Entrepreneurship Session

ENTREPRENEURSHIP:INTRODUCTION TO INITIATE

Prof: Karan .R. JaganiChapter 1

What Is An Entrepreneur?

ENTREPRENEUR

A vision-driven individual who assumes significant personal and financial risk to

start or expand a business.

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What Is An Entrepreneur?

ENTREPRENEURSHIP

The pursuit of opportunity throughinnovation, creativity and hard work

without regard for the resources currently controlled.

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Entrepreneurship4

• Entrepreneurship: a way of thinking, reasoning, and acting that is:

– opportunity obsessed– holistic in approach– and leadership balanced

Prof: Karan .R. Jagani

Who is an Entrepreneur?5

Situational more than personality

AgeDistribution

forStarting Company

Ability

Age

20 3025 35 4540

Flexibility


Who is an Entrepreneur?6

Manager’s Opportunities

PerceivedCapability

Future Goals

Change Status Quo

Possible

Blocked

SatisfiedmanagerEntrepreneur

Frustratedmanager

Classicbureaucrat


What is Your Entrepreneruial Potential?

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Realistically assess your potential for anEntrepreneurial Career

Understand thepersonal attributesimportant for success in a business of your own

Understand thedemands theentrepreneurialrole will make onyou and yourfamily

Evaluateyour managerialskills

Conduct a personal financialassessment

Develop apersonalbalance sheet

Develop apersonalbudget

Assess your strengths and weaknesses that will affect your ability to achieve your entrepreneurial goals


Why to be an entrepreneur?9

To be independent To utilize oneself To give a fair trial of his own talent and

skill To do something unique or outstanding To gain an economic reward To bring change in the society To solve a problem


Achievement Motivation 10

Nine characteristics of achievement motivated people:- To take personal responsibility To take moderate risk TO know the results of his efforts To persist in the face of adversity To be innovative To demonstrate interpersonal competence To be future oriented To be mobile To not completely be content based


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1. Create new product and/or service businesses.

2. Bring creative and innovative methods to developing or producing new products or services.

3. Provide employment opportunities and create new jobs as a result of growing their businesses consistently and rapidly.

4. Help contribute to regional and national economic growth.

5. Encourage greater industrial efficiency/productivity to enhance our international competitiveness.

Entrepreneurs Can Play a Number of Roles in the Economy Prof: Karan .R.

Jagani

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6. Stimulates redistribution of wealth, income and political power

7. Helps improving the social welfare by harnessing dormant and neglected talent

8. Facilitates transfer of technology to rural areas

9. Tools of job creation by virtue of its labour intensiveness

10. Restructuring and transformation of economy

Entrepreneurs Can Play a Number of Roles in the Economy (cont..)

Women Entrepreneur13

A women capable of achieving self economic independence individually or in collaboration, generates employment opportunities for others through initiating, establishing and running the enterprise by keeping place with her personal, family & social life.


Why do Women Take-up Employment?14

• Push Factors– Death of bread winner– Sudden fall in family income– Permanent inadequacy in income of the family

• Pull Factors– Women’s desire to evaluate their talent– To utilize their free time or education– Need and perception of Women’s Liberation, Equity etc.– To gain recognition, importance and social status.– To get economic independence


Women Entrepreneurship in India15

Earlier there were 3 Ks Kitchen Kids Knitting

Then came 3 Ps Powder Pappad Pickles

At present there are 4 Es Electricity Electronics Energy Engineering


Some examples16

Mahila Grih Udyog 7 ladies started in 1959: Lizzat Pappad

Lakme Simon Tata

Shipping corporation Mrs. Sumati Morarji

Biocon Ms. Kiran Mazumdar Shaw

Herbal Heritage Ms. Shahnaz Hussain

Balaji films Ekta Kapoor


Key elements for Success17

Elements of this Presentation are Courtesy of Dr. Mohan Sawhney @ Kellogg School of Management

Big

Idea

Competent

TeamSufficient

Money

Good

Plan

RelentlessRelentless

ExecutionExecution

And a generous helping of luck…And a generous helping of luck…


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INTRAPRENEURSHIP

“...Any of the dreamers who do. Those who take hands-on responsibility for creating innovation of any kind, within a business. The intrapreneur may be the creator or inventor but is always the dreamer who figures out how to turn an idea into a profitable reality.”

• Intrapreneurs are therefore people who put new ideas into action within established businesses.

• Although employed in a corporate position intrapreneurs are nevertheless given freedom and incentives to create and market their own ideas.


FORMS OF ORGANIZATION

Prof: Karan .R. JaganiChapter 2

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Factors to Consider in Selecting an Appropriate Business Entity

Liability - Limited Liability v. Personal Liability

Tax Implications Complexity of Formation and

Management Capital - effect on ability to raise capital

through angel investment, venture capital, or initial public offering (IPO)

Credibility in the business world


Legal Forms of Business Organization

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StructureOwnership

Requirements Tax Treatment Liability Advantages Drawbacks

Sole

proprietorship

One owner Income and losses “pass through” to owner and are taxed at personal rate

Unlimited personal liability

Low start-up costs

Freedom from most regulations

Owner has direct control

All profits go to owner

Easy to exit business


Personal finances at risk

Miss out on many business tax deductions

Total responsibility

May be more difficult to raise financing

General partnership

Two or more owners

Income and losses “pass through” to partners and are taxed at personal rate

flexibility in profit-loss allocations to partners


Ease of formation

Pooled talent

Pooled resources

Somewhat easier access to financing

Some tax benefits


Divided authority and decisions

Potential for conflict

Continuity of transfer of ownership



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StructureOwnership

Requirements Tax Treatment Liability Advantages Drawbacks

Limited liability partnership (LLP)

Two or more owners

Income and losses “pass through” to partner and are taxed at personal rate; flexibility in profit-loss allocations to partners

Limited, Good way to acquire capital from limited partners

Cost and complexity of forming can be high

Limited partners cannot participate in management of business without losing liability protection



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Group Entrepreneurship is turning entrepreneurship into a group of people instead of an individual, enabling them to undertake any business propositions. E.g. SEWA

Family enterprise is and enterprise which is managed and run within the family. Large no. of Indian businesses are family

run business.


Small Enterprise24

A business that is independently owned and operated for profit and is not dominant in its field is known as small enterprise


Advantages of small enterprise

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Providing technological innovation Innovation among small-business workers is higher

than among workers in large businesses Small firms produce 2.5 times as many innovations

as large firms relative to the number of persons employed

More than half of the major technological advances of the 20th century originated with individual inventors and small businesses

Inventions may spark new industries or contribute to established industries



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Providing employment Small firms hire a larger proportion of

younger workers, older workers, women, and part-time workers

Small businesses provide workers with their first job and initial job skills

Small businesses provide 2/3 of the net new jobs added to the economy



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Providing competition Small firms can compete with large firms,

forcing the larger firm to become more efficient and responsive to customer needs

Filling needs of society and other businesses Small firms can meet the special needs of

smaller groups of customers Small firms can act as specialized suppliers

of goods and services to larger businesses



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It helps in quick decision making It is adaptable to change Communication vertical and lateral is

fast and distinct Due to small size, effective integration of

production and market can be easily achieved

Doesn’t hesitate to take risks Are more simple and motivated

The Pro and Cons of Smallness

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ADVANTAGES Personal relationships

with customers and employees

Ability to adapt to change

Simplified recordkeeping

Independence Advantages of sole

proprietorships Keeping all profits Ease and low cost of

going into business Keeping business

information secret

DISADVANTAGES Risk of failure Limited potential Limited ability to raise

capital


Why Small Businesses Fail?30


Entrepreneurship Session

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