what is entrepreneurship, nature, entrepreneurial process, different entrepreneur examples, questions regarding entrepreneurship, article reading, discussion regarding entrepreneurship

1. Entrepreneurship and small business
Muhammad Shafiq
forshaf@gmail.com
http://www.slideshare.net/forshaf

2. Simple example of entrepreneur

3. The Nature and Importance of
Entrepreneurs
References:
•Entrepreneurship by Hisrich
• Entrepreneurship by Bruce R. Barringer
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4. 1. Do you ever question what you will be doing next year?
What about five years down the road?
2. Are you sure the courses you are taking will help you
fulfill your future goals?
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9. 9

10. What Is An Entrepreneur?
• A person who sets up a
business or businesses, taking
on financial risks in the hope
of profit.
• A vision-driven individual who
assumes significant personal
and financial risk to start or
expand a business.

11. Who is an Entrepreneur
recognise opportunities where others see chaos or confusion
highly creative and innovative
possess business know-how , networks and general management
skills
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12. Definition Of Entrepreneur
A concise, universally accepted definition has not yet
emerged
-Almost all the definitions includes:
1) initiative taking,
2) the organizing and reorganizing of social and
economic mechanisms to turn resources and
situations to practical account,
3) the acceptance of risk or failure.
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13. Why Entrepreneurship?
Key to economic development and growth
Creates jobs, income, and wealth
Source of new technology and products

14. T
The entrepreneur
The opportunity-spotter The project championThe inventor
The person who realizes the opportunity and is
determined to engage it
The person who makes things happenThe originator of
the product or
concept
The idea
Identifying
the
opportunity
Matching
the idea
to the
opportunity
Exploiting
the
opportunity
to build
something
of value
Source: Bolton & Thompson
Entrepreneurs: Talent, Temperament, Technique14

15. Entrepreneur as an innovator:
• an integral part of entrepreneurship
• the act of introducing something new
• the ability to create and conceptualize
• to understand all the forces at work in the
environment
• Tools have changed with advances in science
and technology but the ability to innovate has
been present in every civilization.
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16. Entrepreneurship Versus Small Business Management
 The terms entrepreneur and small business management
are used interchangeably.
An entrepreneur or a person who engages in
entrepreneurship is someone who innovates or creates.
A small business manager, on the other hand, is a person
who is engaged in the actual management of a business
A small business owner who starts a small business but never creates
new products or develops new ways to manage his business only
engaged in one act of entrepreneurship when he started the
business.
Some entrepreneurs never want to become full-time managers and
would prefer to hire professional managers to look after the day-to-
day activities associated with running a company. These
entrepreneurs prefer to create rather than manage ventures.
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17. Why Become an Entrepreneur?
The three primary reasons that people become
entrepreneurs and start their own firms
Desire to be their own boss
Financial rewards
Desire to pursue their
own ideas
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18. Characteristics of Successful Entrepreneurs
Four Primary Characteristics
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19. Characteristics of Successful Entrepreneurs
• Passion for the Business
• The number one characteristic shared by successful
entrepreneurs is a passion for the business.
• This passion typically stems from the entrepreneur’s belief
that the business will positively influence people’s lives.
• Product/Customer Focus
• A second defining characteristic of successful
entrepreneurs is a product/customer focus.
• An entrepreneur’s keen focus on products and customers
typically stems from the fact that most entrepreneurs are,
at heart, craftspeople.
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20. Characteristics of Successful Entrepreneurs
• Tenacity Despite Failure
• Because entrepreneurs are typically trying something new, the failure rate is
naturally high.
• A defining characteristic for successful entrepreneurs’ is their ability to
persevere through setbacks and failures.
• Execution Intelligence
• The ability to fashion a solid business idea into a viable business is a key
characteristic of successful entrepreneurs.
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21. Entrepreneurial Process
1. Opportunity assessment
2. Creation and length of
opportunities
3. Real and perceived value
opp
4. Risk and return opp
5. Opportunity v/s personal
skills and goals
6. Competitive environment
Identify and evaluate the
oppertunity

22. Entrepreneurial Process
Title page
Table of contents
Executive summary
Major setions
Discription of business
Discription of industry
Technology plan
Marketing plan
Financial plan
Prodution plan
Org plan
Oppertional plan
Summary
appendix
Identify and evaluate the
oppertunity
Develop and business plan

23. Entrepreneurial Process
Identify and
evaluate the
oppertunity
Develop and
business plan
Required resources
Determine resources needed
Determine existing resources
Identify resource gaps and
available supplies
Develop access to needed
resources

24. Entrepreneurial Process
Identify and
evaluate the
oppertunity
Develop
and
business
plan
Required
resources
Develop management styles
Understand key variables for
success
Identify problems and potential
problems
Implement control system
Develop growth strategy
Manage the enterprise

25. Common Myths About Entrepreneurs
• Myth 1: Entrepreneurs Are Born Not Made
• This myth is based on the mistaken belief that some people are genetically
predisposed 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
the environment, life experiences, and personal choices.
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26. Common Myths About Entrepreneurs
Although no one is “born” to be an entrepreneur, there are
common traits and characteristics of successful entrepreneurs
• Achievement motivated
• Alert to opportunities
• Creative
• Decisive
• Energetic
• Has a strong work ethic
• Is a moderate risk taker
• Is a networker
• Lengthy attention span
• Optimistic disposition
• Persuasive
• Promoter
• Resource assembler
• Self-confident
• Self-starter
• Persistent
• Tolerant of ambiguity
• Visionary
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27. Common Myths About Entrepreneurs
• Myth 2: Entrepreneurs Are Gamblers
• Most entrepreneurs are moderate risk takers.
• The idea that entrepreneurs are gamblers originates from
two sources:
• Entrepreneurs typically have jobs that are less structured, and so
they face a more uncertain set of possibilities than people in
traditional jobs.
• Many entrepreneurs have a strong need to achieve and set
challenging goals, a behavior that is often equated with risk taking.
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28. Common Myths About Entrepreneurs
• Myth 3: Entrepreneurs Are Motivated Primarily by Money.
• While it is naïve to think that entrepreneurs don’t seek financial rewards,
money is rarely the reason entrepreneurs start new firms.
• In fact, some entrepreneurs warn that the pursuit of money can be
distracting.
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29. Common Myths About Entrepreneurs
• Myth 4: Entrepreneurs Should Be Young and Energetic.
• 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 the entrepreneur 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.
• Ray Kroc's success came later in life when he was past his
50th birthday.
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30. Common Myths About Entrepreneurs
• Myth 5: Entrepreneurs Are Always Inventors
• The idea that entrepreneurs are inventors is a result of
misunderstanding and tunnel vision.
• Although many inventors are also entrepreneurs,
numerous entrepreneurs encompass all sorts of innovative
activity.
• For example, Ray Kroc did not invent the fast-food
franchise, but his innovative ideas made McDonald's the
largest fast-food enterprise in the world
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31. • The Founder is an upcoming American
biographical film directed by John Lee
Hancock and written by Robert D. Siegel. The
film portrays the story of Ray Kroc and his
acquisition of the McDonald's fast food chain.
The film stars Michael Keaton as Kroc and
Laura Dern as his wife Ethel Fleming. The
additional cast includes Nick Offerman, John
Carroll Lynch, Patrick Wilson, Ric Reitz, and
Wilbur Fitzgerald. The film is scheduled to be
released on November 25, 2016.
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32. Common Myths About Entrepreneurs
• Myth 6: Entrepreneurs Are Doers, Not Thinkers
• Although it is true entrepreneurs tend toward action, they
are also thinkers. Indeed, they are often very methodical
people who plan their moves carefully.
• The emphasis today on the creation of clear and complete
business plans is an indication that "thinking"
entrepreneurs are as important as "doing" entrepreneurs.
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33. List of the Richest School Drop Out Billionaires and Successful
Entrepreneurs
• Henry Ford (Ford)- Net Worth $199 Billion – Dropped out at 16.
• Bill Gates (Microsoft)- Net Worth $78.8 Billion – Dropped out at
19. Gates attended Harvard in the fall of 1973, only to drop out
two years later to found Microsoft with childhood buddy Paul
Allen. In 2007, he ended up receiving an honorary degree from
Harvard.
• Steve Jobs (Apple) Net Worth $8.3 Billion – Dropped out at
21. Jobs dropped out of college after one semester of Reed
College to start Apple.
• Mark Zuckerberg: The youngest billionaire in the world, dropped
out of Harvard to promote his social networking platform ($33.1
billion).
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34. Common Myths About Entrepreneurs
• Myth : Entrepreneurs Are Academic and Social
Misfits
• The belief that entrepreneurs are academically and socially
ineffective is a result of some business owners having
started successful enterprises after dropping out of school
or quitting a job.
• Today the entrepreneur is considered a hero—socially,
economically, and academically. No longer a misfit, the
entrepreneur is now viewed as a professional.
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35. 35

36. Entrepreneurial Decision Process
Deciding to become an entrepreneur by leaving
present Activity…….!
 Indeed, millions of ventures are formed despite recession, inflation, high interest rates, lack
of infrastructure, economic uncertainty, and the high probability of failure.
 Many entrepreneurs follow the entrepreneurial decision process, which entails a
movement from something to something—a movement from a present lifestyle to forming
a new enterprise, as indicated in previous slide
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37. Change from Present Lifestyle
• The decision to leave a career or lifestyle is not an easy one.
Work Environment: individuals tend to start businesses in
areas that are familiar.
• R&D and Marketing
A negative force—disruption:
Retirement, relocation, frustration, no growth opportunity,
unemployment etc.
For example, a student who is not promoted after receiving an
MBA degree may become frustrated and decide to leave and start
a new company.
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38. •Desirability of new venture formation:
 Aspects of a situation that make it
desirable to start a new company
The perception that starting a new
company is desirable results from an
individual’s culture, subculture, family, peers
and teachers.
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39. • Possibility of new venture formation:
Factors making it possible to create a new venture.
Several factors contribute to the
creation of a new venture.
1. The Government
2. Formal education
3. Previous business experience
4. Marketing know how
5. A role model
6. Financial resources
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40. Types of Start-Up Firms
The vast majority of small business fit
into this category.
 Salary – substitute firms offer
ordinary, easily available products or
services to customers that are not
particularly innovate.
Typically, they offer common
products—retail merchandise, for
example, or a service like accounting
or hairstyling. Most small businesses
are of this type
Cottage industry: A job or
occupation carried out at home or on
a part-time basis.
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41. These firms are not
innovative, nor do they grow
quickly.
Commonly, lifestyle
companies promote a
particular sport, hobby, or
pastime and may employ only
the owner or just handful
people.
Examples:
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42. Gazelle Company- An extremely
fast-growing company, which
maintains consistent expansion
of both employment and
turnover over a prolonged
period (for at least 4years) by at
least 20% annually.
Also, gazelle companies usually
are known for creating many
new job opportunities.
Examples:
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43. Role of entrepreneurship in Economic Development
• It involves initiating and constituting change in the structure of
business and society (i-e innovation).
Innovation
Developing new stimulating investment
products (& services) interest in the new venture
for the market
Expanding the capacity Utilizing new capacity
for growth and output
(supply side) (demand side)
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44. Economic Impact of Entrepreneurial Firms
• Innovation
• Is the process of creating something new, which is central
to the entrepreneurial process.
• Small firms are twice as innovative per employee as large
firms.
• Job Creation
• In the past two decades, economic activity has moved in
the direction of smaller entrepreneurial firms, which may
be due to their unique ability to innovate and focus on
specialized tasks.
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45. Entrepreneurial Firms’ Impact on Society and Larger
Firms
• Impact on Society
• The innovations of entrepreneurial firms have a dramatic impact on society.
• Think of all the new products and services that make our lives easier,
enhanced our productivity at work, improved our health, and entertained us
in new ways.
• Impact on Larger Firms
• Many entrepreneurial firms have built their entire business models around
producing products and services that help larger firms become more efficient
and effective.
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46. Microsoft's new CEO Satya Nadella to get
$1.2 mn salary; total package at $18 mn
• The new Microsoft CEO, will get a base annual salary of USD 1.2 million, but
his overall package after taking into account bonus and stock awards may
reach USD 18 million a year besides various other perks.
• As per his new employment agreement, the Indian-origin CEO of USD 78-
billion software major will be paid his salary on "semi-monthly" basis at an
annual rate of USD 1.2 million.
• 46-year-old Nadella, who has been with Microsoft for 22 years, would also
be eligible for a cash bonus, which can range from zero to 300 per cent,
resulting into total payout of up to USD 3.6 million.
Besides this, Nadella, will get stock awards to the tune of USD 13.2 million,
taking the total package to USD 18 million.
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47. Intrapreneurship
The act of behaving like an entrepreneur while working (as
employee) within a established firm.
The term is derived from a combination of "intra" or
internal, and "entrepreneurship.“
 Intraprenuers are usually highly self-motivated, proactive
and action-oriented people who are comfortable with taking
the initiative, even within the boundaries of an organization,
in pursuit of an innovative product or service.
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48. Muhammad Yunus- A well-known
contemporary social entrepreneur, founder
and manager of Grameen Bank and its
growing family of social venture businesses,
Awarded a Nobel Peace Prize in 2006.
The work of Yunus and Grameen echoes a
theme among modern day social
entrepreneurs that emphasizes the
enormous synergies and benefits when
business principles are unified with social
ventures.
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49. Forms of Entrepreneurship
• Political entrepreneur- The term may refer to any of the following:
someone (usually active in the fields of either politics or business) who
founds a new political project, group, or political party
the function of political entrepreneurship consists in the direction of
coercively obtained resources by the state toward processes of production
which would not otherwise have taken place.
a businessman who seeks to gain profit through subsidies, protectionism,
government contracts, or other such favorable arrangements with
government(s) through political influence (also known as a rent-seeker).
a political actor (not necessarily a politician) who seeks to further his or her
own political career and popularity by pursuing the creation of policy that
pleases the populace.
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50. Social entrepreneurship
• The process of pursuing innovative solutions to social
problems.
Social entrepreneurs adopt a mission to create and sustain
social value. They pursue opportunities to serve this
mission.
Today, nonprofits and non-governmental organizations,
foundations, governments, and individuals also play the role
to promote, fund, and advise social entrepreneurs around
the planet.
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51. Lee Kuan Yew
• Lee Kuan Yew(born Harry Lee Kuan
Yew, 16 September 1923 – 23 March
2015) was a Singaporean politician. He
was the first Prime Minister of
Singapore, governing for three
decades. He is recognized as the
founding father of modern Singapore,
and the only leader known to bring an
entire country from third-world to
first-world status in a single
generation.
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63. • Count the number of yes answers.
Above17 score : You have the drive to be an entrepreneur
13-17: Your entrepreneurial drive is not apparent but you
may defiantly have ability to be an entrepreneur, if you
accept pains and gains of being your own boss.
Below 13: Your entrepreneurial drive is even less apparent.
However if you work hard, you can be a superb
Intrapreneur.
Remember: Regardless of your score, take time to educate,
gain and develop experience in your area of interest.
This quiz is just a raw indicator, not scientifically validated
indicator.
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64. Joke of the Day
Teacher: When Mohammed Bin Qasim was at age of 18, he
conquered Sindh and you still don’t know the definition of
Entrepreneurship.
Student: Sir, when Alexander was at age of 34, he conquered the
world and you are still teaching entrepreneurship in SBKWU.
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65. CASE 1. Paul's Four Short Comings
Paul Enden has always been very reliable and a hard worker.
For the past eight years Paul has been working in a large auto
service garage. During this lime he has made a number of
recommendations to the owner regarding new services that
could be provided to customers. One of these is called the
"'fast lube." With this service people who want to have their
oil changed and their car lubricated do not have to leave the
auto and come back later in the day. Three service racks
handle this job. It generally takes less than 10 minutes lo take
care of a car, and most people can have the job completed
within 25 minutes of the time they arrive. The service, which
has become extremely popular with customers, resulted in an
increase in overall profits of 5 percent last year.
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66. Paul's wife believes he has a large number of ideas that could
prove profitable. "You ought to break away and open your own
shop," she has told him, Paul would like to do so, but he
believes four things help account for entrepreneurial success
and he has none of them. Here is how he explained it to his
wife:
"To be a successful entrepreneur, you have lo be a thinker, not a
doer. I'm a doer. Thinking bores me. I wouldn't like being an
entrepreneur. Second, those guys who do best as entrepreneurs
tend to he inventors. I'm not an inventor. If anything, I think of
new approaches to old ways of doing business. I'm more of a
tinkerer than an inventor. Third, you've got to be lucky to be a
successful entrepreneur. I'm hard working; I'm not lucky. Fourth,
you have to have a lot of money to do well as an entrepreneur. I
don't have much money. 1 doubt whether $50,000 would get
me started as an entrepreneur."
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67. Questions
1. Does Paul need to be an inventor to be an effective entrepreneur?
Explain your answer.
2. How important is it that Paul have a lot of money if he hopes to be
an entrepreneur? Explain your answer.
3. What is wrong with Paul's overall thinking? Be sure to include a
discussion of the myths of entrepreneurs hip in your answer.
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68. • Case Answers
1. No, Paul does not need to be an inventor. That idea is one of the ten
most commonly known myths of entrepreneurship. Entrepreneurship
covers all varieties of profit-making activities and, thus, is not limited to
inventions.
2. While having start-up capital is always important in new ventures, it is
not the only factor. In fact, many entrepreneurs are able to obtain
enough capital through loans because the funding source believes in
the managerial ability of the entrepreneur. Thus, having lots of money
is not the only key to success.
3. Paul’s overall thinking is caught up in the typical mythical beliefs about
entrepreneurship. The myths have arisen due to lack of knowledge and
research about entrepreneurs. Therefore, people have simply believed
that entrepreneurs are born not made and need luck, money, and
ignorance to succeed. Paul is reflecting the traditionally accepted
“folklore” that still exists due to the infancy of the current research.
However, each year the research expands, knowledge increases, and
contemporary entrepreneurs realize this weakness in the myths.
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69. Related Articles
1. Self-employment as a Career Choice: Attitudes, Entrepreneurial
Intentions, and Utility Maximization ..
2. Entrepreneurial Ecosystem: Case Study on the Influence of
Environnemental Factors on Entrepreneurial Success.
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