he
would like that person to do.

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Cont…

Team building: entrepreneurs are good at creating

teams which comprises of highly qualified and well
motivated employees to ensure the establishment
of successful business ventures.
Visionary: entrepreneurs have an enthusiastic
vision, the driving force of an enterprise. They know
where they want to go. They do have a concept of
what their firm can be in some years to come.

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 Cont…
High Energy level: Entrepreneurs are more energetic
than the average person. That energy may be a
critical factor given the incredible efforts required to
launch a start-up company.
 Building a company requires a great deal of energy.
It is obvious that entrepreneurs are engaged in
extraordinary work load and stressful dedication
that require great deal of energy.
 Successful entrepreneurs fine-tune their energy level
by carefully monitoring what they eat, drink, and
know when to go away for relaxation.
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Cont…

Self Confidence : Individuals who possess self-

confidence feel that they can meet the challenges
which confront them. They have the sense of
mastery over the types of problems that they might
encounter. Entrepreneurs have a strong belief in
self and own abilities.
Optimism: they live by the philosophy that this is
the best of times, and that anything is possible.

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Cont…
Flexible and able to adapt to change: one hallmark of
true entrepreneurs is their ability to adapt to the
changing demands of their customers and their
businesses. Entrepreneurs understand that in this
rapidly changing world economy, rigidity often leads to
failure.
Dynamic leaders: entrepreneurs are dynamic leaders
in the sense that they transform the pattern of
production or distribution to focus on catching up with
the changing demands of the environment and the
market. They are more of transformational leaders
than transitional ones.
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Cont…
Time management: Entrepreneurs know that time is
finite. They know how to manage their time
effectively in that they would be able to live their
lives, accomplish the tasks that they need to
accomplish, and enjoy lives.

Concern for High quality work:

Entrepreneurs act to do things that meet or beat
existing standards of excellence. They have high
desire to produce of work of high quality.

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 Entrepreneurial Decision Process

• Pull Factors- the factor which attract a person

to become entrepreneur
– Perception of advantages- If a person feels that he
can earn better or overall gains in terms of money
– Spotting an Opportunity
– Government Policies
– Motivation
– Influenced by Culture, Community, Family
Background, Teachers, Peers, etc.
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 Cont…
• Push Factors- the factors that force him
– Job Dissatisfaction
– Relocation
– Joblessness
– Lay off
– Retirement
– Boredom- This is applicable to many ladies from well
to do families. With their army of servants to take
care of home, they find an opportunity to keep the
boredom away and start ventures

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Factors Influencing Entrepreneurship

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 Putting Failure Into Perspective
• Failure is a natural part of the creative process.
• Failures are simply stepping stones along the path to
success.
• The “secret” to success is the ability to fail intelligently,
learning why you failed so that you can avoid making the
same mistake again.

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 Current Entrepreneurial Trends
One way to identify business opportunities is to study current
trends that provide opportunities for entrepreneurs.

social
Internet businesses
entrepreneurship

service businesses focus on technology

home-based outsourcing and

businesses strategic alliances

green businesses corporate ventures

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 Roles of Entrepreneurship in an Economy

• Entrepreneurship raises productivity through technical

and other forms of innovation.
• Entrepreneurship is powerful tool of job creation.
• Entrepreneurship facilitates the transfer of technology.
• Entrepreneurs play a strategic role in commercializing
inventions and products.
• Entrepreneurs play a critical role in restructuring and
transformation of economy.

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 Roles of Entre….Con’td
• Entrepreneurship and entrepreneurial behavior can
breathe vitality into the life of large corporations and
government enterprises.
• Entrepreneurs make markets more competitive and
thereby reduce both static and dynamic market
inefficiencies.
• Entrepreneurs improve the social welfare of a country
by harnessing dormant, previously overlooked talent.
• Entrepreneurs create new markets and facilitate
expansion into international markets.

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 Entrepreneurial Myths-NOT facts

• Entrepreneurs are Lucky

• Entrepreneurs make or break on the first venture
• Entrepreneurs are born not made
• Entrepreneurs are High-Tech wizards
• Entrepreneurs extreme risk takers (Gamblers)
• All Entrepreneur need to be successful is Money

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