Entrepreneurship & New Venture Creation-(3.1)-Module-1


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Entrepreneurship & New Venture Creation-(3.1)-Module-1

  1. 1. Entrepreneurship & New Venture Creation-(3.1)<br />BU-MBA-Semister-3<br />
  2. 2. Entrepreneur<br /><ul><li>The term entrepreneur is derived from the French word ‘entreprendre’ which means ‘to undertake’.
  3. 3. It means the person who undertakes the risk of the new enterprise
  4. 4. In the 16th century the Frenchman who organized and led military expeditions were referred as Entrepreneurs</li></li></ul><li>According to Richard Cotillion<br /><ul><li>An entrepreneur is a person who buys factor services at certain prices with a view to selling its product at uncertain price (un- expected price)</li></ul>According to International Labor Organization (ILO)<br /><ul><li>Entrepreneurs as those people who have the ability to see and evaluate business opportunities, together with the necessary resources to take advantage of them and to initiate appropriate action to ensure success</li></ul>According to Peter F.Drucker<br /><ul><li>An entrepreneur is one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the specific tool of entrepreneurs, that means by which they exploit change as an opportunity for a different business or service</li></li></ul><li>Importance of Entrepreneurs<br />Nature/Characteristics of Entrepreneur<br />The importance of any entrepreneur is as follows:-<br /><ul><li>Develop new markets
  5. 5. Discover new sources of materials
  6. 6. Mobilize capital resources
  7. 7. Introduce new technologies
  8. 8. Create employment
  9. 9. Entrepreneur is a key player in economic progress
  10. 10. Entrepreneurs introduce new things in the economy
  11. 11. They are considered as the business leader and not as simple owner of capital.</li></li></ul><li>Finally to become successful entrepreneur one should have the following characteristics:-<br /><ul><li>Need to achieve (goals should achieve)
  12. 12. Independence (start business their own)
  13. 13. Risk bearing (ready to face uncertainty)
  14. 14. Locus of control (governing and shaping the goals with high control)
  15. 15. Determination (working sincerely on goal achieving)
  16. 16. Positive self-concept (thinking positive and analyze anything by SWOT analysis)
  17. 17. Ability to find and explore opportunities (finding/grab opportunities)
  18. 18. Hope success (feeling success in each and every step they move no failure)
  19. 19. Flexibility (measuring pros and cons of decision and tend to change if situation demands)
  20. 20. Analytical ability of mind (unaffected by personal likes and dislikes)
  21. 21. Sense of efficacy (oriented always to goals no deviation or diversion by external influence)</li></li></ul><li><ul><li>Openness to feedback and learning from experience (ready to accept feedback)
  22. 22. Confronting uncertainty (they are always optimistic, they take odd as the opportunity)
  23. 23. Interpersonal skills (they like dealing with people at all levels)
  24. 24. Need to influence others (they influence the others by their goals and their procedures/convince others)
  25. 25. Stress takers (ready to work for long hours with full energy)
  26. 26. Time orientation (they will stick on to the time, time is important)
  27. 27. Innovators (they will introduce new products and services)
  28. 28. Business communication skill (they must have good communication to lead market)
  29. 29. Telescopic ability (they will think every activity in microscope)
  30. 30. Leadership (they will act as leaders to lead business)
  31. 31. Business planning (they will plan present and future course of action)
  32. 32. Decision making (they have quick decision making ability)
  33. 33. Ability to mobilize resources (they will mobilize 6-M’s: Man, Money, Machinery, Market and Method)
  34. 34. Self-confidence (they must have self-confidence about their goal achievement)</li></li></ul><li>FUNCTIONS<br />
  35. 35. Role of Entrepreneur<br />
  36. 36. Quality of a Successful Entrepreneur<br /><ul><li>Accepting of constructive criticism and rejection (ready to accepts mistakes)
  37. 37. Time management
  38. 38. Vision and leadership
  39. 39. Ethics and morals
  40. 40. Discipline yourself
  41. 41. Highly motivated and energetic
  42. 42. Inner drive to succeed</li></ul>( should have feeling to win in the heart)<br /><ul><li>Strong belief in themselves
  43. 43. Search for new ideas and innovation
  44. 44. Openness to change
  45. 45. Competitive by nature
  46. 46. Risk taker</li></li></ul><li>Ethics and Social Responsibility of Entrepreneurs<br /><ul><li>The word ‘ethics’ is derived from Greek word ‘ethos’ which means standard or ideals that should prevail
  47. 47. Entrepreneurship ethics are the moral principles which should govern the entrepreneurship activities.
  48. 48. It also referred business ethics
  49. 49. Business ethics refers to the application of ethics to business
  50. 50. Business ethics is a specialized study of moral right or wrong. It concentrates on moral standards as they apply to business policies, institutions and behavior</li></li></ul><li>Principles of Entrepreneurs Ethics<br /><ul><li>An Entrepreneur will think of themselves as a part of community not just ‘profit maker’
  51. 51. An Entrepreneur will treat the environment as a silent ‘stakeholder’, a party to which they are wholly accountable
  52. 52. An Entrepreneur will protect the privacy rights of the suppliers, customers and employees
  53. 53. An Entrepreneur will deliver what they promises, and promise what they can deliver</li></li></ul><li>Misconceptions about Entrepreneurs<br /><ul><li>Entrepreneurs are born and Entrepreneurship is Hereditary
  54. 54. Entrepreneurs are profit Hungry and Exploit(hard work done by Labor)
  55. 55. Entrepreneurs are Dishonest(fraud & cheating)
  56. 56. Entrepreneurs are favored by luck
  57. 57. Only Rich people can become entrepreneurs
  58. 58. Entrepreneurship is monopoly (a market in which there are many buyers but only one seller )of certain communities</li></li></ul><li>Entrepreneurship<br /><ul><li>The Entrepreneurship was defined as ,” Entrepreneurship is the attempt to create value through recognition of business opportunity, the management of risk taking appropriate to the opportunity and through the communicative and management skills to mobilize human, financial and material resources necessary to bring a project to successful”
  59. 59. According to A.H.Cole,” Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or maximize wealth, profit by production or distribution of economic goods and services
  60. 60. Entrepreneurship = Entrepreneur + Enterprise</li></ul> (Process) (Person) (Object)<br />
  61. 61. Nature/Characteristics of Entrepreneurship<br /><ul><li>Purposeful activity
  62. 62. Decision making
  63. 63. Accepting challenges
  64. 64. Risk taking
  65. 65. Building organization
  66. 66. Dynamic process (bring new opportunities)
  67. 67. Gap filling function (filling goods and services to society)
  68. 68. Skillful management
  69. 69. Innovation
  70. 70. Mobilization of resources
  71. 71. Economic Activity (creation and operation of an enterprise)</li></li></ul><li>Difference<br />
  72. 72. Factors Affecting EntrepreneushipInternal Factors<br />
  73. 73. External Factors<br />
  74. 74. Entrepreneurial Decision Process<br /><ul><li>Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort and assuming the risk
  75. 75. The new venture is formed through a very personal human process </li></ul>There are 3 steps in the entrepreneurial decision process<br /><ul><li>The decision to leave a present career or lifestyle
  76. 76. The decision to form new venture
  77. 77. The decision that both external and internal factors make new venture creation possible</li></li></ul><li>Types of Start Up Firms by Entrepreneurs <br />
  78. 78. Scope of Entrepreneurship<br />Entrepreneurship Works in different ways in different economic systems, such as……<br /><ul><li>Capitalism
  79. 79. Socialism
  80. 80. Mixed Economy</li></li></ul><li>Scope of Entrepreneurship<br />
  81. 81. Role of Entrepreneurship in Economic Development<br /><ul><li>Increase in National Income
  82. 82. Balanced Regional Development
  83. 83. Bringing Change in Structure of Business and Society
  84. 84. New Products, New Services and New Business
  85. 85. Dispersal of Economic Power
  86. 86. Better Standards of Living
  87. 87. Creating Innovation
  88. 88. Production Evolution Process</li></li></ul><li>Product/Service Evolution Process<br /><ul><li>Before starting a product or service an Entrepreneur should follow the evolution steps in order to produce a product or provide a service</li></ul>Exploration <br />Screening<br />Business Analysis (risk/return/features/recommendations/creativity)<br />Development<br />Testing<br />Commercialization (full scale production )<br />
  89. 89. Problems of Entrepreneurship<br /><ul><li>Wrong surveys
  90. 90. Lack of identification of projects
  91. 91. Lack of infrastructure
  92. 92. Lack of quality control
  93. 93. Lack of market promotion
  94. 94. Lack of technology
  95. 95. Lack of finance
  96. 96. Lack of consulting services</li></li></ul><li>Factors Favoring Entrepreneurship as a Career Options<br /><ul><li>High need for Independence
  97. 97. To satisfy the dream of having high financial rewards
  98. 98. Opportunity to deal with all aspects of a business
  99. 99. Achievement orientation
  100. 100. Implantation of Ideas
  101. 101. Insecurity of Job
  102. 102. Family Business
  103. 103. Risk Taking
  104. 104. Government Economic Policy (Assistance from Government)
  105. 105. Vision to Leave a Long Lasting Mark (Zeal to Innovate new product/Service)</li></li></ul><li>Indian Entrepreneurs<br />
  106. 106. Creating Indian Entrepreneurs <br /><ul><li>A recent Mckinsey & Company-Nasscom report estimates that India needs at least 8,000 new businesses to achieve its target of building a US$87 billion IT sector by 2008.
  107. 107. Similarly, in the next 10 years, 110-130 million Indian citizens will be searching for jobs, including 80-100 million looking for their first jobs.
  108. 108. This does not include disguised unemployment of over 50% among the 230 million employed in rural India.
  109. 109. Since traditional large employers- including the government and the old economy player-may find it difficult to sustain this level of employment in future, it is entrepreneurs who will create these new jobs and opportunities.</li></li></ul><li><ul><li>Today’s knowledge based economy is fertile ground for entrepreneurs, in India.
  110. 110. It is rightly believed that India has an extraordinary talent pool with virtually limitless potential to become entrepreneurs.
  111. 111. Therefore, it is important to get committed to creating the right environment to develop successful entrepreneurs.
  112. 112. To achieve this, India must focus on Four areas as follows……………….</li></li></ul><li>The Four Areas<br />Create the Right Environment for Success<br />Ensure that Entrepreneurs have access to the Right Skill<br />Ensure that Entrepreneurs have access to ‘Smart Capital’<br />Enable Networking and Exchange<br />
  113. 113. The Future of Entrepreneurship<br /><ul><li>Both the Central Government and various State Governments are taking increased interest in promoting the growth of entrepreneurship.
  114. 114. Individuals are being encouraged to form new businesses and are being provided such government support as tax incentives, buildings, roads, and a communication system to facilitate this creation process.
  115. 115. The encouragement by the central and state governments should continue in future as more lawmakers are realizing that new enterprises create jobs and increase the economic output of the region.
  116. 116. Every state government should develop its own innovative industrial strategies for fostering entrepreneurial activity and timely development of the technology of the area.
  117. 117. The states should have their own state-sponsored venture funds, where a percentage of the funds has to invested in the ventures in the states. </li></li></ul><li><ul><li>Society’s support of entrepreneurship should also continue.
  118. 118. This support is critical in providing both motivation and public support.
  119. 119. A major factor in the development of this societal approval is the media.
  120. 120. The media should play a powerful and constructive role by reporting on the general entrepreneurial spirit in the country highlighting specific success cases of this spirit in operation. </li>