The document discusses entrepreneurship, defining it as the process of starting a business based on innovative ideas and encompassing various risks and rewards. It outlines the role of entrepreneurs in the economy, their characteristics, and the importance of sociological and behavioral perspectives in understanding entrepreneurial success. Additionally, it details the entrepreneurial process in five phases: idea generation, opportunity evaluation, planning, company formation, and growth.

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Entrepreneurship
Subject: Entrepreneurship
Semester: 6th
By
Engr Israr Ahmed
Department of Electrical Technology BUET Uthal Campus
07-09-2023

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Entrepreneurship
• Entrepreneurship is when an individual who has an idea acts on that
idea, usually to disrupt the current market with a new product or
service.
• Entrepreneurship usually starts as a small business but the long-term
vision is much greater, to seek high profits and capture market share
with an innovative new idea.
• What Is an Entrepreneur?
• An entrepreneur is an individual who creates a new business, bearing
most of the risks and enjoying most of the rewards. The process of
setting up a business is known as entrepreneurship.
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Continued….
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• Entrepreneurs play a key role in any economy, using the skills and
initiative necessary to anticipate needs and bring new ideas to market.
• Entrepreneurship that proves to be successful in taking on the risks of
creating a startup is rewarded with profits and growth opportunities.
• Entrepreneurship in Economics
• In economist-speak, an entrepreneur acts as a coordinating agent in
a capitalist economy.
• This coordination takes the form of resources being diverted toward
new potential profit opportunities.
• The entrepreneur moves various resources, both tangible and
intangible, promoting capital formation.

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Continued….
• In a market full of uncertainty, it is the entrepreneur who can actually
help clear up uncertainty, as they make judgments or assume risk.
• To the extent that capitalism is a dynamic profit-and-loss system,
entrepreneurs drive efficient discovery and consistently reveal
knowledge.
• Established firms face increased competition and challenges from
entrepreneurs, which often spurs them toward research and
development efforts as well.
• In technical economic terms, the entrepreneur disrupts the course
toward steady-state equilibrium.
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Sociological Theory of Entrepreneurship
• The sociological theory of entrepreneurship is the study of how people,
groups, and organizations come together to identify and seize opportunities
to start new businesses or ventures.
• Sociologists have identified a range of factors that influence the formation
and success of entrepreneurial activities, including attitudes toward risk-
taking, levels of social capital, access to resources, and access to capital.
• The Sociological Entrepreneurship research suggests that entrepreneurs
need to be aware of these factors in order to be successful.
• Sociologists have also looked at how entrepreneurial attitudes, such as risk-
taking and ambition, can influence the success of entrepreneurial ventures.
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Behavioral approach of Entrepreneurship and Management.
• Management and behavioral experts have delved into entrepreneurship
extensively, and there's a whole body of work on the topic.
• Lazear paints a broad picture, defining an entrepreneur as someone who starts
a new venture.
• But that definition lumps together someone opening a small local business
with giants like Jeff Bezos or Steve Jobs.
• Sure, there's some truth there, but it's tricky to draw general conclusions
about entrepreneurship because it comes in so many shapes and sizes.
• Entrepreneurship research tackles big questions like why some people dive
into entrepreneurial ventures while others with similar talents and energy
don't, and why some spot entrepreneurial opportunities while others miss
them.
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The process of entrepreneurship, Entrepreneurial
Management,
• Framework
• Of course, there are many ways to organize the effort of planning,
launching and building a venture.
• But there are a set of fundamentals that must be covered in any approach.
• We offer the following as a way to break down the basic activities
necessary.
• It is useful to break the entrepreneurial process into five phases: idea
generation, opportunity evaluation, planning, company formation/launch
and growth.
• These phases are summarized in this table, and the Opportunity
Evaluation and Planning steps are expanded in greater detail below.
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1. Idea Generation:
• Every new venture begins with an idea. In our context, we take
an idea to be a description of a need or problem of some constituency
coupled with a concept of a possible solution. (A characterization of
this phase is still work in process on this site.)
• 2. Opportunity Evaluation:
• This is the step where you ask the question of whether there is an
opportunity worth investing in.
• Investment is principally capital, whether from individuals in the
company or from outside investors, and the time and energy of a set of
people.
• But you should also consider other assets such as intellectual property,
personal relationships, physical property, etc.
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3. Planning:
• Once you have decided that an opportunity, you need a plan for how
to capitalize on that opportunity.
• A plan begins as a fairly simple set of ideas, and then becomes more
complex as the business takes shape.
• In the planning phase you will need to create two
things: strategy and operating plan.
4. Company formation/launch:
• Once there is a sufficiently compelling opportunity and a plan, the
entrepreneurial team will go through the process of choosing the
right form of corporate entity and actually creating the venture as a
legal entity.
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5. Growth:
• After launch, the company works toward creating its product or
service, generating revenue and moving toward sustainable
performance.
• The emphasis shifts from planning to execution.
• At this point, you continue to ask questions but spend more of your
time carrying out your plans.
• Although it is natural to think of the early steps as occurring
sequentially, they are actually proceeding in parallel.
• Even as you begin your evaluation, you are forming at least a
hypothesis of a business strategy.
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Continued….
• As you test the hypothesis, you are beginning to execute the first
steps of your marketing plan (and possibly also your sales plan).
• We separate these ideas for convenience in description but it is
worth keeping in mind that these are ongoing aspects of your
management of the business.
• In the growth phases, you continue to refine you basic idea, re-
evaluate the opportunity and revise your plan.
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