ENTREPRENEURSHIP MPU3223

PREPARED BY:
DR. MOHD SALEH BIN ABBAS
6016-2215587
[email protected]
www.facebook.com/Dr.Saleh.Abbas
Dr. MOHD SALEH ABBAS
EDUCATION & EXPERIENCE AREA OF SPECIALISATION
 40 years of industrial experience:  Area of specialization:
 Automotive industry

• Marketing
Telecommunication industry
 Retail industry
• Entrepreneurship
 Education / Training Industry • Strategic Management
 Education: • Personal Development
 PhD from IIUM, Malaysia • Organizational Behaviour
 MBA from Ohio University, USA
 ADBS (Marketing) from UiTM, Malaysia.
 Dip. in Professional Marketing (CIM-UK)
 Certified Professional Consultant, HSB
REQUIREMENT FROM STUDENTS DURING E-TUTORIAL

 Medium of Language – English and Bahasa Malaysia.

 Two-way communication.
 Stop me if there is any questions to ask.
 Inform me if lecture delivery is too fast or too slow.
 Lectures will base on case studies and relevant
examples in relation to the concept of Entrepreneurship.
GETTING TO KNOW YOU

 About yourself
 About your work experience
 About education background
 Your career objective
ASSESSMENT

 Assignment 1 (Q) - 50 % due 14/3/2023

 Assignment 2 (OCP) - 10 % due 14/3/2023
 Assignment 3 (OA) - 10 % due 14/3/2023
 Final Exam. - 30 % due 4-18/4/2023
 TOTAL -100 %
COURSE CONTENTS –
ENTREPRENEURSHIP MPU3223
TOPIC 1: INTRODUCTION TO ENTREPRENEURSHIP (Done)
TOPIC 2: IDENTIFYING ENTREPRENEURIAL CHARACTERISTICS
TOPIC 3: DEVELOPING ENTREPRENEURIAL CREATIVITY AND INNOVATION
TOPIC 4: VENTURES ENVIRONMENT ASSESSMENT (Assignment 2)
TOPIC 5: BUSINESS PLAN (Assignment 1 & 3)
TOPIC 6: STARTING A NEW ENTREPRENEURIAL VENTURE
TOPIC 7: ENTREPRENEURIAL NETWORK
TOPIC 8: EVALUATION OF ENTREPRENEURIAL OPPORTUNITIES
TOPIC 9: ENTREPRENEUR AND PERSONAL FINANCIAL PLANNING (Assignment 1)
TOPIC 10: ACHIEVING AN ENTREPRENEUR’S PERSONAL FINANCIAL DREAMS (Asg 3)
COURSE OUTCOMES –
ENTREPRENEURSHIP MPU3223
By the end of this course, you should be able to:
 1. Illustrate the basic concepts, theories of entrepreneurship and
identify characteristics of successful entrepreneurs;
 2.Analyse the business opportunities consistent with the concepts
and theories of entrepreneurship; and
 3.Formulate a business venture through the development of a good
business plan report.
COURSE CONTENTS –
ENTREPRENEURSHIP MPU3223
TOPIC 1: INTRODUCTION TO ENTREPRENEURSHIP
TOPIC 2: IDENTIFYING ENTREPRENEURIAL CHARACTERISTICS
TOPIC 3: DEVELOPING ENTREPRENEURIAL CREATIVITY AND INNOVATION
TOPIC 4: VENTURES ENVIRONMENT ASSESSMENT
TOPIC 5: BUSINESS PLAN
TOPIC 6: STARTING A NEW ENTREPRENEURIAL VENTURE
TOPIC 7: ENTREPRENEURIAL NETWORK
TOPIC 8: EVALUATION OF ENTREPRENEURIAL OPPORTUNITIES
TOPIC 9: ENTREPRENEUR AND PERSONAL FINANCIAL PLANNING
TOPIC 10: ACHIEVING AN ENTREPRENEUR’S PERSONAL FINANCIAL DREAMS
WELCOME TO THE WORLD OF
ENTREPRENEURSHIP
“Most of what you hear about entrepreneurship,
is all wrong. It’s not magic. It’s not mysterious,
and it has nothing to do with genes. It’s a
discipline, and it can be learned.”
 Peter F. Drucker (Innovation and Entrepreneurship)

 Source: Kuratko, D.F., and Hodgetts, R.M. (2001), Entrepreneurship: A

contemporary approach (5th edition) Harcourt College Publishers.
ENTREPRENEURSHIP CONCEPT – DEFINITION 1
ENTREPRENEURSHIP is the dynamic process of
creating incremental wealth. The wealth is created
by individuals. It is a process of creating something
new with value by individuals who devote their
time and effort, undertake the financial,
psychological and social risks and receiving the
resulting rewards of monetary, personal satisfaction
and independence.
Source: Hisrich and Peter (1998)
ENTREPRENEURSHIP CONCEPT – DEFINITION 2
 ENTREPRENEURSHIP is the dynamic process of vision, change, and creation. It requires
an application of energy and passion towards the creation and implementation of
innovative ideas and creative solutions. Essential ingredients include the willingness to
take calculated risks in term of time, equity, or career; the ability to formulate the
effective venture team; the creative skill to marshal needed resources; the
fundamental skill of building a solid business plan; and finally, the vision to recognize
opportunity pro-actively where other see chaos, contradiction, and confusion.
Source: Kuratko and Hodgetts (2004)
ENTREPRENEURSHIP CONCEPT – DEFINITION 2
Both definition focuses on the process of
innovation and new venture creation through four
major dimensions:
1. Individuals 3. Environmental
2. Organizational 4. Process.
Those dimensions are aided by collaborative
networks in government, education, and
institution.
Source: Kuratko and Hodgetts (2004)
 TOPIC 5:
BUSINESS PLAN
COURSE SYNOPSIS – TOPIC 5
 Outlines the techniques of preparing a business
plan which will help students to evaluate a
business plan objectively, critically and
practically.
 How to produce a blueprint for a realistic business
plan.
 Exposing students to several methods and
techniques of presenting an effective business
plan.
LEARNING OUTCOMES
By end of this topic, you should be able to:
 1. Explain what a business plan is;
 2. Explain the importance of business plans;
 3. Identify the parties who need business plans;
 4. Explain eight essential elements of a good business plan;
 5. Discuss six guidelines for preparing a business plan; and
 6.
Describe five factors that contribute to the failure of
business plans.
INTRODUCTION
 Business environments today are dynamic, complex and
subject to continual changes.
 An entrepreneur must have a good business plan in order
to gain and retain sustainable competitive advantage.
 Business planning is one of the management tools used to
achieve business objectives and to attract investors.
 The accuracy of a business plan will reflect the
management’s ability, experience and history in running
the business.
WHAT IS A BUSINESS PLAN?
A business plan is a written document, which
describes in detail the overall plans of a business in
which an entrepreneur aims to get involved. Three
main elements:

 1. Evidence of focus entrepreneur’s expertise

 2. Identify target market
 3. Fulfilling investors need
IMPORTANCE OF BUSINESS PLAN
WHO NEEDS THE BUSINESS PLAN
1. The Management team
2. The shareholders
3. Bankers or Creditors
4. Customers
5. Suppliers
6. The employees
ELEMENTS OF GOOD BUSINESS PLAN
 BUSINESS PLAN OUTLINE
 Title page
 Executive summary
 Introduction – Organizational profile /Product or Services
 Industry Analysis / Market Analysis – BCG matrix
 Marketing and Sales Strategies
 Execution of Marketing activities
 Monitoring and Control
 Budgeting / Funding request
 Conclusion

 The Financial Perspective*
Predicts how changes in a business
Cash flow will affect its ability to take in more
analysis cash than it pays out

Provide a snapshot of a company’s

Balance sheets financial position at a particular time

Show what has happened to an

Income organization’s income, expenses,
statements and net profit over a period of time

Used to track liquidity, efficiency,

Financial and profitability over time compared
ratios to other businesses in its industry
MANAGEMENT 23
 Basic Accounting Tools*
Steps for a Basic Cash Flow Analysis

Basic Income Statement

Parts of a Basic Balance Sheet

MANAGEMENT 24
 Basic Accounting Tools*
Steps for a Basic Cash Flow Analysis
1. Forecast sales
2. Project changes in anticipated cash flows
3. Project anticipated cash outflows
4. Project net cash flows by combining anticipated
cash inflows and outflows

MANAGEMENT 25
Basic Accounting Tools*
SALES REVENUE
Basic Income Statement
- sales returns and allowances
+ other income
= NET REVENUE
- cost of goods sold
= GROSS PROFIT
- total operating expenses
= INCOME FROM OPERATIONS
- interest expense
= PRETAX INCOME
- income tax
MANAGEMENT 26

= NET INCOME
Basic Accounting Tools*

Parts of a Basic Balance Sheet

 Assets: Current assets; Fixed assets

 Liabilities: Current liabilities; Long-term liabilities
 Owner’s equity: Stock; Additional paid in capital;
Retained earnings

MANAGEMENT 27
Basic Accounting Tools*
Steps for a Basic Cash Flow Analysis
1. Forecast sales
2. Project changes in anticipated cash flows Basic Income Statement
3. Project anticipated cash outflows
4. Project net cash flows by combining anticipated SALES REVENUE
cash inflows and outflows - sales returns and allowances
+ other income
= NET REVENUE
Parts of a Basic Balance Sheet - cost of goods sold
= GROSS PROFIT
- total operating expenses
1. Assets: Current assets; Fixed assets = INCOME FROM OPERATIONS
2. Liabilities: Current liabilities; Long-term liabilities - interest expense
3. Owner’s equity: Stock; Additional paid in capital; = PRETAX INCOME
Retained earnings - income tax
= NET INCOME

MANAGEMENT 28
 Financial Ratios*
LIQUIDITY RATIOS LEVERAGE RATIOS

•Current Ratio •Debt to Equity

•Quick (Acid Test) Ratio •Debt Coverage

PROFITABILITY RATIOS
EFFICIENCY RATIOS
•Gross Profit Margin
•Inventory Turnover
•Return on Equity
•Average Collections Period

MANAGEMENT 29
Common Kinds of Budgets*
Revenue Used to project or forecast
Budgets future sales
Expense Used to determine spending on
Budgets supplies, projects, or activities
Profit Used by profit centers, which have
Budgets “profit and loss” responsibility
Cash Used to forecast the cash a
Budgets company will have for expenses
Capital Expenditure Used to forecast large,
Budgets long-lasting investments
Used to project costs across
Variable Budgets
MANAGEMENT varying levels of sales/revenues 30
GUIDELINES IN BUSINESS PLAN
1. Keep the Business plan short
2. Be focused
3. Reveal people involved and their roles
4. Avoid the uses of Jargons
5. Information should be based on study
6. Be realistic and objectives
PITFALL TO AVOID IN PLANNING
1. No realistic goals
2. Failure to anticipate obstacles
3. No commitment or dedication
4. Lack of business or technical experience
5. No market niche
SUMMARY
 Business
planning is a management system. It integrates the
management functions of planning, organizing, implementing
and controlling.
 The business planning process provides management with basic
tools and information that describe the management and
resource environment and contribute to establishing the
accountability framework needed to manage in a dynamic
environment.
 Theexecution of business planning is very important to ensure
the survival and expansion of the business.
QUESTION & ANSWER
 Why are business plans important for
entrepreneurs?
 What are the important elements in a good
business plan?
 Describe the factors which contribute to the
failure of Business Plans.
End of Topic 5.
THANK YOU
ASSIGNMENT INSTRUCTION
ASSIGNMENT INSTRUCTION
ASSIGNMENT TASK 1
ASSIGNMENT – TASK 2
ONLINE CLASS PARTICIPATION (10%)
ONLINE ACTIVITY
ONLINE ACTIVITY
NEXT CHANGE
TOPIC 6:
STARTING A NEW
ENTREPRENEURIAL VENTURE
THANK YOU