UNDERSTANDING ENTREPRENEURSHIP

The Entrepreneur

entreprende, which means – ‘to undertake’

Webster dictionary – one who organizes, manages and assumes the risks of a business or enterprise

Richard Cantillion – an entrepreneur is someone who takes the risk of running an enterprise by paying a certain price for securing and using resources to make a product and reselling the product for an uncertain price.

Joseph Schumpeter - an innovator playing the role of a dynamic businessman adding material growth to economic development

Timmons - Entrepreneurship is the process of creating or seizing an opportunity and pursuing it regardless of the resources currently controlled

Reasons for Growth of Entrepreneurship

• Industry Structure

• New technologies

• Deregulation and privatization

• Formation of new business communities

• Increasing demand for variety

• Government incentives and subsidies

• Increasing flow of information

• Easier access to resources• Entrepreneurial education• Return on innovation• Entrepreneur as a Hero• Self-employment is highly valued• Rising dissatisfaction at job• Acceptance of ex-entrepreneurs in the job

market

Impact of Entrepreneurial Firms

• Job Creation

• Economic growth

• New Technology

• Serving small markets

Why Start a Business?

• Control

• The idea

• Flexibility

• Money

Pros & Cons

• You are the boss• All profits are yours• There will be great variety

in roles and tasks• Increases self confidence• Work can be very

satisfying• Success will give you

immense satisfaction

• You are alone• All decisions are yours• All losses are yours• Work may not be

satisfying• You will need to put in

long hours• Lack of success will effect

self esteem• Exiting the business is

difficult• Pressures will affect

social and family life

Entrepreneurial Characteristics

Timmons:

1. commitment and determination;

2. leadership;

3. opportunity obsession;

4. tolerance of risk, ambiguity and uncertainty;

5. creativity, self-reliance and ability to adapt; and

6. motivation to excel

Bianchi

1. being an offspring of self-employed parents;

2. being fired from more than one job;

3. being an immigrant or a child of immigrants;

4. previous employment in a firm with more than 100 people;

5. being the oldest child in the family

6. being a college graduate

Entrepreneurial Skills

• Creativity and Opportunity Evaluation• Real-time Strategy and Decision Making• Comfort with Change and Chaos• Teamwork• Evangelism, Selling, Negotiation, and Motivation

through Influence and Persuasion• Oral and Written Communication• Basics of Start-Up Finance, Accounting and Law

Entrepreneurial Attitudes

• Comfortable with lifestyle changes

• Willingness to break / bend / stretch laws

• Patience to start small

• Prepared to make enemies

• Comfort with confrontations

• Dealing with failure

• Willingness to learn

Types of Entrepreneurs

1. Early starters2. Experienced3. Mature

1. 1st generation entrepreneurs2. From Business families3. Minority entrepreneurs4. Women Entrepreneurs

1. Novice

2. Serial

3. Portfolio

Reasons for Entrepreneurial Failure

• Lack of experienced management• Few trained or experienced manpower• Poor financial management• Rapid growth• Lack of business linkages• Weak marketing efforts• Lack of information• Incorrect pricing• Improper inventory control• Short term outlook