Upload
mohad758
View
246
Download
0
Embed Size (px)
Citation preview
8/19/2019 Chapter 1 - Foundation
1/75
ENTREPRENEURS
HIPB.com (Hons)
5th semesterHailey college of Commerce
Instructor :Touseef Ahmad
8/19/2019 Chapter 1 - Foundation
2/75
Chapter 1
The oundations of!ntrepreneurship
8/19/2019 Chapter 1 - Foundation
3/75
Chapter "utline
The #orld of entrepreneurs
$hat is entrepreneurship%
The &ene'ts of entrepreneurship The potential dra#&acs of !ntrepreneurship
ole of !ntrepreneurship in !conomic*e+elopment
The po#er of small &usiness Ten ,istaes of !ntrepreneurship
8/19/2019 Chapter 1 - Foundation
4/75
The $orld of the
!ntrepreneurIn the -../ entrepreneurs start &et#een 0
million and .5 million &usinesses a year2Appro3imately 14.5 of Americans are
acti+ely in+ol+ed in trying to start a ne#&usiness.
6 of entrepreneurs start 'rst time76 of Americans &elie+e in !ntrepreneurship*o#nsi8ing in all o+er the #orld (Increasing
-nemployment )
8/19/2019 Chapter 1 - Foundation
5/75
The 9lo&al !ntrepreneurship ,onitor (9!,)411 9lo&al eport 'nds an upsurge inentrepreneurship around the #orld ;entrepreneurs are no# num&ering near 44million in 5 countries
8/19/2019 Chapter 1 - Foundation
6/75
Ch. 1: The oundations of !ntrepreneurship
e or o e!ntrepreneur9lo&al !ntrepreneurship ,onitor (9!,) study
reports:,en are t#ice as liely to start a &usiness as
#omen.
,ost entrepreneurs turn to family mem&ers andfriends for capital.
!ntrepreneurs are most liely to launch&usinesses #hen they are
&et#een the ages of 5 and .
1 < >
8/19/2019 Chapter 1 - Foundation
7/75
e or o e!ntrepreneur
!+ery year -.. entrepreneurs launch 654/444ne# &usinesses.
!ntrepreneurial spirit < the most signi'cant
economic de+elopment in recent history.
Ch. 1: The oundations of !ntrepreneurship1 < 7
8/19/2019 Chapter 1 - Foundation
8/75
8/19/2019 Chapter 1 - Foundation
9/75Ch. 1: The oundations of !ntrepreneurship
8/19/2019 Chapter 1 - Foundation
10/75
8/19/2019 Chapter 1 - Foundation
11/75
What is Entrepreneurship?
The #ord @entrepreneur deri+esfrom the rench #ords entre/ meaning&et#een/ and prendre/ meaning @to
tae. The #ord #as originally usedto descri&e people #ho @tae on theris &et#een &uyers and sellers or
#ho @undertae a tas such asstarting a ne# +enture.
1
8/19/2019 Chapter 1 - Foundation
12/75
$hat is an
!ntrepreneur%"ne #ho creates a ne# &usiness in the face ofris and uncertainty for the purpose of
achie+ing pro't and gro#th &y identifyingopportunities and assem&ling the necessaryresources to capitali8e on them.
imply *e'ne:
rocess of creating something ne# andassuming the riss and re#ards.
o&ert *.Hisrich/ ,..eters *.A.hepherd
8/19/2019 Chapter 1 - Foundation
13/75
1
8/19/2019 Chapter 1 - Foundation
14/75
8/19/2019 Chapter 1 - Foundation
15/75
"ne #ho creates a ne# &usiness in the face ofris and uncertainty for the purpose of achie+ingpro't and gro#th &y identifying opportunities andassem&ling the necessary resources to capitali8e
on them. inding inno+ation and maret gaps for ne#
products and ser+ices.
!ntrepreneurship is a&out creativity. !ntrepreneursuse inno+ation and hard #or to o+ercome o&staclesto their success.
!ntrepreneurship is a&out fun. Dothing feels &etterthan focused e?ort and accomplishment.
Ch. 1: The oundations of !ntrepreneurship1 < 15
8/19/2019 Chapter 1 - Foundation
16/75
Introduction of a ne# product or ser+ice that is animpro+ement in the Euality of an e3isting product orser+ice.
Introduction of a ne# process or method thatincreases producti+ity.
The opening of a ne# maret/ particularly ane3port maret in a ne# territory.
The conEuest of a ne# source of supply ofra# materials/ half
8/19/2019 Chapter 1 - Foundation
17/75
Tom Fs decision in the late 1G>4s to create*ominos i88a &ased on home deli+ery and
e? Be8oss decision in 1GG5 to launchAma8on.com as a totally online &oostore aree3amples of inno+ati+e distri&ution strategiesthat re+olutioni8ed the maretplace.
8/19/2019 Chapter 1 - Foundation
18/75
!ntrepreneur is a person #ho starts anenterprise. The process of creation called
entrepreneurship. The entrepreneur is theactor and entrepreneurship is the act. Theoutcome of the actor and the act is called theenterprise. An enterprise is the &usiness
organi8ation that is formed and #hichpro+ides goods and ser+ices/ creates =o&s/contri&utes to national income/ e3ports ando+er all economic de+elopment.
8/19/2019 Chapter 1 - Foundation
19/75
To put it +ery simply an entrepreneur issomeone #ho percei+es opportunity/organi8es resources needed for e3ploitingthat opportunity and e3ploits it.
Computers/ mo&ile phones/ #ashingmachines/ AT,s/ Credit Cards/ Courierer+ice/ and eady to eat oods are alle3amples of entrepreneurial ideas that gotcon+erted into products or ser+ices.
8/19/2019 Chapter 1 - Foundation
20/75
Jou can also choose to &e lie ,r. atel ofDirma #ho #as a chemistKs assistance andhas a s. 544 crore company today. *id youno# that the original ,r.
Bata #as a co&&ler% And no# has stores inmore than 04 countries all o+er the #orld.
8/19/2019 Chapter 1 - Foundation
21/75
!ntrepreneur performs the function of ris anduncertainty &earing. !+ery decision pertaining tode+elopment of ne# products/ adapting ne#
technologies/ opening up ne# marets in+ol+es ris!ntrepreneurs see diseEuili&rium ; a gap &et#een the
#ants and needs of the customers and the productsand ser+ices that are currently a+aila&le in themarets. The entrepreneurs then &ring together the
factors of production necessary to produce/ o?er andsell desired products and ser+ices. They in+est and ristheir money ; and other peoples money ; to produceproducts andLor ser+ices that can &e sold at a pro't.
8/19/2019 Chapter 1 - Foundation
22/75
The tapal Story Transforming A Mision Into eality
8/19/2019 Chapter 1 - Foundation
23/75
Tapal Tea is &orn!sta&lished in 1G7 &y Adamali Tapaltarted &usiness due to maret opportunity
and potential gro#th rather than priore3perience
A small shop ne3t to odia Ba8ar
uccess to lo# o+erhead costs and personal
customer ser+ice
8/19/2019 Chapter 1 - Foundation
24/75
,aret egmentationAdamali Tapal segments maret Tea stall consumers Tea &re#ed at homeN @amily ,i3ture
8/19/2019 Chapter 1 - Foundation
25/75
nd
9eneration steps inai8ullah Tapal taes control after ather losesinterest in &usiness
Business has gro#n and management controlremains #ith fe# employees
Both ather and on reluctant to manage&usiness
8/19/2019 Chapter 1 - Foundation
26/75
Afta& Tapal oins the amily
Business Trained in ri Oana
Oooed after #arehousing/ &lending/pacaging/ shop sales and customer ser+ice.
assionate a&out the tea &usiness after#oring in it.
8/19/2019 Chapter 1 - Foundation
27/75
Business trategyA+oiding direct competition #ith foreign&rands
ocus on ignored or o+erlooed niche
Introduction of colour coded pacaging
Appointed distri&utors rather than +erticallyintegrating as #as industry norm
Oarger premises &uilt in Porangi/ 'nanced &ysale of assets one at a time to a+oid cash Qo#pro&lems
8/19/2019 Chapter 1 - Foundation
28/75
Introduction of mechani8ation
AcEuisition of &uilding in odia Ba8ar tomaintain contacts
eorgani8ation of =o& functions such as'nance/ mareting etc!mployee lea+es to open a competing &usiness
Introduction of *anedar/ #hich has a mildertaste &ut strong in Qa+our
8/19/2019 Chapter 1 - Foundation
29/75
Achie+ementsioneered in mechani8ed soft pacaging fortea in aistan
1st to introduce Penyan teaR e3porting tea to 5continents/ metal free tea &agsR tea plantationin hiniari/ Dorthern Areas
!sta&lished @Hum Sadam/ an entrepreneurial
resource centre for the disad+antaged.
8/19/2019 Chapter 1 - Foundation
30/75
IAT AACompany pro'le:Ideal tarBusiness type:lastic recycling
,!A9!@De+er say sy is the limit/the moon has footprints @
8/19/2019 Chapter 1 - Foundation
31/75
8/19/2019 Chapter 1 - Foundation
32/75
Monis Rahan !chairperson o"naseeb networ#s and "ounder
o" ro$ee%co&
8/19/2019 Chapter 1 - Foundation
33/75
Characteristics of entrepreneurs
'esire "or responsibility
personal responsi&ility for the outcome of their +enture o Pre"erence "or oderate ris#
is taer &ut not #ild ris taero (on)dence in their ability to succeed
"ptimistic U.
o 'esire "or iediate "eedbac#
Dic 9leason ..city soft Inc.
o Hi*h level o" ener*y
,ore energetic than a+erage personUColin Angle and Helen
iRobot spent 18 hours a day with their 6 employees tocreate software and assembling robots.
8/19/2019 Chapter 1 - Foundation
34/75
o +uture rientation
Al#ays searching for opportunitieserial !ntrepreneurs
"pportunity entrepreneur
Decessity entrepreneurs
o S#ill at or*ani$in*
&uilding a &usiness from setch U.right people to accomplish goal
o -alue o" achieveent over Moneyo Hi*h de*ree o" coitent
Be *!A #hen people tell J"- that
you cannot ful'll your dreams2 Al#ays thin: 9od and I can do this2
Tolerance "or abi*uity
+lexibilitya&ility to adapt the changing demand and technological changes
..rigidity lead to failure
8/19/2019 Chapter 1 - Foundation
35/75
o Tenacityuch is the case #ith Thomas !dison/ #hose most
memora&le in+ention #as the light &ul&
,ilton Hershey his 'rst three candy maing &usiness failed hecreated Oancaster caramel company #hich &ecame +ery
successful. De+er say I ha+e failed
ay I ha+e not yet succeed
8/19/2019 Chapter 1 - Foundation
36/75
TH! B!D!IT "!DT!!D!-HI
"pportunity to create your o#n destiny
*oug *anforth Qo#er shop
"prah #infrey started reporter for radio station
U..Harpo production/ Harpo 'lms/ Harpo studios
o "pportunity to mae di?erenceo "pportunity to reach your full potentialo
"pportunity to reach impressi+e pro'ts T#o third of American millionaires are entrepreneurs
or&es 44 richest people 75 are entrepreneurs
8/19/2019 Chapter 1 - Foundation
37/75
"pportunity to contri&ute to society and &e
recogni8ed for your e?ort,! contri&ution in economy and local &usiness s
o "pportunity to do #hat you en=oy and ha+e fun
,ost of entrepreneurs enter to 'eld in #hichthey ha+e interest
Har+ey ad+ice
@ ind a =o& doing #hat you lo+e/ and you ha+e tone+er #or a day in your life
8/19/2019 Chapter 1 - Foundation
38/75
8/19/2019 Chapter 1 - Foundation
39/75
8/19/2019 Chapter 1 - Foundation
40/75
Michael 'ell 0132
Created a ne# model for Csales
Cutting out the retail
middleman and custom<&uilding computers to suit&uyerFs needs put *ell at thefront of the class of Cmaers.
8/19/2019 Chapter 1 - Foundation
41/75
To 4nderson 5 (hris 'e 6ol"e
ounders of ,ypace.com
egistering 1>4/444 people perday #ith no mareting.
As of eptem&er 447/ there are
o+er 44 million accounts.
8/19/2019 Chapter 1 - Foundation
42/75
prah 6in"rey0127
"prah #infrey turned her
name into one of the most
successful and respected
$rands in the world.
%everaged that fame into
other interests&
magaines, #e$ sites,
film and television
production and (ocial
)ntrepreneurship.
8/19/2019 Chapter 1 - Foundation
43/75
(had Hurley, 81, Steve (hen, 89 5 :awed;ari, 8<
ounders of JouTu&e
Broadcasts 144 millionshort +ideos daily onmyriad(countless)su&=ects
old to 9oogle
8/19/2019 Chapter 1 - Foundation
44/75
01=>, Harland Sanders
"pened (anders
Court * Cafe in the
front room of a gas
station.
Colonel (anders
$egan franchising in
+-.
/warded the first
franchise to Pete Harman
in (alt %ak City, 0tah.
8/19/2019 Chapter 1 - Foundation
45/75
otential dra#&acs of
8/19/2019 Chapter 1 - Foundation
46/75
otential dra#&acs of!ntrepreneurs
-ncertainty of income is of losing your entire in+estments
Oong hours and hard #or
Oo#er Euality of life until the &usiness get esta&lished
High le+el of stress
Complete responsi&ility
*iscouragement
8/19/2019 Chapter 1 - Foundation
47/75
B!HID* TH! B"",: $HAT !!*ID9 TH! !DT!!D!- I!%
$hat forces are dri+ing this entrepreneurial trends in our economy %
$hich factors led to this age of entrepreneurship%
8/19/2019 Chapter 1 - Foundation
48/75
Entrepreneurs as Heroes
intangi&le source for inspiration
Bill 9ates (,icrosoft corporation)
e? Be8os (Ama8on.com)
,ichel *ell (*ell computers)
o Entrepreneurial Education
popular course of study
career path as entrepreneur
o 'eo*raphic and Econoic "actors
Age/ gender/ income
8/19/2019 Chapter 1 - Foundation
49/75
The ser+ices sector plays a +ital role in sustaining the gro#th of aistanKs economy/ #ith a share o"2
8/19/2019 Chapter 1 - Foundation
50/75
Technolo*ical 4dvanceents
-sage of computers/ color machines/ a3/ ans#ering machines
currently all these technology are #ithin the &udget of small&usinessU..diVcult to produce hea+y machine and
esta&lish factories Independent life styles
Independent and the $orld $ide $e&
International opportunities :
Access to international maret
8/19/2019 Chapter 1 - Foundation
51/75
TH! C-OT-AO *IM!ITJ "!DT!!D!-HI
Aoun* entrepreneurs ? *esire to create o#n destiny
9eneration W( &et#een 1G>5 and 1G7>)
64 of all &usiness
@9eneration !
Taylor *icman at the age of 15 cool Tronics
6oen entrepreneurs?
till faces discriminationsDearly > of adult #omen ha+e their o#n &usiness .
/lass (eilin*
*iscriminatory &arrier that pre+ents #omen and minorities from rising topositions of po#er or responsi&ility/ as #ithin a corporation.
Minority Entrepreneurs
8/19/2019 Chapter 1 - Foundation
52/75
Part Tie Entrepreneurs
15 millions Americans are !
,inimum ris
,ay &ecome full time !ntrepreneur
o HoeB .ased Entrepreneurs
• 50 of &usiness are home &ased
• 64 of them ha+e no employee
• X s7 &illion a year sales• minimum start up cost
• In past cottage industry
• High tech &usinesses
+ il b d b i
8/19/2019 Chapter 1 - Foundation
53/75
+aily based business ?
t#o or more family mem&er control &usinesso (opreneurs
Co o#ners of &usiness
personality conQicts Common +ision
espect each other talent Dot superior and su&ordinate (full and eEual partners) Appreciate and acno#ledge each other Clear di+ision of duties &ased on the sills of partners A&ility of encouragement
o(orporate castoC ? ha+e e3tensi+e on
8/19/2019 Chapter 1 - Foundation
54/75
ocial entrepreneurs:
#ho use their sills not only to create pro'ta&le &usiness&ut also achie+e social and en+ironmental goals for common good.
on 9onen/ a former consultant start a &usiness to create a&usiness that can address the pro&lem of gar&age disposal and
also generate a pro't. ecycle Ban.!conomic/ social and en+ironmental
TH! T!D *!A*OJ ,ITAP!
8/19/2019 Chapter 1 - Foundation
55/75
TH! T!D *!A*OJ ,ITAP!
,anagement ,istaes
Oac of e3perience
•
technical no#ledge a&out the &usiness going to start• !3perience regarding operations of &usiness. oor inancial controls
• uVcient amount of capital to start &usiness
• -ndercapitali8ation
• ,is=udgment a&out the 'nancial reEuirement
@shoestring• oor Cash Qo# management $ea ,areting !?orts
ailure to de+elop a strategic plan
• Deglecting strategic management process
8/19/2019 Chapter 1 - Foundation
56/75
-ncontrolla&le 9ro#th• 9ro#th must &e planned and controlled
• !3pansion reEuires changes in organi8ationstructure
• inancial controls and also managerial e3pertise.
oor Oocation• oor location #ithout studying in+estigation
Improper in+entory control• InsuVcient in+entory le+el
• roper type of in+entory
Incorrect ricing• Ho# much cost to mae/ maret/ and deli+er their
product
Ina&ility to mae the @ !ntrepreneurialtransition
8/19/2019 Chapter 1 - Foundation
57/75
!ntrepreneur should delegate authorities
*onKt push into areas #here they are notcapa&le
8/19/2019 Chapter 1 - Foundation
58/75
utting ailure into perspecti+e
!ntrepreneurs not paraly8ed &y failure
Oearn from failure
ailure is natural part of creati+e process
The only people #ho ne+er fail are those #ho ne+er do anything or ne+er attemptedne# thing
• Ba&e uth
• Base&all player
• ecord of home run in career for many years 71• B-T ho# many no#s record for strieouts
1004%%%
8/19/2019 Chapter 1 - Foundation
59/75
Harland *a+id anders/ the famous PC couldnt sell hischicen. ,ore than 1/444 restaurants re=ected him.
$alt *isney #as 'red &y a ne#spaper editor &ecause heYlaced imagination and had no good ideas.Ye+eral more of his &usinesses failed &efore the premiere of hismo+ie no# $hite. Today/ most childhoods #ouldnt &e the
same #ithout his ideas.
Al&ert !instein didnt spea until age four and didnt read untilage se+en. His teachers la&eled him Yslo#Y and Ymentallyhandicapped.@
"prah $infrey #as 'red from her tele+ision reporting =o&&ecause they told her she #asnt 't to &e on screen.
H"$ T" AM"I* ITAOO
http://voices.yahoo.com/walt-disney-american-icon-lived-american-11426476.htmlhttp://voices.yahoo.com/walt-disney-american-icon-lived-american-11426476.html
8/19/2019 Chapter 1 - Foundation
60/75
H"$ T" AM"I* ITAOO
Pno# your Business in *epth
• ight e3perience for &usiness
• tudy your &usiness• ersonal contact #ith suppliers/ customer/ trade
association and rele+ant la#s *e+elop a solid &usiness plan
,anage 'nancial resources
• Cash Qo# management -nderstanding 'nancial statements
• Basic understanding of &usiness and 'nance• $oring capital management
Oearn to manage people e?ecti+ely
• trained and moti+ated employees Peep in tune #ith yourself
• hysically and mentally in your &usiness
• uccess of &usiness depends on your presence and
attention•
8/19/2019 Chapter 1 - Foundation
61/75
Working capital is a common measure of a
companys liEuidity/ eVciency/ and o+erall health.Because it includes cash/ in+entory/accounts recei+a&le/ accounts paya&le/ theportion of de&t due #ithin one year/ and other
short
8/19/2019 Chapter 1 - Foundation
62/75
mall Businesses ...
,ae up GG.7 of the 04.1 million&usinesses in the -..
!mploy 51 of the nationKs pri+ate sector#orforce.
Create more =o&s than &ig &usinesses.>4 to 64 of net ne# =o&s o+er the last
decade
Are leaders in o?ering
training and ad+ancement opportunities to#orers.
8/19/2019 Chapter 1 - Foundation
63/75
,AOO B-ID! ID
8/19/2019 Chapter 1 - Foundation
64/75
,AOO B-ID! IDAPITAD
Contri&ute 4 to 9*
!mploys 64 of non agricultural la&or force
8/19/2019 Chapter 1 - Foundation
65/75
The mall and ,edium !nterprise *e+elopment Authority (,!*A) estimates that in aistan/ small and
medium enterprises (,!s) #ith less than 144 employees constitute nearly 1>@ o" all =%2 illion private
'rms that employ 9>@ o" the nonBa*ricultural labor "orceD and their share in the annual /'P is
7>@1% Their 'rm structure is dominated &y sole proprietorship and most are family run &usinesses #ith no
culture of taing it to the pu&ic (I"s).
,! *e'nition
8/19/2019 Chapter 1 - Foundation
66/75
Enterprise (ate*ory Eployent Si$e !a& Paid Up (apital !b& 4nnual Sales !c&
mall ,edium !nterprise (,!) -p to 54 -p to s. 5 ,illion -p to s. 54 ,illion
Institution Sall Mediu
,! Ban Total Assets of s. 4 million Total Assets of s. 144 million
ederal Bureau of tatistics Oess than 14 employees DLA
un=a& mall IndustriesCorporation
i3ed in+estment. up to s. 4 million e3cluding land and&uilding
DLA
un=a& Industries*epartment
i3ed assets #ith s. 14 million e3cluding cost of land
indh Industries*epartment
!ntity engaged in handicrafts or manufacturing of consumer or producer goods #ith '3ed capitalin+estment up to s.14 million including land &uilding
tate Ban of aistan (,!rudential egulations)
An entity / ideally not &eing a pu&lic limited company/ #hich does not employee more than 54persons ( manufacturing) and 54 persons (trade L ser+ices) and also ful'lls one of the follo#ingcriteria:(i) A trade L ser+ices concern #ith total assets at cost e3cluding land and &uildings up to s 54million.(ii) A manufacturing concern #ith total assets at cost e3cluding land and &uilding up to s 144million.(iii) Any concern (trade/ ser+ices or manufacturing) #ith net sales not e3ceeding s 044 million asper latest 'nancial statements.
9!, aistan
8/19/2019 Chapter 1 - Foundation
67/75
9!, aistan
aistans estimated population in 411 is o+er 09< illion maing it the #orlds si3thmost
8/19/2019 Chapter 1 - Foundation
68/75
The te3tile &ased ,!s are the &ac &one of
the economy.
8/19/2019 Chapter 1 - Foundation
69/75
The "actorBdriven sta*e is mared &y high rates of agriculturalself
8/19/2019 Chapter 1 - Foundation
70/75
8/19/2019 Chapter 1 - Foundation
71/75
CHAT! 1 TH! "-D*ATI"D "
!DT!!D!-HI !D*
8/19/2019 Chapter 1 - Foundation
72/75
*iscuss importance of entrepreneurship ineconomic de+elopment of aistan.
( su&mission date: )
9roup assignment :
#rite do#n summary of 14 to 15 pages on
9lo&al entrepreneurship report on aistan andha+e to present. mem&ers in each group.
Dote : do not gi+e any e3use to increase gr[o
(u&mission date: )
8/19/2019 Chapter 1 - Foundation
73/75
Oearning outcomes
Hope fully at the end of chapter you are a&le to ans#er follo#ing Euestion.
8/19/2019 Chapter 1 - Foundation
74/75
*e'ne the role of entrepreneurship in united states and across the #orld%
*escri&e the entrepreneur pro'le and e+aluate your potential as an entrepreneur%
*escri&es the &ene'ts and dra#&acs of entrepreneurship%
!3plain the cultural di+ersity of entrepreneurship%
*escri&e important role of small &usiness play in our nation %
*escri&e 14 deadly mistaes of entrepreneurship and e3plain ho# to a+oid them%
ut failure into proper prospecti+e
!3plain ho# entrepreneurs can a+oid &ecoming another failure statistics%
8/19/2019 Chapter 1 - Foundation
75/75