Overview of Entrepreneurship: The

Entrepreneurial Perspective
4 Lecture Hours

Entrepreneurship Management

Lecturer : Mrs. Pinky Sharma

Email: [email protected]
 Content
• What is an entrepreneur?
• Characteristics of an entrepreneur
• Growth pressures, managing a family business, and corporate
intrapreneurship
• Entrepreneurship and Intrapreneurship.
• Key Elements of Entrepreneurship.
• Personality Characteristics of Successful Entrepreneurs.
• Common Myths about Entrepreneurs.
• Ethics and Social Responsibility of Entrepreneurs.
• Types of Start-Up Firms.
• Process of New Venture Creation.
• Role of Entrepreneurship in Economic Development.
• Emerging Trends and Issues in Entrepreneurship.
• References
 Entrepreneur and Manager
• Entrepreneur: Entrepreneurship is the process of
designing, launching and running a new business,
which is often initially a small business. The people
who create these businesses are called entrepreneurs
• Manager: The definition of a manager is a person
responsible for supervising and motivating employees
and for directing the progress of an organization.
 Entrepreneurs V. Intrapreneurs
• Entrepreneurs are people that notice opportunities and
take the initiative to mobilize resources to make new
goods and services.
• Intrapreneurs also notice opportunities and take
initiative to mobilize resources, however they work in
large companies and contribute to the innovation of the
firm.

• Intrapreneurs often become entrepreneurs.

 Intrapreneurship
• Learning organizations encourage intrapreneurship.
• Organizations want to form:
– Product Champions: people who take ownership of a product
from concept to market.
– Skunkworks: a group of intrapreneurs kept separate from the
rest of the organization.
– New Venture Division: allows a division to act as its own
smaller company.
– Rewards for Innovation: link innovation by workers to
valued rewards.
 Small Business Owners
• Small business owners are people who own a major
equity stake in a company with fewer than 500
employees.
• In 1997 there were 22.56 million small business in the
United States.
• 47% of people are employed by a small business.
 Advantages of a Small Business

• Greater Opportunity to
get rich through stock
options
• Feel more important
• Feel more secure
• Comfort Level
 Disadvantages of a Small Business
• Lower guaranteed pay
• Fewer benefits
• Expected to have many skills
• Too much cohesion
• Hard to move to a big company
• Large fluctuations in income possible
 Who are Entrepreneurs?

• Common traits
– Original thinkers – Self employed parents
– Risk takers – Firstborns
– Take responsibility for – Between 30-50 years old
own actions
– Well educated – 80%
– Feel competent and
capable have college degree and
– Set high goals and enjoy 1/3 have a graduate level
working toward them degree
Successful and Unsuccessful Entrepreneurs

• Successful • Unsuccessful
– Creative and Innovative – Poor Managers
– Position themselves in – Low work ethic
shifting or new markets
– Inefficient
– Create new products
– Create new processes – Failure to plan and
– Create new delivery prepare
– Poor money managers
 Characteristics of Entrepreneurs

Key Personal
Attributes

Strong Managerial Successful

Competencies Entrepreneurs

Good Technical Skills

 Key Personal Attributes
• Entrepreneurs are Made, Not Born!
– Many of these key attributes are developed early in
life, with the family environment playing an
important role
– Entrepreneurs tend to have had self employed
parents who tend to support and encourage
independence, achievement, and responsibility
– Firstborns tend to have more entrepreneurial
attributes because they receive more attention, have
to forge their own way, thus creating higher self-
confidence
 Key Personal Attributes (cont.)
• Entrepreneurial Careers
– The idea that entrepreneurial success leads to more
entrepreneurial activity may explain why many
entrepreneurs start multiple companies over the
course of their career
– Corridor Principle- Using one business to start or
acquire others and then repeating the process
– Serial Entrepreneurs- A person who founds and
operates multiple companies during one career
 Key Personal Attributes (cont.)
• Need for Achievement
– A person’s desire either for excellence or to succeed
in competitive situations
– High achievers take responsibility for attaining their
goals, set moderately difficult goals, and want
immediate feedback on their performance
– Success is measured in terms of what those efforts
have accomplished
– McClelland’s research
 Key Personal Attributes (cont.)
• Desire for Independence
– Entrepreneurs often seek independence from others
– As a result, they generally aren’t motivated to
perform well in large, bureaucratic organizations
– Entrepreneurs have internal drive, are confident in
their own abilities, and possess a great deal of self-
respect
 Key Personal Attributes (cont.)
• Self-Confidence
– Because of the high risks involved in running an
entrepreneurial organization, having an “upbeat” and
self-confident attitude is essential
– A successful track record leads to improved self-
confidence and self-esteem
– Self-confidence enables that person to be optimistic
in representing the firm to employees and customers
alike
 Key Personal Attributes (cont.)
• Self-Sacrifice
– Essential
– Nothing worth having is free
– Success has a high price, and entrepreneurs have to
be willing to sacrifice certain things
 Technical Proficiency
• Many entrepreneurs demonstrate strong technical skills,
typically bringing some related experience to their
business ventures
• For example, successful car dealers usually have lots of
technical knowledge about selling and servicing
automobiles before opening their dealerships
• Especially important in the computer industry
• NOT ALWAYS NECESSARY
 Planning
• Business Plan – A step-by-step outline of how an
entrepreneur or the owner of an enterprise expects to
turn ideas into reality.
 Questions To Keep In Mind
• What are my motivations for owning a business?

• Should I start or buy a business?

• What and where is the market for what I want to sell?

• How much will all this cost me?

• Should my company be domestic or global?

 Start or Buy?
• Start – cheapest, but very difficult
-requires most planning/research
• Buy – expensive – may be out or reach
-requires less planning and research
• Franchise (middle ground) – a business run by an
individual (the franchisee) to whom a franchiser grants
the right to market a certain good or service.
 The Market???
• Planning & Research essential
• Extensive market surveys (family, friends,
neighbors…)
• Magazines and Polls offer some information on the
market -Businessweek, Harris Poll
 What about the cost?
• Plan realistically, not optimistically
• Don’t overestimate your profits
• Don’t underestimate your costs
• Sources of Funds
• Banks
• Venture Capitalists – filthy rich, high risk
investors looking for a many-times-over yield
• Angels – seem to have altruistic motives and less
stringent demands than venture capitalists
 Domestic or Global?
• Drawbacks to Global – more research and less
accessible connections in startup phase, more travel
time required, more considerations.
• Advantages to Global – more human resources, more
demand, more financing, easier to start global than go
from domestic to global.
Entrepreneurship: Growth Pressures
Entrepreneurs often find that as their business grows,
they feel more pressure to use formal methods to lead
their organizations.

Although this formalization process may compromise

some entrepreneurs spirit, it often leads to more focus,
organization, and greater financial returns.

Basically, it’s a movement from a “seat-of-the-pants”

operation to a more structured, legitimate and
recognizable business.
 Entrepreneurship: Growth Pressures
Entrepreneurial and Formal Organizations differ in six business
dimensions :
 Strategic orientation
 Commitment to opportunity
 Commitment to resources
 Control of resources
 Management structure
 Compensation policy
 Entrepreneurship: Growth Pressures
Business Dimension Entrepreneurial Formal Organization
Organization
Strategic orientation Seeks opportunity Controls resources

Commitment to opportunity Revolutionary Evolutionary

Short duration Long duration
Commitment to resources Lack of stable needs and Systematic planning systems
(capital, people, and resource bases
equipment)
Control of resources Lack of commitment to Power, status, financial rewards for
permanent ventures maintaining status quo

Management Structure Flat Clearly defined authority and

Many informal networks responsibility

Compensation policy Unlimited; based on team’s Short-term driven; limited by

accomplishments investors
 Entrepreneurship: Growth Pressures
Going Global….
From domestic to worldwide expansion, globalization can be
extremely rewarding for entrepreneurs.
THINK: Money and Business Exposure
However, it is a huge undertaking. Adapting your business to
operate in the global market can lead to a decrease in ownership,
and a forced focus on raising money to keep your business alive.
THINK: Selling out, Private to Public (Initial Public Offering,
IPO)
Entrepreneurship: Managing a Family Business
 Over 50% of the U.S. Gross Domestic Product (GDP) is
generated from family business.
 12% of CEOs on the Inc. 500 list describe their company as a
family business.

So, why not dream up a plan and go into

business with your family or friends?
Entrepreneurship: Managing a Family Business

Two reasons not to go into business with your family or friends.

…
Families fight
Friends fight

Often, it involves money. So a business environment could

potentially breed arguments, disagreements, and feuds.

Fighting can occur during early developmental stages when

hours are long and pay is low. Or, after success has been
achieved.
Entrepreneurship: Managing a Family Business

Six steps to help lead you to a successful Family Business:

 Clear job responsibilities

 Clear hiring criteria
 Clear plan for management transition
 Agreement on whether and when to sell business
 Commitment to resolving conflicts quickly
 Outside advisors are used to mediate conflicts.

Clarity is key….
 Entrepreneurship: Managing a Family Business
Operational vs. Survival Issues….
• Operational = Decisions about the economics of the business and
how to balance that with rational and family obligation criteria.

THINK: Day-to-day grind.

• Survival = Develop out of a lack of attention on the operational

issues within the business.

THINK: Festering problems; ultimately compromise

livelihood.
Entrepreneurship: Managing a Family Business

FAMILY FEUD:

Severed Divorce Poor business Low morale,

relationships performance motivation
Entrepreneurship: Corporate INTRA-preneurs
Intrapreneur = someone in an existing organization
who turns new ideas into profitable realities.

Not every employee has the ability to become a

successful intrapreneur. It takes well-developed
strategic action, teamwork and communication abilities.
Entrepreneurship: Corporate INTRA-preneurs
Organizations that redirect themselves through innovation have
the following characteristics:

 Commitment from senior management

 Flexible organization design
 Autonomy of the venture team
 Competent/Talented people with entrepreneurial attitudes
 Incentives and rewards for risk taking
 Appropriately designed control system
 Entrepreneurship: Corporate INTRA-preneurs
In order to, for this type of forward thinking to reap long-term
benefits, top management must allow it to flourish in the day-to-
day operations of the business….

This is known as “skunkworks”

• Skunkworks = Islands of intrapreneurial activity within an

organization.

REMEMBER: On the island, formal rules and policies of the

organization often DO NOT apply.
Common myths about entrepreneurs
1. Entrepreneurs are born that way.
2. The only requirement is a good idea.
3. Starting a new business guarantees freedom.
4. Launching a company quickly leads to wealth.
5. Only money motivates employees
6. Businesses either flourish or fail.
7. All responsibility falls on the entrepreneur
8. There’s a secret, “silver bullet” key to success.
9. Businesses need someone with an MBA at the helm.
10. Quitting is for losers.
Social Responsibility of Entrepreneurs
1. Responsibility Towards Employees:
• Fair wages and salaries
• Adequate Basic Facilities like safe drinking water,
electricity, canteen, hygienic toilets.
• Skill development programs.
• Good and safe working environment.
• Retirement benefits and pension schemes
2. Responsibility Towards Customers:
• Charge reasonable price for products or services.
• Supply of right quality of goods in right quantity.
• No use of manipulated or false advertisements.
• Avoid unfair selling practices.
• Fair guarantee of product
3. Responsibility Towards Shareholders:
• A fair return on investment.
• Safety of invested capital.
• Regular and complete information about the
performance and progress of the company.
• Regular Payment if dividend
4. Responsibility Towards Suppliers, Creditors:
• Maintain healthy and co-operative inter-business
relationship between different businesses.
• Provide accurate and relevant information to
creditors.
• Payment of price of materials on time.
• Prompt payment of interest on borrowed funds.
• Producing original documents for credit processing.
5. Responsibility Towards Public in General:
• Help the weaker section of the society.
• Creation of job opportunities.
• Improvement in living standards.
• Building of basic infrastructure like roads, sewerage.
• Health and educational development schemes.
• To make best use of society’s resources for their
welfare.
6. Responsibility towards Government:
• Payment of corporate tax in correct amount with no
manipulation of profit figures.
• To avoid corrupting public servants by offering
bribe.
• To encourage fair trade practices.
• To avoid monopoly practices.
• To improve national income.
According to Steve Blank, there are six different
types of startups

1. Lifestyle Startups: Self-employed folks

2. Small Business Startups: Feeding the Family
3. Scalable Startups: Born to Be Big
4. Buyable Startups: Born to be bought
5. Large Company Startups: Innovate or die
6. Social Startups: Mission - Difference
 New Venture Creation Process
Phase I: Discovery -- identifying opportunities and
shaping them into business concepts;
Phase II: Feasibility analysis and assessment;
Phase III: Creating your business plan;
Phase IV: Launching your business;
Phase V: Growing your business;
Phase VI: Exiting your business
Entrepreneurs for Economic Development
• Essentially, the entrepreneur searches for change, sees
need and then brings together the manpower, material
and capital required to respond the opportunity what
he sees.
• The entrepreneurs contribute more in favorable
opportunity conditions than in the economies with
relatively less favorable opportunity conditions.
 Role of Entrepreneurs
• The important role that entrepreneurship plays in the
economic development of an economy can now be put
in a more systematic and orderly manner as follows:
• Promotes Capital Formation:- Entrepreneurs promote
capital formation by mobilizing the idle savings of
public.
• Creates Large-Scale Employment Opportunities:-
Entrepreneurs provide immediate large-scale
employment to the unemployed which is a chronic
problem of underdeveloped nations.
• Reduces Concentration of Economic Power:-
Economic power is the natural outcome of industrial
and business activity. Industrial development
normally lead to concentration of economic power in
the hands of a few individuals which results in the
growth of monopolies.
• Wealth Creation and Distribution:-It stimulates
equitable redistribution of wealth and income in the
interest of the country to more people and geographic
areas, thus giving benefit to larger sections of the
society.
• Promotes Balanced Regional Development:-
Entrepreneurs help to remove regional disparities
through setting up of industries in less developed and
backward areas.
• Increasing Gross National Product and Per Capita
Income:-Entrepreneurs are always on the look out for
opportunities. They explore and exploit opportunities,
encourage effective resource mobilization of capital
and skill, bring in new products and services and
develops markets for growth of the economy.
• Improvement in the Standard of Living:-Increase
in the standard of living of the people is a
characteristic feature of economic development of the
country. Entrepreneurs play a key role in increasing
the standard of living of the people by adopting latest
innovations in the production of wide variety of
goods and services in large scale that too at a lower
cost.
• Promotes Country's Export Trade:- Entrepreneurs
help in promoting a country's export-trade, which is
an important ingredient of economic development.
• Creating innovation :-An entrepreneur is a person
who always look for changes. apart from combining
the factors of production, he also introduces new
ideas and new combination of factors
• Entrepreneurs Create New Businesses:- Path
breaking offerings by entrepreneurs, in the form of
new goods & services, result in new employment,
which can produce a cascading effect or virtuous
circle in the economy
• Induces Backward and Forward Linkages:-
Entrepreneurs like to work in an environment of
change and try to maximize profits by innovation
• Entrepreneurs Also Create Social Change
• Personal Growth
• Entrepreneurship puts new business ideas into
practice
• Facilitates Overall Development
Emerging Trends in Entrepreneurship
• Startup accelerators
• Student Sandbox and Business Lab
• Crowd Funding
• Co working spaces
• Entrepreneurship Degree
Startup accelerators
• This concept was not even in our vocabulary a few
years ago, and now startup accelerator programs are
popping up all over the country.
• Often privately funded and mostly used by tech
startups, these accelerators help companies with the
strongest potential of success obtain funding in
exchange for equity.
Student Sandbox and Business Lab
• More Universities are developing student sandboxes
on and off their campuses to support student startups.
• Sandboxes operate like business incubators except
that they are more focused on developing and
mentoring student startup teams and are often tied
into some type of entrepreneurship degree program or
course.
• Many sandbox programs provide students with the
opportunity to win seed money, grants, business
services and receive coaching and mentorship from
successful startup founders.
• Some examples include Student Sandbox, Student
Startup and Venture Lab
Crowd Funding
• Crowd funding, also known as social funding, is a pretty
new phenomenon as well. Startups were typically funded
by way of bootstrapping, investors (venture capital or
angel) and bank loans.
• Now entrepreneurs and business owners, along with
artists, nonprofit leaders and community groups, are
using their social networks to raise money for their
businesses, community projects, and events or to develop
a new product
Co-working spaces
• Also known as co-working communities, these spaces
provide entrepreneurs and small business owners
with a collaborative, open environment to work in.
• The concept is similar to a business incubator, except
there are no actual office spaces or cubicles for
individual businesses, and tenants are encouraged to
collaborate and support one another.
Boot camps
• An entrepreneurship boot camp is an intense hands-on
program for small business owners, startup founders
and new entrepreneurs.
• Boot camps will focus more of their attention on
teaching the practical application for new venture
creation and small business management within a short
period of time.
• Their aim is to help teach, equip and direct
entrepreneurs. There is a growing trend in
entrepreneurship boot camps dedicated to teaching and
training military veterans.
Entrepreneurship Degree
• There used to be a lot of resistance to the idea of
offering an entrepreneurship major in higher
education.
• Many academics and institutions felt that
entrepreneurship must be taught in a traditional
classroom by a fulltime business faculty.
• With the innovation in technology, growth in social
media interaction for startups and funding options
that are being generated online, more Universities
have adopted a virtual option for their
entrepreneurship seeking students
 Issues
1.  Cash flow management
2.  Hiring employees
3.  Time management
4.  Delegating tasks
5.  Choosing what to sell
6.  Marketing strategy
7.  Capital
8.  Strapped budget
9.  Business growth
10. Self-doubt
 Reference
• www.google.com
• www.wikipedia.com
• www.studymafia.org
Thanks
 Meeting Objectives
• To understand the learning environment of NBC

• To inform the college protocols

• To introduce Lesson plan

• To entail the importance of Question Keys

• To introduce with the technical evaluation process of
NBC
Thank you for your kind
attention