Entrepreneurship

Who is an entrepreneur?

• Entrepreneur is the person responsible for setting up a business or an enterprise.

• He takes the initiative, is innovative, and looks for high achievements.

• He is a change agent who puts up new projects that create wealth, open up employment opportunities and leads to the growth of the sector.

• One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them.

Workshop on EntrepreneurshipPrepared from the works of good hearted people who ventured to

document their experience and findings

Entrepreneurship

Definitions

• The entrepreneur is an individual who introduces something new in the economy- a new production method, a new product, a new source of raw material, a new market etc.

- Joseph Schumpeter.

• An entrepreneur is the one who always searches for change, responds to it and exploits it as an opportunity. Innovation is a specific tool by which he exploits change as an opportunity, for a business or service.

- Peter Drucker

• A true entrepreneur is the one who is endowed with more than average capacity in the task of organising and coordinating the various other factors of production.

– Francis Walker

Entrepreneurship

Entrepreneurship

Characteristics/Attributes of Entrepreneurs

• Desire for responsibility

• Preference for moderate risk

• Confidence in their ability to succeed

• Desire for immediate feedback

• High level of energy

• Future orientation

• Skilled at organizing

• Value achievement over money

Entrepreneurship

The ‘Type E’ Personality

Common Traits of Entrepreneurs:

• Aggressively pursues goals; pushes self and others

• Seeks autonomy, independence and freedom from boundaries

• Sends consistent messages; very focused

• Acts quickly, often without deliberating

• Keeps distance and maintains objectivity

• Pursues simple, practical solutions

• Willing to take risks; comfortable with uncertainty

• Exhibits clear opinions and values; has high expectations

• Impatient; “just do it” mentality

• Positive, upbeat, optimistic; communicates confidence

Entrepreneurship

What is entrepreneurship?

• It is the propensity of mind to take calculated risks with confidence to achieve a pre determined business or industrial objective

Entrepreneur Entrepreneurship

Person Object

Enterprise

Process of action

Entrepreneurship

Entrepreneurship and developing countries like Sri Lanka

• The potential of economic development remains dormant because of undeveloped or underdeveloped human resources.

• In fact, man is much more crucial to development than any other economic factors. The sufficiency of other resources alone, does not lead us anywhere.

• Resources to be developed may exist in plenty but if development-linked human minds are absent, hardly any economic development will take place.

• While human skills include manufacturing, technical, supervisory, managerial, administrative and entrepreneurial competence, it is the entrepreneurial quality, which is a key ingredient.

• It often sets the limit to the degree of industrial development and the speed with which it can be achieved in a particular country or region.

Entrepreneurship

Barriers to entrepreneurship

• Lack of a viable concept• Lack of market knowledge• Lack of technical skills• Lack of seed capital/resources• Lack of business know how• Lack of sufficient infrastructure• Complacency• Restrictive effects of customs and traditions• Legal constraints• Monopoly• Restrictions due to patents

Entrepreneurship

Intrapreneur

• He is the one who innovates and turns the idea into a profitable reality, within the framework of an organization

• It is necessary that an organization has a conducive environment to encourage intrapreneurs

Characteristics of a conducive intrapreneurial environment are:

• Encouragement to innovation and experimentation• Freely available resources• Measurable rewards• Flexibility to alter plans• Long time horizon to measure success• Top management support

Entrepreneurship

Advantages of Entrepreneurship

Entrepreneurship

To an Individual

• Self Employment

• Employment for near & dear ones

• Prolonged career for next generations

• Freedom to use own ideas - Innovation and creativity

• Unlimited income / higher retained income

• Independence

• Satisfaction

Entrepreneurship

To the Nation

• Provides larger employment

• Results in wider distribution of wealth

• Mobilizes local resources, skills and savings

• Accelerates the pace of economic development

• Reap the benefits of the peace

• Stimulates innovation & efficiency

Entreprenership

Factors favouring Entrepreneurship

• Growth of education- science, technology & management

• Developed infrastructure facilities

• Financial assistance

• Training facilities

• Protective and promotional policies

• Globalization

Entrepreneurship

Entrepreneurship and Economic Development

• Entrepreneurs combine resources, put their time and efforts and produce goods or services

• What they contribute – productivity, output, value addition, income and employment

• Entrepreneurship is a “Low Cost Strategy”. Entrepreneurs perform the crucial role themselves

• The spirit of Entrepreneurship – Drive, achieving higher goals, creativity, innovative attitude.

• A dynamic society emerges and the spirit spreads like a chain reaction.

Entrepreneurship Management

Entrepreneurship and Management Students

• Enterprises in protected economy can be mismanaged

• Enterprises in competitive environment are essentially to be managed

• A Management Graduate is a person trained to manage an enterprise. Naturally, he will deliver the best results

• A Management Graduate should not be just a Job Seeker. He can and should take the role of Job Provider

• Experience confirms that more Management Graduates take Entrepreneurial Role (after some experience) and their income is higher than their colleagues who are in job ( In Sri Lanka the percentage of Management Graduates who venture into business is dismally low. They prefer working for some one, but that trend is changing now. It is good news???)

Entrepreneurship

Entrepreneurial Decision Process

• Pull Factors

– Perception of Advantages

– Spotting an Opportunity

– Government Policies

– Motivation from Biographies or Success Stories

– Influenced by Culture, Community, Family Background, Teachers, Peers, etc.

• Push Factors

– Job Dissatisfaction

– Relocation

– Lay-off

– Retirement

– Boredom

Entrepreneurship Management

Comparison of Traditional Managers, Entrepreneurs and Intrapreneurs

Traditional Managers

Entrepreneurs Intrapreneurs

Primary motives

Perks and promotion

Self-employment, satisfaction and money

Creative freedom and recognition

Time Orientation

Short-term – meeting quotas and budgets; weekly, monthly, quarterly and the annual planning horizon

Short-term –business establishment; Long-term – growth of business

Tend to follow the middle path

Entrepreneurship Management

Traditional Managers

Entrepreneurs Intrapreneurs

Activity Delegates and supervises

Direct involvement

Direct involvement , not merely delegation

Risk Careful Moderate risk taker

Moderate risk taker

Monetary Risk Nil High Nil

Status Concerned about status

Not concerned about status

Not concerned about traditional status

Failure and mistakes

Tries to avoid mistakes

Deals with mistakes and failures

Attempts to hide risky projects from view until ready

Entrepreneurship

Traditional Managers

Entrepreneurs Intrapreneurs

Decisions Like to take their own but unable to disagree with superiors

Follows dream with decisions

Able to get others to agree to help achieve their dreams

Serves who? Others Self and customers

Self, customers, and sponsors

Family history Family members worked for large organizations

Entrepreneurial small-business, professional

Entrepreneurial small-business, professional

Relationship with others

Hierarchy as basic relationship

Transactions and deal-making as basic relationship

Transactions within hierarchy

If you want to be an entrepreneur It is not too late . You can start .

Entrepreneurship

You have one more task !

• This is a presentation done by Maxwell Ranasinghe to Students of the Final Year in the Department of Marketing at the University of Kelaniya.

• Please develop it further with your own insight, knowledge and experience, share with your friends and members of your staff. Send comments to. I used a presentation made by a person called Swarupa to develop and adjust according to our requirements. So I claim no copyright to this.

• The knowledge is universal, we need to share it for the common benefit.

• So act now and send it to many friends as possible AS A CHAIN LETTER.( you may have been part of sending many mythological, time wasting, illogical chain letters but send this, it will at least help another fellow Sri Lankan to be an entrepreneur)

• We, Sri Lankans need a big change in this attitudes more than any other thing.

• Good luck …………

Entrepreneurship Management

Entrepreneurship

Assignment for Students

Choose an entrepreneur as a case study.

Understand his qualities/characteristicsFactors that introduced him to entrepreneurship-push/pullEnvironment conditions (political, social etc)- favorable/unfavourableProcess of starting a business venture; use of innovation and creativityDetails of the enterprise, product/service providedPath to success-overcoming failures, problems faced, major milestones. SWOT of the organization/business in general;

Recommendations if any for the future sustenance and growth