Introduction to Entrepreneurship · Tenacity despite failure Because entrepreneurs are typically trying something new, the failure rate is naturally high. A defining characteristic

Introduction to Entrepreneurship

Saturday, 30th June, 2018

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q IntroductionqWho is an Entrepreneur?qWhat is Entrepreneurship?qMyths about Entrepreneurshipq Characteristics of successful Entrepreneursq Types of Start-UP Firmsq Nature of Entrepreneurship risk

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TRAININGTRAININGEXPECTATIONSEXPECTATIONS

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At the end of this training, participants should be able to;

1.State the meaning of

Entrepreneur and Entreprenurship

3.Outline the four

main characteristics of a successful entrepreneur

2.Discuss three main reasons

people decide to become

entrepreneurs

4.State the

functions of an entrepreneur

5.Distinguish between

entrepreneur and promoter

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A recent survey by Global EntrepreneurshipMonitor (GEM) has revealed that Nigerianshave more enthusiasm for business than therest of the world.

According to the GEM survey, 90 percent ofNigerian adults strongly believe they have theskills required to run a business, and 35percent of Nigerians are already involved inone entrepreneurial activity or the other.

“Do you see a man skillful inhis work? He will stand beforekings; he will not stand beforeobscure men.”.

Proverbs 22:29

Introduction toEntrepreneurship

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A vision-driven individual who assumessignificant personal and financial risk to startor expand a business.

~Karen Lamb

Who is anEntrepreneur?

AgeDistribution

forStarting Company

Ability

Age20 3025 35 4540

Flexibility


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The pursuit of opportunity throughinnovation, creativity and hard work withoutregard for the resources currently controlled.

~Karen Lamb

What isEntrepreneurship?

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Entrepreneurship

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

q opportunity obsessed

q holistic in approach

q leadership balanced

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Common myths aboutEntrepreneurship

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Common myths aboutEntrepreneurship 1 of 4

This myth is based on the mistaken belief that some people are geneticallypredisposed to be entrepreneurs. The consensus of many studies is that no one is“born” to be an entrepreneur; everyone has the potential to become one.

Whether someone does or doesn’t become an entrepreneur, is a function of theenvironment, life experiences, and personal choices.

Myth 1: Entrepreneurs are born not made



Most entrepreneurs are moderate risk takers.The idea that entrepreneurs are gamblers originates from two sources:q Entrepreneurs typically have jobs that are less structured, and so they face a

more uncertain set of possibilities than people in traditional jobs.qMany entrepreneurs have a strong need to achieve and set challenging goals,

a behavior that is often equated with risk taking.

Myth 2: Entrepreneurs are gamblers



While it is naïve to think that entrepreneurs don’t seek financial rewards, money israrely the reason entrepreneurs start new firms.

In fact, some entrepreneurs warn that the pursuit of money can be distracting.

Myth 3: Entrepreneurs are motivated primarily by money

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The most active age for business ownership is 35 to 45 years old.While it is important to be energetic, investors often cite the strength of theentrepreneur as their most important criteria in making investment decisions.What makes an entrepreneur “strong” in the eyes of an investor is experience,maturity, a solid reputation, and a track record of success.These criteria favor older rather than younger entrepreneurs.

Myth 4: Entrepreneurs should be young and energetic.

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Entrepreneur?Why become an

Desire to be their own

boss

Desire to pursue their

own ideas

Financial Rewards

The three primary reasons that people become entrepreneurs and start their own firms are

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Passion for Business

Product / Customer

focus

Tenacity despite failure

Execution intelligence

Successful Entrepreneur?Characteristics of

“Bread is made for laughter, and wine gladdens life, and money answers everything.” Ecclesiastes 10:19

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Passion for Business

The number one characteristic shared by successful entrepreneurs is a passion forthe business. This passion typically stems from the entrepreneur’s belief that thebusiness will positively influence people’s lives.

“In all toil there is profit, but mere talk tends only to poverty.”

Proverbs 14:23

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Product/Customer focus

A successful entrepreneur with a product/customer focus is one that clearlyunderstands the needs and wants of their customers and thereby producing anddeveloping products that enhance people's lives, but also products that meet andsatisfy customers needs and wants.Without customers and a product that appeals to these customers, the businesswould go nowhere.

“Lazy hands make for poverty, but diligent hands bring wealth.”

Proverbs 10:4


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Tenacity despite failure

Because entrepreneurs are typically trying something new, the failure rate isnaturally high.A defining characteristic for successful entrepreneurs’ is their ability to perseverethrough setbacks and failures.

“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it”

Proverbs 13:11


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Execution Intelligence

The ability to fashion a solid business idea into a viable business is a keycharacteristic of successful entrepreneurs.

“Sluggards do not plow in season; so at harvest time theylook but find nothing.”.

Proverbs 20:4


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An entrepreneur is the person with a creativemind who can identify business opportunities andtake steps for the conversion of ideas intosuccessful business ventures, and give them aconcrete shape.

(a) Conception of an idea

Functions of anEntrepreneur

It is felt that generally an entrepreneurundertakes the risk of setting up a smallenterprise as a sole proprietor. But, now-a-daysmany entrepreneurs have assumed the role ofpromoters of large companies.

(b) Promotion

An entrepreneur is also seen as an innovator whotries to develop new technology, products andmarkets. The entrepreneur uses his creativeabilities to do new things and exploitopportunities in the market.

(c) InnovationYou know that starting of a new business ventureinvolves good amount of risk and uncertainty. Tostart with, it is the entrepreneur who assumesrisks and is prepared for the losses that may arisebecause of unforeseen situations infuture.

(d) Bearer of risks and uncertainty

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Arranging funds is one of the biggest hurdles insetting up a new entrepreneur. It is he who hasto provide the initial capital for starting theventures and also funds required to carry on andexpand the business.

(e) Arranging necessary capital

Nature ofEntrepreneurship risk

An entrepreneur has to design the organisationalstructure and recruit suitable persons for variouspositions. He also makes an estimate for skilledand unskilled workers required and makearrangements for their recruitment.

(f) Staffing


Distinction betweenEntrepreneur and promoter

An entrepreneur is also known as thepromoter as he also assembles therequisite funds and people, undertakes therisk and gives a shape to the businessproposition. However, in theory, thereexists a fine distinction between the two.Those who visualize a business opportunityand are ready to bear the risk are termedas ‘entrepreneurs’ while those who takesteps to set up the business and make itoperational are known as promoter. But inactual practice, such distinction does nothold good because the role ofentrepreneur, now-a-days, does notconfine only to identifying a businessopportunity and his readiness to bear therisk.

It also extends to taking necessary stepsto set up the business and make itoperational specially because facilities likeventure capital and services ofprofessional are readily available. It maybe noted that while some economistsidentify the basic entrepreneurial functionas risk taking, other have emphasized thecoordination of production resources,provision of capital or the introduction ofinnovations. Hence, a more practicalapproach would be to treatentrepreneurship as a wider term whichincludes promotion. Even otherwise, mostpromoters of business unit in India happento be the entrepreneurs themselves and ina family run business, the entrepreneur isowner as well as manager.

“You don’t learn to walk by following rules. You

learn by doing and falling over.”

– Richard Branson

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Types of Start-Up FirmsTypical early tasks in forming a startup are assembling a team to secure skills, know-how,financial resources, and other elements to conduct research on the target market. A startup willthen begin building a first minimum viable product (MVP), a prototype, to validate, assess anddevelop the new ideas or business concepts. Lets take a look at the three types of start-up firms

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You are given N500 tostart a business. You areexpected to return themoney in 30days. Whatkind of investment willyou undertake with it?


Risk-taking is almost synonymous with entrepreneurship. To start and support your ownbusiness, you'll have to put your career, personal finances and even your mental health atstake. For most, the prospect of making your own decisions and being in charge of yourown destiny is worth it. The 2-major entrepreneurship risk are:

Nature ofEntrepreneurial risk

2Risk of Competition

Stiff competition at times canwipe out a business completely.Many times small venturescannot survive the onslaught ofbig ventures.

1Risk of loss

Chances of suffering from heavyloss. The fear of setback dues tomarket not being favorable or ageneral economic decline.Recession, for example, causesmany setbacks to businesspeople.


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All things work together for the good of those who love the Lord and are called

according to His purpose

Rom. 8:28

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Introduction to Entrepreneurship · Tenacity despite failure Because entrepreneurs are typically trying something new, the failure rate is naturally high. A defining characteristic