25 enterprenuership

Entrepreneurship studiesEntrepreneurship studies ––
Chapter 1Chapter 1

Introduction to EntrepreneurshipIntroduction to Entrepreneurship
What is Entrepreneurship?What is Entrepreneurship?
–– Entrepreneurship is the process of creatingEntrepreneurship is the process of creating
something new of value by devoting (giving) thesomething new of value by devoting (giving) the
necessary time and effort.necessary time and effort.
–– By accepting and acknowledging the necessaryBy accepting and acknowledging the necessary
financial, psychological, and social risks, andfinancial, psychological, and social risks, and
–– Finally receiving the resulting rewards be itFinally receiving the resulting rewards be it
monetary and personal satisfaction and freedommonetary and personal satisfaction and freedom
to do what you want.to do what you want.
Robert D.Hisrich, M. Peters & D.A ShepherdRobert D.Hisrich, M. Peters & D.A Shepherd

Simple DefinitionSimple Definition
–– Process of creating something new andProcess of creating something new and
assuming the risks and rewards.assuming the risks and rewards.
Robert D.Hisrich, M.P.Peters &Robert D.Hisrich, M.P.Peters &
D.A.ShepherdD.A.Shepherd

What is an Entrepreneur?What is an Entrepreneur?
–– He or she is an individual who actively form or lead theirHe or she is an individual who actively form or lead their
own business and nurture them for growth andown business and nurture them for growth and
prosperity.prosperity.
UiTM Entrepreneurship Study GroupUiTM Entrepreneurship Study Group
–– A person who creates and manages change by theA person who creates and manages change by the
recognition of opportunities (needs, wants, opportunities,recognition of opportunities (needs, wants, opportunities,
problems, and challenges) and develops people andproblems, and challenges) and develops people and
manages resources to take advantage of the resourcesmanages resources to take advantage of the resources
to take the opportunity and creates a venture (profitableto take the opportunity and creates a venture (profitable
business).business).
Eston Kimani, MITEston Kimani, MIT

What are the different outcomes of engaging inWhat are the different outcomes of engaging in
entrepreneurshipentrepreneurship??
–– Innovation or newnessInnovation or newness –– product or service.product or service.
–– Organizing resourcesOrganizing resources –– finance, people, physical andfinance, people, physical and
information resource.information resource.
–– Creating new product or service.Creating new product or service.
–– Generating wealthGenerating wealth
–– Taking risk in a business venture.Taking risk in a business venture.
–– Prepared to face uncertainty.Prepared to face uncertainty.
–– Create job opportunityCreate job opportunity
–– Increase the abundance of wealth generation for the nation.Increase the abundance of wealth generation for the nation.

Characteristics or Personal Competency of anCharacteristics or Personal Competency of an
EntrepreneurEntrepreneur..
–– InitiativeInitiative
–– Sees and Acts on OpportunitiesSees and Acts on Opportunities
–– PersistencePersistence
–– Information seekingInformation seeking
–– Concern for High Quality Work and OutputConcern for High Quality Work and Output –– Increased Productivity.Increased Productivity.
–– Commitment to Work ContractCommitment to Work Contract
–– Efficiency OrientationEfficiency Orientation
–– Systematic and organized planningSystematic and organized planning
–– Problem SolvingProblem Solving
–– Self ConfidenceSelf Confidence
–– AssertivenessAssertiveness –– Negotiation with suppliers & customersNegotiation with suppliers & customers
–– Persuasive & InfluentialPersuasive & Influential –– Peers and stakeholdersPeers and stakeholders
–– Inspirational - employeesInspirational - employees
–– Effective CommunicatorEffective Communicator –– external & internal of organization.external & internal of organization.

The Role of Entrepreneurship inThe Role of Entrepreneurship in
Economic Growth.Economic Growth.
–– In order for Entrepreneurs to thrive in aIn order for Entrepreneurs to thrive in a
nation, the Government must playnation, the Government must play
important role in creating the kind ofimportant role in creating the kind of
business environment that create thebusiness environment that create the
basis for growth, stability and futurebasis for growth, stability and future
success of entrepreneurs.success of entrepreneurs.

The Role of Entrepreneurship in Economic GrowthThe Role of Entrepreneurship in Economic Growth..
–– This primarily involves the:This primarily involves the:
Increasing the per capita output and income of the people of the country.Increasing the per capita output and income of the people of the country.
Initiating and creating change in the structure of business and society.Initiating and creating change in the structure of business and society.
Further growth and increased output arises, thus to enable more wealthFurther growth and increased output arises, thus to enable more wealth
to be divided among the various participants ( stakeholders).to be divided among the various participants ( stakeholders).
Generation of innovation that leads to the creation of new product andGeneration of innovation that leads to the creation of new product and
service.service.
Improvisation and modification on existing product to better suit marketImprovisation and modification on existing product to better suit market
and customersand customers’’ needs.needs.
Creation of self employment and to cut back the dependency of potentialCreation of self employment and to cut back the dependency of potential
employment of new workers in government sectors.employment of new workers in government sectors.
Streamline of the private sector and encourage the inclusion of newStreamline of the private sector and encourage the inclusion of new
technology that is less labor dependent.technology that is less labor dependent.
Increase in the national output which in turn lead to greater andIncrease in the national output which in turn lead to greater and
stronger economic growth.stronger economic growth.
Laying the seed bed for creating new entrepreneur in various newLaying the seed bed for creating new entrepreneur in various new
technologies such as Bio Technology, Bio Technology Medicine, Nanotechnologies such as Bio Technology, Bio Technology Medicine, Nano
Technology , New Material Technology etc.Technology , New Material Technology etc.

The Role of Entrepreneurship in Economic Growth.The Role of Entrepreneurship in Economic Growth.
–– This primarily involves the:This primarily involves the:
Acting as a catalyst to nurture intrapreneurs and corporateActing as a catalyst to nurture intrapreneurs and corporate
entrepreneurs in a business organization.entrepreneurs in a business organization.
Providing Government grant and subsidy to existing and would beProviding Government grant and subsidy to existing and would be
entrepreneurs to aid their business development.entrepreneurs to aid their business development.
Providing Entrepreneurs in the SMI/SME various types ofProviding Entrepreneurs in the SMI/SME various types of
business loans to act as an impetus for business and economicbusiness loans to act as an impetus for business and economic
growth in the nation. To facilitate this various businessgrowth in the nation. To facilitate this various business
developments of entrepreneurs, Commercial Banks, SME Bank,developments of entrepreneurs, Commercial Banks, SME Bank,
Bank Pertanian Malaysia, EXIM Bank, and Bank PembangunanBank Pertanian Malaysia, EXIM Bank, and Bank Pembangunan
Berhad provide the support.Berhad provide the support.
Government decision to engage both would be bumiputra andGovernment decision to engage both would be bumiputra and
non-bumiputra in various entrepreneurship development schemes.non-bumiputra in various entrepreneurship development schemes.
Providing knowledge and information through seminars,Providing knowledge and information through seminars,
conferences, exhibitions, various business, small business andconferences, exhibitions, various business, small business and
entrepreneurial business e-portals.entrepreneurial business e-portals.
Providing of various financial, information resources support fromProviding of various financial, information resources support from
various government agencies and national corporations suchvarious government agencies and national corporations such
MDC,MARDI, FAMA, RISDA, FELDA, MATRADE, TELEKOMSMDC,MARDI, FAMA, RISDA, FELDA, MATRADE, TELEKOMS
MALAYSIA, TNB, MAS etc.MALAYSIA, TNB, MAS etc.

The Entrepreneurial ProcessThe Entrepreneurial Process
–– What is the Entrepreneurial Process?What is the Entrepreneurial Process?
The process of pursuing (going after) a newThe process of pursuing (going after) a new
venture or business,venture or business,
Whether it is a new product going into anWhether it is a new product going into an
existing market ORexisting market OR
Existing product going into a new marketsExisting product going into a new markets
OROR
The creation of a totally new organization.The creation of a totally new organization.

First Entrepreneurial Process:First Entrepreneurial Process:
–– Creation ProcessCreation Process –– creating something new ofcreating something new of
value.value.
Second Entrepreneurial Process:Second Entrepreneurial Process:
–– Requires the commitment of the necessaryRequires the commitment of the necessary
time and effort. Appreciate and understand thetime and effort. Appreciate and understand the
importance of time and effort devoted toimportance of time and effort devoted to
create something new and make it workable.create something new and make it workable.
Third Entrepreneurial Process:Third Entrepreneurial Process:
–– Involves the enjoyment of the rewardsInvolves the enjoyment of the rewards
(Freedom, monetary) after the effort, followed(Freedom, monetary) after the effort, followed
by personal satisfaction.by personal satisfaction.

The Entrepreneurial ProcessThe Entrepreneurial Process –– FourFour
distinct process:-distinct process:-
–– Identification and evaluation of theIdentification and evaluation of the
opportunity.opportunity.
–– Development of the Business Plan.Development of the Business Plan.
–– Determination of the required resourcesDetermination of the required resources
–– Management of the resulting enterprise.Management of the resulting enterprise.

The Benefits of Entrepreneurship:The Benefits of Entrepreneurship:
–– Opportunity to create your own destinyOpportunity to create your own destiny
Owning a business provides anOwning a business provides an
entrepreneurs the independence and theentrepreneurs the independence and the
opportunity to achieve what is important toopportunity to achieve what is important to
them.them.
Entrepreneurs want to decide what theyEntrepreneurs want to decide what they
want in their lives, and they use theirwant in their lives, and they use their
businesses to make their desire a realitybusinesses to make their desire a reality
(come true).(come true).

The Benefits of Entrepreneurship:The Benefits of Entrepreneurship:
–– Opportunity to make a DifferenceOpportunity to make a Difference
More and more entrepreneurs are startingMore and more entrepreneurs are starting
businesses because they see this as an opportunitybusinesses because they see this as an opportunity
to make a difference in a route or way that isto make a difference in a route or way that is
personally important to them.personally important to them.
–– Opportunity to reach your full potential.Opportunity to reach your full potential.
Many people find their work not challenging and notMany people find their work not challenging and not
exciting.exciting.
For entrepreneurs there is little difference betweenFor entrepreneurs there is little difference between
work and play.work and play.
Entrepreneurs see their business as a vehicle of selfEntrepreneurs see their business as a vehicle of self
expression of personal desire and eventual selfexpression of personal desire and eventual self
actualization of their personal goalsactualization of their personal goals –– the pinnacle ofthe pinnacle of
their career success.their career success.

The Benefits of EntrepreneurshipThe Benefits of Entrepreneurship
Opportunity to reap extraordinaryOpportunity to reap extraordinary
(luar biasa) profits.(luar biasa) profits.
–– The profit earned by an entrepreneurThe profit earned by an entrepreneur
are an important motivation andare an important motivation and
indication factor for further increasedindication factor for further increased
performance. Thus these could spurperformance. Thus these could spur
them to greater achievement andthem to greater achievement and
success.success.

Benefits of Entrepreneurship.Benefits of Entrepreneurship.
–– Societal Responsibility and Recognition.Societal Responsibility and Recognition.
Small business owners are among the mostSmall business owners are among the most
admired, respected and trusted individualsadmired, respected and trusted individuals
of society.of society.
Customers have shown their trust andCustomers have shown their trust and
faithfulness over their years for theirfaithfulness over their years for their
business.business.
Help to contribute employment, businessHelp to contribute employment, business
opportunity in a particular locality or area.opportunity in a particular locality or area.

Benefits of Entrepreneurship.Benefits of Entrepreneurship.
Opportunity to engage in work of theirOpportunity to engage in work of their
choicechoice
–– Small business owners tend to engage inSmall business owners tend to engage in
business that gives them personal satisfaction.business that gives them personal satisfaction.
–– Though they may work long hours and engageThough they may work long hours and engage
in very industrious work that is beneficial toin very industrious work that is beneficial to
their organization and themselves.their organization and themselves.
–– Most of all the work they engage in helps toMost of all the work they engage in helps to
benefits the community, society and thebenefits the community, society and the
nation.nation.

The Drawbacks of Entrepreneurship:The Drawbacks of Entrepreneurship:
–– Uncertainty of IncomeUncertainty of Income
Opening and a running a business providesOpening and a running a business provides
no guarantee that an entrepreneur will earnno guarantee that an entrepreneur will earn
enough money and survive.enough money and survive.
Engaging in the wrong business and notEngaging in the wrong business and not
able gain an advantage in the short run andable gain an advantage in the short run and
eventually in the long run can be disastrous.eventually in the long run can be disastrous.
Great effort and proper and effectiveGreat effort and proper and effective
management need to used in beginning tomanagement need to used in beginning to
ensure the organization success.ensure the organization success.

The Drawbacks of EntrepreneurshipThe Drawbacks of Entrepreneurship
Risk of losing your entire InvestmentRisk of losing your entire Investment
–– Small business have a high failure rate.Small business have a high failure rate.
–– Though is successful initially it faces financialThough is successful initially it faces financial
difficulty within the next five years.difficulty within the next five years.
–– Entrepreneurs must be prepared to face theEntrepreneurs must be prepared to face the
consequence of failure.consequence of failure.
–– Entrepreneurs must have acute sense ofEntrepreneurs must have acute sense of
observation and be able to detect the earlyobservation and be able to detect the early
signs of failure.signs of failure.
–– If a business fails the entrepreneur must have aIf a business fails the entrepreneur must have a
contingency plan to overcome a bankruptcy orcontingency plan to overcome a bankruptcy or
personal failure.personal failure.

Drawbacks of EntrepreneurshipDrawbacks of Entrepreneurship
–– Long Hours and Hard WorkLong Hours and Hard Work
Entrepreneurs tend to be generally workaholic, andEntrepreneurs tend to be generally workaholic, and
under tremendous pressure to produce the result theyunder tremendous pressure to produce the result they
expect.expect.
Entrepreneurs seldom find time to be away from theEntrepreneurs seldom find time to be away from the
business but tend to pour all their effort and resourcesbusiness but tend to pour all their effort and resources
to achieve their personal entrepreneurial objective.to achieve their personal entrepreneurial objective.
Some even go to extent of making big sacrifice andSome even go to extent of making big sacrifice and
deprive themselves of a personal life, wife anddeprive themselves of a personal life, wife and
children and social and family associates.children and social and family associates.

–– Lower Quality of Life until the businessLower Quality of Life until the business
get established.get established.
In order for the business to be successfulIn order for the business to be successful
the entrepreneur must engage himself tothe entrepreneur must engage himself to
produce the kind of result he expects.produce the kind of result he expects.
He cannot rest on his laurels (take it easy)He cannot rest on his laurels (take it easy)
until and certain the business has stabilizeduntil and certain the business has stabilized
and established.and established.

–– High level of stressHigh level of stress
Starting the business can be very rewardingStarting the business can be very rewarding
experience, but it can be stressful.experience, but it can be stressful.
An entrepreneur have left the comfort and security ofAn entrepreneur have left the comfort and security of
secured job to venture into their own business.secured job to venture into their own business.
Failure can bring about tremendous personal failure,Failure can bring about tremendous personal failure,
and in turn creates intense levels of anxiety and stress.and in turn creates intense levels of anxiety and stress.
Financial burden may increase and the entrepreneurFinancial burden may increase and the entrepreneur
may face difficulty sustaining the business or maymay face difficulty sustaining the business or may
decide to call it for day and wind up the business fordecide to call it for day and wind up the business for
good.good.

–– Complete ResponsibilityComplete Responsibility
Must be prepared to make decision that areMust be prepared to make decision that are
unfavorable (swallow the bitter pill).unfavorable (swallow the bitter pill).
Must make decision in areas that theMust make decision in areas that the
entrepreneur is not familiar at all.entrepreneur is not familiar at all.
Fear of making decision that can have aFear of making decision that can have a
devastating effect on the business and itsdevastating effect on the business and its
people.people.
Tremendous pressure to perform as theTremendous pressure to perform as the
entrepreneur is too deeply engaged in theentrepreneur is too deeply engaged in the
businessbusiness

–– DiscouragementDiscouragement
–– To undertake a business requires a lot of dedication,To undertake a business requires a lot of dedication,
discipline and tenacity.discipline and tenacity.
–– During running the business they will face manyDuring running the business they will face many
difficulties, obstacles which may difficult to overcome.difficulties, obstacles which may difficult to overcome.
–– Further difficulties, discouragement and disillusionmentFurther difficulties, discouragement and disillusionment
are common emotions.are common emotions.
–– Successful entrepreneurs escape through rough times orSuccessful entrepreneurs escape through rough times or
difficult times through sheer hard work, self confidencedifficult times through sheer hard work, self confidence
and full of optimisms.and full of optimisms.

Ten Deadly Mistakes of Entrepreneurship:Ten Deadly Mistakes of Entrepreneurship:
–– Business entrepreneurship fail because:-Business entrepreneurship fail because:-
Management MistakesManagement Mistakes
Lack of ExperienceLack of Experience
Poor financial controlPoor financial control
Weak marketing effortsWeak marketing efforts
Failure to develop a strategic and effective planFailure to develop a strategic and effective plan
Uncontrolled GrowthUncontrolled Growth
Poor locationPoor location
Improper inventory controlImproper inventory control
Incorrect or unsuitable pricingIncorrect or unsuitable pricing
The inability of to move into entrepreneurial thinking mindsetThe inability of to move into entrepreneurial thinking mindset
from the previous secured permanent managerial position held.from the previous secured permanent managerial position held.

How to avoid failure in a Entrepreneurial business.How to avoid failure in a Entrepreneurial business.
–– Know your business in depth.Know your business in depth.
–– Develop a good, effective and solid Business Plan.Develop a good, effective and solid Business Plan.
–– Manage your financial resources effectively.Manage your financial resources effectively.
–– Have a thorough and complete financial statement.Have a thorough and complete financial statement.
–– Learn hire and manage people effectively.Learn hire and manage people effectively.
–– Keep physically fit, consume healthy foods, and avoidKeep physically fit, consume healthy foods, and avoid
addictive consumption cigarettes and alcohol.addictive consumption cigarettes and alcohol.

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