entrepreneurship - lecture 1

8/7/2019 Entrepreneurship - Lecture 1

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Entrepreneurship

BBA 2008 Spring Semester

Salmaan Rahman

Lecture 1What is Business? A thumbnail view



What is a Business?

� The state of being busy either as an individual,or as part of an organization, doing commerciallyviable and profitable work.

± Profits are usually financial, or may be even-trade

� Most commonly, a business is a legally recognizedorganization designed to provide goods, services,or both to consumers.

� The main objective is to generate and receivefinancial return in exchange for work, and risk.

� Businesses can be non-profit, or state-owned.



Business categories� Single owners Sole Proprietorship may operate on

his own or employ others.

± Personal liability for debts.

� Partnership owned by two or more people±

Limited or shared personal liability± May also be known as a company

� Corporation: - separate legal personality from itsowners

± Can be privately or publically (state) owned

± Privately owned corporations might have multipleshareholders, and overseen by a board of directors whohire the managerial staff

± Can be for profit or non-profit.



Business ownership:

� Most Businesses are owned by private individuals

± Capitalist Society

� Some are owned by the Government

± Postal services, transportation etc.

± Nationalized businesses

� In some societies, all businesses are owned bythe government. Private ownership isdiscouraged. State provides both goods andservices, and keeps profits

± Socialism, communism.



What do businesses do?� Businesses either provide goods, or services to consumers� Classifications:

± Raw Material production: agriculture, mining

± Utility electricity, gas etc.

± Capital generation: Banking, investment, management of money

± Manufacturing: production of physical goods from rawmaterials

± Retailers and distributors middlemen, sell goodsmanufactured by others

± Service Businesses offer intangible goods,�

Profit generated from labor. Customers: consumers, govt, otherbuisnessess

± Information businesses - resell intellectual property� Software, movies etc.

± Others real estate, transportation



The business world

� What is a market?

� What is a market sector?

� What is an industry?



Markets� Market the world of commercial activity where goods, services, or

information are bought and sold

± Any arrangement that allows buyers and sellers to exchange goods

± Is there a difference between market and trade?

± What are the different types of markets?� What is a free market? A virtual market? Black market? Prediction

market?

± In marketing a group of consumers that is interested in one product,has the resources, and is permitted to acquire the product

� Market Sector - a set of businesses that are buying and selling suchsimilar goods and services

± share similar characteristics± In direct competition with each other.

± can be treated similarly - E.g. for the purposes of advertising



Commercial law� Most commercial transactions are governed by a very detailed and well-

established body of rules

� Laws govern:

± treatment of labor

± safety and protection issues,

± anti-discrimination laws (age, gender, disabilities, race, and in some

jurisdictions, sexual orientation),± minimum wage laws

± workers compensation laws,

± annual vacation or working hours time.

� License and trademark laws.

� Minimum qualification laws

� Some businesses are subject to ongoing special regulation± investment securities, banking, insurance,

± health care providers.

± Broadcast



What are Entrepreneurs?And how do they fit into the business world?

� Loan word from French entreprendre toundertake

� Related words: enterprise± An undertaking, especially one of some scope,

complication, and risk.

± A business organization.

± Industrious, systematic activity, especially when directedtoward profit: P rivate enterprise is basic to capitalism.

± Willingness to undertake new ventures; initiative

� A person who organizes, operates, and assumes therisk for a business venture



Who are entrepreneurs?

� Classically, entrepreneurs are those people

who are willing or able to take a creative

idea and transform it into a commercially

viable business.

� Entrepreneurship is a cohesive process

involving creativity, innovation, risk taking,and planning.



Some facts about entrepreneurship

� All economies are based upon entrepreneurship

� Entrepreneurship has a somewhat paradoxical

relationship with the economy when the

economy takes a downturn, its usually

entrepreneurship that brings it back

± Entrepreneurs are individual who see opportunity

where others see chaos and confusion± They are often aggressive catalysts for change

± They often challenge and break barriers.



Is there a difference between

entrepreneurs and small business owners?

� The words are often used interchangeably and

many aspects are similar

�

However. . .± Small business owners usually do not engage in

new or innovative practices

± Usually expect stable sales, predictable profits,

and growth, and a non-aggressive approach.

± Small business owners may be considered as

managers of business rather than entrepreneurs.



Entrepreneurial Ventures

� Usually involves some degree of innovation, thepotential for higher profitability, and much morerapid growth±

And naturally, much higher risk� Entrepreneurs usually have a different

perspective than SBOs± Might seek rapid growth, immediate profits, or even

the sale of their business for large capital gains.

� Entrepreneurship studies often focus on theparticular type of growth associated withinnovation and change



Entrepreneurship

� Is more than the mere creation of a business

� Often characterized by:± Seeking opportunities

� 14% of entrepreneurs report that their product has no competitor

± Taking risks beyond security

± Having the tenacity or persistence to push an idea throughbarriers to reality

�

Entrepreneurship± can occur within an organization (intrapreneurship)

± be for profit or non-profit

± Be unrelated to business entirely (social entrepreneurs)

entrepreneurship - lecture 1

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