Entrepreneurship and Management

• Entrepreneurs


  A very strong driving force in an economy, providing products and services as well as creating employment
• Many entrepreneurs are not there by choice, being forced into starting their own businesses due to unemployment or other circumstances
• Entrepreneurs


  • Need strong managerial skills in order to make a success of running their own businesses
  • Need good leadership skills in terms of being able to work with and motivate teams to achieve their goals
• Entrepreneurship vs Management


  • Similarities: An Entrepreneur must be a manager and leader when managing his/her own business
  • An Entrepreneur must manage the day-to-day duties, resources (financial, physical and human)
• Entrepreneurship vs Management


  Differences: Entrepreneur - To build his/her own business, to gain personal gratification and to be successful

  Manager - Employment – as he/she works for a business that already exists. Manager works to achieve the objectives of a business and to ensure the success of someone else's business
• Entrepreneurship vs Management


  Differences: Entrepreneur - Owner of business

  Manager - Employee of business
• Entrepreneurship vs Management


  Differences: Entrepreneur - Assumes (takes) all the risk

  Manager - Does not bear any financial risk, only job security
• Entrepreneurship vs Management


  Differences: Entrepreneur - Profit

  Manager - Salary
• Entrepreneurship vs Management


  Differences: Entrepreneur - Innovate through creativity and problem-solving

  Manager - Involved in the strategy of plans
• Entrepreneur


  Takes risks and starts their own business
• Intrapreneur


  Has similar characteristics to entrepreneurs, the only difference is that they do not have the risk-taking factor (they do not want to start their own businesses and risk losing their capital or other assets)

  They are employees of businesses who have a secure salary, and they create new ideas and strategies to improve the workplace (products and services)
• Types of Entrepreneurs


  • Techno-entrepreneur - Look for ways to develop technology or who use technology to grow their business

  Social-entrepreneur - Start ventures to solve social problems in society (NGOs)

  Tourism Entrepreneur - Identifies gaps in the tourism industry (sight-seeing tours)

  Enviro-entrepreneur - Create business ventures to solve environmental problems (solar panels)
• The Entrepreneurial Process


  1. Environmental Scanning (Macro and market)

  2. Market research (target market; research instrument)

  3. Location factors

  4. Competitors

  5. SWOT - analysis

  6. Financial

  7. Physical

  8. Human

  9. Full description of business

  10. Investment/funding

  11. Timelines, GANTT Charts, Work Breakdown Structures (WBS)

  12. Creating the right structures to manage the business effectively and efficiently (chain of command)
• Producing a detailed and viable business plan which can be implemented
• Drawing up a Business Plan without implementing it is like planning a holiday that you never go on!
• Timelines


  A linear scale showing a series of tasks that must be completed in a specific order in a projected timeframe

  Indicates the projected due date of completion for each short-term objective

  It does not indicate the duration of a project

  Divided into equal spaces that represent weeks or months
• Work Breakdown Structure (WBS)


  A tree-type planning tool where a specific project is divided into tasks and sub-tasks

  WHAT needs to be done

  Example: Individuals involved in registering the business and finding a suitable location
• GANTT Chart


  Levels of Management and their functions (Organisational structure/Organogram)

  The levels of management is a chain of command

  The top level of management has a certain amount of authority & status enjoyed by any managerial position

  The number of levels in management increases when the size of the business and work force increases and vice versa
• General Management


  Developing a strategic plan for a business in order to improve the overall performance and profitability

  The umbrella function also leads, controls and organizes all the other functions through the management tasks
• Planning


  Looking at the future and deciding proactively how to tackle certain issues to achieve success

  Contingency plans NB

  Organising - Combining the factors of production in such a way that the objectives of the business are met

  Leading - Plans are implemented to help employees understand what they have to do and how they have to do it, while also encouraging the employees to perform accordingly

  Controlling - Actual results achieved are compared to the standards that were set
• Communication


  The transfer of information between people. Proper communication is needed between management and employees
• Coordination


  Management must be able to coordinate a variety of different perceptions, opinions, interests and attitudes of all stakeholders. All stakeholders must contribute towards the same objective (Coordinate tangible and intangible resources)
• Decision-making


  To solve problems. Before making a decision, all possible and relevant facts must be considered
• Delegate


  Meaningful distribution of work to reduce the burden on management. Allocation of duties, authority and responsibilities
• Discipline


  To improve future behaviour. Everybody knows what is regarded as misconduct and what the consequences of actions will be
• Motivation


  To encourage employees to perform to the best of their abilities. Monetary reward or promotion
• Planning


  Looking at the future and deciding proactively how to tackle certain issues to achieve success

  Action plans

  Contingency plans NB

  PLAN - WHY must the plan be executed?

  ACTION - WHAT activities are required

  WHERE must the planned activities take place

  WHEN will the activities commence

  WHO will partake in these activities

  HOW is the plan executed
• Planning


  Should be aimed at the future

  Future is anticipated by identifying and bridging the gap

  Formulation of the business's vision, mission, objectives, policies

  Plan how and where to obtain the resources needed to achieve the objectives
• Planning


  Should follow a funnel approach

  Business is one of the role-players within the micro and market environment. The business might be influenced by various factors

  Management should constantly be involved in the process of environmental scanning
• Planning


  Plans have to be flexible

  The business needs to be able to adapt to internal and external pressures

  Flexibility is limited to the resources the business has at its disposal

  Assess potential benefits vs. costs involved before making significant changes
• Planning


  Planning needs to take place at all levels in the business

  Top-level should communicate the long-term direction of the business to ensure understanding and buy-in at lower levels

  Each manager in every level should receive guidance and support from his/her superior to ensure plans are realistic and economical
• Planning Process


  Understanding the problem

  Get all the relevant information

  Analyse the information and look at all the eventualities

  Define the plan of action

  Define alternative plans (contingency plans)

  Implement the plan carefully

  Follow up to ensure the plan is successful
• Planning Policy


  Every business needs a planning policy

  The plan should be drawn up with the aim of achieving the goals and objectives of the business

  All plans must be endorsed (approved) by the senior manager of the business

  The planning policy should be flexible and adaptable (adjustable)
• Organising


  Focusing all resources and activities towards achieving objectives

  Combining the factors of production in such a way that the objectives of the business are met

  Identifying activities that should be done, grouping these activities and distributing them to teams or individuals
• Organising Concepts


  Range of control - the number of workers under the supervision of someone who is in a managerial position

  Delegation - transfer of authority, e.g. when the manager gives tasks to workers at lower levels

  Authority - the right given to a person to make decisions and perform certain tasks

  Responsibility - the duty people have to carry out

  Accountability - the expectation of a worker to give reasons why decisions or actions were taken
• Organising Process


  Steps involved in organising
• Organisational Structures


  Line organisational structures - a simple structure of authority where every employee in the organisation is a sub-ordinate (report to) to ONE superior only

  Line and staff organisational structures - a combination of line and functional organisation. There is only one person giving orders. The advisors do not give orders, but only give advice

  Functional - has one main manager who communicates with each manager in charge of a department

  Project - employees from different departments are put together to form a team to carry out the project. This is often a temporary project structure

  Matrix - very similar to the project structure, except the employees don't move out of their departments for a project
• Organisational Structure


  Provides for communication structure

  Helps business to identify key internal stakeholders to which responsibilities are assigned
• Range of control


  The number of workers under the supervision of someone who is in a managerial position
• Delegation


  Transfer of authority, e.g. when the manager gives tasks to workers at lower levels