ENTREPRENEURSHIPDevelopment of Entrepreneurship Theory

18th Century

Richard Cantillon:

Invented the term

‘entrepreneur’

(“go-between” or

“between taker”)

Entrepreneur takes

risks, organizes and

manages factors of

production

Development of Entrepreneurship

Theory

19th Century

Jean Baptiste Says:

Alleges that risk based profit,

derived from

entrepreneurship, is different

from the income of financial

capital.

There is a distinction

between the people who

raise funds for their

business and people who

make profits by taking risks

with their managerial skills.

Development of Entrepreneurship

Theory

19th Century

Joseph Schumpeter:

Defined entrepreneur as a person who is innovative

and destroys old andconstructs new (creative

destruction) in a creatie way.

Peter Drucker:

Defined entrepreneur as

a person who maximizes

opportunites (proactive)

Entrepreneurship

• Ability to take advantages of opportunities ororganize production inputs in order to createnew opportunites.

• A process which is independent of controllingthe resources and directed to create andfollow the opportunites.

Who is an entrepreneur?

A person who starts a new business

• In a risky and uncertain setting,

• With the aim of profitability and growth,

• Examining the opportunities,

• And gathering the necessary resources to useopportunities.

Who is an entrepreneur?• A person who captures factors of production in order to

produce products or service, organizes them regularly, andbears all the possible risks as a result of profit seekingoperations and enterprises.

• A person who predicts resources in order to increase thevalues of them and plans work according to it, enablesprocessing of inputs by organizing human resources anddisplays the skill of presenting outputs to consumers.

Who is an entrepreneur?• An entrepreneur, is a person

who• produces products, • provides services, • or does business

that the society needs, and aimsfinancial and moral gain, for thispurpose who starts his/her ownbusiness and in order to do it he conducts

• research, • planning, • organizing, • and coordination

activities, in conclusion, whobrings

• Necessaryinformation-ability,

• Business inputs likeworkplace, personnel, machine-equipmentetc.

• Financial resources

Together and sets up

His/her ownbusiness.

By Setting Up His/Her own Business an

Entrepreneur; Has business, provides employment, increases

employment, Gains financial power, Be beneficial to his/her society by his/her added

value, Be able to work according to his/her own view

and plans, Experiences the spiritual satisfaction of self-

achievement, Has an independent workplace, Shapes his/her future with his/her own work

effort and will.

What are the Reasons that Entrepreneurs ChooseThis Path?

Reasons Related to Obligations Being obliged to continue family business Constraints related to finding paid employment

Practical Reasons A way to earn necessary income Activities for the retirement period The need for the additional income Efforts for making use of spare time activities The desire of handing the company down the next

generations

What are the Reasons thatEntrepreneurs Choose This Path?

Reasons Related to Personality

Do not want to work for other people

The will of a personal workplace and time

Do not want to work under command

The will to shape his/her future with his/her owndecisions and efforts

Personal satisfaction, struggle for developingcreativity

Struggle for a different social status objective

Types of EntrepreneurshipIntrapreneurship: It is taking responsibility of converting an idea into a profitable finalproduct by making innovation and taking risks in big businesses. Intrapreneurshipmeans all types of entrepreneurship activities within the business and organization. Afirm’s finding new markets within itself, applying new technologies, automatizing etc.are counted as intrapreneurship.Commecial Entrepreneurship: Gathering factors of production and forwarding themto goods or service production for making profit is called commercialentrepreneurship. Commercial entrepreneurship can also be named as private sectorentrepreneurship.Women Entrepreneurship: Women have started to have impact upon development inassociation with the enrichment of women entrepreneurship. The woman who hasauthority on her investment and its area of usage can be called as a womanentrepreneur.Social Entrepreneurship: Social entrepreneurship has caused transformations bychanging the usual behaviours of societies. A social entrepreneur finds what is wrong,convinces society with new leaps and solves the problem by changing the system.Public Entrepreneurship: Public institutions at different levels may start an enterprise.They may embark an enterprise in the fields of process development, developing newservice areas, provide facility in business.Virtual Entrepreneurship: Technological developments have introduced newentrepreneurship areas in a virtual environment. Enterprise may be embarked as ameans of e-commerce or providing service.

Fundamental Features of Entrepreneurship

An entrepreneur seeks for profit but has the risk of loss.

An entrepreneur is the boss of his/her business but has to be a employee and boss at the same time.

The objective income of an entrepreneur depends on capital structure of his/her business.

An entrepreneur has to continue his/her business in theperiods of foundation and development. His/her owngain comes later.

Each enterprise has a significant place in business life independent of the business scale. Whatever its scale, an entrepreneur has many relations with the people fromprivate and public sectors.

An entrepreneur must have knowledge and experience ata certain level when he/she starts his/her own business.Knowledge and experiences increase rapidly whenhe/she carries on his/her own business.

‘Self-confidence’ is a great weapon for an entrepreneur.This confidence gradually increase in business life.

When an entrepreneur is in the process of startinghis/her own business, he/she becomes an effectivecitizen who watches everything in many different fields atthe same time.

Entrepreneurship is a permanent feature. Startingbusiness is the beginning of using entrepreneurshipfeatures.

Fundamental Features of Entrepreneurship

Fundamental Features of Entrepreneurship An entrepreneur should feel responsible for all

preliminary preparation and programs while startinghis/her own business.

An entrepreneur should plan about when and whereto assign his/her personnel.

An entrepreneur himself/herself should believe thatthe business idea is applicable and convince theothers (family, partner, sponsor) when it is necessary.

An entrepreneur should believe the idea of business, have enough motivation to spend plenty of time andmoney to start the business.

While an entrepreneur seeks for the advantages of his/her own business, he/she should consider thedifficulties and be prepared.

Defining the Characteristics of Entrepreneurs

A strong will to succeed,Challenging anddetermination,Desire and ability to takeresponsibility,Have initiative, ability tomake and implement thedecision,Be able to direct people forleadership and itsobjectives,Creativeness, ability toanticipate theopportunities,

Ability to work accordingto a plan and do research,Be able to work with theothers, trust them and giveconfidence,Knowing deficiencies andlimitations and make use of suggestionsBe ready to work underdifficult conditionsDesire to improvehimself/herself,

Defining the Characteristics of Entrepreneurs

Be kind to other people,Be honest to otherpeople,Be a good role model forhis/her employees andother people, Be able to cooperatewith the other people,Trustable,

A good listener and has

respect for the others’

views,

Good-humoured,

optimistic,

Be helpful for the people

who want to have a better

business,

Quick-witted and accept

the new ideas,

Well-balanced and

consistent in relationships

with the people,

Defining the Characteristics of Entrepreneurs

Work hard,Be fair to employees,Accept responsibilities,Accept mistakes,Be skilled and good atwork,Have exemplary habits at work,

-Be good at assigningauthority andresponsibilities,-Set goals,-Organize and coordinategroup works according togoals, -Support work andcommitment amongemployees.

THERE IS NO TYPICAL AND SUCCESSFUL ENTREPRENEURS!!!

THERE ARE COMMON CHARACTERISTICS OF

SUCCESSFUL ENTREPRENEURS!

Profit

Avoiding standart wage

and income limitations

Independence

Avoiding the bureacratic

rules and oppressive

control system of

institutions

Self-Fulfillment

Avoiding the routine

and strifeless

business life

Benefits of Entrepreneurship

Why do you become an entrepreneur?

In order to

earn money

To be your own

boss

To enjoy life

Essentials of Entrepreneurial Idea

Being Innovative

and

Creative

Risk Taking

Being ProactiveThinking

Competitive

Being Innovative

And

Creative

• It states searching for creative,uncommon and new solutions forproblems and needs.

–These solutions can be defined asusing new products and services, newtechnologies or production processes.

• It includes readyness to relate asignificant amount of resource toan acceptable level of risk oropportunities that have failurepossibility.

Risk Taking

It is a term related to practice.

Instead of following the others, it stands forhaving the awareness that you have a moreconcrete vision compared to your rivals andtaking responsibility, acting by makingnecessary decisions without losing time.

Being Proactive

• It creates a healthy market environment in terms of both businesses and consumers.

• Competition enables entrepreneurs toproduce quality products to attain a place in the market, work efficiently and be consumeroriented.

Thinking Competitive

Process of Entrepreneurship

Entrepreneur

• Dreamer

• Visionary

• Change Agent

• Lives in theFuture

• Sees PossibleOpportunities

Manager

• Planner

• Lives in thePast

• Focuses on Problems

• Organizer

• Seeks forTrust

Technician

• Does theWork andSolves theProblem

• Lives Today

• Takes theEasy Way

• Content withthe CurrentSituation

The Process of EntrepreneurshipAnswers 5 Questions…

Where are the opportunities?

How can I use theseopportunities?

Which resources arenecessary?

What is the level of my controlon resources?

Which structure is convenient?

Entrepreneurial Process

Enviromental opportunities Identify the opportunitiesIntrepreneurial people List the detailsBusiness Ideas Find the related resourcesOrganizational context Apply Resources

Input-Output Components of Entrepreneurship

INPUTS

Frequency of entrepreneurship

The quantity and level of entrepreneurial events

Innovativeness / Risk taking / Leadership

Input-Output Components of Entrepreneurship

FUNCTIONS OF ENTREPRENEUR

ProvidingProduct

Diversification

CreatingEmployment

Creating New Markets and

SalesMethods

ProvidingCapital Stock

Organizingand Providing

Production

As a result of increasing competitionconditions, entrepreneurs needdiversification and specialization.Small businesses has the potential ofproviding more production and productdiversification with less investment.◦ Technological developments should be

followed closely,◦ Businesses should follow product

development personally,◦ Product diversification should make

marketing easier.

ProvidingProduct

Diversification

The products which make our lives easier are the results

of organizing and providing production efforts among

entrepreneurs.

Competitive environment encourages entrepreneurs to;

◦ Produce qualified and low-priced products and service,

◦ Lower the prices,

◦ Produce according to the needs of the society while

diversifying the products.

Organizing andProviding

Production

Together with the fact that

entrepreneurship is an important factor in

creating employment, it is an important

effect that it can also change the features

of this employment.

Qualified personnel who is open to

innovations and comply with the

innovations are needed.

CreatingEmployment

Together with the developing technology, innovative entrepreneurs create new marketswith their new products

◦ Lowering the information and communicationcosts,

◦ Increasing the accessibility to market andcompetition,

◦ Diversifying products and services of e-commerce,

◦ Inceasing the quality may result in decline of prices.

Creating New Markets and

Sales Methods

The amount of rising output in economy through

embarking new enterprises results in industrial

growth and profit improvement.

Using these profits for new investments provides

new employment areas and capital stock.

Entrepreneurship is one of the most important

factors in capital stock in terms of activating

necessary promotions and convenience

mechanisms.

ProvidingCapital Stock