entrepreneurship definitions, role, application innovation and creativity small business
TRANSCRIPT
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Entrepreneurship
Definitions, role, application
Innovation and CreativitySmall business
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Job Shift...How to Prosperin a Workplace Without Jobs
• "Today's BUSINESS organization is rapidly being transformed from a structure built on jobs to a field of work needing to be done".
• "The new work arrangements (part time, temporary, team responsibility, contract work, outsourcing) are created to meet the productivity needs in an immediate but changing situation".
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Job Shift...How to Prosperin a Workplace Without Jobs contd…
• "Your employability will depend on having the skills and attitudes that are needed in your industry."
• "Employees must learn to think like an external vendor who has been hired to accomplish a specific task."
• "You will need to live with high levels of uncertainty, bounce back quickly from disappointment, and find your own security."
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Job Shift...How to Prosperin a Workplace Without Jobs contd…
• "Learn to look at every potential work situation as a market ...people who are looking for products and services even though they have no jobs available."
• "In the future you are going to get less mileage from a 'career plan' than out of a 'business plan' for your own personal enterprise."
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RISK or OPPORTUNITY?• Only 1 in 7 of those businesses that
"disappear" actually "fail"
Of those who actually failed,
• 53% became owners of another business • 73.2% said they plan to start a business in
the future
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WHAT ARE SOME OF THE REASONS BUSINESSES DISAPPEAR?
• Sold the idea to another person or company • Retired and closed the doors • Found a better idea for a business • Invented a different type of product • Moved the business to another state or country • Preferred to work for someone else instead • Actually failed/went bankrupt • The market for this type of business disappeared or
became too competitive • Owner died or became disabled
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Remember......
NOT ALL CHANGE MEANS FAILURE
IF YOU MISS AN OPPORTUNITY.... . . IT MIGHT EVEN BE A BIGGER
FAILURE
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ENTREPRENEURS BEHAVE DIFFERENTLY BECAUSE THEY...
• Risk their own money
• Must find customers to survive
• Organize their own work
• Are vulnerable to economic change
• Have income that varies with market success
• Make all the final decisions
• Need a wide range of management skills
• Handle diverse activities at the same time
• Depend on their own ability to market and sell
• Work longer hours...at least at first
• Are open to change as a necessity of existence
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How is wealth created ?
• Investing surplus/savings
• Harnessing nature
• Getting means of production together
• Innovations and creativity
• Process/system changes
• Technology spread
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Jamshetji Tata
• devoted himself setting up an iron and steel company, a world class learning institution and a hydro electric plant.
• The company started by Jamsetji Tata came to be known as the Tata Group
• Jamsetji, was a pioneer in his field and thought way ahead of his times.
• he also put in place very good labour practiceslong before any labour laws came into existence.
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Various definitions
• French: “ go between” :
• “mixes” customer need and innovation
• Person bearing risks of profit/loss
• Separate profits of entrepreneur from that of Capital
• Peter Drucker: maximises opportunities
• Create something different; adds time and energy
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Role of Entrepreneurship in Economic Growth
• critical in capitalist economy• An entrepreneur is not a “Gambler”
• He takes moderate risk , after due assessment
• Should have multiple Management skills as he will have limited support initially.
• Difference from Venture Capitalists: high risk+ high interest on capital
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Essentials for entrepreneurs developing
• Role models
• Tax structure
• Free markets
• Risk capital availability
• Social acceptance
• Education and system support
• Legal protection on Innovations
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Personal traits
• Seeks independence • Need for achievement• Believes in the idea• Willing to risk a failure• Graduate • Bangalore study: initial investment of Rs 5 L• Failure rate : 20 %• Multiple tries at success • 30 years +
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Typical traits of an entrepreneur
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Risk
• Probability of occurrence * likely cost of damage
• THREE TYPES OF UNCERTAINTY.
• Risk, which is measurable statistically
• Ambiguity: hard to measure
• True Uncertainty: impossible to predict
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RISKS
• TECHNOLOGY
• MARKET
• FINANCIAL
• PEOPLE
• GOVERNMENT POLICIES
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Creativity
• Ability to bring something new into existence
• Lateral thinking
• Multi-disciplinary approach
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Some innovative ideas from Internet( to be taken with pinch of
salt)
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The creative process
• Idea Germination
• Preparation
• Illumination
• Validation: check
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Creativity is normal
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Knowledge society
• Peter Drucker’s prediction
• Blue collar/ white collar/knowledge worker
• Human assets will predominate the worth of a Company in future
• Not more than 2 % of Microsoft’s worth is held in factories!
• Knowledge workers are paid for INNOVATIONS and Creativity!!!
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Innovation
• Convert useful applications /ideas into new process/product
• A business instinct is essential for this conversion.
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Process of Innovation
• An inventor does not necessarily become an entrepreneur
• Difference between an idea and Business Opportunity?
• Difference between Innovation and Invention
• Who is the link?
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• An Entrepreneur identifies the window of opportunity
• Develops the business
• Plan:• Determine resources required:• Manage • Reap
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New product ideas emerge from
• Consumers
• Walkman
• Existing Companies
• Distribution channels
• Laboratories: Research
• Government
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Let us think of some new products
• Common “tricks”
• Lateral thinking
• “Pepsi Crow “
• “Kahan ja rahe ho?”
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Intellectual property
• Definitions
• Protection
• Patent Laws
• Registration
• Trademarks
• Copyright
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Extension of IP
• Licensing
• Franchising
• Contracts
• Serial Entrepreneurship
• Compete or complement large business
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WHATEVR THE MIND CAN CONCEIVE AND BELIEVE
……….IT CAN ACHIEVE
Success is not in never failing
……….. but in rising every time you fall.
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BUSINESS PLAN
• LIKE A JOURNEY
• WHERE DO YOU WANT TO BE
• LANDMARKS ?
• HOW TO TRAVEL
• STEER ROUND OBSTACLES
• RESOURCE USAGE
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MARKETING PLAN
• Essential issues
• 4 P’s
• Product
• Price
• Place
• Promotion
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Financial Plan
• Cash flow is critical
• Initial stages: receivables are low
• Cash support needed form various sources
• Scrutiny by lenders
• Collateral security
• Venture Capital
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Financial Appraisal
• Necessary to know the basics of how banks/lending institutions appraise a proposal
• Is the idea sound?
• is the operation likely to be profitable in future?
• Are the promoters dependable/skilled to deliver?
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Entrepreneurship vs. Small Business Ownership
• Innovation is the key difference
• Managerial issues remain the same
• Element of risk is different.
• Entrepreneurship is rarer.
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Intrapreneurship
• Corporate Venturing
• Profit Centre concept
• Critical to Technology companies
• Research and Development effort
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KEY INGREDIENTS FOR ENTREPRENEURSHIP
* PERSONAL CHARACTERISTICS
* TECHNICAL KNOW-HOW
* MARKETABLE IDEA
* CONTACTS FOR ASSISTANCE
* FINANCIAL RESOURCES
* POTENTIAL CUSTOMERS
* SUPPORTIVE LIFESTYLE
* LEADERSHIP EXPERIENCE
* PERSONAL MOTIVATION
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APTITUDES ARE OPPORTUNITIES
•What Are Your Strengths?•Verbal or non-verbal communications
•Verbal comprehension•Logical thinking•Artistic activities
•Mechanical thinking•Numerical activities
•Clerical•Spatial
•Physical•Organizational
•Intellectual
How will your strengths help you find a business idea?
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HOPE. . .• Helping Other People through Enterprise•Services to other businesses•Entertainment•Marketing the products of others•Repair services•New inventions•Products representing the culture•Value added to raw materials•New technologies•Buying out a business
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????... PLEASE