FUNDAMENTALS OF

ENTREPRENEURSHIP

Matching Entrepreneurial & Management characteristics with the Business Idea

ESSENTIAL CHARACTERISTICS

1.

Some one who can coordinate the factors of production (resources) to gain a profitable outcome.

2.

Some one who has information additional to that held by competitors

3.

The ability to innovate from existing products and practices

4.

On who is prepared to take risks in an uncertain environment

5.

Some one whao has command over resources and can also coordinate and reallocate these resources

ECONOMIC THEORY

KIRZNER

SCHUMPETER

KNIGHT

CASSON

THE ENTREPRENEURIAL PERSONALITY

Most common identified vharacteristics

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High Achievement Orientated

High Ambiguity Tolerance
High Internal Locus of Control
High need for Independence
Innovative
Visionary
Deviant (none conformist)
Proactive
Self Confident
Ability to Deal with Failure
Fit & Energetic
Creative & Innovative
Risk Taker

THE MANAGEMENT PERSONALITY

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Ability to Take Decisions

Commitment to Others
Self Confident
Conformist
Emotional Stability
Good Communicator
Ability to Lead and Work with Others
Knowledge of and Access to Resources

 THE ENTREPRENEURIAL BUSINESS

Established to provide the founder with commercial prosperity and the satisfaction of
being innovative. Additionally this type of business will be looked upon to create new
wealth, employment and economic development.

suhaanya@gmail.com

THE MANAGED BUSINESS

The role of the manager is to plan, make decisions, change and coordinate resources
and take control of the business activities on a daily basis and in so doing satisfies
the objectives of the businesses owners.

SUCCESSFUL ENTERPRISE VENTURES

There are 4 fundamental needs for an enterprise venture to succeed:

1.

The market opportunity that fits the skills and interest of the persons concerned.

2.

Developing self confidence, initiative and harnessing the motivation/enthusiasm of the

entrepreneur.

3.

Enhancing the functional management skills of the entrepreneur

4.

Information of and access to land, labour, finance and tangible assets

A BUSINESS IDEA

ENTREPRENEURIAL DEVELOPMENT

MANAGEMENT SKILLS DEVELOPMENT

RESOURCES

WHAT BUSINESS DO I WANT TO BE IN

ADVANTAGES OF RUNNING YOUR OWN BUSINESS

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DISADVANTAGES OF RUNNING YOUR OWN COMPANY

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Development of an hobby or interest

Play to own knowledge, skills and experience
Work in field of enjoyment
Opportunity to create your own company
Independence form employer
Determine own remuneration package
Tax advantages

Personal Liability
Stressful
Unsociable Hours
Meetings
Bureaucracy
Seed Capital

BUSINESS START-UP STATISTICS

80% OF NEW BUSINESSES FAIL IN THE FIRST 6 MONTHS

ONLY 40% WILL SURVIVE TO THE 4TH YEAR

120,000 BUSINESSES FILE FOR BANKRUPTCY EACH YEAR

70% OF ALL INSOLVENCIES ARE CAUSED THROUGH DEBT

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1989 WAS THE BEST YEAR TO DATE FOR BUSINESS LAUNCHES
(520,000)

OVERTADING COMMON CAUSE OF BUSINESS FAILURE

MAJORITY SEED FINANCE IS THE OWNERS OWN

REASONS FOR BUSINESS FAILURES

11 DEADLY SINS:

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Lack of Expertise
No Product/Service Market Strategy
Over Optimism of Market size
Under Estimating Start-up time
Lack of Working Capital
Start-Up costs to high
Over-Trading
Mistaking Profit for Cash
Wrong Location
Wrong Staff Selection
Poor Accounting Standards

CHOOSING THE BUSINESS

SPOTTING A GAP IN THE MARKET

FACTORS THAT SHOULD INFLUENCE YOUR CHOICE

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What are you good at that could influence your choice

(a) Organising
(b) Selling
(c) buying

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How much start-up capital is needed

Is there a market for your idea
Will you like the work
How much time are you prepared to put in
What business is right for you

QUALITIES YOU NEED TO SUCCEED

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Self Confidence
Being an all Rounder
Ability to Bounce back
Innovative
Positive Result Orientated
Risk-Taker

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Total Commitment
(a) Single Minded
(b) Energetic
(c) Hardworking

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Self Motivation
Initiative
Communication Skills
Patience
Attention to Detail