Professional & Enterprise

Development
CT024-3-1

Entrepreneurship
The Entrepreneurial Mindset

Level 1

Prepared by: RHR First Prepared on: September 10, 2006 Last Modified on:
Quality checked by: MOH
Copyright 2004 Asia Pacific Institute of Information Technology

Structure of the Lesson

Explore

the entrepreneurial
characteristics and individual

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Introduction

Learning Outcomes

Define the
individual

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entrepreneurs

Introduction

as

an

Entrepreneur

Entrepreneurs
Recognize opportunities where
others see confusion
Are aggressive catalysts for
change within the marketplace
Challenge the unknown and
continuously create the future
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Introduction

2007 Thomson/South-Western. All rights reserved.

Our Entrepreneurial Economy

The Environment for Entrepreneurship
Entrepreneurship is the dynamic process of creating
wealth.
Symbol of business tenacity and achievement.
Entrepreneurs are the pioneers of todays business
successes.
Two perspectives on entrepreneurship:
Statistical: numbers that emphasize the importance of
entrepreneurs to the economy.
Academic: trends in entrepreneurial research and
education.
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2007 Thomson/South-Western. All rights reserved.

Entrepreneurs versus Small

Business Owners: A Distinction

Small Businesses Owners

Manage their businesses by
expecting stable sales, profits and
growth

Entrepreneurs
Focus their efforts on innovation,
profitability and sustainable growth
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2007 Thomson/South-Western. All rights reserved.

Entrepreneurship: A Perspective
Entrepreneurship is more than the mere
creation of business.
The characteristics of seeking opportunities,
taking risks beyond security, and having the
tenacity to push an idea through to reality
combine into a special perspective that
permeates entrepreneurs.
Entrepreneurship is an integrated concept that
permeates an individuals business in an
innovative manner.
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Effects of Entrepreneurship

Entrepreneurs lead growth by:

Entering and expanding existing
markets.
Creating entirely new markets by
offering innovative products.
Increasing diversity and fostering
minority participation in the economy
e.g. Ikea
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2007 Thomson/South-Western. All rights reserved.

Entrepreneurs

Name any 3 Young Entrepreneurs that you

know

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Introduction

Entrepreneurs
Blake Ross of Mozilla Firefox
Some Top Entrepreneurs - Steve Jobs, Bill
Gates, Thomas Edison, Henry Ford, Li Ka
Shing, Lakshmi Mittal, Robert Kuok

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Entrepreneurial Firms Impact

Entrepreneurial firms make two indispensable
contributions to the economy:
1. Integral part of the renewal process that pervades and
defines market economies.
2. Essential mechanism by which millions enter the
economic and social mainstream of society.

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Visit the National Federation of Independent Business (NFIB)

website for more information about entrepreneurs.
Introduction

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2007 Thomson/South-Western. All rights reserved.

Research and Education

The entrepreneurial and managerial domains are not
mutually exclusive.
Venture financing (venture capital and angel capital
financing) and other innovative financing techniques
strengthened in the 1990s.
Intrapreneurship (entrepreneurship within large
organizations) and the need for entrepreneurial
cultures has increased.
Entrepreneurial entry strategies have been shown to
share common denominators, issues and trade-offs.
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Venture Financing
Venture capital is funds for new or small businesses that
typically have no access to capital markets.
The funds come from venture capital partnership firms or
wealthy individuals/investment banks/pension funds/ insurance
companies who wish to foster new products and technologies
(VC Firms)
Fund-raising is through a prospectus to potential investors who
agree to commit money to the fund.
It typically entails high risk for the investor, but it has the
potential for above-average returns.

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Venture Financing Cont

Angel Investor

Small Startup
Businesses

Venture
capitalists or
large VC (Venture
Firms)

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Invest in a proven
business concept
seeking established
innovative
companies

Introduction

Research & Education cont

Comes from a group of wealthy investors, investment banks and other financial institutions
Capital Market - a market where individuals and institutions trade financial securities e.g.
bonds and stocks.
Organizations/institutions in the public and private sectors often sell securities on the capital
markets in order to raise funds.
Both the stock and bond markets are parts of the capital markets
Capital markets help channelise surplus funds from savers to institutions which then invest
them into productive use.
Capital market consists of primary markets and secondary markets. Primary markets:
trading of new stock issue and secondary market deals with the existing or previouslyissued securities.

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Research and Education cont

Entrepreneurs have been the subject of keen research
interest.
Women and minority entrepreneurs have emerged in
unprecedented numbers.
The entrepreneurial spirit is universal.
Entrepreneurs economic and social contributions are
significant for job creation, innovation and economic
renewal.
Entrepreneurial education is one of the hottest topics at
U.S. business and engineering schools

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Common Characteristics of
Entrepreneurs
Commitment,
determination,
perseverance
Drive to achieve
Opportunity orientation
Initiative, responsibility
Persistent problem solving
Seeking feedback
Internal locus of control
Tolerance for ambiguity

Calculated risk taking

Tolerance for failure
High energy level
Creativity and
Innovativeness
Vision
Self-confidence and
optimism
Independence
Team building
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Entrepreneurs: Type A
Personalities
Chronic and severe sense of time urgency.
Constant involvement in multiple projects
subject to deadlines.
Neglects all aspects of life except work.
A tendency to take on excessive responsibility,
combined with the feeling that Only I am
capable of taking care of this matter.
Explosiveness of speech and a tendency to
speak faster than most people.
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2007 Thomson/South-Western. All rights reserved.

The Dark Side of Entrepreneurship

The Entrepreneurs Confrontation with
Risk
Financial risk versus profit (return) motive
varies in entrepreneurs desire for wealth.
Career risk i.e. loss of employment security
Family and social risk i.e. competing
commitments of work and family
Psychic risk - psychological impact of failure
on the well-being of entrepreneurs
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2007 Thomson/South-Western. All rights reserved.

Advantages And Challenges Of ECommerce For Entrepreneurial Firms

ADVANTAGES

1. Ability of small firms to compete with other companies, locally and nationally

(promotional tools)
2. Creation of the possibility and opportunity for more diverse people to start a business
3. Convenient and easy way of doing business transactions (not restricted to certain
hours of operation, open 24 hours a day, seven days a week)
4. An inexpensive way (compared to the cost of paper, printing, and postage prior to the
Internet) for small business to compete with larger companies and for U.S. firms to
make American products available in other countries
5. Higher revenues for small businesses that utilize the Internet, averaging $3.79 million
compared to $2.72 million overall (IDC research)
CHALLENGES
1. Managing upgrades (anticipating business needs/application)
2. Assuring security for a Web site and integration with existing company systems
3. Avoiding being a victim of fraudulent activities online - security
4. Handling the costs required to maintain the site - maintenance
5. Finding and retaining qualified employees - employability

Note
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Source: E-Commerce: Small Business Ventures Online (Washington, D.C.:Introduction

U.S. Small Business Administration, Office of Advocacy,July
1999).
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2007 Thomson/South-Western. All rights reserved.

Entrepreneurial Opportunities
Free Enterprise
The economic basis for all entrepreneurial
activity - any individual is free to transform an
idea into a business.

Opportunities
Opportunities for potential entrepreneurs
are unlimited.
Opportunities during this century will be
immense.
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Cont

Entrepreneurial opportunities
will continue to arise for
individuals willing to take the
risk.

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Question and Answer Session

Q&A
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Introduction

Next Session
Topic and Structure of next session
Organizational Structure

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Introduction