Introduction to entrepreneurship.pptx

INTRODUCTION TO ENTREPRENEURSHIP

MEANING Entrepreneurship is defined as the process of making money, earni rning profits and increasing sing the wealth while posin sing char chara acterist ristic icss such uch as ris risk takin king, management, leadership and innovation. The term entrepreneurship is a complicated term and giv gives vario arious us me mean anin ing g de depe pend ndin ing g on the the situ situat atio ion. n. The word entrepreneur has a Frenc h origin. It originated during the Middle Ages when the term entrepreneur was applied to   “the   ma man in cha charge of the great  reat  architectural works: castles and fortifications, public buildings, abbeys and cathedrals” cathedrals”. It is derived from the Frenc h word,   entreprendre, whic h means “to undertake.” In a business context, it means to undertake a business activity or simply to star t a business. The Merriamtebster Dictionary defines an entrepreneur as ‘one who org organiz anizes es,, ma mana nag ges, es, and and assum ssumes es the the risk riskss of a busi busine ness ss or ente enterp rpri rise se’.

FOUR KEY ELEMENTS OF ENTREPRENEURSHIP  – Innovation  – Risk taking  – Vision  – Organising skills

IN CRUX THESE ARE VARIOUS INTERCHANGEABLE MEANINGS OF WHA WHAT T IS ENTREPRENEUR ENTREPRENEURSHIP SHIP..

 – A theory of evolution of economic activities.  – A continuous process and an ingredient of economic development.  – Essentially a creative activity or an innovative function.  – A risk taking factor which is responsible for an end result.  – The name given to the factor of production, which performs the functions of

enterprise.  – Creates awareness among people about economic activity.  – Generates Self-employment and additional employment.

TRAITS OF AN ENTREPRENUER -He is a person who develops and owns his own enterprise.  – He is a moderate risk taker and works under uncer tainty for achieving the goal.  – He is innovative.

- He peruses the deviant deviant pursuits. pursuits.  – Reflects strong urge to be independent.  – Persistently tries to do something bette r.  – Dissatisfied with routine activities.  – Prepared to withstand the hard life.  – Determined but patient.  – Exhibits sense of leadership.  – Also exhibits sense of competitiveness.  – Takes personals responsibility.  – Oriented towards the future.

pe rsist in the face to adversity.  – Tends to persist  – Convert a situation into opportunity.

WHO IS AN ENTREPRENEUR? Entrepreneurship is a very famous word amongst the business community life. But, there are many common people still cannot get the definition and the meaning for who is the entrep repreneur. ‘One who underta rtakes an end endeavor’ is the meaning of the Fren French ch word ord entr entrep epre rene neur ur.. Ther There e is no one one de defi fini niti tivve prof profil ile. e. Succ Succes essf sful ul entr entrep epre rene neur urss come in various ages, income levels, gender, and race. They differ in education and experience. But research indicates that most successful entrepreneurs share certa rtain personal attr attriibute butess, inclu ncludi ding ng:: crea creati tivi vity ty,, de dedi diccati ation, on, de dete term rmin inat atiion, on, fle flexibi xibili lity ty,, lead leader ersh shiip, passion passion,, self-co self-confi nfiden dence ce and “smarts”.

“SMARTS” “Smarts” consists of common sense joined with knowledge knowledge or experience in a related

business or endeavour. endeavour. The former gives a person good instinct, the latter, latter, expertise. Many people have smarts they don’t recognize. A person who successfully keeps a household on a budget has organizational and financial skills. Employment, education, and life experiences all contribute to smarts.

CHARACTERISTICS OF AN ENTREPRENEUR Ability: entrepreneur must have creative thinking and must be able to (i) Mental Ability:

analyse problems and situations. He should be able to anticipate c hanges. (ii) Business Secrecy : he should guard his business secrets from his competitors. (iii) Clear Objectives: he must have clear objectives as to the exact nature of business

or the nature of goods to be produced. cus tomers, employees employees Relation: he must maintain good relations with his customers, (iv) Human Relation: etc. to maintain good relationship he should have emotional stability, stability, personal relations, tactfulness and consideration. th e (v) Communication Ability: he should have good communication skills means both the sender and the receiver should understand each others message.

WHY ENTREPRENEURSHIP 1. Doing What You Love

If an entrepreneur is going to start his business it is assured he will get better odds to succeed if he is doing something he loves. Why? Because, Because, passion is the fuel that is needed to face all the obstacles. It is natural to feel fearful to fail. But to start with ones own business is like leaving Comfort Zone and entering a Twilight Zone. It is an activity where it should be ensured to strike balance between between the business what you love to do and which is profitable as well. well. Additionally in the business jungle; jungle; it is of utter most importance to survive sur vive being one of the best and that is easier if the entrepreneur is passionate about what he is doing. Therefore, Therefore, one of the advantages advantages of being an entrepreneur is doing what one loves. “Choose a job that you like and you will never never have to work a day in your life.” 

2. INDEPENDENCE AND FREEDOM Entrepreneurship allows undertaking the activities of one’s choice and comfort which

offers independence and freedom in return. r eturn. Many people think independence and freedom means going to work or take vacations when you want or need. The truth is that is not possible at least in the earlier years of business. On the other hand, when business is mature, strong and self sufficient, it begins to offer independence and financial freedom. “Entrepreneurship is living a few years of your life like most people won’t, won’t, so that you can spend the rest of your life like most people can’t”

3. RECOGNITION AND SELF FULFILMENT Entr Entrep epre rene neur ursh ship ip prov provid ides es the the ab abil ilit ity y to be inv involv olved in the the tota totall op oper erat atio ionn of the the busi busine ness ss,, from from conc concep eptt to de desi sign gn and and crea creati tion on,, from from sale saless to busi busine ness ss op oper erat atio ions ns and and cust custom omer er resp respon onse se.. It offe offers rs the the pres presti tig ge of be bein ing g the the pe pers rson on in char charg ge.

In line with the Maslow’s hierarch archy y of need edss, it is huma mann to de dessire for rec recognit gnitiion and and strive ive for self fulfillment and achi chievement. Entrepreneurship offers excitement compared to being regu regula larr em empl plo oyees. ees. Entr Entrep epre rene neur urss enjo enjoy y much much excite citeme ment nt be begi ginn nnin ing g from from the the plan planni ning ng stag stage e of the business up to development and realization. Thrillseekers obviously love being entr entrep epre rene neur urss as the they are are exp xpos osed ed to too too much much risk risk.. “What a man can be, he mus must be. This need we call self actualization.” – Maslow “I hav have wandered all my life, fe, and I have also traveled; the the differ ference between een the the two being this this,, that that we wande anderr for for dist distra ract ctio ion, n, but but we trav travel el for for fulf fulfil illm lmen ent. t.”

4. INCOME POTENTIAL Entrepreneurship offers a greater possibility of achieving significant financial rewards rewards than working work ing for someone else. This is a big one because when you’re an entrepreneur you can create a direct

relationship between your efforts and your income. In other words: if your efforts are higher your reward reward should be higher too. Of course that happens if your efforts are well planned, effective and well focused. Many people really believe believe that of all the advantages of being an entrepreneur this employer,, the is the best. That’s probably because in comparison to a job where employer salary. In case of an company’s company’s financial budget, the Board and the economy decides salary. entrepreneur nobody except the market forces defines returns retur ns and income. “A large income is the best recipe for happiness I ever heard of.”

5. OWN BOSS Entrepreneurs are their own bosses. They They make the decisions. They choose whom to do business with and what work they will do. do. They decide what hours to work, as well as what to pay and whether to take vacations. “Your “Your real boss is the one who walks around under your hat.”

6. INNOVATION Entrepreneurship creates an opportu rtunity for a person to make a contribution. Most new entrepreneurs help the local economy. A few  –  thr through ugh thei theirr inno innovvatio ations ns  –  contribute to society as a whole. One example is entrepreneur Steve Jobs, who cofound ounded ed Appl Apple e in 19 1976 76,, and and the subs subse equen quentt rev revolut olutiion in de desk skto top p comp comput uter erss. It gives an individual the oppor tunity to build equity, whic h can be kept, sold, or pass pa ssed ed on to the the next next gener enerat atiion. on.

TYPES OF ENTREPRENEURS Star Starti ting ng and and gro growing wing one’s own business requires many skills to be successful. One could be a visionary like Bill Gates or a superstar like Peter Sematimba. The entrep repren reneur person sonality types are the tra traits and cha charac actterist istics that hat ble blend with the needs of the business. Understanding the types of entrepreneur personality type helps in enjoying busin siness as well as providing with what it nee needs to grow in best. st.

1. IDEALIST The idealist entrepreneur is the most common type of entrepreneur. He likes innovation and enjoys worki rking on something new or creative. He is guided by more ideals while keeping in view the ideas that are formu rmulated by him in order to pursue his innov innovati ation. on.

2. OPTIMIZERS The optimizer entrepreneur comes in a close second and is content with the personal satisfaction of simply being a business owner. owner. It is derived from being optimistic.

3. HARD WORKERS The hard workers entrepreneur category includes persons pers ons who enjoy putting in long hours to build a larger and more profitable business. They like like to challenge ch allenge themselves and strive harder to attain the same. They reap the most rewards if the business turns out to be a multi-million dollar enterprise. Hard work comes with all businesses but not everyone works works hard for the business bus iness to grow as this type of entrepreneurs does.

4. SUSTAINERS As the meaning of the word itself implies, sustain is to to maintain; the sustainer type of entrepreneurs comprise of people who like to maintain a balance between work and a personal life. Most often, they do not wish the business to grow too large large where it will cut into their personal life. These people just need enough to survive. sur vive.

5. IMPROVER The improver types of entre trepreneu neur are the ones who pred redominantly are focused sed to star t a business to improve the wor ld. Their motto is to work in a manner whic h is morally and ethically correct so as to contribute to a noble cause. Improvers have an unwa nwavering ab abiility to run run their busine siness sse es with high inte ntegrity. At the same tim time, these people need to be aware of their tendency of being over critical of employees and cli clients nts in orde orderr to be a perfe erfecction tionis ist. t.

6. ADVISOR These types of people believe in consumer sovereignty where they indulge excessively excessively in providing customer services. This business personality per sonality type will provide an extremely high level of assistance and advice to customers. They want want to please their customers. Their businesses soon become customer oriented business which involves providing advisory services to them at a cost to themselves.

7. SUPERST SUPERSTAR AR This type of entrepreneur is lead by c harisma, c har m and high energy. An entrepreneur like this has an overwhelming personality which works rks in his favour so does in the favour of business. This personality often will cause to build business around own person sonal brand and. However, such such people tend to become too competit titive and workaholics; whic h can sour the workplace and the market. Entrepreneur exa xamp mple le is Peter eter Sema Semati timb mba, a, CEO of Super uper FM. FM.

8. ARTISTE These hese are crea reativit vity oriented entre trepren reneurs. rs. Thu Thus, the type of busine siness ss also also are tho those which demand huge levels of creativity such as; adverti rtising agencies and people in the the musi musicc indus ndustr try y. The The arti artist st invo nvolves lves in busi busine ness ss ac acti tivi vity ty whic whichh is cente entere red d arou around nd the their talents and creative fields. The limitation faced by such entrepreneur is that of over sens sensiitiv tively ely reac reacti ting ng to the the cust custom omer erss feed feedba back ckss if such such is a neg negativ ative e one one.

9. VISIONAR V ISIONARY Y Normally, all the businesses are founded keeping a vision in mind. The founding members who visualize a dream and materialize the same are known as visionary. These hese are thin hinkers who pursue rsue to make thei heir visio sion come true rue. Such uch people are curio rious in nature and have a long sighted vision which helps them in understanding the world rld around better thereby to set up plans to avoid pitfall and hurdles. At the same time, these people lack to relate their dreams with reality which might result in opposite results when it comes to star ting up all new. Thus it is advisable to act before visualizing.

10. ANALYST These types of entrepreneurs excel at problem solving in a systematic way. Thus businesses involving complications suit them a lot. They are able to crop up the solution at no cost and less time. The cha challenge is to realize that too much much analysis can resu resullt in no ac acti tio on be bein ing g tak taken. Secon econdl dly y, the they might ight get ca caug ught ht in anal analy ysis sis pa parralys alysis is..

11. FIREBALL Fireball is a casual word used for an energetic person so does it imply for entrepreneurs. A business owned and operated by a fireball is full of life, energy and optim timism. Such uch busine siness sse es are are life energizing and makes custom tomers feel the the firm firm has a get it done attitude. Since every coin has two sides, suc h people have a downsid side too. In being too outrig right and ener nergetic tic, they may over com omm mit and act too impu impuls lsiv ive ely. ly. Ma Main inta tain inin ing g a ba bala lanc nce e for impu impullsiv siveness ness with with sens sensiitiv tive plan planni ning ng is of utte utterr most most importan importance ce..

12. JUGGLERS A juggl uggler er conv conven enti tion onal ally ly me mean anss ente ntertai rtaine nerr who keep epss sev several eral plat plates es,, kniv knives es,, ba ball llss, or other objects in the air at once by tossing and catchi ching them. The art of juggling has been practiced since antiquity. The juggler entrepreneur likes the concept that the business gives them a cha chance to handle everything themselves. They are usually people with lots of energy and exist on the pressure of meeting deadlines, paying bil bills and and of cour course se ma maki king ng pa pay yroll. ll.

13. HERO Hero like entrepreneurs are the people with great willingness and efficient leadershi rship p. He inspi spires others hers.. He has an incr ncredible will and ability to lead the world rld and the business through any cha challenge. He is the essence of entrepreneurship and can asse ssemble gre great compani anies. Over promising and usi using force rce full ull tactics to get the way out are the bane sides of being a hero entrepreneur; whic h definitely is not frui fruitf tful ul in long long term term..

14. HEALER Healer as the name suggest, nurtures the business by bringing harmony with a surprising ability to survive with an inner calm. Healer is closely related to calmness which lets him avoid the outside harsh realities of business. One must keep a scenario planning to pre prepare for any kind of turmoil. tur moil.

ENTREPRENEUR VS. MANAGER - The main difference between the two terms is that an entrepreneur starts a business enterprise cons consti titu tutting ing of idea ideass he com compreh prehen end ds; em empl plo oyin ying perso ersona nall stak stakes es in it wher where e as a ma mana nag ger provi ovide dess his his service servicess in an enter enterpri prise se establ establis ished hed by entre entrepre prene neur ur..  –  An entrepreneur and a manager differ in their standing, an entrepreneur is the owner of the

orga rganization and he bears all the risk risk and uncerta rtainties invo nvolved in runn runniing an orga rganization where as a mana ma nag ger is an em empl plo oyee yee and and do does es not not unde underta rtakke resp respon onsi sibi bili liti ties es for for any any risk risk..

 –  An entr entrep epre rene neur ur and and a ma mannag ager er diff differ er in thei theirr ob objjecti ectivves. es. Entrepreneur’s obj objecti ectivve is to innov nnovat ate e and and create and he acts as a c hange agent where as a manager’s objective is to supervi rvise and create rout routin ines es.. He impl implem emen ents ts the the entrepreneur’s plan planss and and idea ideas. s.

entrep epre rene neur ur is face faced d with with mo more re inco income me unce uncert rta ainti inties es as his his inco incom me is cont contin ing gent ent on the the pe perf rfor orm manc ance  – An entr of the fir m where as a manager’s compensation is less dependent on the performance of the organization.

 –  An entr entrep epre rene neur ur is not not induc nduced ed to inv involv olve in frau fraudu dullent ent behav ehaviior wher where e as a ma mang nger er does oes. A ma mana nag ger

may c heat by not working hard because his income is not tied up to the performance of the organization.

 –  Their areas of qualifications differ in the sense that; entrepreneur is required to have certain

qual qualif ific icat atio ions ns and and qual qualit itie iess like like high high accom accompl plis ishm hmen entt mo moti tive ve,, inno innova vati tive ve thin thinki king ng,, fore foreth thou ough ght, t, risk risk-b -bea eari ring ng abil ab ilit ity y etc. etc. Conv Conver erse sely ly it’s mandatory for a manager to be educated in the fields of management theori theories es and and pract practic ices es..

“An entrepreneur could be a manager but a manager cannot be an entrepreneur”.

An entrepreneur is intensely dedicated to develop business through constant innovation. He may employ a manager in order to perform some of his functions such as sett settiing obje bjectiv ctives es,, po poli liccies ies, rul rules etc. tc. A ma mana nag ger canno annott repl replac ace e an entr entrep epre rene neur ur in spite of perfor ming the allotted duties because a manager has to work as per the guid guidel elin ines es laid laid do down wn by the the entr entrep epre rene neur ur..

INTRAPRENEURSHIP A dictionary meaning to word provides that, “A pers erson within hin a large rge corpora oration who takes direc rect respo sponsib sibility for turni rning an idea into a profi ofitable ble finished hed pro product thro throug ughh asse asserti rtivve risk risk-t -tak akin ing g and and inno innovvatio ationn is an intr intrap apre rene neur ur..” It is de deri rivved as INTR INTRA A (co (corpor rporat ate) e) + (ent (entre re)) PRENE RENEUR UR]. ].

Intrapreneurship is a combination of entrepreneurship and management skills. In simple words, Intrapreneurship is the practice of entrepreneurship by employees within an organization. The trend today is suc h that every one who is capable of managing othe thers bus business is himself indulg ulging in entrep repreneurshi rship p. Thi This is result ulting in inad inadeq equac uacy y of ma mana nag gem emen entt staff staff..

FEATURES FEA TURES OF INTRAPRENEURSHIP An intr intrap apre rene neur ur thin thinks ks lik like an entr entrep epre rene neur ur look lookin ing g out out for op oppo portu rtuni niti ties es,, which which prof profit itss the organization. Intrapreneurship is a novel way of making organizations more prof profit ita able ble whe where emp mplo loy yees ees ente entert rtai ainn ent entrepr repren eneu euri rial al tho thought ughts. s. It is in the the inte intere rest st of an org organiz anizat atio ionn to enc encoura ourag ge intr intrap apre rene neur urs. s. Intr ntrap apre rene neur ursh ship ip is a sign signif ific ican antt me meth tho od for com ompa pani nies es to rein reinvvent ent them themse sellves and and impr improv ove e pe perf rfor orm manc ance. Ma Mana nag gers would ould do well to take employees who do not appear entrepreneurial but can turn out to be good good intrap intrapren reneuri eurial al choices. choices.

KEY CHARACTERISTICS OF INTRAPRENEURSHIP age ers to be more innovative ive and take more respo sponsibi sibillity while  –  It promotes the manag demons dem onstra tratin ting g charisma charismatic tic leader leadership ship qualit qualities ies..

ntrapre preneurs urship hip proje ojects are fund unded by large rge busi businness organization and and agree reed  –  Intr percentage of profits are remitted to the fund provider/head quarters of the business.

ntrap apre rene neur ursh shiip will will cul cultiv tivate ate entre ntrepr pren eneu euri rial al skil skills ls/c /cul ultu ture re with within in the the corpo orporrate ate  –  Intr cul culture ture whe where ma mana nag gers ers will will be mo moti tivvated ated to ac acce cept pt mo more re risk risk..

chances of failure are low when  –  Due to the backing from the headquar ters, the cha com compa pare red d to star startt ups ups.

 –  It adds value to the life of the intrapreneur as he is being given the task of being

an entr entrep epre rene neur ur whil while e rece receiv ivin ing g nece necessa ssary ry trai traini ning ng from from head headqu quart arter ers. s.

 –  Business

por tfolio diversification.

of

funding organization

will be expanded creating

 –  Finally, it creates wealth for the headquarters as well as for the intrapreneur

thro throug ughh its its prof profit it shar sharin ing g ag agre reem emen ent. t.

DIFFERENCE BETWEEN AN ENTREPRENEUR AND AN INTRAPRENEUR ntrepren reneur eurs can be found anywhere ere; whereas intraprene reneur urss are found, nd, rather  –  Entr enco encour urag aged ed with within in the the conf confin ines es of an org organiz anizat atio ionn  –  While entrepreneurs face hurdles in the for m of ridicule and setbacks from the

society in general; intrapreneurs have to face rivalry within the organization they work. Entrep epre rene neur urss find find it diff diffic icul ultt to arra arrang nge e reso resour urce cess whil while e thes these e are are read readil ily y avai availa labl ble e  – Entr to intrap intrapren reneurs eurs..

DISTINGUISHING FACTORS

MANAGER

ENTREPRENEUR

INTRAPRENEUR

Primary Focus

Salary Promotion Traditional Corporate awards

Independent chance to be creative Opportunity to make more money

Independent chance to be creative To move towards organizational and personal successes

Skills re required

Managing qualities, like planning, organizing, leadership, communication communication skills skills etc.

Creative, innovative, innovative, risk taking, visionary, passion, dedication, determination

Blend of managerial and entrepreneurial skills.

Time Focus

Short term to meet deadlines set by top management.

Survival and achieving long term growth

To meet self imposed deadlines

Activity Delegation

Delegated by top management

Del Delega egated ted to ones onesel elff

Del Delega egated ted to ones onesel elff

Amount of risk bearing

Conser vative

Extreme

Moderate

Status Check

Concerned about status

Not concerned about status

Not concerned about status

DISTINGUISHING FACTORS

MANAGER

ENTREPRENEUR

INTRAPRENEUR

Failure and Mistakes

Minimizes mistakes

Deals with mistakes

Reduces risky activities

Decision

Agrees with top management

Follows a dream

Gets help from others to achieve dreams

Availability of resources

Readily available

Needs to arrange

Provided by Entrepreneur

Competitors

No one

Other entrepreneurs outside the organization

Within the organisation

Constituencies Se Serve rved

Upper ma management an and Customers

Onese neself lf and and Custo ustome mers rs

Onese nesellf, Cus Custo tom mers ers and and organization