ENTREPRENEURSHIP

DR. JAVED QURESHI

What is an Entrepreneur?
O An entrepreneur is a person who undertakes to

do a job Richard Carleton (1755)The term entrepreneur is a French word derived from Entreprendre means to undertake O first coined by Richard Carleton. O An Entrepreneur is a person who organizes and manages a business undertaking, assuming the risk for the sake of profit. Any person (any age) who starts and operates a business is an entrepreneur

see problems as opportunities, then take action to identify the solutions to those problems and the customers who will pay to have those problems solved O In Malaysia the term usahawan is used for entrepreneur.
O Entrepreneurs

O Peter F Drucker : One who considers the

changes that take place in market as an opportunity to do business. Innovation is his tool. O Joseph Schwnpeter : Individuals who introduce something new in the market or economy. O New encyclopaedia: An individual who bears the risk of operating business in the face of uncertainty about the future conditions.

ENTREPRENEURSHIP
O Entrepreneurship

is a process through which individuals identify opportunities, allocate resources, and create value. This creation of value is often through the identification of unmet needs or through the identification of opportunities for change OR O Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence

Definition
O Entrepreneurship

involves not only the process that leads to the setting up of a business entity but also the expansion and development of an on going concern. The study of entrepreneurship is concerned with the entrepreneurial behavior, the dynamics of business set up and expansion and development

Pros of entrepreneurship
O Excitement: Due to its high capacity for risk, there O

is a lot of adventure. Rules and regulations: Work in a current job is difficult to do because of all the "red tape" and consistent administration approval needed. Originality: Some people feel that they can offer a new service/product that no one else has offered before. Competition: Employees feel they can offer their current company's product/service at a lesser expense to the public. Independence: Some people wish to be their own boss and make all the important decisions him/herself.

O Salary potential: Generally, people want to be

O O

paid for the amount of work they do in full; they do not want to be "short-changed. Flexibility: Entrepreneurs can schedule their work hours to spend quality time with family or any other reason. Rational salary: They are not being paid what they're worth and would rather work on their own and earn the money they should be earning for their efforts. Freedom: Entrepreneurs can work whenever they want, wherever they want, and however they want Personal satisfaction: being own boss, make your own decision

O Innovation: beneficial for society industry O O O O O O

and country Introduction of new product/ improved product Opportunity to tackle challenges Feeling of achievement and pride Potential for greater financial rewards Social status Family involvement

cons of entrepreneurship
O Salary: Starting your own business means that you

must be willing to give up the security of a regular paycheck. O Benefits: There will undoubtedly be fewer benefits, especially when considering that your business will be just starting off. O Work schedule: The work schedule of an entrepreneur is never predictable; an emergency can come up in a matter of a second and late hours will have to be put in. O Administration: All the decisions of the business must be made on your own; there is no one ranked higher than you on the chain of command in YOUR business.

O Incompetent staff: Often times, you will find

yourself working with an employee who "doesn't know the ropes" as well as you do due to lack of experience. O Procedures: Many times during your entrepreneurial life, you will find that many policies do not make sense, nor will they ever make sense. O Stress: financial pressure, time pressure, personal business life link, impact on family O Failure: a constant threat

What makes someone an entrepreneur

O Creativity: O Dedication O Determination O Flexibility O Leadership O Passion O Self confidence O Knowledge and experience

SWOT analysis
O Strength O Weakness O Opportunity O Threats

A SWOT analysis looks at your companys: O Strengths - to build on O Weaknesses to cover O Opportunities to capture O Threats to defend against O It aims to: O Reveal your competitive advantages O Analyse your prospects for sales and profitability O Prepare your company for problems O Allow for the development of contingency plans

O Useful for analyzing:

O The prospects of a new business and

enterprise O The current situation of existing business and enterprise

O Also known as situational analysis O Often recommended for companies as

regular practice: annual O Examines both internal and external factors

Internal and external factors

Opportunities Strengths weakness Threats

strength
A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of such strengths include: O strong brand names O good reputation among customers O cost advantages from proprietary know-how O exclusive access to high grade natural resources O favorable access to distribution networks

Weakness
Internal attributes that are harmful to the organization to achieving its objectives

O Lack of marketing expertise. O Undifferentiated products or services (i.e. in O O O O O O

relation to your competitors). Location of your business. Poor quality goods or services. Damaged reputation. Technology advancement require capital International opportunity: competition Lack of access to key distribution channels

PRIMEFACT checklist
O People O Reputation (brand name) O Intellectual property right O Market information O Ethos (culture or values) O Finances O Agility (change-ability) O Collaborators O Talents (skills)

Opportunities
External factors that help the organization to achieving its objectives

O an unfulfilled customer need O arrival of new technologies O loosening of regulations O removal of international trade barriers O Changes in government policies O Changes in social patterns, population profile,

life style changes O Local events

Threats
External factors that are harmful to the organization to achieving its objectives

O Failure to develop a strategic plan O Shifts in consumer tastes away from the firm's O O O O O O O

products Emergence of substitute products New regulations Increased trade barriers Poor financial control Expectation of partners Dispute in team Risk of losing entire investment.

ICEDRIPS analysis
O Innovation O Competition O Economics O Demographics O Regulations O Infrastructure O Partners O Social trends

SWOT .. conclusion
After completing your SWOT analysis, ask yourself these questions: 1. How can I use my strengths to enable me to take advantage of the opportunities I have identified? 2. How can I use these strengths to overcome the threats identified? 3. What do I need to do to overcome the identified weaknesses in order to take advantage of the opportunities? 4. How will I minimize my weaknesses to overcome the identified threats?

Acquiring finances and Resources

There are two major categories: O Debt O Equity
O Debt is actually money that is given to the business as a

loan and does not grant partnership in the business.

O Equity means ownership. Everyone who owns an equity

share of a company owns a part of the company. He/she can influence the decision making in the company Read more:

DEBT
O Commercial credit:
O Customers credit O Suppliers credit

O Banks O Non banks: provided by insurance companies O Bonds

O Convertible bonds O Permanent bonds

O Leasing

Equity resources
O Venture capitals O Personal savings O Friends and family members O Angels O Partners O Corporations O Public stock scale

Government support for entrepreneurs

O The government provides lots of support for

entrepreneurs who are wishing to set up their own business or who already have one. O The government provides grant to businesses that are located in areas that have low employment and very little growth. O Governments will prevent companies from abusing their power by taking action against monopolistic activities.

O The Malaysian government wanted to show its

O O O O O O

recognition of local SMEs and has created several initiatives over the years including: SME (small or medium sized enterprises) group Reductions in setup and operating fees SME Bank entrepreneurship division of MITI (Ministry of International Trade & Industry) Government grants: A helping hand Tax exemption