Entrepreneurship

1. GST 307 INTRODUCTION TO
ENTREPRENURSHIP
DEVELOPMENT (MODULE ONE)
ENTREPRENEURSHIP AND SKILLS
DEVELOPMENT CENTRE (ESDC)
UNIVERSITY OF LAGOS
SUNDAY A. ADEBISI. PhD,
ACTING DIRECTOR

2. GST 307 INTRODUCTION TO
ENTREPRENURSHIP DEVELOPMENT (MODULE
ONE)
What is entrepreneurship?
Who is an entrepreneur?
What is an idea?
Where do great ideas come from?
Self employment vs Wage employment
Seed Funding
Sources of Capital

3. There is no universal definition of
entrepreneurship; however, many
authors have come up with
different definitions but with
common understanding based on
changing conditions. Some of
these definitions are :
What is Entrepreneurship?

4. What is entrepreneurship?
“Entrepreneurship is a process by
which individuals pursue and
exploit opportunities irrespective
of the resources they currently
control” (Stevenson & Gumpert,
1985)
“Entrepreneurship is the creation
of organizations, the process by
which new organizations come
into existence” (Gartner, 1988)
“Entrepreneurship is about how,
by whom, and with what
consequences opportunities to
bring future goods and services
into existence are discovered,
created and exploited”
(Venkataraman, 1997)

5. What is entrepreneurship?
The most common among these
traditional definitions is that,
entrepreneurship is the ability
and enthusiasm of an individual
to identify, develop, and run a
business enterprise, majorly a
new venture with the aim of
achieving desired goals (profits or
social benefits) in the midst of its
inherent risks and challenges.
From these definitions; one can
infer that entrepreneurship is a
process-involving skill to identify
opportunities,
• Entrepreneurship encompasses
willingness to develop and run
businesses,
• It also contains taking calculated
risks for profits or any other
predetermined objectives.
• In nutshell, the definition of
entrepreneurship comprises six
key elements: process, ability,
willingness, ventures, risks, and
goals.

6. What is entrepreneurship?
However, while these traditional definitions of
entrepreneurship focus on having new businesses
with the possible risks and profits, the new
dimension of entrepreneurship focuses on what
makes some persons to identify opportunities and be
able to turn them to profitable businesses while
others cannot, and how can innovation be brought
into the exiting opportunities for additional wealth
creation.

7. In 1755, Richard Cantillon
described an entrepreneur as an
individual who buys raw material
at an identified price so as to sell
it at unidentified price. Cantillon
definition indicates that an
entrepreneur engages in business
activities with the aim of making
profit despite the unknown
circumstances.
Who is an Entrepreneur?

8. An Entrepreneur Defined?
In 1815, Jean-Baptiste Say
identified innovation as a key
element in describing an
entrepreneur. Therefore, an
entrepreneur is a person who
could do things in different ways
from others, or a person who
could add new things to the
exiting methods.
In 1928, Joseph Alois
Schumpeter went further to
strengthen the relationship
between innovation and
entrepreneurs by describing an
entrepreneur as a person that can
exploit new opportunities.
Peter Drucker between 1909 and
2005 described an entrepreneur as
someone who seeks out change,
responds to change, and makes
efforts to turn change to
opportunities.

9. An Entrepreneur Defined
In all these definitions, an
entrepreneur could therefore be
described as an individual that has
innovative ideas with the capacity
to convert the ideas not just into
profitable business ventures but a
sustainable functioning reality in
the face of challenges.

10. An idea is an intellectual concept
in the mind of someone which can
be translated to something
meaningful and valuable to
humankind.
What is an Idea?

11. Great ideas could come from
products, employees, feedback
from the consumers, government
regulations or policies,
distributors, traveling to a new
environment, group discussion,
seminars, research and
development (R&D) etc.
Where do GREAT IDEAS come from?

12. Self-employment is a situation
where someone is not working
under anybody to earn money, but
is making his or her earning
through personal business or
businesses.
Self-employment vs Wage employment

13. Self-employment vs Wage employment
In contrast, wage employment is
when someone is working under
another person or organization for
payment either on a daily
arrangement or on a fixed regular
period.

14. Self-employment
You are the boss
You are the owner of the proceeds
You suffer alone for the loss
You earn from your profits
Taxes are deducted from profits
You are an employer
An employer of labour
You are working for yourself
You cannot be sacked
The tendency to get rich within a
very short period is high
Wage employment
Working under a boss
The proceeds belong to the employer
The employer suffers for the loss
The earnings are from salary
Taxes are deducted from salary
You are an employee
A supplier of labour
You are working for another person
You can be sacked
The tendency is very low under wage
employment
Self-employment vs Wage employment

15. SOURCES OF CAPITAL FOR STARTUPS
What is seed funding?
Who qualifies for seed funding
Traditional sources of funding for entrepreneurs:
i. Friends and Families
ii. Thrift Collector
iii. Personal Savings
iv. Borrowing etc

16. Who are these two young men?
What are the problems?

17. Seed Funding

18. • As the name implies, seed funding is a form of capital to fund a new
business idea at the first stage.
• Seed funding is mainly used to build up business ideas to the stage it can
further attract investors for equity.
• The fund could come from the owner of the idea, family, friends or angel
investors.
• Historically, our fore-fathers used this method in olden days whereby yam
seeds were given to a young agile man who has been under the tutelage of
another man in farming to start having his own farm especially when the
young man was about getting married.
• Some still do it up till today (i.e. Igbos usually give certain amount of
money to a young man that has learned trading under a master for a period
to start a new business on his own, and this has made them more
enterprising than any other tribes in Nigeria till today).
What is Seed Funding?

19. The seed must SPROUT
However, what is important for
the receiver of the seed funds is
that he/she should make sure the
business grows beyond startup
because it is not every seed that is
planted that germinates; some
even germinate and wither owing
to scorching sun (hot weather),
while some survive it probably
because of rain or irrigation.

20. Who qualifies for seed funding? (1)
People with NEW IDEAS

21. Who qualifies for seed funding? (2)
People that have businesses at FIRST STAGE (to cover
business plan and operating costs)

22. Who qualifies for seed funding? (3)
People with relatively small investment

23. Who qualifies for seed funding? (4)
Startups

24. Traditional sources of funds for entrepreneurs
Traditional source of funds is a form of business
financing that does not require stringent conditions
or securities.

25. This type of capital involves close
associates and immediate family
members to fund business ideas.
Friends and Family

26. Thrift collector is someone who
engages in an informal
arrangement to collect money and
keep it on behalf of the person
called ‘contributor’ till the
matured date or period when the
accumulated money will be given
to the contributor based on agreed
participation charges. Hence, a
young entrepreneur can raise fund
from thrift collection method to
start a business after he/she has
made a reasonable contribution
over a period.
Thrift Collector

27. Thrift is about contributing small amount of
money over a period of time to achieve
something

28. Personal Savings
Personal savings can be regarded as disposable income after domestic
expenditures to be kept for a purpose over a period of time

29. Borrowing is a process of
sourcing for money from an
individual (friends or family
members) or financial institutions
with interest in the case of banks
or without interest from individual
but with agreement for
repayment. The money borrowed
for business can be regarded as
loan capital or debt equity
because it must be refunded with
interest or without interest as the
case may be whether the business
survives or not.
Borrowing