ENTREPRENURSHIP

• Enterpreneurs are the DRIVING FORCE behind the business organization
• decide WHAT,HOW,BY WHOM and TO WHOM products and services should be produced
• An entrepreneur is someone who starts a business with the intention of making profit and assumes risk of losing all his/her resources/assets/possessions
• entrepreneurs mobilise the factors of production [land,labour,capital]
• Entrepreneurs are described as people who:

  • are creative
  • innovative
  • take financial risks
  • able to identify opportunities
  • find resources and create opportunities for financial growth
  • bring change,growth and wealth in an economy
• ROLE OF ENTREPRENEURS:

  • satisfy wants and needs by mobilising the factors of production [labour, land and capital]
  • create wealth for society [in the form of jobs] and themselves[profit]
• SMALL-BUSINESS OWNERS:

  • satisfied with some autonomoy[self-independence]
  • earn a reasonable income
  • no intention of growing and developing business
• 3 reasons WHY ENTREPRENEURS DO WHAT THEY DO:

  1. the individual's traits and characteristics
  2. skills and industry experience
  3. the opportunities that OUTSOURCING has to offer
• Outsourcing

  • grow and scale your business
  • obtain goods and services from companies or individuals OUTSIDE the business
  • disadvantage: lack of work quality and control
  • COSTS: businesses normally outsource because the costs are LOW
  • CONFIDENTIALITY: there is a RISK of confidentiality
• Insourcing

  • delegation of work to the internal employees
  • internal employees can be promoted, and vacancy can be filled
  • Disadvantages: time consuming and huge investment on building team
  • COSTS: high
  • CONFIDENTIALITY: no risk of confidentiality
• Traits and characteristics of entrepreneurs:

  • achievement motivation
  • risk-taking
  • internal locus of control
  • innovation and creativity
• Achievement motivation:

  • ambition and competitiveness
  • intense, prolonged and repeated effort to accomplish a difficult task/challenge
  • success drive
• Internal locus of control:

  • indicates a person's need to be in charge of their destiny
  • believe they can control their life
  • feeling like you have the power to determine your future
  • hard workers
  • react well to what happens around them
• Innovation and Creativity:

  • identifying opportunities
  • new ideas
  • creative ways to reintroduce what already exists
  • improves a business's products and services
• Risk-taking:

  • successful entrepreneurs take calculated risks
  • avoid opportunities where there is a high probability of a loss
  • reduce their exposure to financial loss
  • limit the time of conceptualising an idea and availability of a product or service
• SKILLS AND INDUSTRY EXPERIENCE:

  • education
  • training and
  • experience will help you identify an opportunity, establish and manage a business
• • Necessity-based entrepreneur: doesn't succeed to well. Unemployed and has nothing better to do. Just to survive
  • Opportunity-based early stage entrepreneur: sees an opportunity. has the drive. has a job, just seeking better
• Services mainly outsourced [in-order]:

  1. architectural designs
  2. waste and trash removal
  3. housekeeping
  4. landscape maintenance
  5. property appraisals
  6. major moves
  7. hazardous-materials removal
  8. major redesigns
  9. furniture moves
  10. food services
• SMALL BUSINESSES

  • Defining criteria: sales volume, number of employees, market share and value of assets
  • privately owned, corporations, partnerships or sole proprietorships
  • ROLE: AID big businesses, Job creation, Innovation and Production of goods and services
• THE ENTREPRENEURIAL PROCESS:

  1. possession of characteristics, abilities and skills
  2. access to resources
  3. opportunities and ideas
  4. feasibility study
  5. compilation of business plan
  6. launch and manage new business
• Skills required in entrepreneurship:

  1. strategy skills
  2. marketing skills
  3. planning skills
  4. project management skills
  5. financial skills
  6. human relations skills
• STRATEGY SKILLS

  • ability to consider the business as a whole
  • understand how it fits into its market place
• PLANNING SKILLS

  • ability to consider what the future offers
  • how this will impact the business and
  • what resources and actions are needed
• MARKETING SKILLS

  • to determine and satisfy customers needs and wants
  • and understand why they find them attractive
  • pricing, promotion and distribution of products and services
• FINANCIAL SKILLS

  • ability to manage money
  • monitor cash flow and track expenditure
  • assess investments in terms of potential and their risks
• PROJECT MANGEMENT SKILLS

  • ability to manage projects
  • to ensure necessary resources are in the right place, time, quantity and quality
• HUMAN RELATIONS SKILLS

  • ability to deal and work with people
  • communication skills, leadership skills, and motivational skills
• RESOURCES NEEDED TO START A BUSINESS:

  1. financial resources
  2. operating/physical resources
  3. human resources
• • THIRD PROCESS OF PROJECT MANAGEMENT IS THE ACQUISTION OF RESOURCES
  • acquisition of resources implies a risk for the business
  • especially if the predicted profits and return on investments do not materialise
• •Among the new services that have sprung up in the wake of privatisation of government organisations are mail and courier services
• New venture ideas:

  • look at trends: economic trends, social trends and political trends
  • look at growth industries: education, healthcare, privatisation of government and semi-government services
• New venture opportunities: the fundamental requirements for a good investment opportunity are:

  • growth potential
  • should be rewarding for the entrepreneur and/or investor
  • right timing of the opportunity to be established
  • a clearly defined market for the product
• most successful entrepreneurs and investors are MARKET-FOCUSED
• advantages of buying an existing business:

  • customers will be familiar with the location
  • employees come with the business
  • customer base has already been established
  • inventory and equipment will be in place


  disadvantages of buying an existing business:

  • location of the business may be undesirable or have potential of being undesirable
  • employees are inherited and not chosen
  • it will be difficult to change the image of the business
  • inventory and equipment may be obsolete
• Good opportunities are those that are

  • well-timed
  • satisfy market-need
  • reward the entrepreneur
• FRANCHISING

  • opportunity to start a business that has already been proven in the market
  • FRANCHISOR: sells the business. Entrepreneur
  • FRANCHISEE: buys the business. Intrapreneur
  • franchisor gives franchisee the right to operate a business, using franchise name, products and systems
• Corporate entrepreneurship [intrapreneurship] is the process of creating new business opportunities within an existing business
• Corporate entrepreneurship [intrapreneurship]:

  • corporation introduces new and diversified products and services
  • done through internal processes and corporation's resources
  • enables investment and profits through establishment of a business within a business
• The feasibility of the idea or opportunity:

  • entrepreneurs need to conduct a feasibility study/analysis to detect whether their idea or opportunity will survive or not
  • after feasibility has been established, a business plan can be drawn-up