APK - BASIC ENTREPRENEUR CULTURE

CONCEPT & DEVELOPMENT OF ENTREPRENEURSHIP IMPORTANCE OF ENTREPRENEURS

Catalyst for change & growth of national economy- increase rate of per capita product & income, structural change of business & society. Give rise to successful individuals having highly viable & competitive businesses. Develop & expand a higher level of culture and attributes of entrepreneurship.

Entrepreneurs create wealth, encourage wealth distribution and contribute to economic well-being of the nation. Entrepreneurs will make the nation more competitive, open employment opportunities, reduce crime rates and reduce unemployment & poverty level. Entrepreneurs are the engines of creativity and innovation that will make the nation be well-known internationally.

CONCEPT OF ENTREPRENEUR & ENTREPRENEURSHIP Entrepreneurs: They are Pioneers of successful business activities. They usually have first mover advantage as they serve to produce creative and innovative products or services which are distinctly different than current ones.

 Entreprendre means To shoulder or try. This suggests that entrepreneurs have a responsible role in society by providing products/services the society requires.

Joseph Schumpeter established his Theory of Economics Development and introduced the term entrepreneur in 1934. Attributes of entrepreneurs, being, unique, innovative, creative, playing change agent role and providing novelty.

 According to Scarborough & Zimmerer (1998) Entrepreneurs are creators of new business and they have the ability to face uncertainties & acquire profits by seizing opportunities through available resources. Kuratko & Hodgetts (2007) states that Entrepreneurs identify opportunities where others see obstacles and confusion, are meticulous, adept at weighing chances, plan, manage and take on risks while being innovative, profit and growth oriented.

ENTREPRENEURSHIP According to Hisrich & Peter (1998), Entrepreneurship means a dynamic process to create wealth, taking on capital risk, time & career commitment. They also invent something new via taking financial, psychological and social risks and acquire profits, personal satisfaction and freedom. Attributes of entrepreneurship according to Kao, 1991, are:

1. people with commitment, determination, & strong-willed. 2. people who are success & Growth oriented. 3. They are Opportunity & Objective oriented. 4. They have initiative & are responsible. 5. They are continuously making decisions.

6. They are realistic and not day dreaming. 7. They search & use feedback to decide wisely.. 8. Internal Locust of control. 9. They take on calculated risks to the minimum. 10. They are less motivated by power & status.

11. They have integrity & trustworthiness. ISLAMIC PERSPECTIVE According to Islamic view via research done by Mohd Salleh et al., 2005, the attributes of entrepreneurship are: 1. High needs & dedication.

2. Right intentions. This suggest positive reasons like financial independence and doing a service to the society. 3. Knowledgeable & Skillful in Business. The Prophet enjoins muslims to be expert in their own area. 4. Responsible to All. The prophet enjoins trading justfully and legally. 5. Prudent & Frugal in using resources. Wastage in Islam is forbidden.

6. Skilled at making decisions. 7. Future focused. 8. Skilled at communication. 9. Quality conscious. 10. Abstain from illegal activities.

11. Avoid excessive debts. 12. Careful & Self-checking. Look at ones own fault before pinting fingers at others. 13. Thankful to Allah for success. 14. Not spendtrift and Greedy. Not spending unnecessarily with greed. 15. Always pays debts. Creditors need fast money to do their business.

DEVELOPMENT OF ENTREPRENEURSHIP

The development of entreprenerurship in Malaysia started with the Malaccan Sultanate in early 14th century. When the British conquered Malaya they introduced the governing system of Divide & Rule, whereby the Malays are made to be Administrators & Farmers, the Chinese are led to be miners & business people whereas the Indians are relegated to the Plantations sector.

After Independence day, 31st August 1957, the government under the present leadership, introduced the New Economic Policy. (1971-1990), the National Development Policy. (1990-2000) & Vision 2020. (Towards a developed nation and ethnically integrated Malaysian society.) In 1995 there was established the Ministry of Entrepreneurial Development to control & promote development of entrepreneurship. Further to that, in 2005, the above ministry underwent a name change to Ministry of Malaysian Entrepreneur development and Cooperation.

SELF-COMPETENCY ANALYSIS Before embarking on setting up a business, would be entrepreneurs should have attributes like: Initiative:

 Taking action without being forced to. They need to act according to opportunities available. Endeavour to expand a new business. There is the need to grow steadily. Viewing & Grabbing Opportunities: View, search and seize opportunities. If they are slow it may be too late.

 Creative & able to seize opportunities. Creativity sets them apart from the competitors positively. Improve business performance. There is a need to continuously improve on present services rendered. Steadfast:

 Overcome obstacles toward achieving objectives. Creatively finding solutions to any roadblocks to success. Undying effort to solve problems. Possibility of getting expert help in finding solutions. Strong-willed and determination from self-confidence, perseverance, vigilance and patience. Rome was not built within a day so above attributes come a long way towards attaining set objectives.

Information seeking: Ability to seek, use info & make decisions from feedback. Using expert help if internal staff do not have expertise. Market research and evaluate them. Primary information need to be researched well.

Networking for new information as more heads are better than one. Widen contacts circles. Evaluate all data before making decisions. Search for alternative solutions and then decide on which one is the optimum decision. Focused on Quality Work: Customers expect quality to be improved upon continuously.

Desire to create products/services of high quality. Make benchmarking to stay ahead of competitors or keeping abreast is the least acceptable standards. Maintain quality operations following ISO standards representing internationally accepted standards of excellence..

Commitment to Agreements:

 Focused & fully sacrifices on business time and attention wise. Responsible to customers & Staff. Must have integrity in doing what is promised to them. Customer satisfaction oriented. Customers are always right in making them satisfied so that they will come again.

 Establish confidence of customers on the company. Do what it takes to please them. Promise of quality, fast delivery, acceptable pricing & taking actions on complaints. Deliver all these promises and timely. Efficiency-focused which means keeping costs down and prices down.: Operations based on speed & low cost. Fast delivery and maintain low costs.

 Using latest mgt techniques.to manage efficiently. Innovative action based on cost & profits. Lower costs and higher profits results. Technology, expertise, efficiency and latest information orientations.

Systematic Planning:

All steps and stages planned and simplified to the smallest detail if possible.. Overcoming expected problems and document them for easy trouble shooting.. Evaluate & Making decisions based on alternative solutions. Achievement of objectives via logical and systematic approaches. Doing operations logically and systematically renders lower costs and higher profits.

Solving Problems:

Seek & implement strategies to achieve objectives. Finding ways and means to solve problems and then implement them efficiently Solving problems innovatively. Use your own or staffs creativity and innovation to solve problems. Reward their efforts.

Self-Confidence:

Confidence in ability and self- efficiency. Stay alert, capable and be efficient. Gather & use knowledge & experience outside where expertise is nonexisting. Do not fear failing. However, calculate risks efficiently.

 Iron-willed:

Follow change and progress. Follow the market le4ader or become the market leader via creativity and innovation or first mover advantage.

Able to face opposing forces on actions. Exhibit firmness in getting debtors to repay loans, lazy employees to work and face uncertain business environment.

USING POWER STRATEGIES Legitimate power --Influence based on power to instruct others.

Punishment Power Influence based on power to punish others. Reward Power Influence based on power to reward others like bonus, increment, etc. Expert Power Influence based on power of knowing what to do in areas where others do not have the expertise.

Referent Power --- Influence based on power hold on information flowing through the person.

ENTREPRENEURIAL ETHICS Entrepreneurship in the Eyes of Islam: People do Manufacturing/Service Business to seek for legal providence.

People in manufacturing, distribution, agriculture and services sector hold special positions in Islam. Entrepreneurs hold a High Status (Prophets example as a businessman with high trustworthiness and integrity. Nine out of ten divine providence comes from business & business is seen as fardhu kifayah which means that at least one muslim must undertake to do business in the community otherwise the whole community will get the blame.

Warning Against Hoarding: Allah SWT: Those that Allah has given providence to them must not be stingy and feel that being stingy is good for them. Nay! Tis dangerous for them, their property so hoarded will be burdened on their necks on doomsday. Allah Lord of the heavens knows all that you do. (Ali-Imran:180). Destruction of Over-supplies:

Do not waste and destroy things that are in abundance just because you would make losses due to low prices. Business involving riba (interests): Says Allah SWT: Allah allows buying & selling & prohibits interests. (AlBaqarah:275). Buying and selling is allowed but usury is disallowed as a poor person has to pay interest on loans borrowed whereas in Islam loans are paid at 100% loan taken and not at 110% etc.

Workers Recruitment Practice: The Best management practices are based on being fair & responsible. Fair to workers involve catering to their welfare, wages & a comfortable workplace. Environmental Control & Care:

Social Responsibility & Green Environment Focused Besides Profit Maximization. Nature is to be preserved and not plundered and destroyed by mankind. Allah SWT: There are visible destructions on land & seas due to mans handiwork because God wants them to feel part of what they have done so that they will return. (Ar-Rum:41) Return here means to return to Allahs covenants and laws.

CREATIVITY & INNOVATION. Meaning of creativity: According to Schemerhorn, Hunt & Osborn (2003) Creativity is a unique development & answer/response to expected problems. Meaning of innovation:

According to Kinicki & Williams (2003) Innovation is an approach towards creating a new product, process or service in an improved manner & not resting on laurels.

Creative Process:

According to Kuratko & Hodgetts (2004) there are 4 stages to the creative process.: 1. Assimilation of knowledge via readings, discussions, seminars, workshops to create new products/services. 2. Incubator:

Does not care where the source of ideas originates as development of creative ideas is very vital. They may arise from competitors or customers as well as staff. 3. Idea: Acquired ideas unplanned for during lunch/dinner, travelling etc. Anywhere anytime we can gather ideas. 4. Assessment & implementation:

Transform ideas into reality finally & without doubt by first evaluating them thoroughly. Importance of Developing Creative Ideas: Use thinking skills innovatively & exploit ideas to develop concrete business planning.

Viewing the environment in a topsy turvy way & approach problems as realised business opportunities. Attributes of Creative Individuals: 1. Modest & Proud of oneself simultaneously. Modest for creating something new but proud for success. 2. Work committed and objective oriented. Fully focused on work with objective set.

3. Dare to try new ideas. Challenge oneself to researching and trying new ideas. 4. Open to positive criticism. Mind is set to welcome constructive criticism. 5. Disciplined & Responsible. There is focus and dedication in the work and responsibility taken and accepted. 6. Good self-control like growing gradually but not too fast too soon. 7. Rational, objective oriented & not hasty. Take time to decide.

8. Take calculated/determined risks. Cautious in decision makings. Techniques of generating creative & innovative ideas: Proliferation of ideas via discussions with workers.

1. The more ideas the better. 2. Accept all ideas even if ideas seem illogical.

3. Use other groups ideas to add inputs. 4. Criticisms or evaluations are not allowed. Forced Analogy. Use objects or pictures to generate ideas & see its forced relatedness. Implementation (Do it):

Complex problems are simplified and broken down into smaller pieces. Next generate as many ideas possible whether good or bad. Choose the best alternative as a business strategy. Mind Map: Technique using pictures or words to develop opinions. The more ideas acquired the better the result. Good for new product development.

Nominal Grouping: Face to face group discussion to solve problems. Each member states ideas & discuss steps to achieve explanations & evaluations. Vote secretly to choose the best idea.

Other techniques:

Listing attributes technique ---List attributes in detail & adjust based on costs, function and service/safety. Expiring date technique --- forcing members to generate ideas within specific time. Association technique --- mental relation between two objects/ideas. Two words technique --- listing alternative phrases for each word.

Sensory Technique --- using sensitive senses to create cooperation towards creativity based on environment. Technique to the Sun --- improving products ad solving ideas involving the sun as a power source. Image stimulation Technique --- focused on using imagination via sources of pictures.

Contra product Technique --- using adverbs and antonyms to establish alternatives. Topsy turvy Technique ---- using old ideas and generating new opposite ones. Checklist Technique ---- using list of key words and combining them with provocative questions.

Types Of Innovation:

1. Invention New/original product, service or process. Original and untested. 2. Expansion Addition to existing products, services or processes. 3. Duplication Cloning with added functions to existing products, services or processes. 4. Integration Combination of different parts to develop a product/application based on existing ones.

Obstacles/hindrances to Creativity & Innovativeness: 1. Other Organisations do not encourage innovations or stop people trying new ones. 2. Limited resources do not allow creativity & innovations. 3. Management obstructs creativity especially among their staff.

4. Afraid to try. What if I fail? 5. Fear of making mistakes. Fear of repercussions on making mistakes. 6. Wrong or erroneous motivation like motivating staff to compete in wrong arena. 7. Fear of Failure. The failure stigma is strong. 8. Lack of Confidence. No trust in ones capability.

Creativive & Innovative Strategies: 1. Determine ability & self-competency. See what you are good at. 2. Change perception from viewing things as problems to optimum opportunities. 3. Reward cultural change towards creativity & innovativeness. 4. Willing to accept failure while attempting to improve company performance.

BUSINESS OPORTUNITIES Definition Of Opportunity: New ideas generated via innovative process by establishing a new business, developing new products or services.( Barjoyai Bardai, 2000) Situations Contributing To Business Opportunities:

1. Customers requiring new products/services solving their problems or needs. 2. Existing products/services not able to solve problems or fulfill their needs. Solution: Identify Strengths, Minimising weaknesses, using opportunities & lessening threats.

Process Of Identifying, Evaluating & Choosing Opportunities:

Analyse environment & market with understanding of customer needs. Evaluating of self-competency, societal needs & analyse business ideas. Choose the business opportunities & set up a business structure.

Environmental & Market Factors:

1. Demographic Change age, sex, income, education, family members count, etc. 2. Psychographic Change taste, status & ego. 3. Import & export data regarding demand & supply of products/services in market & identifying opportunities. 4. Provision of local & technological facilities. Available or not and to what extent.

5. Relationship between industries. If they support each other well then its good. 6. Private & govt. projects. If they are many then its good for business. 7. Laws & procedures of local govt. are key contributors to business and investments. 8. Social responsibilities & problems increasing jobs & eliminating crime rates. 9. Info Technology & Communication more ideas and feedback.

10. Globalisation a pro-active catalyst but may have stiff competition. 11. E-Commerce important, vital & practical providing ease of doing business. Evaluation of Match between self & business: Experience is a plus factor. Knowledge in particular business area.

Expertise need to be expert to be successful. Financeeasy availability of capital. Interest must be interested in the business. Networking --- many contacts locally and internationally.

Evaluating Match of Business with Society:

Values of people for family, love and respect, etc. Norms --- what is generally accepted by the society. Culture what traditions, customs practiced by certain groups of people.

Evaluating Match of Self with Environment: Laws --- legal business only.

Level of Competition --- stay away from an industry with too stiff competition. Capital requirements.--- easy finance facilities. Risks --- looking at calculated risks.

Based on all the above factors conceive a concrete idea, choose a business & develop a business plan and finally execute the plans successfully.

TECHNIQUES TO IDENTIFY REQUIRED RESOURCES 5W1H TECHNIQUE.(What, Which, Where, When, Who, How) What are resources required, which resources are vital and supportive, when to acquire such resources, who are the suppliers involved and how to acquire it like renting, buying, joint venturing, leasing, etc.

1. Business Capital:

In the form of finance, workforce, raw materials and equipments. How much capital required to start a business? What other supporting capital required? Maybe working capital etc. Who is going to contribute to initial operation capital? Owner 50% others 50%?

2. Product or Service.

Products offered for sale according to categories, types and price list. Source of supplies acquired? Via yellow pages, trade journals, networking, etc. Amount of stock required for initial operations? Just in time stock management. The uniqueness of products customers go for? Differentiate your products. Agreements to be concluded? Conclude legal agreements.

4. Business Facilities: Layout facilities, basic facilities, basic equipment for initial starting of business operations and basic documents required. List and decide. Essential facilities required to operate business? What are other facilities required? Agenda, objective and timing.

Conducive environment. Elected representative has authority to decide. Internal negotiations (mgt vs staff) or external negotiations (banker, supplier, investors, public agencies and customers) Where can you secure these facilities from?

What are the costs involved? How to arrange and manage the facilities and equipments?

5. Negotiation Skills: Purchasing and selling requires negotiation process involving preparations, planning, strategies, tactics and communication skills to effect a two way agreement.

Must at least be involving at least two parties. Must have agenda, objective and timing. Conducive environment. Air-conditioned room, no disturbance, comfortable etc. Elected representative has authority to decide. Otherwise time is wasted.

Internal negotiations (mgt vs staff) or external negotiations (banker, supplier, investors, public agencies and customers)

6. Preparations of Negotiation. Focus on non-verbal communication: Dressing, appearance and style. Wear white or light clothings, stay trimmed and proper.

Way of walking. Confident air and style of walking. Gestures. Avoid excessive fidgeting, scratching etc. Body language, way you seat yourself, and posture. Proper posture and manner of seating. Eye contact. Do not look down but straight and but gntly into the eyes of the other party/ies.

Body odour. Be careful not to ooze bad odour. Exhibit positive first impressions, cooperate, avoid threatening situations and secure important information on the other side:

Look at others annual growth, sale trend, installment and subcontract costs. Secure evidence of business documents like sales invoices and inventories so that their business is legitimate.

7. Negotiation process: Be ready to compromise. Say maybe 10 -20 % discounts allowed. Relax and do not over react. Sell yourself and your objectives. Convince the other party on your objectives. Present yourself & secure feedback.

Take your time/Dont rush decisions. Remember the names of members of opposite party before & during negotiations. Do not compromise on your objectives. Say stick to 50% discounts. Use your strengths wisely. Show your expertise.

Be confident & fair in dealings. End negotiations positively and offer words of appreciation. Thank them for their time, etc. Negotiation Strategies:

Prepare a complete negotiation agenda.

Provide early concession for satisfaction of other party. Give a little to gain more later. For important issues, gather as much info as possible for evaluation. Be prepared to rediscuss issues already closed should the negotiation proceed the following days. Negotiation Tactics:

Politeness counts towards effectiveness. Be polite. Negotiate with authorised personnel/decision makers. You introduce the issues according to a convenient time. If extra time is required fix a time & place. If not in agreement, avoid negative attitudes.

Pause & discuss with your partner to diffuse any explosive situation. Postpone sensitive issues. Be silent if you get an unacceptable offer. Accept small concessions without losing sight of the main bargaining items.

Use positive/negative tactics partner with negative attitude allowing the other partner to negotiate closely with the other party.

11. Communication Skills: Process involving at least two way sending and receiving of message (verbal, written and non-verbal) with mutual understanding.(congruence of the minds) Forms of communication:

1. Verbal- meetings, telephone, intercom, face-to-face, seminar and conference. 2. Written- memo, report, electronic mail, notice, circulars, minutes, bulletin, internal paper, formal letter, fax, ads, brochures, invitation, telegrams and telex. Criteria of Media Choice depends on: Purpose- whether its for instructions, information or offer.

Receiver whether there are few, many people involved, status and job positions. Time- whether instant or time-zone involved? Distance locality, state, national or international. Costs Justification required if too high. Secrecy Guaranteed strictly.private and confidential (SPC).

Safety- send registered letter, via courier, personally? Source facility used or staff may distort communication if not expert.

BUSINESS PLAN Definition Of BP: A written document to explain the business that is to be runned comprehensively covering analysis, forecast and expectations plus implementation of business strategy.

Importance Of BP: 1. To provide others an opportunity to meticulously, critically and objectively evaluate ideas and business projects.

2. To display the viability of a planned project.

3. Assist someone to assess requirements of business necessities so that distribution of resources could be done effectively. 4. To provide someone with the realisation that there could be future problems associated with running the project. Format BP: 1. Title Of Front Page:

Title of BP. Name & Address of Business. Name of Writer. Date Prepared.

2. Table Of Contents:

Major Titles according to page.

3. Executive Summary: To explain briefly the main elements of business as a separate document.

4. Structure of BP: Introduction

Purpose Business Background. Ownership background. Marketing (Method & strategy) Finance (Capital & cost)

Conclusion & justification.

5. Appendices. Checklist of BP Format: Introduction 1. Name of Business?

2. BP addressed to whom? 3. Sole-Proprietorship or Partnership? 4. Name, address & telephone number of main prsonnel to contact?

Purpose:

1. JTotal costs of project implementation and total financing required? 2. Usage of Financing? Particular sections? Repayments? Background Of Business: 1. Type of business: Merchandising, manufacturing or Services?

2. New business or expansion? 3. Form of Business? Why you chose it? 4. Unique characteristics of products/services? 5. Strengths & Weaknesses of Company? 6. How to overcome weaknesses?

7. Why project is profitable?

Industry information: 1. Expansion, recession or Stagnant? 2. Industry position economy wise?

3. Any credit facility? 4. Terms of Credit? Irrevocable credit. Short or long-term? Marketing: Product/Service Information. 1. Product/Service offered?

2. Characteristics of product/service? Marketing information: 1. Identify Target Market? 2. Market Size? 3. Expected Market Share?

4. Way to penetrate and maintain market. 5. How to expand market? 6. Expanding market, increase in market share? Price 1. Price of Product/service?

2. Price Determination? 3. Competitive price? 4. Profit potential? 5. Customer accepts price? Promotion

1. Promotion method? 2. Why above method chosen? 3. Method suitable to product/service? 4. Promotion allocation? 5. Method of determining effectiveness of promotion?

Distribution? 1. Channel usage? 2. How is delivery effected? 3. Return Policy? 4. Customer Relationship Management? Maintain customers satisfaction.

Competition 1. Location of competitors? 2. Strengths & Weaknesses of Competitors? 3. Similarity or difference of products compared to competitors? 4. Method of operation better than competitors?

5. Scanning & Monitoring competitive climate? Stay in business where not many competitors. Management 1. Experience in business? 2. Nature of tasks to be accomplished? Like selling, production, etc. 3. Who are to carry out tasks? Recruit them.

4. Company decision makers? Partners? 5. How are business plans managed? 6. Type of personnel required? 7. Expertise/qualifications required? 8. Personnel working full-time or part-time?

9. Salary received by personnel? 10. Training & Costs? 11. Personnel policies?

Operations 1. Production process involved? 2. Process requires facilities? 3. Machines & Equipments required? 4. Level of inventory?

5. Cost of holding inventory? Finance 1. Costs involved in project? 2. Source of finance to be used? 3. Investment of Owner?

4. Distribution of Finance?

Skills For Project Management Management: Process of administration, and coordination of resources effectively & Efficiently toward organisational objectives.

 Organisation involves group of individuals cooperating to achieve mutual objectives. Four management Functions: Planning, organising, Leading & Control.

PLANNING

 Strategic involving long-term planning. Operational is day to- day planning. Fixed. The same annually but may change annually. Once Off. Only once and then new planning. MBO. Involves planning of all division, department and section leaders.

 Contigency. Alternative plans like plan B. Organising Who , What and How? Job Design . The pattern of jobs assigned. Job Description. List of duties.

Job Enlargement. Giving more assignments which are related. Job Enrichment. Giving more in-depth assignments and key ones. Job Rotation. Do different jobs in the department or other departments. Command chain involves who controls whom and what, where etc, span of control is extent of power, Staff Authority only has advisory powers in other departments & delegation is giving power and responsibility to do your job..

Organisational Structure Function Based like production, finance etc. Division Based have two or more departments. Matrics combine function and project base departments. Chain involves many branches around the state or country and /or internationally.

Leading Attributes of Leaders: Desire Emotional stability

Honesty/Integrity Strongly Motivated Cognitive Ability with brains to think solutions. Confident. Firm in his decision. Knowledgeable

CONTROL Strategic which is long-term. Tactical suggest daily control like supervisors have. Operation control usually controlled electronically like thermometer heat gauge and sensors.

BASICS OF MARKETING

Government sells and buys. Seller sells and buys. Consumer purchases only. Industry may also use our raw material which we produce like rubber to make tyres in cars.

MARKET SIZE

Alor Gajah, has 5000 households, one household eats 4 chickens a month & price is RM10 per chicken so market size is = 5000 x RM40 = RM200,000 Monthly & yearly RM2.4 million.

Market Segmentation Geographic like Penang, northern zone, eastern zone etc.

Demographic like job, income, position, age, sex etc. Psychographic like taste, pattern, status, etc.

SWOT Analysis Name of competitors & strengths and weaknesses. Market Share.How much compared to you in %.

Sales Forecast.

MARKETING STRATEGY Product. Differentiate it. Price.Lowest price possible. Promotion to entice purchases.

Place to get products within easy reach and convenience.

FINANCE Operational BudgetCosts opf each operations. Cash Budget involving cash only. Capital Budget. Use financial tools to calculate project feasibility.

Proforma Income Statement: Sales Forecast Profit Target Balance Sheet

Return on Capital Analysis:

Breakeven point: Fixed Cost/Selling price Variable Cost. If you add target profit to the above fixed cost you will know how much to sell to get desired profit.