entrepreneurship chapter 1. introduction to entrepreneurship what is entrepreneurship?...

EntrepreneurshipEntrepreneurship Chapter 1 Chapter 1

Introduction to EntrepreneurshipIntroduction to Entrepreneurship

What is Entrepreneurship?What is Entrepreneurship?– Entrepreneurship is the process of creating Entrepreneurship is the process of creating

something new of value by devoting (giving) something new of value by devoting (giving) the necessary time and effort. the necessary time and effort.

– By accepting and acknowledging the By accepting and acknowledging the necessary financial, psychological, and social necessary financial, psychological, and social risks, andrisks, and

– Finally receiving the resulting rewards be it Finally receiving the resulting rewards be it monetary and personal satisfaction and monetary and personal satisfaction and freedom to do what you want. freedom to do what you want.

Robert D.Hisrich, M. Peters Robert D.Hisrich, M. Peters & D.A Shepherd& D.A Shepherd


Simple DefinitionSimple Definition– Process of creating something new and Process of creating something new and

assuming the risks and rewards.assuming the risks and rewards. Robert D.Hisrich, M.P.Peters & Robert D.Hisrich, M.P.Peters &

D.A.ShepherdD.A.Shepherd


What is an Entrepreneur?What is an Entrepreneur?– He or she is an individual who actively form or lead their He or she is an individual who actively form or lead their

own business and nurture them for growth and own business and nurture them for growth and prosperity.prosperity.

UiTM Entrepreneurship Study GroupUiTM Entrepreneurship Study Group

– A person who creates and manages change by the A person who creates and manages change by the recognition of opportunities (needs, wants, recognition of opportunities (needs, wants, opportunities, problems, and challenges) and develops opportunities, problems, and challenges) and develops people and manages resources to take advantage of the people and manages resources to take advantage of the resources to take the opportunity and creates a venture resources to take the opportunity and creates a venture (profitable business).(profitable business).

Eston Kimani, Eston Kimani, MIT MIT


What are the different outcomes of engaging in What are the different outcomes of engaging in entrepreneurship?entrepreneurship?

– Innovation or newness – product or service.Innovation or newness – product or service.– Organizing resources – finance, people, physical and Organizing resources – finance, people, physical and

information resource.information resource.– Creating new product or service.Creating new product or service.– Generating wealthGenerating wealth– Taking risk in a business venture.Taking risk in a business venture.– Prepared to face uncertainty.Prepared to face uncertainty.– Create job opportunityCreate job opportunity– Increase the abundance of wealth generation for the Increase the abundance of wealth generation for the

nation.nation.


The Role of Entrepreneurship in The Role of Entrepreneurship in Economic Growth.Economic Growth.– In order for Entrepreneurs to thrive in a In order for Entrepreneurs to thrive in a

nation, the Government must play nation, the Government must play important role in creating the kind of important role in creating the kind of business environment that create the business environment that create the basis for growth, stability and future basis for growth, stability and future success of entrepreneurs. success of entrepreneurs.

..The Role of Entrepreneurship in The Role of Entrepreneurship in

Economic GrowthEconomic Growth

– This primarily involves the:This primarily involves the:

Increasing the per capita output and Increasing the per capita output and income of the people of the country.income of the people of the country.

Initiating and creating change in the Initiating and creating change in the structure of business and society. Further structure of business and society. Further growth and increased output arises, thus growth and increased output arises, thus to enable more wealth to be divided to enable more wealth to be divided among the various participants among the various participants ( stakeholders).( stakeholders).

Generation of innovation that leads to the Generation of innovation that leads to the creation of new product and service.creation of new product and service.

..The Role of Entrepreneurship in Economic The Role of Entrepreneurship in Economic

GrowthGrowth

Improvement and modification on existing Improvement and modification on existing product to better suit market and product to better suit market and customers’ needs.customers’ needs.Creation of self employment and to cut Creation of self employment and to cut back the dependency of potential back the dependency of potential employment of new workers in employment of new workers in government sectors.government sectors.Streamline of the private sector and Streamline of the private sector and encourage the inclusion of new encourage the inclusion of new technology that is less labor dependent.technology that is less labor dependent.Increase in the national output which in Increase in the national output which in turn lead to greater and stronger turn lead to greater and stronger economic growth.economic growth.

Introduction to EntrepreneurshipIntroduction to EntrepreneurshipThe Entrepreneurial ProcessThe Entrepreneurial Process– What is the Entrepreneurial Process?What is the Entrepreneurial Process?

The process of pursuing (going after) a new The process of pursuing (going after) a new venture or business, venture or business,

Whether it is a new product going into an Whether it is a new product going into an existing market ORexisting market OR

Existing product going into a new markets Existing product going into a new markets OROR

The creation of a totally new organization. The creation of a totally new organization.


First Entrepreneurial Process:First Entrepreneurial Process:– Creation Process – creating something new of Creation Process – creating something new of

value.value.Second Entrepreneurial Process:Second Entrepreneurial Process:– Requires the commitment of the necessary Requires the commitment of the necessary

time and effort. Appreciate and understand the time and effort. Appreciate and understand the importance of time and effort devoted to importance of time and effort devoted to create something new and make it workable.create something new and make it workable.

Third Entrepreneurial Process:Third Entrepreneurial Process:– Involves the enjoyment of the rewards Involves the enjoyment of the rewards

(Freedom, monetary) after the effort, followed (Freedom, monetary) after the effort, followed by personal satisfaction. by personal satisfaction.


The Entrepreneurial Process – Four The Entrepreneurial Process – Four distinct process:-distinct process:-– Identification and evaluation of the Identification and evaluation of the

opportunity.opportunity.– Development of the Business Plan.Development of the Business Plan.– Determination of the required resources Determination of the required resources – Management of the resulting enterprise.Management of the resulting enterprise.


The Benefits of Entrepreneurship:The Benefits of Entrepreneurship:– Opportunity to create your own destinyOpportunity to create your own destiny

Owning a business provides an Owning a business provides an entrepreneurs the independence and the entrepreneurs the independence and the opportunity to achieve what is important to opportunity to achieve what is important to them.them.

Entrepreneurs want to decide what they Entrepreneurs want to decide what they want in their lives, and they use their want in their lives, and they use their businesses to make their desire a reality businesses to make their desire a reality (come true).(come true).

The Benefits of Entrepreneurship:The Benefits of Entrepreneurship:– Opportunity to make a DifferenceOpportunity to make a Difference

More and more entrepreneurs are starting More and more entrepreneurs are starting businesses because they see this as an opportunity businesses because they see this as an opportunity to make a difference in a route or way that is to make a difference in a route or way that is personally important to them.personally important to them.

– Opportunity to reach your full potential.Opportunity to reach your full potential.Many people find their work not challenging and not Many people find their work not challenging and not exciting.exciting.For entrepreneurs there is little difference between For entrepreneurs there is little difference between work and play.work and play.Entrepreneurs see their business as a vehicle of self Entrepreneurs see their business as a vehicle of self expression of personal desire and eventual self expression of personal desire and eventual self actualization of their personal goals – the pinnacle of actualization of their personal goals – the pinnacle of their career success.their career success.


The Benefits of EntrepreneurshipThe Benefits of Entrepreneurship

Opportunity to reap extraordinary Opportunity to reap extraordinary (luar biasa) profits.(luar biasa) profits.– The profit earned by an entrepreneur The profit earned by an entrepreneur

are an important motivation and are an important motivation and indication factor for further increased indication factor for further increased performance. Thus these could spur performance. Thus these could spur them to greater achievement and them to greater achievement and success. success.


Benefits of Entrepreneurship.Benefits of Entrepreneurship.– Societal Responsibility and Recognition.Societal Responsibility and Recognition.

Small business owners are among the most Small business owners are among the most admired, respected and trusted individuals admired, respected and trusted individuals of society.of society.

Customers have shown their trust and Customers have shown their trust and faithfulness over their years for their faithfulness over their years for their business.business.

Help to contribute employment, business Help to contribute employment, business opportunity in a particular locality or area.opportunity in a particular locality or area.



Benefits of Entrepreneurship.Benefits of Entrepreneurship.

Opportunity to engage in work of their Opportunity to engage in work of their choicechoice– Small business owners tend to engage in Small business owners tend to engage in

business that gives them personal satisfaction.business that gives them personal satisfaction.– Though they may work long hours and engage Though they may work long hours and engage

in very industrious work that is beneficial to in very industrious work that is beneficial to their organization and themselves.their organization and themselves.

– Most of all the work they engage in helps to Most of all the work they engage in helps to benefits the community, society and the benefits the community, society and the nation.nation.


The Drawbacks of Entrepreneurship:The Drawbacks of Entrepreneurship:– Uncertainty of IncomeUncertainty of Income

Opening and a running a business provides Opening and a running a business provides no guarantee that an entrepreneur will earn no guarantee that an entrepreneur will earn enough money and survive. enough money and survive. Engaging in the wrong business and not able Engaging in the wrong business and not able gain an advantage in the short run and gain an advantage in the short run and eventually in the long run can be disastrous.eventually in the long run can be disastrous.Great effort and proper and effective Great effort and proper and effective management need to used in beginning to management need to used in beginning to ensure the organization success.ensure the organization success.

The Drawbacks of EntrepreneurshipThe Drawbacks of EntrepreneurshipRisk of losing your entire InvestmentRisk of losing your entire Investment– Small business have a high failure rate.Small business have a high failure rate.– Though is successful initially it faces financial Though is successful initially it faces financial

difficulty within the next five years.difficulty within the next five years.– Entrepreneurs must be prepared to face the Entrepreneurs must be prepared to face the

consequence of failure.consequence of failure.– Entrepreneurs must have acute sense of Entrepreneurs must have acute sense of

observation and be able to detect the early signs observation and be able to detect the early signs of failure. of failure.

– If a business fails the entrepreneur must have a If a business fails the entrepreneur must have a contingency plan to overcome a bankruptcy or contingency plan to overcome a bankruptcy or personal failure.personal failure.



Drawbacks of EntrepreneurshipDrawbacks of Entrepreneurship– Long Hours and Hard WorkLong Hours and Hard Work

Entrepreneurs tend to be generally workaholic, Entrepreneurs tend to be generally workaholic, and under tremendous pressure to produce the and under tremendous pressure to produce the result they expect.result they expect.Entrepreneurs seldom find time to be away Entrepreneurs seldom find time to be away from the business but tend to pour all their from the business but tend to pour all their effort and resources to achieve their personal effort and resources to achieve their personal entrepreneurial objective.entrepreneurial objective.Some even go to extent of making big sacrifice Some even go to extent of making big sacrifice and deprive themselves of a personal life, wife and deprive themselves of a personal life, wife and children and social and family associates.and children and social and family associates.


Drawbacks of EntrepreneurshipDrawbacks of Entrepreneurship– Lower Quality of Life until the business Lower Quality of Life until the business

get established.get established.In order for the business to be successful the In order for the business to be successful the entrepreneur must engage himself to entrepreneur must engage himself to produce the kind of result he expects.produce the kind of result he expects.

He cannot rest on his laurels (take it easy) He cannot rest on his laurels (take it easy) until and certain the business has stabilized until and certain the business has stabilized and established.and established.

Drawbacks of EntrepreneurshipDrawbacks of Entrepreneurship– High level of stressHigh level of stress

Starting the business can be very rewarding Starting the business can be very rewarding experience, but it can be stressful.experience, but it can be stressful.

An entrepreneur have left the comfort and security of An entrepreneur have left the comfort and security of secured job to venture into their own business.secured job to venture into their own business.

Failure can bring about tremendous personal failure, Failure can bring about tremendous personal failure, and in turn creates intense levels of anxiety and stress.and in turn creates intense levels of anxiety and stress.

Financial burden may increase and the entrepreneur Financial burden may increase and the entrepreneur may face difficulty sustaining the business or may may face difficulty sustaining the business or may decide to call it for day and wind up the business for decide to call it for day and wind up the business for good.good.


Drawbacks of EntrepreneurshipDrawbacks of Entrepreneurship– Complete ResponsibilityComplete Responsibility

Must be prepared to make decision that are Must be prepared to make decision that are unfavorable (swallow the bitter pill).unfavorable (swallow the bitter pill).Must make decision in areas that the Must make decision in areas that the entrepreneur is not familiar at all.entrepreneur is not familiar at all.Fear of making decision that can have a Fear of making decision that can have a devastating effect on the business and its devastating effect on the business and its people.people.Tremendous pressure to perform as the Tremendous pressure to perform as the entrepreneur is too deeply engaged in the entrepreneur is too deeply engaged in the businessbusiness


Drawbacks of EntrepreneurshipDrawbacks of Entrepreneurship– DiscouragementDiscouragement– To undertake a business requires a lot of To undertake a business requires a lot of

dedication, discipline and tenacity.dedication, discipline and tenacity.– During running the business they will face many During running the business they will face many

difficulties, obstacles which may difficult to difficulties, obstacles which may difficult to overcome.overcome.

– Further difficulties, discouragement and Further difficulties, discouragement and disillusionment are common emotions.disillusionment are common emotions.

– Successful entrepreneurs escape through rough Successful entrepreneurs escape through rough times or difficult times through sheer hard work, times or difficult times through sheer hard work, self confidence and full of optimisms.self confidence and full of optimisms.



Ten Deadly Mistakes of Entrepreneurship:Ten Deadly Mistakes of Entrepreneurship:– Business entrepreneurship fail because:-Business entrepreneurship fail because:-

Management MistakesManagement MistakesLack of Experience Lack of Experience Poor financial controlPoor financial controlWeak marketing effortsWeak marketing effortsFailure to develop a strategic and effective planFailure to develop a strategic and effective planUncontrolled GrowthUncontrolled GrowthPoor location Poor location Improper inventory controlImproper inventory controlIncorrect or unsuitable pricingIncorrect or unsuitable pricingThe inability of to move into entrepreneurial thinking mindsetThe inability of to move into entrepreneurial thinking mindsetfrom the previous secured permanent managerial position from the previous secured permanent managerial position held. held.

How to avoid failure in a Entrepreneurial How to avoid failure in a Entrepreneurial business.business.– Know your business in depth.Know your business in depth.– Develop a good, effective and solid Business Plan.Develop a good, effective and solid Business Plan.– Manage your financial resources effectively.Manage your financial resources effectively.– Have a thorough and complete financial Have a thorough and complete financial

statement.statement.– Learn hire and manage people effectively.Learn hire and manage people effectively.– Keep physically fit, consume healthy foods, and Keep physically fit, consume healthy foods, and

avoid addictive consumption cigarettes and avoid addictive consumption cigarettes and alcohol. alcohol.


entrepreneurship chapter 1. introduction to entrepreneurship what is entrepreneurship?...

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