Course: ENTREPRENUERSHIP, 451

Topics: Entrepreneurship in the 21st Century, Entrepreneurship Education, The

Entrepreneur, Self-Employment, Venture Creation

Lecturer: Ossom Emmanuel Ossom (MSc. Entrepreneurship, MA. Leadership &

Management, Ph.D Strategy & Entrepreneurship Candidate), Babson College
Certified Entrepreneurship Coach/Educator, Action Learning Coach
 Course Requirements & Completion Modes

Course Requirements:

Class attendance is compulsory

No lateness to class
No disturbances in class or you lose marks or driven out of class
Active participation in all class and outside class activities is compulsory
Must meet deadlines for all course works without fail
 Mode of Assessment
(1) Continuous Assessment:

 Active Class Participation, Class Attendance, Case Studies

, Quizzes: 12%

 Elevator Pitch & Group Business Plan 18%

(2) End of Semester Exams 70%

Continuous Assessment + Exams: 12% + 18 +70% = 100%

Learning Objectives

 Identify what makes knowledge useful today

 Acquire entrepreneurial mindset and be responsible for their own lives
 Explain ways of acquiring entrepreneurial mindset
 Define entrepreneurship
 Distinguish between the entrepreneur and the non-entrepreneur
 Demonstrate the importance of entrepreneurship to society
 Introduction

“Anything that we have to learn to do we learn by the actual doing of it....”

–Aristotle

“What you do with what you know is more important than what you know”
Constant D. Beugré, Ph.D.
 Introduction, Cont,d

Thinking Exercise
What is Entrepreneurship? Why Entrepreneurship? How to become an
entrepreneur? When do I have to pursue entrepreneurship
 Introduction, Cont,d
“Entrepreneurship is the future. It can truly solve the ills of the world, if we
help to fulfill its full potential!!!!!”

“Entrepreneurship and entrepreneurs are the path out of the world’s

economic troubles and Chaos!”

 “The winners of the future are those who create their own future.”

“Those who just keep doing things “as we always did them” are the losers of
the future”

Fred Kiesner, 2010

 Innovation & Entrepreneurship:
The New Wealth of Nations
Introduction, Cont,d

• Exactly 241 years ago, Adam Smith published the ‘Inquiry into the
Wealth of Nations.’

• Smith acknowledged the importance of three factors of

production:
• Land
• Labor
• Capital

© Constant D. Beugré, Ph.D.

 Innovation & Entrepreneurship:
The New Wealth of Nations

• Introduction (cont’d)
• Today we must question the importance of these three factors:

• India and China had large populations in the 18, 19, 20th centuries and today.
• Africa is endowed with natural resources.
• Arab countries have large cash of money.

• Yet, these regions/countries are less developed than countries, such as Japan, North
Korea, or the United States.
Example: Israel has 93 companies listed on NASDAQ and 6,000 start-ups every
year.

© Constant D. Beugré, Ph.D.

 Innovation & Entrepreneurship:
The New Wealth of Nations

• Introduction (cont’d)

• Why are some countries wealthier than others?

• Why are some products more likely to be made in some countries and not in
others?
• Why were companies, such as Apple, Dell, Google, Hewlett Packard and
Microsoft created in the United States rather than in another country?

© Constant D. Beugré, Ph.D.

 Innovation & Entrepreneurship:
The New Wealth of Nations

• Introduction (cont’d)

• Two more factors:

• Innovation
• Entrepreneurship

Explore the Innovation--Entrepreneurship nexus in

wealth creation.

© Constant D. Beugré, Ph.D.

 Entrepreneurship & Self-Reliance

‘There is no better way to provide a

broad basis for rapid economic growth
than to increase the number of
entrepreneurs in a society instead of
relying or on foreign aid’ (David
McClelland, 1987).
 The Rising Recognition of Entrepreneurs
• “Entrepreneurs have evolved to become super-heroes who valiantly and single-handedly
battle to make the most of business opportunities, pulling together resources they do not
own, finding willing suppliers and eager customers and, just sometimes against all the odds,
winning out to become millionaires” (Burns, 2011: 5)

• The entrepreneur has emerged as the new ‘cultural hero’ (Cannon, 1991, Carr & Beaver,
2002).

• “Entrepreneurs are held as role models. They are said to embody ephemeral qualities that
we ought to emulate – freedom of spirit, creativity, vision, zeal. Above all have the courage
and self-belief to turn their dreams into reality. Is it any wonder that they envy them?”
(Burns, 2011:5)

• Entrepreneurs, like super-heroes, valiantly make the most of opportunities. (Burns, 2011:5)
 Evolution Of Entrepreneurship Around the World
Every country is witnessing nothing short of an entrepreneurial revolution
The major factors behind this are change and the pace at which it is
accelerating
The change we are seeing in this 21st century has become discontinuous,
abrupt but all pervasive
Small entrepreneurial firms are better able to cope with this change
They are flexible, hence respond to changing market circumstances with
speed
In a turbulent world full of uncertainties, small firms seem to be better able to
survive and prosper.
The essence of success of small firms lies in their ability to spot an
opportunity arising out of change and even to create it and focus resources
on delivering what the market wants quickly.
In essence, small firms are expert in innovation. This often means they take
risks that larger businesses are unwilling or unable to take. One word that
describes all this is entrepreneurship.
 Evolution Of Entrepreneurship Around the World
Entrepreneurial firms are able to capitalize most on the turbulent world we
face today – entrepreneurial firms are led by founders like Bill Gates, Michael
Dell and Richard Branson

Other influences have accelerated this trend towards smaller firms:

1. Most economies have been shifting away from manufacturing towards the service
sectors where small firms often flourish because of their ability to deliver a
personalized, flexible, tailor-made service at a local level
2. Technology has played its part in three ways: a)the new technologies that swept
away the late twentieth century – computers and the internet – were pioneered by
new, rapidly growing firms; b) these technologies actually facilitated the growth of
self-employment and small businesses by easing communication, encouraging
working from home, and allowing smaller and smaller market segments to be serviced;
c) many new technologies, for e.g. in printing, have reduced fixed costs so that
production can be profitable in smaller, more flexible units
3. Social and market trends have also accelerated the growth of small firms. Firstly,
customers increasingly expect firms to address their particular needs; secondly people
want to control their own destiny more
 Evolution Of Entrepreneurship In Ghana

Entrepreneurship developed in Ghana before the first arrival

of Europeans.
Our ancestors trade with other tribes and risked resources to
produce or procure the relevant items for trade.
Precious minerals into jewels, implements and weapons, bows,
wove cloth such as Kente and other fabrics.
 Pre-colonial entrepreneurs were slave traders who used their
experience from dealing with foreigners during the slave trade
to profit from legitimate trade.
After independence witnessed the introduction of a mixed
economic system (private& foreign)
companies owned either solely by the state Owned
Enterprises or in joint partnership with the private sector.
NLC developed framework of market oriented backed by a
nationalistic agenda (‘Ghanaianisation’)
 Evolution Of Entrepreneurship In Ghana
Acheampong regime encouraged state ownership,
joint state/foreign ownership, private Ghanaian/foreign
ownership and purely Ghanaian ownership.
ERP/SAP emerged in Rawlings’s regime
ERP/SAP emerged in Rawlings’s regime also divestiture
implementation policy.
Kuffour came with Venture Capital Trust Fund to
provide long-term capital for small and medium scale
enterprises.
Mills with a ‘Better Ghana Agenda’ Facilitating the use
of various incentive schemes to ease credit delivery to
entrepreneurs (EDIF, EXIM NIB, NBSSI etc)
The better Ghana agenda is continue by John
Mahama.
The Economics of Entrepreneurship

Could you think of any underlying

theories that explain the growth in
number and existence of smaller
firms?
 The Economics of Entrepreneurship
Marxist theory predicts that capitalism will degenerate into economics
dominated by a small number of larger firms and society will polarize
between those who own them and those that work in them
To a Marxist, the rise of small firms is just another , subtler way for this trend
to manifest itself.
The successful growth of many small firms since the 1980s, the increasing
fragmentation of industries and markets and the increasing self-
employment by choice would seem to belie this theory.
For e.g., Fritz Schumacher (1974) argue that the growth of small firms is
part of a social trend towards a more democratic and responsive society
– ‘small is beautiful’. To him, the quality of life is more important than
materialism. This he thinks is achievable through ‘intermediate
technology’ – that is simpler, cheaper and easier to use, leading to
production on a smaller and more locally based.
But people argue that the technologies that fuelled the growth of small
firms at the twentieth century were far from simple, and for many, the
quality of life improved alongside. This takes us to free-market economies
 The Economics of Entrepreneurship
From another angle, the growth of small firms has been seen us the triumph of
the free market and the success of the ‘enterprise culture’ promulgated by
politicians such as Ronald Regan and Margaret Thatcher. Increasing number of
small firms are viewed as the natural result of increased competition and a drive
to prevent private and public monopoly

But what exactly does economic theory have to say about the creation of small
firms?:

 Traditional industrial economists see the growth of small firms as a function of industrial
profitability, growth, barriers to entry and concentration. They are more concerned with
‘entry’ to an industry rather than whether this entry is by a new or an existing firm. They
assume an endless supply of potential new entrants
 In contrast, labour market economists have been more concerned by what influences
individuals to become potential entrants to an industry by becoming self-employed . In
contributing to this work, psychologists have focused on the character or personality of
the individual, the antecedent influences on them, such as age, sex, education,
employment status, experience and ethnicity, as well as other social influences
 The Economics of Entrepreneurship
The link between entrepreneurship – the creation of new firms and
economic growth has until recently been far from clear, in so far as
economists are concerned:

 Traditional theories claim entrepreneurship impeded rather than fostered economic

growth

 Classical economics focused on optimizing existing resources within a stable

environment and treated any disruptions, such as entrepreneurial new firms creating
whole new industries, as ‘god sent’ external forces

 It was Joseph Schumpeter (1934), an Australian Economist, who created the link
between entrepreneurship, innovation and growth. Schumpeter made effort to
explain economic development as a process caused by enterprise – or innovation –
and carried out by entrepreneurs. This is termed the process of ‘creative destruction’
whereby new entrants displaced inefficient ones, and this was restated by Aghion
and Howitt (1992)
 The Economics of Entrepreneurship

More recent theories of ‘industrial revolution’ have linked

entrepreneurship and economic growth directly (e.g., Jovanovic, 1982;
Lambson, 1991, etc,).

 These theories focus on change as the central phenomenon and

emphasise the role knowledge plays in chartering a way through this

 Innovation is seen as the key to entry, growth and survival for an

enterprise and the way entire industries change over time

 But the information they need in order to innovate is crucial – being

inherently uncertain, asymmetric (one party may have more than
another) and associated with high transaction costs
 The Economics of Entrepreneurship

These evolutionary theories (see previous slide), supported by

empirical evidence, therefore state that entrepreneurship
encourages economic growth for three reasons:

 It encourages competition by increasing the number of enterprises

 It is a mechanism for ‘knowledge spillovers’ – transmission of

knowledge from its point of origin to other individuals or organizations

 It generates diversity and variety among enterprises in any location.

Each enterprise is in some way different or unique and this influences
economic growth
 Means of Attracting Money

Employer Investor

Attracting
Money

Self-employed Employee
 Why Entrepreneurship Education?
Irrespective of whether you are an entrepreneurship student, a
corporate manager, or a seasoned creator of new ventures, you already
know that entrepreneurship is already becoming the de facto engine of
growth, innovation, and that most delicious of personal freedoms –
financial self-reliance (Stuart, 2010:1)

• Entrepreneurship education is needed throughout the world.

• Joblessness is the root cause of global unrest.
• Joblessness threatens international security.
• (see book by Steven Koltai on Peace through entrepreneurship).
 Why Entrepreneurship Education

• Purpose of Entrepreneurship Education

• Providing skills for new venture creation.

• Developing the entrepreneurial mindset.

• Must have a bias for action in all contexts.
• Students should act as ‘owners’ of entrepreneurship education.

• Must not be limited to the creation of new ventures.

© Constant D. Beugré, Ph.D.

• General Definition of Entrepreneurship Education:
 “Entrepreneurship refers to an individual’s ability to turn ideas into action. It includes creativity, innovation
and risk taking, as well as the ability to plan and manage projects in order to achieve objectives. This
supports everyone in day-to-day life at home and in society, makes employees more aware of the context of
their work and better able to seize opportunities, and provides a foundation for entrepreneurs establishing a
social or commercial activity.” (Commission Communication “Fostering entrepreneurial mindsets through
education and learning”. COM(2006) 33 final.)

 But in higher education, the primary purpose of entrepreneurship education is to develop entrepreneurial
capacities and mindsets. (European Commission, 2008)

 Gartner (1988) defined entrepreneurship as the creation of new organizations, and Kirchhoff exemplifies this
focus on the creation of new ventures when he defined entrepreneurship as:

 as the process of (1) identifying an invention worthy of commercialization; (2) converting the
invention into a salable product/service; (3) creating or finding a small firm to sell the
product/service; (3) obtaining the resources to operate the firm and sell the product/service;
(4)successfully operating the firm and generating product/service sales so as to achieve firm
survival and growth. (Kirchhoff, 1994, p. 62).
 Chewing the definition of student’s Entrepreneurship

 What is students’ entrepreneurship?

 Involvement in as many live business projects as possible on short-term basis;

which could lead to students’ creation of innovative companies

 Ability to define a proposition/opportunity needed to move things ahead in your

own life,

 For students to embrace entrepreneurial life – they need entrepreneurial thinking,

mindset, and behaviour, because the global world is changing every time with many
uncertainties, and to find their place in life, they need to be entrepreneurial, able
to compete in life and take responsibility of their own future
 Chewing the definition of student’s Entrepreneurship
Student’s Entrepreneurship

• “Student’s entrepreneurship” is about ...“identifying needs and problems and

being able to fix solutions to them - it doesn’t matter whether it is about your
personal life or whilst working for company or someone else, and whether they
are able to improve the financial situation, processes and procedures for the
companies or those they work for. Setting up companies by students is not a
requirement but if they can do so, then it becomes a bonus of the
entrepreneurial process they go through.”

• Thus students’ entrepreneurship is about inculcating into students ‘competence

value creation skills’, which enable them move things ahead in their lives.
Source: Ossom’s ongoing research.
 Chewing the definition of student’s Entrepreneurship
Ossom (ongoing research) found from his study that entrepreneurship is a 3-layered
framework and students’ entrepreneurship is the fulfillment of the first two layers as
illustrated in the figure below. So students’ entrepreneurship comprises creativity education
and exhibiting of innovative behaviours. Students’ company creation is a bonus of
entrepreneurship education.

Firm
Creation

Innovation

Creativity
Fig.2: A Framework of Entrepreneurship
 Does Students’ Entrepreneurship Matter
To illustrate the importance of students’ entrepreneurship, consider the following:

• Over 1500 colleges and universities in the USA offer some form of entrepreneurship training

• There is even more explosive growth in the UK, with over 500 courses being offered at over
100 UK universities and interest in entrepreneurship education spreading to non-business
disciplines, where students in engineering, life sciences and liberal arts are interested in
becoming entrepreneurs fostering a ‘comparative entrepreneurship approach’

• The impact of entrepreneurship could be seen in the form of self-realization, personal wealth,
competitiveness and economic growth

(See e.g., Mellor, 2009; Wennekers & Thurik, 1999)

 Does Students’ Entrepreneurship Matter
Why students entrepreneurship? Students' entrepreneurship is critical today
and will continue to be so tomorrow for reasons such as:

 The usual employment provided by existing companies is no longer guaranteed after school; or could
be short-term or contract-based, so a student must figure out to employ himself,

 In the past, most people aspired to become medical doctors, lawyers, engineers, pilots, professors,
and so on because these were the only role models they mostly see on our TVs, but today the trend
has changed where business men and women are receiving attention as role models and are being
celebrated

 Government sees students employment as important because the more companies we have, the
more export products/services the country can have

 A way to test students’ creativity and innovation with the aid of the internet and technology in solving
the ills of our society and to promote economic growth

 Reduce social exclusion and increase social inclusion

 Does Students’ Entrepreneurship Matter
Why students entrepreneurship? Cont’d :

• FDI and Capital Flight: Case of Czech Republic

• If we don’t acquire skills to spot entrepreneurial opportunities, the foreigners will

come and do it for us,

• Then they will employ you and pay you just peanuts, AND

• They would have depleted our resources

• Of course, they take all the money to their countries to develop them at the expense
of ours
 Why encourage students’ entrepreneurship?
 Entrepreneurship is about efficient value creation that culminates into economic growth.
 This efficient value creation often occurs at the overlap of entrepreneurial and managerial behaviour
(often called ‘strategic innovation’, ‘entrepreneurial management’, or ‘strategic entrepreneurship’.
 This efficient value creation is illustrated in the diagram below:

Entrepreneurship value Management

(opportunity-seeking) creation (advantage-seeking)
Mellor (2009, p. 4)
 Chewing the Definition of
Entrepreneurship

 Understanding Entrepreneurship

 As a process:
 Pursuing opportunities that create economic or social value.
 Creation of for-profit organizations.
 Creation of non-profit organizations.

© Constant D. Beugré, Ph.D.

Innovation & Entrepreneurship:
The New Wealth of Nations

 Understanding Entrepreneurship (cont’d)

 As a mindset:
 A particular way of construing situations that one encounters.
 Growth mindset:
 A view that one’s abilities can be developed through effort and discipline.
 Fixed mindset:
 A view that one’s abilities are a set of fixed traits.

© Constant D. Beugré, Ph.D.

 Definition of entrepreneurship

 How do you understand the term ‘entrepreneurship’?

 How would you differentiate between “traditional entrepreneurship” and

“students’ entrepreneurship”?
 Entrepreneurship is About Action

“Developing an entrepreneurial mindset goes beyond

knowing and talking—it requires action and practice.”
By: Heidi Neck, PhD SEE Faculty Director and Professor of
Entrepreneurship at Babeson College of Business

“Entrepreneurship is never letting failure prevent you

from succeeding”
By Jessica, Undergraduate Student, Glen Mills PA
 Entrepreneurship: A Mindset

 Entrepreneurship is more than the mere creation of business:

– Seeking opportunities

– Taking risks beyond security

– Having the tenacity to push an idea through to reality

 Entrepreneurship is an integrated concept that permeates an

individual’s business in an innovative manner.
Traditional and Social Entrepreneurship Defined:

 “Entrepreneurship involves the process of creating something new with value

by devoting the time, money, and sweat equity and assuming the
accompanying financial, psychic, and social risks to receive the rewards of
monetary and personal satisfaction and independence” (Kelly & Booth, 2004,
p.57: Dictionary of Strategy: Strategic Management A-Z )

 “Social entrepreneurship comprises endeavors undertaken with the view to

achieve a socially beneficial goal rather than for the profit motive.” (Kelly &
Booth, 2004: Dictionary of Strategy: Strategic Management A-Z )
 Entrepreneurial Tendencies

 What is an enterprising or entrepreneurial tendency? The test on entrepreneurial

tendency is at: http://www.get2test.net/ Perform this test, print your results and
bring it to class on Monday, 12.03.2018

 If you have an entrepreneurial tendency it may mean that you have the tendency to
start up and manage projects; this could be your own business venture, within your
employing organisation or your community.

 Some elements comprising entrepreneurial tendency are

 enterprise
 achievement
 autonomy
 creativity
 risk taking and locus of control
Who is an entrepreneur?
 Who is an Entrepreneur?
 “The people who “want to be entrepreneurs” are separated from those who
are entrepreneurs simply because entrepreneurs are able to do, and don’t just
think about doing. If you believe in your ideas just do something about it.”
This does not suggest that you should start every business you think about, but
it rather suggests that you should research, talk about, explore, and
conceptualize every single idea you have – that bad ideas will quickly fail this
scrutiny, and the good ones will rise to the top.

 “Entrepreneurs are “tinkerers of ideas,” constantly playing around with

concepts, ideas, and plans for how to make things better, solve problems”

By Brad Keywell (in Fred Kiesner, 2010)

Who is an Entrepreneur? Entrepreneurs—Challenging

 Entrepreneurs
– Recognize opportunities where others see chaos or confusion

– Are aggressive catalysts for change within the marketplace

– Challenge the unknown and continuously create the future

 Who is an Entrepreneur?
 An entrepreneur is one who creates a new business in the face of risk and
uncertainty for achieving profit and growth opportunities and assembles
the necessary resources to capitalize on those opportunities.

 A Person who undertakes innovations, financing, and other business

acumen in an effort to transform innovations into economic goods.

 Entrepreneurship is the act of being an entrepreneur.

 Entrepreneurship may result in establishing new organizations or revitalizing a mature
organizations in response to a perceived opportunity.

 The most obvious form of entrepreneurship is that of starting new

businesses (Start up Company).
 Who is an Entrepreneur Cont’d

 Even though a consensus does not exist yet, most would agree that an entrepreneur is
the one who starts a business and accepts (most of) the risk associated with owning
that business. Some believe that one must bring an innovative product or service to
the market to be considered an entrepreneur, but others would consider any self-
employed person to be an entrepreneur. (See e.g., Evans and Leighton (1989) and
Blanchflower and Oswald (1998)

 “Somebody who sets up a business or enterprise. The individual displays attributes like
creativity, initiative, risk taking, and problem solving. Setting up a business typically
puts capital at risk as well.” (Kelly & Booth, 2004: Dictionary of Strategy: Strategic
Management A-Z )
 Practical Definition of An Entrepreneur?
 A person who starts an enterprise.
 Searches for change and responds to it.
 The economists view him as a 4th factor of production along with
land, labour and capital.
 They are innovators who come up with new ideas for products,
markets or techniques.
 They can perceive opportunity, organizes resources needed for
exploiting that opportunity and exploits it.
 E.gs of entrepreneurial ideas are Computers, mobile phones,
washing machines, ATMs, Credit Cards, Courier Service, etc.
 Entrepreneur, Entrepreneurship & Enterprise

The entrepreneur is the actor and

entrepreneurship is the act.

The outcome of the actor and the act is

called the enterprise.

An enterprise is the business organization that

is formed and which provides goods and
services, creates jobs, contributes to national
income, exports and over all economic
development.
 Some Celebrated Ghanaian Entrepreneurs

Capt.Prince Kofi Amoabeng Alhaji Asoma Banda Mr Roland Agambire Mrs. Theresa Oppong-Beeko
(UT Group) (Antrak Group) (CEO of RLG) (Manet)

Dr. Paa Kwesi Nduom

(Group Nduom)

Ken Ofori-Atta (Databank) Dr. (Mrs.) Esther Ocloo Ernest Bediako Mr. Albert Ocran
(Nkulenu) Sampong (CEO of Combert)
(Ernest Chemist)
 Some Celebrated Ghanaian Entrepreneurs

Dr. Michael Agyekum Addo Herman Chinery- Hesse Mark Davies

(Kama Group) (SOFT Tribe) Mr. Edward Effah
(Busy Internet in Accra)
(Fidelity Bank)

Mr. Osei Kwame Despite Dr. Joseph Siaw Agyepong Mr. Tony Oteng Gyasi Mr. Kwaw Ansah
(CEO of Despite Group) Zoom Lion (CEO of Tropical Cable) (CEO of TV Africa)
Entrepreneur Characteristics
 Entrepreneur Characteristics
 Individual entrepreneurs have many common unique traits that are not common to
others, but all entrepreneurs do share a kindred spirit, a certain type of constitution
and outlook, and a special drive and willingness

 But the traits that are common to all entrepreneurs include the following:

1. Dedicated
1. Confident
2. Grateful
2. Feels a sense of ownership
3. Optimistic
3. Able to communicate
4. Gregarious
4. Passionate about learning
5. A leader by example
5. Team player
6. Not afraid of risks or success
6. System oriented
Qualities of An Entrepreneur
Interpersonal skills/committed/future oriented
Great Salesmanship/tolerance to ambiguity
Ability to become connected/Resilient
Dynamic leadership & Vision/Resourcefulness & creative
1) Self confidence and Optimism
2) Discipline/Realist
3) Good organized/Sense of Mission
4) Opportunity obsessed
5) Energetic and Harding
6) Take initiative/unwillingness to submit to authority
7) Desired for Responsibility
Also the roles of the entrepreneur is another way to look at the importance of
entrepreneurship:
1. The person who assumes the risk associated with uncertainty
2. The supplier of financial capital
3. An innovator
4. A decision-maker
5. An industrial leader
6. A manager or a superintendent
7. An organizer and a coordinator of economic resources
8. The owner of an enterprise
9. An employer of factors of production
10. A contractor
11. An arbitrageur
12. An allocator of resources among alternative uses
13. The person who realizes a start-up of a new business
(In Wennekers & Thurik, 199)
10 Personal Entrepreneurial Competencies
Classificatio (PECS)Sub-Category
n
1) Opportunity Seeking & initiative
Achievement 2) Risk Taking
3) Demand for efficiency &Quality
Cluster
4) Persistence
5) Commitment
6)Information Seeking
Planning 7)Goal Setting
8)Systematic planning & monitoring

Power 9)Persuasion & Networking

10)Independence & Self-Confidence
Are entrepreneurs ‘born or made’?

Discuss this in groups of 3-4 only

Are entrepreneurs born or made?
 If people can become entrepreneurs by virtue of their genes, then there is little point in trying
to teach it – one cannot teach blue-eyed people to have brown eyes

 But it must also be emphasized that entrepreneurial behaviour does not follow Mandelian
inheritance patterns – which can best be explained by social imprinting – similar to Pavlovian
reflex – from entrepreneurial role models during childhood

 Entrepreneurship during one’s early twenties is also relatively popular, but ‘nothing ventured,
nothing is gained’ is an attractive philosophy when you have little to lose

 Anybody can become an entrepreneur at any stage in life and it can be argued that
learning the tools of business creation is a tool, that if learnt now, may become useful
later, if even not in the immediate future.

 Even though some people have more natural traits of entrepreneurship, they can as well be
acquired and be translated into entrepreneurship

(Mellor, 2009: Entrepreneurship for Everyone: A Student Textbok)

  Owning your own business can be an excellent way to satisfy personal as well as professional
objectives

 Before starting your own business, however, you should be aware of the drawbacks involved as well
as the payoffs.
Pros:
1. Opportunity for Independence: having more control over your life; a means to reach your self-
actualization; way to realize their talents, ambitions, or vision

2. Opportunity for a Better Lifestyle: desire to use one’s skills fully is the most common
motivation for self-employment; the idea is to provide a good or service that other people need
while enjoying what you do’ owning your own business makes going to work fun; working for
yourself becomes a creative outlet that gives you the opportunity to use a combination of your
previously untapped talents; you are challenged everyday to work for yourself but you may be
bored everyday working for someone else – your challenge is from perseverance and creativity, not
from barriers placed before you by other people or the constraints of an organization; you want to
provide the best for your family, children without any limitation, you want to leave a legacy for
them

3. Opportunity for profit: most people start business not to get rich but to earn an honest living
Pros:
Cons/risks of self-employment

 Personal liability, uncertain income, long working hours, and frequently limited
compensation while the business grows are some of the disadvantages of self-
employment

 Moreover, not having anyone looking over your shoulder may leave you with fewer
places to turn for advice when the going gets tough. And even though you are your own
boss, you are still answerable to many masters

 You must respond to customer demands and complaints, keep your employees happy,
obey government regulations, and grapple with competitive pressures.

 “A small business manager needs perseverance, patience, and intelligence to meet the
ongoing challenges of keeping a company vibrant
Traits of a successful entrepreneur

 Virtually every successful entrepreneur possesses these four characteristics of passion,

determination, trustworthiness, and knowledge

 A pioneer in entrepreneurial research, David McClelland identified entrepreneurs as

people with a higher need to achieve than nonentrepreneurs. People with a high need
to achieve are attracted to jobs that challenge their skills and problem-solving abilities,
yet offer a good chance of success. They equally avoid goals that seem almost
impossible to achieve and those that pose no challenge. They prefer tasks in which the
outcome depends on their individual effort

 Entrepreneurs have high locus of control: Locus of control is a term used to explain
how people view their ability to determine their own fate. Entrepreneurs tend to have
stronger internal locus of control (their effort matters to turn things around) whilst
nonentrepreneurs tend to have stronger external locus of control (others have to help
them, or luck, chance, fate, or being controlled by others are very important to them
 Successful entrepreneurs and small business owners are
innovative and creative.

 Innovation results from the ability to conceive of and create new

and unique products, processes, or services.

 Entrepreneurs see opportunities in the marketplace and visualize

creative new ways to take advantage of them.
 Meaning of Venture Creation
 A venture by definition is a Start-up entity developed with the intent of profiting
financially.
 A business venture may also be considered a small business.
 Many ventures will be invested in by one or more individuals or groups with the
expectation of the business bringing in a financial gain for all backers.
 Most business ventures are created based on demand of the market or a lack of
supply in the market.
 The Needs/wants of consumers are identified for a product or a service and the
entrepreneur and investors will proceed to develop the idea, market the idea,
and sell the product or service developed.
 Venture creation is the process of turning a new idea or technology into a
business that can succeed and will attract investors:

 It requires directed effort exerted over time, thus direction, effort, and persistence
over time are the three pillars of motivation.
 Golden Rules of New Venture Creation
Golden Rule I: Know Thy Customer.
 Does the product/service meet a customer's needs or wants?
 How can the new business attract customers to its product(s)/service(s)?
 How can the new business keep those customers coming back for repeat
purchases?

Golden Rule II: Know Thy Self

 know the key factors and critical skills needed for their profitability/success (production
choice, quality/image, marketing, costs, etc.).
 must be able to determine if your strength lie in the areas of production, marketing, or
business management and how those strengths match up with the needs of the
business.
 Marketing and management experiences are generally much more important for a
new product launch than production experience.
 Note that, start-up may take 3 to 5 years for a new business to generate a significant
annual profit.
 Determining the value/importance of you critical skills and relevant experiences to
combat your weaknesses.
Golden Rule II: Know Thy Self
 Enterprise: May be starting your own business, operating as an intrapreneur within an organisation or setting up
community ventures.

 Motivation: The enterprising person is highly motivated, energetic, and has a capacity for hard work. They are busy,
driven, dynamic and highly committed to getting things done. Their high motivation levels are characterised by a
high need for achievement and for autonomy, manifesting as the desire to lead, shape and compete projects.

 Creative tendency: The enterprising person is restless with ideas, has an imaginative approach to solving problems,
and tends to see life in a different way to others. Their innovative tendency and need for achievement helps them to
develop ideas to create new products and processes, for example new technologies, businesses, projects,
organisations, comedy and artistic outputs.

 Calculated risk-taking: The enterprising person is opportunistic and seeks information and expertise to evaluate if
it is worth pursuing the opportunity which will usually involve some risk.

 Locus of control: The enterprising person has an internal rather than external locus of control which means that
they believe they have control over their own destiny and make their own 'luck'. This means that they confidently
seek to exert control over life, draw on inner resources and believe that it is down to them if they succeed through
their own efforts and hard work
Source: http://www.get2test.net/
 Framework of Venture Creation

Venture creation integrates 4 major perspectives:

a. Individuals are people involved in starting a new

organization.

b. Organization is the kind of firm that is started.

c. Environment is the situation surrounding and influencing

the new organization.

d. New venture process is the actions undertaken by the

individuals to start the venture.
 2 Aspects of Business Venture

(a) A person undertaking the venture

(b) The venture itself

 We tend to focus on how to build the business without taking

into consideration the caliber of people who will take charge of
the business

 Venture creation is not a technical subject by which is hooked

to formulae but rather a mindset subject.

 Venture creation is a life style one has to live and the process
must affect the inner life.
Role of Venture Creation & Development
 Create jobs
 Drives economic growth
 Frees up State Resources
 Fosters Competition
 Fosters innovation
 Increases productivity
 Tax base to government
 Promotes Capital Formation
 Creates Large-Scale
Employment Opportunities
 Promotes Balanced Regional
Development
 Increasing Gross National
Product and Per Capita
Income
 Improvement in the Standard
of Living
 Promotes Country's Export
Trade
 Induces Backward and
Forward Linkages
 Facilitates Overall
Development
 Reduces Concentration of
Economic Power
 Wealth Creation and
Distribution
 On which mountain do you compete?
When Setting up Your Small Business, You Must Decide How You Will Satisfy Your
Customers. Do You Need to Offer Them the Best Product, the Best Price, or the
Best Service?

1 2
Operational Excellence Product Leadership
(low price) (high quality)

3
Customer Intimacy
(service)
 Benefits of Venture Creation

 Opportunity to create your own destiny

 Opportunity to make a difference

 Opportunity to reach your full potential/self-actualization. Importance?

 Opportunity to reap impressive profits

 Opportunity to contribute to society and be recognized for your efforts.

 Opportunity to do what you enjoy and have fun at it