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    Entrepreneurship - 1

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    Entrepreneurship - 1

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    13 views27 pages

    Entrepreneurship - 1

    Uploaded by

    tibebtitan123

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    © All Rights Reserved
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    of 27

    ETHIOPIAN DEFENSE UNIVERSITY.

    Entrepreneurship

    Lecture Note
    Chapter One: The Nature of Entrepreneurship
    Chapter Two: Business Planning
    Chapter Three: BUSINESS FORMATION
    Chapter Four :PRODUCT/SERVICE DEVELOPMENT
    Chapter Five : MARKETING
    Chapter Six : BUSINESS FINANCING
    Chapter Seven :MANAGING GROWTH AND TRANSITION
    1.1. Introduction.
    The word ‘entrepreneur’ is originated from a French
    word, entreprender, where an entrepreneur was an
    individual commissioned to undertake a particular
    commercial project.

    Entrepreneurship is then what the entrepreneur does.

    1.2 Historical Origin of Entrepreneurship.


     What is entrepreneurship? And who is an entrepreneur?

     During the ancient period the word entrepreneur was


    used to refer to a person managing large commercial
    projects through the resources provided to him.
    In the 17th Century a person who has signed a
    contractual agreement with the government to provide
    stipulated products or to perform service was
    considered as entrepreneur.

    In the 18th Century the first theory of entrepreneur has


    been developed by Richard Cantillon. He said that an
    entrepreneur is a risk taker.

    In the late 19th and early 20th Century an entrepreneur


    was viewed from economic perspectives.

    In the middle of the 20th Century the notion of an


    entrepreneur as an inventor as established.
    From the historical development it is possible to
    understand the fact that the perception of the word
    entrepreneur was evolved from managing commercial
    project to the application of innovation (creativity) in
    the business idea.

    1.3 Definitions of Entrepreneurship and Entrepreneur


     Intuitively, it is know that entrepreneurship is the
    process and entrepreneur is the person undertaking
    entrepreneurial activity such as undertaking own
    business.
    1. Entrepreneurship is the process of identifying
    opportunities in the market place, arranging the resources
    required to pursue these opportunities and investing the
    resources to exploit the opportunities for long term gains.

     It involves creating incremental wealth by bringing


    together resources in new ways to start and operate an
    enterprise.

    2. Entrepreneurship is the processes through which


    individuals become aware of business ownership then
    develop ideas for, and initiate a business.
    3. Entrepreneurship can also be defined as the process of
    creating something different and better with value by
    devoting the necessary time and effort by assuming the
    accompanying different risks and receiving the resulting
    monetary reward and personal satisfaction.

     In this case an individual should come up with


    something different and better in order to the named as
    entrepreneur.

    4. Entrepreneurship is the art of identifying viable


    business opportunities and mobilizing resources to
    convert those opportunities into a successful enterprise
    through creativity, innovation, risk taking and progressive
    imagination.
    Entrepreneurship is a practice and a process that results
    in creativity, innovation and enterprise development
    and growth.

    It refers to an individual’s ability to turn ideas into


    action involving and engaging in socially-useful wealth
    creation through application of innovative thinking and
    execution to meet consumer needs, using one’s own
    labor, time and ideas.

    Engaging in entrepreneurship shifts people from being


    “job seekers” to “job creators”
    In general, the process of entrepreneurship includes five
    critical elements. These are:
    1) The ability to perceive an opportunity.
    2) The ability to commercialize the perceived
    opportunity i.e. innovation
    3) The ability to pursue it on a sustainable basis.
    4) The ability to pursue it through systematic means.
    5) The acceptance of risk or failure.
    1.4 Types of Entrepreneurs.
    Entrepreneurship can take three different forms. They are:
    1. The individual entrepreneur:
     An individual entrepreneur is someone who started;
    acquired or franchised his/her own independent
    organization.

    2. Intrapreneur:
     An Intrapreneur is a person who does entrepreneurial
    work within large organization.

    3. The Entrepreneurial Organization


    An organization can create an environment in which
    all of its members can contribute in some function to the
    entrepreneurial function.

     An organization that creates such an internal


    environment is defined as entrepreneurial organization.

    1.5 Role of Entrepreneurs in Economic Development

     Entrepreneurial development is the most important


    input in the economic development of any country.
    Among others the major roles of entrepreneurs in
    economic development includes:
    ◦ Improvement in per capita Income/Wealth Generation.
    ◦ Generation of Employment Opportunities
    ◦ Inspire others Towards Entrepreneurship
    ◦ Balanced Regional Development
    ◦ Enhance the Number of Enterprise
    ◦ Provide Diversity in Firms
    ◦ Economic Independence
    ◦ Combine Economic factors
    ◦ Provide Market efficiency
    ◦ Accepting Risk
    ◦ Maximize Investor’s Return

    1.6. Entrepreneurial Mindset : Who Becomes an Entrepreneur?


    The Young Professional
    The Inventor
    The Excluded
    1.6.1. Qualities of an Entrepreneur.
     Opportunity-seeking
     Persevering
     Risk Taking
     Demanding for efficiency and quality
     Information-seeking
     Planning and Goal Setting
     Persuasion and networking
     Building self-confidence
     Listening to others
     Demonstrating leadership
    1.6.2.Entrepreneurial Skills .
    General management skills and
    People management skills
    A. General Management Skills
    Strategy Skills
    Planning Skills
    Marketing Skills
    Financial Skills
    Project Management Skills
    Time Management Skills
    B. People Management Skills.
    Communication Skills
    Leadership Skill
    Motivation Skills
    Delegation Skills
    Negotiation Skills
    1.6.3.The Entrepreneurial Tasks.
    Owning Organizations
    Founding New Organizations
    Bringing Innovations to Market
    Identification of Market Opportunity
    Application of Expertise
    Provision of leadership
    The entrepreneur as manager
    Wealth of Entrepreneurs.

    Who benefits from the entrepreneur’s wealth?


    o Employees
    o Investors
    o Suppliers
    o Customers
    o The local community
    o Government
    o Many others
    1.6.4. Entrepreneurship and Environment .
     Business environment may be classified into two broad
    categories; namely external; and internal environment.

     External environment includes:


    Economic Environment
    Legal Environment
    Political Environment
    Socio-Cultural Environment
    Demographic Environment
    Internal Environment includes:
     Raw Material
     Production/Operation
     Finance
     Human Resource
     etc
    1.7. Creativity, Innovation and Entrepreneurship.
    What is creativity?
     Creativity is defined as the tendency to generate or
    recognize ideas, alternatives, or possibilities that may
    be useful in solving problems, communicating with
    others, and entertaining ourselves and others.

     Creativity is the ability to come up with new idea and to


    identify new and different ways of looking at a problem
    and opportunities.

     It is a process of assembling ideas by recombining


    elements already known but wrongly assumed to be
    unrelated to each other.
    What is Innovation?
     Innovation lies at the heart of entrepreneurial
    process and is a means to the exploitation of
    opportunity.
     It is the implementation of new idea at the
    individual, group or organizational level.

     Innovation is a process of intentional change


    made to rate value by meeting opportunity and
    seeking advantage.
    There are four distinct types of innovation, these
    are as follows:
     Invention - described as the creation of a new
    product, service or process

     Extension- the expansion of a product, service


    or process

     Duplication- defined as replication of an


    already existing product, service or process

     Synthesis
    - the combination of existing
    concepts and factors into a new formulation
    Areas of Innovation includes:
     New product
     New Services
     New Production Techniques
     New Way of Delivering the Product or Service to the Customer
     New Operating Practices
     New Means of Informing the Customer about the Product
     New Ways of Managing Relationships between Organizations
     etc
    From Creativity to Entrepreneurship .
     Creativity is the ability to develop new ideas and
    to discover new ways of looking at problems
    and opportunities.

     Innovation is the ability to apply creative


    solution to those problems and
    opportunities in order to enhance people’s lives
    or to enrich society.
    Creativity = Thinking new things

    Innovation = Doing new things

    Entrepreneurship = creativity + innovation


    CHAPTER ONE ENDS!

    I THANK YOU!

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