Topic 1, Chapter 1

Chapter Summary
We begin this chapter via seeking the definition of the modern entrepreneur and the importance of
their roles in today’s global economy, with small to medium enterprises (SMEs) currently employing
68% of Australia’s total workforce; contrasting the level of global SME start-ups to the risks and
rewards of new venture creation, from the times of the industrial revolution to the modern
sustainable approach to business.
How do entrepreneurs seek to change the world via transformative innovation, to relieve society of
a variety of pains; such as climate change, social welfare, and new technologies that seek to improve
or enhance living standards? Who are modern entrepreneurs that seek to convert ideas into
workable solutions to solve pain points? We review new classes of entrepreneurs from around our
region engaged in free enterprise of modern forms of capitalism.
This chapter reviews the modern schools of entrepreneurial thought, macro theories, external
factors, and micro approaches; where an individual’s internal locus of control provides the rise for
new venture creation. We conclude with the modern processes and frameworks that have created
new styles of entrepreneurs and discussion of how the entrepreneurial revolution has become a
global phenomenon.
1. Why is entrepreneurship considered important in today’s context? Explain how
entrepreneurship addresses some of today’s major challenges.
When it is considered that on a global basis, many economies rely on SMEs to provide up to 70% of
total employment, basic social issues come into play. In the modern age, entrepreneurs are not
solely concerned with profit; rather we have recognised the advent of socialpreneurs, actively
working towards better societies.
2. What is transformative innovation and what role do entrepreneurs play in solving wicked
problems?
Transformative innovation refers to ‘disruptive’ technologies/services. A simple answer is the
development of the life straw, a reasonably inexpensive and low technology solution that provides
‘safe’ drinking water to disadvantaged communities facing polluted waterways. Lifesaving may
indeed be ‘wicked’!
3. Briefly describe what is meant by the term ‘entrepreneurship’.
In a traditional sense, the ability to resolve ‘pain’ points for consumers; now also seen as an applied
mindset to solve issues experienced by communities at large. This is evinced by the move from
‘profit’ to ‘social’ enterprises.
9. Name four major schools of thought in entrepreneurship theory, describe them and explain
how they differ.
Any four of the following seven school of thought are acceptable responses:
• Social and cultural: part of the macro view, this school of thought deals with external factors
and surrounding conditions and influences that affect a potential entrepreneur’s lifestyle.
• Financial/capital: part of the macro view, this school of thought is based on the capital-
seeking process; the search for seed and growth capital is the entire focus of this
entrepreneurial emphasis.
 • Displacement: part of the macro view, this school of thought focuses on the negative side of
group phenomenon, in which someone feels displaced from the group.
• Ecological: part of the macro view, this school of thought comes from the growing
perception of the natural world and our relationship to it as entrepreneurs. It is based on the
idea that everything is related to everything, everywhere.
• Entrepreneurial trait: part of the micro view, this school of thought is grounded in the study
of successful people who tend to exhibit similar characteristics that, if, copied, would
increase success opportunities for the emulators.
• Venture opportunity: part of the micro view, this school of thought focuses on the
opportunity aspect of venture development.
• Strategic planning: part of the micro view, this school of thought emphasises the planning
process in successful venture development.
10. Why is a framework of frameworks useful in entrepreneurship theory?
Answers may vary and may include
• Creativity and innovation
• A cycle of disruptive behaviour
• To offer a more dynamic view of entrepreneurship
• To delve into some of the aspects of entrepreneurship with greater granularity.
11. What is the difference between social entrepreneurs and business entrepreneurs?
We would generally consider ‘profit’ as the key difference. However, as discussed, sustainability may
now ‘blur’ any real differentiation between the two; e.g. a suburban butcher may donate product to
his local school or engage in sustainable disposal of waste products, whereas a social entrepreneur
may engage with the butcher to utilise waste products to feed an endangered species.
12. What is the difference between entrepreneurs and small-business managers?
There may be no differences, depending on their own perceptions of entrepreneurial activity/traits;
indeed, consider that many new ventures commence as SMEs.
14. Is entrepreneurship really another word for ‘human freedom’?
Depending on your own cultural background, perhaps not. However, if you are an African woman
empowered via micro-finance to engage in ‘self-employment’, resulting in ‘self-empowerment’,
perhaps yes!
Topic 2, Chapter 2

Chapter Summary
Following from Chapter 1, we continue to focus on what constitutes an entrepreneurial mindset.
What drives individuals towards a new career path, essentially driven by their own motivations? We
will consider situations driven by opportunity and necessity, as well as motivation and social norms
that may influence a shift towards an entrepreneurial career change, including cultural aspects.
We visit the various stages of building upon entrepreneurial behaviour, and the implied capabilities
that may manifest themselves as precursors for a successful entrepreneurial experience, revisiting
the inherent need to succeed, versus the need to achieve. We will expand upon individual goal
orientation, and how inherent tolerances for ambiguity and risk taking, and the ability to bounce
back from failure, foster the enduring entrepreneurial spirit.
What drives entrepreneurs? A need for absolute control, a desire for ongoing success, or ultimate
optimism. We will touch on traditional pathways, further discussed in Chapter 4, whilst exploring
new-venture development, strategic renewal and corporate venturing. We conclude with family
dynasties, the entrepreneurial family, and its associated succession plans.
1. How is the motivation for entrepreneurship influenced by the context of a person’s country?
Each country will have its own cultural nuances, effectively dictating an individual’s role/status in
society. An effective entrepreneur may be able to overcome traditions; however, they may also
realise that the way forward is to exit their domicile and use a third-party nation to launch their
venture into their country of origin.
2. According to research, what characteristics of entrepreneurs specifically support the
development of a venture at the nascent, survival and growth stages?
Refer to Table 2.1, which then leads into the next question, cognition. Discuss the stages of
development from an individual’s perspective, contrasted with real world venturing, i.e. bridging the
gap from start-up, to survival, to ongoing growth.
3. Many people believe that entrepreneurs think differently to non-entrepreneurs. How can this
be explained in terms of entrepreneurial cognition?
Entrepreneurial cognition refers to the knowledge structures that people use to make assessments,
judgements, or decisions involving opportunity evaluation, venture creation and growth. The
metacognitive perspective calls attention to cognitive adaptability, which can be defined as the
ability to be dynamic, flexible, and self-regulating in one’s cognitions given dynamic and uncertain
task environments. Before an entrepreneur is prepared to evaluate alternative strategies, the
entrepreneur must first formulate a strategy to frame how he or she will 'think' about this task.
Entrepreneurial cognition basically suggests that entrepreneurs are not the same as the general
population – they think differently. Entrepreneurs can piece together information that may not have
been previously connected and from this they are able to identify new ideas for products and
services and assemble the resources to start a business. The focus of this theory is on the individual
entrepreneur, and how they are crucial to understanding entrepreneurship. They have certain
passions, experience and knowledge that is different from other entrepreneurs, and other non-
entrepreneurs.
4. Why is it that entrepreneurs perceive risk differently to most people in deciding upon
undertaking a new venture?
Entrepreneurs perceive risk differently to most people in deciding upon undertaking a new venture
because they attempt to get everything to work in their favour. They are known as calculated risk
takers who use strategies such as sharing risks to advance their cause.
5. Identify two high-profile entrepreneurs from your country and research their backgrounds.
Using the characteristics of entrepreneurs outlined in this chapter as a reference, construct a
character profile of each. How does your own profile compare to these?
Students should be able find high-profile entrepreneurs via the media, autobiographies or on things
such as ‘Rich Lists’ or Ernst and Young’s Entrepreneur of the Year awards lists, for example. They will
often find corresponding interviews about the person that have been done for the media. Students
should be able to see some of the characteristics from this chapter relatively easily and then
compare themselves against what they have found. However, the goal is not for the student to find
they fall short of the entrepreneur’s characteristics; they should be reminded that the high-profile
entrepreneur is likely well into their entrepreneurial career.
6. How do the following traits relate to entrepreneurs: desire to achieve, opportunity orientation,
initiative and responsibility?
In most entrepreneurs, these interrelated goals are the backbone that drives them toward the
unreachable goal of perfection. Despite the importance of the remaining ten entrepreneurial
characteristics, these entrepreneurial traits – desire to achieve, opportunity orientation, and
initiative and responsibility – form the cornerstone for success in entrepreneurial actions. Because of
the incorporation of these traits, high-risk decisions for the average businessperson often are
moderate risk for the well-prepared high achiever.
7. Explain why entrepreneurs are not gamblers.
Many entrepreneurs will say they are not gamblers, they are calculated risk-takers. You will often
hear entrepreneurs say they would never set foot inside a casino or buy lottery tickets, as they are
more interested in taking opportunities where they are able to partially at least calculate the odds of
the success of the venture or decision.
They do everything possible to get the odds in their favour, and they often avoid taking unnecessary
risks. These strategies include getting others to share inherent financial and business risks with them
– for example, by persuading partners and investors to put up money, creditors to offer special
terms, and suppliers to advance merchandise.
8. Is it true that most successful entrepreneurs have failed at some point in their business careers?
Explain.
Yes, the truly successful entrepreneurs have failed on an average of two or three times. Failing is an
educational process. When a successful entrepreneur fails, he or she does not look at the setbacks in
a negative way, but as a learning process.
13. What are four causes of stress among entrepreneurs? How can an entrepreneur deal with each
of them?
There are four causes of stress: loneliness, immersion in business, people problems and the need to
achieve. To reduce stress, entrepreneurs must define the cause of the stress. After clarifying the
cause of stress, the entrepreneur can combat excessive stress by acknowledging its existence,
developing coping mechanisms and probing personal unacknowledged needs.
Work/life balance is the key to reducing any occupational stress; however, as the average
entrepreneur remains 100% focused, the dark side may be inevitable.
Topic 3, Chapter 3

Chapter Summary
Following Chapter 2, we continue to develop upon the theme of entrepreneurial mind-sets, via
examining emerging trends in a cross-cultural context, expanding upon how a nation's culture may
impact upon budding entrepreneurs. We further discuss the impact of changing thoughts regarding
social, environmental and ethical standards in today’s globally connected community.
We explore the role of, and definitions of, a social enterprise, and the emerging role of
socialpreneurs; introducing the role of corporate social responsibility, and how this growing global
trend has created an avenue for social enterprises. In Chapter 2 we discussed the entrepreneurial
mind-set; we now expand this topic via the impact of sustainability, social awareness, and the
importance of ethical organisations.
The mind-set of social entrepreneurs is a bit different as well, particularly in relation to mission and
gap filling. Sustainability entrepreneurs are again different in their focus on the environment and
social justice. Entrepreneurs face many ethical decisions, especially during the early stages of their
new ventures. Some arrive at the ‘greed is good’ conclusion, while others consider the ethical
consequences of their behaviours. The opportunity for entrepreneurs to exert ethical influence on
their ventures creates a unique challenge of ethical leadership for all entrepreneurs.
The global economic and climate crises make it essential to consider the role of ethics for
entrepreneurs. Entrepreneurs around the world are some of the planet’s best hopes to solve the big
problems. Corporate responsibility has now evolved to include protecting a sustainable
environment. Fortunately, entrepreneurs can achieve both growth and a better climate.
1. Can you identify some social entrepreneurs in your community?
Is your local butcher, who actively supports your Parents and Citizens Association, a social
entrepreneur, suggested by the fact that he provides gratis meat trays for weekly fundraising raffles,
thus giving back to the community? Or is the butcher using the P&C to promote his business?
Discuss why.
3. Name three dimensions that distinguish the mindset of social entrepreneurs from that of
business entrepreneurs.
They are looking to solve social pain points. They adopt a mission to create and sustain social value,
perusing opportunities to serve a social mission. They engage in innovation boldly, without feeling
limited by available resources (past issues), seizing future opportunities with innovative approaches
to fixing the old problems.
6. Why does doing business in certain Asian countries raise ethical considerations for the
entrepreneur?
Some Asian countries rank highly in measures of the Corruption Perception Index (e.g. Pakistan,
Philippines, China), while others are at the other extreme (Singapore). In many Asian countries, it is
common and expected that gifts will be given and bribes are ‘how things are done’. If you want to
work in such countries, do you adopt a ‘when in Rome’ approach, or try to stick to your own
expectations and experiences of what is ethical and acceptable? Would a USD 50.00 gift, that may
allow your NGO access to the disadvantaged, be described as a bribe or as cultural courtesy?
7. As an Australian or a New Zealander, would you pay bribes while doing business in China?
Perhaps it is ‘relativist’. Coming from New Zealand and Australia, where corruption is very low, often
the scale of paying bribes in countries such as China is difficult to understand and accept. Such a
situation will ultimately rely upon corporate guidelines, and individual perceptions of what is ‘asked’.
11. Is it possible that disadvantaged people can become more entrepreneurial than other people?
It may be considered that disadvantaged individuals have an enduring need to solve social issues.
Consider psychological disequilibrium and social exclusion theory. Is it an advantage to emerge from
a culture that previously offered no entrepreneurial opportunities?
12. What are some of the advantages that differently-abled entrepreneurs might have?
They may, via association with a specific community sector, have unique insights into problems
requiring innovative solutions, opening up niche markets not considered by the average
entrepreneur.
13. What are the barriers and restraints that disadvantaged entrepreneurs face?
Social and individual; geographic; community; cultural; economic; political and structural;
organisational.
15. Describe ecopreneurship and think of three real-life examples.
Ventures associated within the three ‘spheres’, seeking to reduce environmental harm, and change
society’s behaviours towards long-term sustainability; the triple bottom line. Examples: whale
watching and marine eco-tourism; recycling ventures; NGOs promoting the ban of harmful
products/acts.
Topic 4, Chapter 4

Chapter Summary
We commence with introducing the concept that there exist various pathways to experience
entrepreneurial behaviour, via the creation of a new venture, the acquisition of an existing venture,
and the rise of social entrepreneurs and intrapreneurship. We examine the impact factors such as
upbringing and family experience, education, culture, and personal circumstances play in an
individual’s approach to entrepreneurial activities. We also consider various financial approaches
and barriers that may impact on the ability to undertake entrepreneurial ventures; along with
specific strategies to facilitate individual entry with available resources, and how different ventures
may fail or succeed, depending upon entry and ongoing levels of capital expenditure and cash flows.
The chapter discusses entry methods in detail, whether they be disruptive or improvements to
current models; the roles of adaptors and innovators; and how modern technology provides
opportunities that have previously been impossible or unthinkable. Indeed, technology such as
instant global communications, virtual team collaboration, and the increased use of key
performance indicators have seen the ascendance of the intrapreneurial organisation. New public
management techniques have moved intrapreneurial behaviour into the sphere of public service and
NGOs. This chapter provides detailed examples of, and methodology to, introduce students to
current entrepreneurial trends and opportunities.
1. Discuss how personal preferences may influence the type of entrepreneurial pathway an
entrepreneur may choose.
Individuals are not born as entrepreneurs; individual pathways may be influenced by personal
background (family, culture, education, likes/dislikes), skillsets and business/personal experiences.
Location, entry level and finances all contribute to a chosen pathway. This also includes a desire for
profit or social outcomes.
3. What are some examples of bootstrapping that you could use in your business idea?
Bootstrapping often relies on networks, family, friends and commercial partners. A lean start-up
requires strict control of overheads and accepts minimum growth in the early stages of
development. Cash flow is the main objective, without which failure is guaranteed. Non-commercial
loans from family and acquaintances are preferable to commercial finance.
Remaining in existing employment to ensure personal cash flow and working on your own venture in
your free time allows for security. Deferment of personal wages, seeking prepayments from
customers (e.g. internet sales), and purchasing stock from cash flow will allow for sustainability.
In the real world, obtaining credit from suppliers or entering into consignment type agreements are
rare; a proven track record is required.
6. How does a new-old approach differ from the new-new pathway to starting a new venture and
what are the advantages of the new-old approach?
Different timeframes for launch, and the financials required, provide limitations for a start-up
venture in the new-new approach. Adopting a new-old approach simplifies market entry as the
venture focuses on minor ‘tweaks’ to existing models. A coffee shop in the main street of Memphis,
USA, providing Elvis Presley or Otis Redding impersonators may lure tourists away from ventures
that only provide coffee. However, competitors may quickly employ their own impersonators; hence
the need for incremental innovation, to stay ahead of the pack.
Adopting a new-old approach has the benefits of a shorter time to market and lower costs; and a
savvy entrepreneur will employ low-cost increments for continual enhancement, gaining customers
in the short-term, whilst new-new enterprises continue to consume resources, with delayed market
entry.
Topic 4, Chapter 5

Chapter Summary
In Part 1, we examined the entrepreneurial mindset and explored various types of ventures and
types of entrepreneurs, along with their motivations, needs and expectations. In Part 2, we focus on
opportunity identification and development, exploring different creative conduits.
We examine the concept of value proposition, and how our previously described pain solution may
be developed via the definition of market segments, using a value proposition canvas, ultimately
leading towards a successful business model. A VPC is the crux to defining why a specific venture has
a unique selling proposition. The use of a canvas provides a pathway to ensure that any venture has
used innovation; grounded in the ability to build, measure and learn as the key to the provision of a
well-considered business plan – based upon lateral, as opposed to vertical, thought processes.
We also consider potential biases that may impact upon arriving at a clearly defined value
proposition when considering the best market fit for our proposed venture. The key take-away from
this chapter is the development of the VPC and why this is essential to launching any new venture.
2. What is opportunity identification? What are some of its distinguishing factors?
Research de Bono’s Five Hats theory to identify the difference between an opportunity and a
potential venture. Is it achievable? Does it meet financial guidelines?
6. What are some examples of wicked problems in your community?
Refer to the 'entrepreneurship in practice’ panel. As an example: in Australia the crown of thorns
starfish, devastating coral reefs, has inspired a company to develop autonomous drones to
‘recognise’ and kill these threats to one of the world’s natural wonders.
8. Why are ideas not necessarily opportunities? Explain the difference between an idea and an
opportunity and how to improve your chance of spotting an idea that could be an opportunity.
Individual biases and personal preferences may appear to ‘enrich’ an assumed opportunity; ‘It's my
idea, so it must be great’. By recognising such failings, we are better placed to reflect on our own
thoughts and thus consider ideas as ‘potential’ opportunities.
9. How would you define a value proposition? Include examples of expressed versus latent needs.
A value proposition is a strategic concept that accounts for the value of a firm’s product or service
offering to a customer or to a market segment. The product or service must provide customer value
in terms of one or more of functionality, emotional considerations or expected ideals or beliefs for a
price the customer is prepared to pay.
Examples of expressed versus latent needs will vary.
10. What are the three major components of a value proposition?
• The opportunity
• The benefits
• How you apply it
Topic 5, Chapter 13

Chapter Summary
This chapter focuses on sourcing and acquiring financial capital for an entrepreneurial venture.
While all new ventures and businesses will need to acquire capital at some stage – through revenue
growth, self-funding or external sources – the entrepreneurial venture is likely to need a significant
cash injection at some point, to set up an ambitious new venture, accelerate growth, respond to
significant customer demand or expand into new markets.
We discuss the various sources of financial capital that may be relevant to different stages of the
venture’s development, setting out where these different sources sit in a spectrum; from very
informal to extremely formal sources of capital.
We discuss the differences between debt and equity financing, detailing various sources of capital,
including commercial bank loans, trade credit, accounts receivable financing, factoring and finance
companies. We move on to the financing of public entities, and the advantages and disadvantages of
public share offerings as a source of equity capital.
A significant formal source of funds for an entrepreneurial venture is venture capital, and we
dedicate a comprehensive section to discussing this source. We then switch focus to other forms of
financing, including modern alternatives such as crowdfunding; concluding with the exploration of
cryptocurrencies as a potential source of modern capital.
1 Identify five different sources of capital and describe the stage of venture development that
would most suit each different source.
Economic capital/Financial capital: Financial assets, such as currency, bank accounts, bonds and
stock, that can be used to store wealth and to purchase goods and services or other assets.
Economic capital/Manufactured capital: It may include tools, clothing, shelter, canals, sewers,
irrigation systems, dams, roads, boats, ports, factories or any physical improvements made to
nature.
Cultural capital: Cultural capital adds value to culture as a collective resource.
Human capital: health, strength, education, training and skills that people bring to their jobs,
competencies, know-how and innovativeness of an organisation’s members; skills, know-how,
training and new values acquired through new migrants.
Social capital: connections between people; including trust, mutual understanding, shared values
and behaviours that bind together the members of groups, networks and communities that make
cooperation possible; norms and relations embedded in social structures that enable people to
coordinate action to achieve desired goals.
Natural capital: land, water and minerals, core and crust of the earth, the full complement of the
world’s ecosystems, and the upper layers of the atmosphere. Also includes the nitrogen cycle, the
water cycle, the carbon cycle and the oxygen cycle.
2 If a new venture has its choice between long-term debt and equity financing, which would you
recommend? Why?
I would recommend equity financing because it would give the entrepreneur the chance to start off
the small business with a big debt. Long-term debt matures in five years, which isn’t adequate time
for the business to show a large profit. Also, long-term debt is used mainly to finance the purchase
of property or equipment.
3 Identify and describe four types of debt financing. Which would you use and why?
Trade credit: is credit given by suppliers who sell goods on account. This credit is reflected on the
entrepreneur’s balance sheet as a liability as accounts payable, and in most cases, it must be paid in
30 to 90 days. Many small, new businesses obtain this credit when no other form of financing is
available to them. Suppliers typically offer this credit as a way of attracting new customers.
However, the entrepreneur must prove that they have the capacity to make payments on time as
trade creditors are unlikely to extend credit facilities to an unknown entity.
Accounts receivable financing: is short-term financing that involves either the pledge of receivables,
as collateral for a loan, or the sale of receivables (factoring). Accounts receivable loans are made by
commercial banks, whereas factoring is done primarily by commercial finance companies and
factoring companies.
Factoring: the process of purchasing commercial accounts receivable (invoices) from a business at a
discount. Under a standard arrangement the factoring company, known as a factor, will buy the
client’s receivables outright, without recourse, as soon as the client creates them by shipment of
goods to customers.
Hire purchase: is an extended payment scheme entered into between the entrepreneur/hirer and
the owner (equipment manufacturer or financial institution). Under hire purchase the hirer only
needs to pay a small deposit up front and then make regular instalment payments. Only on final
instalment does the hirer acquire ownership.
4 Identify and describe four of the most common criteria venture capitalists use to evaluate a
proposal.
1. Capable of sustained intense effort: Will the entrepreneur be able to cope with bad times of
the business?
2. Thoroughly familiar with the market: Does the entrepreneur know enough about the market
to operate in it?
3. At least ten times return in 5–10 years: Will the business profits show a return 10 times the
amount it started showing?
4. Demonstrated leadership in past: Has the owner held any leadership roles?
5 In a new-venture evaluation, what are the four stages through which a proposal typically goes?
Describe each in detail.
1. Initial screening – This is a quick review of the basic venture to see if it meets the venture
capitalist’s particular interest.
2. Evaluation of the business plan – This is a detailed reading of the plan done in order to
evaluate the factors mentioned earlier.
3. Oral presentation – The entrepreneur will verbally present the plan to the venture capitalist.
4. Final evaluation – After analysing the plan and visiting with suppliers, customers,
consultants, and others, the venture capitalist will make a final decision.
6 An entrepreneur is in the process of contacting three different venture capitalists and asking
each to evaluate her new business proposal. What questions should she be able to answer about
each of the three?
• Does the venture capital firm in fact invest in your industry?
• What is it like to work with this venture capital firm?
 • What experience does the partner doing your deal have, and what is his/her clout within the
firm?
• How much time will the partner spend with your company if you run into trouble?
• How healthy is the venture capital fund and how much has been invested?
• Are the investment goals of the venture capitalist consistent with your own?
• Have the venture firm and the partner championing your deal been through any economic
downturns?
7 Which type of informal investors demand a lower return on investment (ROI)?
Because informal investors tend to be friends and family, even neighbours and workmates, their
demand for ROI tends to be more modest. In some case they even expect to lose money or perhaps
just to break even. The closer the relationship, the lower the expected return.
8 What are the four Fs and can you identify four-F investors that you know?
The 4Fs are informal investors – friends, family, founders and other ‘foolhardy’ investors.
9 What are some special considerations in approaching family, friends and the foolhardy for
entrepreneurial capital?
As with any investor, you need to know what your 4F wants out of the deal. Another consideration is
whether the person wants debt or equity. Debt is better for most family and friends. It’s important
to have a personal relationship with the person and to pitch them face-to-face. Prepare some
documentation so that there is no misunderstanding.
10 An entrepreneur of a new venture has had no success in getting financing from formal venture
capitalists. They have now decided to turn to the informal risk capital market. Who is in this
market? How would you recommend that the entrepreneur contact these individuals?
This type of investor is someone who has already made his/her money and now seeks out promising
young entrepreneurs to support financially. They contact these individuals through a network of
friends. Also, many states are formulating venture capital networks, which attempt to link informal
investors with entrepreneurs and their new or growing ventures.
11 Why do some entrepreneurs need micro-credit?
Some entrepreneurs need very small loans because they lack collateral to offer as security to a bank,
are not steadily employed or have no credit history. As well, their previous source of funding was a
local moneylender whose interest rates could be very high.
12 Define the difference between peer-to-peer lending and crowdfunding.
Peer-to-peer lenders are likeminded individuals, sharing a common interest. Crowdfunding offers an
avenue for the public at large to invest, without the benefit of industry experience; unable to
provide age advice when necessary.
Topic 6, Chapter 8

Chapter Summary
In Chapter 7, we decided that a business model was less applicable than proving our design is
suitable for market. Now we move forwards to determining exactly how we may move to a proven,
marketable concept.
We have discussed a lean and agile approach to entrepreneurship, we now expand on preparing a
business model canvas, incorporating elements essential to an effective marketing plan, and how
both approaches may lead to a successful start-up.
As in Chapter 7, we will also consider the traditional business plan versus the modern lean model,
reviewing the pros and cons of both old and new; providing a contrast to determine exactly why the
modern approach will achieve superior results when moving into the marketing stage of a new
venture.
1 What are the differences between entrepreneurial marketing and ‘traditional’ marketing?
Please see answer to Q2, below.
2 How is lean marketing different from traditional marketing?
Traditionally, we used to refer to the marketing mix as the four Ps: product, price, promotion and
place. Today, the marketing mix is widely referred to as the four Cs: co-creation, communities,
customisation and choice, all of which means content is king.
Entrepreneurial marketing is the proactive identification and exploitation of opportunities for
acquiring and retaining profitable customers through innovative approaches to risk management,
resource leveraging and value creation.
Lean marketing is marketing focussed on agility, viewing each campaign or marketing activity as one
step in the ever-improving progress toward customer acquisition and ultimately customer
satisfaction. Lean marketers appeal to the deeper needs of the customer following the ‘Cone of
Experience’ model.
8 In your own words, what is customer segmentation? Give examples.
Customer segmentation is the process of identifying a specific set of characteristics that differentiate
one group of consumers from the rest. Eg. affluent, tech-savvy millennials who will pay top dollar for
the latest and greatest digital innovations vs. retired baby boomers who want lower-tech, less
expensive, simpler solutions for use in their day to day lives are examples of two very different
market segments. Student examples will vary.
12 Describe how the business model canvas and the lean canvas focus the start-up entrepreneur
on distinctive issues. What are the specific differences between the two canvases in application?
Whilst both models provide the opportunity to create a map of a business opportunities and MVP,
the BMC is applicable to new and existing ventures; whereas the LC focuses on lean entrepreneurial
start-ups.
13 What are the top ‘outside forces’ in your business venture?
Any external forces, beyond the direct control of the management, be they market, industry, or
macroeconomic forces in play.
Week 7, Chapter 10

Chapter Summary
In Chapter 9 we ascertained the strategies required for entrepreneurs to achieve and maintain a
successful venture. In this chapter we discuss the actual legal requirements of business entities and
consider the legal options available.
We commence with consideration of the regulatory requirements (in broad terms) within the Asia-
Pacific region, and then discuss the options available to legally protect our innovative ideas via
intellectual property rights.
Businesses may exist in a myriad of legal structures, from a sole trader to a family trust. Hence, we
examine various structures to determine which may best suit an entrepreneurial venture; not only
within a specific industry but considering the global economy and sovereign nation statutory
requirements. We will conclude with an examination of how to cope with failure, and the options
available to the entrepreneur in such circumstances.
1 Briefly discuss how the decision to start a business in different countries may be affected by the
local legal and regulatory environment.
Any sovereign nation has the capacity to enact their own business laws and entity structures. Some
may prove advantageous on the surface; yet without serious research into the pros and cons, an
entrepreneur may find themselves ultimately a victim of lacking the understanding of the legal
frameworks for global business.
2 Before a decision is made regarding the types of intellectual property a business will seek to
protect, what three pieces of business information should be researched and acknowledged?
1. Do some basic searches. Use Google, Bing, Yahoo, or all three to see whether your
idea or something close to your idea is already in the market.
2. Research whether there are potential customers and whether that market of customers
is large enough and sufficiently accessible. Certain forms of protection (eg. patents)
can be very expensive if there is no real market for the idea or the time to recoup the
cost will be too long. Do your homework.
3. Consider your own position to exploit the IP. IPR protection can be costly and time
consuming so be sure you are ready to take the plunge before making the effort. Have
you developed a prototype? Are you in a position to undertake this? What about
access to markets, gearing up for volume production, etc?
3 In your own words, what is a patent, of what value is a patent to an entrepreneur and how long
does that benefit last?
A patent is a ‘registration’ within the relevant jurisprudence, that seeks to inhibit other parties from
obtaining the rights to an original concept. It provides the patent owner exclusive rights to their
original innovative concept/product/service. The time allowed under patent varies from country to
country.
4 What are six basic rules entrepreneurs should remember about securing a patent?
1. Create an IP-protective environment to minimise the risk of losing your IP before
even being able to apply for protection.
2. Pursue patents that are broad, are commercially significant and offer a strong position.
 3. Prepare a patent plan in detail. This plan should outline the costs to develop and
market the innovation as well as analyse the competition and technological
similarities to your idea (refer also to Figure 10.1 and the associated
‘Entrepreneurship in practice’ box).
4. Have your actions relate to your original patent plan. This does not mean the plan
cannot be changed. However, it is wise to remain close to the plan during the early
stages of establishing the patent.
5. Establish an infringement budget. Patent rights are effective only if potential
infringers fear legal damages. Thus, it is important to prepare a realistic budget for
prosecuting violations of the patent.
6. Evaluate the patent plan strategically. The typical patent process takes three to five
years, although it can be expedited. This should be compared to the actual life cycle
of the proposed innovation or technology.
7 In your own words, what is copyright? What benefits does copyright provide?
Copyright protects an individual, or entity, from others using their IP.
It provides, like a patent, a specific timeframe within which competitors may not use your IP;
restricting them from reverse engineering, or adopting your marketing strategies via ‘using’ your
now registered trademark.

9 In your own words, what is a trademark? Why are generic or descriptive names or words difficult
or impossible to register as trademarks?
A trademark is a distinctive name, mark, symbol or motto identified with a company’s product(s).
Descriptive and generic trademarks are less likely to be suitable for registration as they are less
distinctive than other kinds of trademarks – see figure 10.2 on page 351 of your textbook.

11 What is a domain name? Give some examples of interesting cases of domain name
infringement.
A domain name is a registered internet address, with exclusive rights provided to the holder. Refer
to Burger King and Hungry Jacks.

14 Define each of the following: sole tradership, partnership, and corporation.

Sole trader: Also known as a sole proprietor, a business that is owned and operated by one person,
that has no existence apart from its owner.
Partnership: An association of two or more people acting as co-owners of a business for profit.
Corporation: In the US, a legal business entity that often has similar rights in law to those of a natural
person. Equivalent to an incorporated company in Australia, New Zealand, Singapore, the UK and
Ireland. They have limited liability and their shareholders are not normally responsible for the
company's debts beyond the amount they paid for their shares. Accordingly, while the terminology
differs, the concept of a company or corporation is largely the same.
Week 8, Chapter 11

Chapter Summary
Chapters 8 and 9 focus on strategies to ensure a viable business; where we suggested that a
business plan may be secondary. Now we need to re-evaluate, and reconsider when a
comprehensive business plan may be beneficial or necessary. Here we focus on the business plan as
a strategic tool to assist the entrepreneur to obtain resources to grow their venture – financially,
operationally, or simply through experienced management.
This chapter considers the traditional and lean approaches to business plans, and critiques both;
providing a solid background for entrepreneurs to decide which model may best suit their
circumstances. It weighs up the pros and cons of each and addresses the essential elements of both.
We then consider some of the major questions addressed in a complete and thorough business plan,
outlining the major items to be evaluated and explained. The chapter then presents some helpful
hints for preparing a business plan; concluding with a review of how to present a business plan to
prospective audiences.
1 What are the main differences between ‘traditional’ business planning and ‘lean’ business
planning?
The traditional approach requires a comprehensive document, detailing all aspects of the venture. A
lean approach focuses on limited information, tailored for a specific purpose; i.e. a bank loan,
supplier, etc.
2 What are some of the new forms of business planning?
‘Bottom-up’ and ‘practitioner-oriented’ approaches, along with new software modelling programs.
3 Why do traditional plans sometimes not achieve their objectives?
They are too long-winded, requiring considerable input, yet not necessarily focused on the reasons
for producing same.
4 Why has lean business planning emerged as an alternative, particularly among young
companies?
Traditionally, business planning has followed set parameters, involving the entrepreneur in many
hours. This time may be better spent on actually moving the business from a concept to reality,
concentrating resources on the now, rather than an unknown future

10 Briefly describe each of the major segments to be covered in a traditional business plan.
Refer to Table 11.2.

11 Under what circumstances would you suggest simply skipping a business plan?
In the early start-up stages, the time taken to produce a comprehensive business plan may be better
spent on pretotyping and strategy formation. Provide proof of concept prior to embarking on a rigid
plan into, essentially, unknown territory.
Week 9, Chapter 12

Chapter Summary
In this chapter, we focus on performance measurement of tangible and intangible financial and
physical resources. We begin by emphasising the need for performance measures in an
entrepreneurial company. These traditionally have been limited only to bottom-line indicators that
tell the shareholder how well the company is doing financially; without regard to other factors such
as society or the environment, now viewed as a key requirement in financial reporting.
We discuss the principles of traditional financial accounting to entrepreneurs. In the first instance,
three principal financial statements are important to entrepreneurs: the balance sheet, the income
statement and the cash-flow statement. We discuss the various components of these statements
and what they actually indicate.
Budgeting forecasts the financial position of a company at a future point in time, and as such is an
important tool for the entrepreneur. We will examine key budget forecasts and determine the
benefits provided.
We conclude by exploring other financial modelling, such as break-even and ratio analysis, as further
analytical tools for entrepreneurs.
1 What do we mean by performance measures? What are the traditional ones? Why do we need
to look beyond these now?
Traditionally, performance was measured simply by the amount of profits available to the
shareholders or owners. Increasingly, stakeholders and the public are expecting entrepreneurs to
show that they are not merely delivering economic value, but also following socially and
environmentally responsible paths, back to the ‘triple bottom line’: profits for shareholders, respect
for the community at large, and respect for the environment.
2 Describe the purpose of the balance sheet, the income statement and the cash flow statement.
Why are these three statements of accounts important for an entrepreneur to understand?
Explain in detail.
The key components of the financial segment include the balance sheet, which represents the
financial condition of a company at a certain date. It details the items owned by your company
(assets) and the amount owed by the company (liabilities). It also shows the net worth of the
company and its liquidity. The balance sheet must follow the traditional accounting equation: Assets
= Liabilities + Equity.
Another key statement is the income statement commonly referred to as the P & L (profit and loss)
statement, which provides the owner manager with the results of operations. It measures the
success of the business.
Finally, the statement of cash flow is an analysis of the cash availability and cash needs of the
business. The projected cash flow is a planning tool to allow management to make borrowing and
investing decisions.
3 What are the benefits of the budgeting process?
Budgeting allows top management to determine the company’s goals. This is a benefit because top
management is more familiar with the goals, strategies and available resources of the company.
Another benefit can be the involvement of operating management in the budget process. This is
more likely to get a commitment from them than the top-down approach is.
Week 9, Chapter 14

Chapter Summary
This chapter focuses on the need for entrepreneurs to understand how to value a business for
purchase or sale. There are a number of different valuation strategies, and we begin by examining
the most common methods.
We then move our focus to the entrepreneur leaving their venture and ‘harvesting’ a financial
reward; whether for retirement, health or to commence a new venture, many factors come into
play. Is the venture a family concern, and if so, what are the implications?
A succession plan is an essential element of any exit strategy, requiring detailed planning and
consideration of the various implications. Here we analyse such strategies and the pitfalls that need
to be overcome.
We conclude with the two most common options to harvest: taking the company public through a
share offering, or an outright sale to another company. We once again discuss strategies to leverage
outcomes that provide the entrepreneur not only with with financial gain, but peace of mind.
8 What are three of the contextual aspects that must be considered in an effective succession
plan?
The terms of pressures and interests inside the business and outside the business.
To examine forcing events.
To examine the sources of succession.
12 What eight steps should be followed to harvest a business? Discuss each of these steps.
Prepare a financial analysis: the purpose of such an analysis is to define priorities and forecast the
next few years of the business.
Segregate assets: legal and taxation advice should be sought to leverage maximum value from
existing assets.
Value the business: earlier in this chapter we discussed the various methods of valuation; required
to set an asking price.
Identify the appropriate timing: are the profits showing an upward trend? Do we currently have a
solid management structure in place? Is the current economic outlook positive?
Publicise the offer to sell: consult professional marketers.
Finalise the prospective buyers: create a short-list via enquires to ascertain the status and reputation
of the purchasers.
Remain involved through the closing: this reduces the risks of misunderstandings that may hinder
the final sale process.
Communicate after the sale: communication between the seller and the buyer, and between the
buyer and the current management personnel, is a key step.
Week 10, Chapter 4

Chapter Summary
We commence with introducing the concept that there exist various pathways to experience
entrepreneurial behaviour, via the creation of a new venture, the acquisition of an existing venture,
and the rise of social entrepreneurs and intrapreneurship. We examine the impact factors such as
upbringing and family experience, education, culture, and personal circumstances play in an
individual’s approach to entrepreneurial activities. We also consider various financial approaches
and barriers that may impact on the ability to undertake entrepreneurial ventures; along with
specific strategies to facilitate individual entry with available resources, and how different ventures
may fail or succeed, depending upon entry and ongoing levels of capital expenditure and cash flows.
The chapter discusses entry methods in detail, whether they be disruptive or improvements to
current models; the roles of adaptors and innovators; and how modern technology provides
opportunities that have previously been impossible or unthinkable. Indeed, technology such as
instant global communications, virtual team collaboration, and the increased use of key
performance indicators have seen the ascendance of the intrapreneurial organisation. New public
management techniques have moved intrapreneurial behaviour into the sphere of public service and
NGOs. This chapter provides detailed examples of, and methodology to, introduce students to
current entrepreneurial trends and opportunities.
14. Why would some describe entrepreneurship in large organisations as an oxymoron?
What is an oxymoron? The dictionary defines an oxymoron as 'a phrase that combines two words
that seem to be the opposite of each other; for example a human robot' (2018, Oxford Advanced
Learner’s Dictionary). How can we have a ‘human’ robot?
As previously stated, entrepreneurship, or more correctly, intrapreneurship, in MNCs is largely
unheard of, yet new research points to this being an essential component of sustainability. Under
old-school business methodology, entrepreneurship would have no place in large organisations.
15. What is intrapreneurship and why is it becoming increasingly important for large
organisations?
Refer to Question 14 above. Within large organisations, often terminology is blurred. To achieve a
competitive advantage, organisation must be prepared to embrace the principles of
entrepreneurship, via intrapreneurship.
Intrapreneurship mirrors entrepreneurship; however, it is embraced by senior management in
organisations, prepared to delegate the ability for entrepreneurial individuals to embrace such
methodologies and beliefs to foster sustainable innovation within their company.
In today’s world, any venture that does not pursue the three pillars of sustainability, in conjunction
with innovation, may soon see themselves in liquidation.
16. How does re-engineering an organisation differ to the intrapreneurship pathway?
We have identified that intrapreneurial behaviour is the way of the future for most organisations;
however, many ventures do not have a history of encouraging entrepreneurial attitudes to foster
progressive attributes.
To encourage intrapreneurial practices, senior management will need to embrace new commercial
attitudes, providing increased levels of support to line managers, delegating responsibility and
supporting same.
A steep corporate structure will need to be embraced with a flatter approach to corporate
structures; essentially replacing traditional management structures with those that foster innovation
at all levels.
17. What are five questions that can be applied to test whether an organisation is intrapreneurial?
If an organisation may meet even one of these prerequisites, they are heading in the direction of
promoting an intrapreneurial culture.
18. Name and describe at least five tactics an organisation might apply that signal an
intrapreneurial philosophy.
As per Table 4.2, any organisation must employ basic strategies to promote intrapreneurial
philosophies for sustainable innovation, or risk being made redundant by their competitors.
Essentially all tactics discussed in this table will be conducive to promoting an intrapreneurial
corporate culture.

Week 10, Chapter 9

Chapter Summary
Chapters 7 and 8 highlighted the importance of effective planning. We now consider how
entrepreneurs need to develop strategic planning capabilities to move from the pre-launch and
market entry stages, to ensure ongoing growth.
Strategic planning builds capacity in several key areas, including effective resource allocation, an
improved competitive position, higher levels of employee morale and efficient decision making, all
of which are vital to sustainable growth.
Technology has also introduced the ability for entrepreneurs to explore international expansion
options within an ever-increasing global economy. However, it is important that global growth be
carefully researched to ensure it occurs for the correct reasons.
There are various entries into global business markets, and this chapter concludes with discussion of
a variety of options available to the global entrepreneur.
13 What is a ‘born-global’ business? Name three born-global companies that you know.
A business that launches on the international stage, without first maximising domestic market
potential; 42Below Vodka, Skype, Amazon.

14 What are the main motivations for going global?

Profit maximisation, increasing market potential, increased revenue/cash flows, and to reposition
strategic intent.

16 How does a joint venture work? What are the advantages of this arrangement? What are the
disadvantages?
Two or more companies form a new entity, managed under pre-agreed conditions. Each party
should bring unique value/experience to the new venture. However, depending on the agreed
structure of the new venture, one party may have a controlling interest, prohibiting equal
participation in strategic matters.