Escolar Documentos
Profissional Documentos
Cultura Documentos
HIP
B.com (Hons)
5th semester
Hailey college of Commerce
Instructor :Touseef Ahmad
Chapter 1
The Foundations of
Entrepreneurship
Chapter Outline
The world of entrepreneurs
What is entrepreneurship?
The benefits of entrepreneurship
The potential drawbacks of Entrepreneurship
Role of Entrepreneurship in Economic
Development
The power of small business
Ten Mistakes of Entrepreneurship
reports:
Men are twice as likely to start a business as
women.
Most entrepreneurs turn to family members and
friends for capital.
Entrepreneurs are most likely to launch
businesses when they are
between the ages of 25 and 44.
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new businesses.
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What is Entrepreneurship?
The word entrepreneur derives
from the French words entre, meaning
between, and prendre, meaning to
take. The word was originally used
to describe people who take on the
risk between buyers and sellers or
who undertake a task such as
starting a new venture.
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What is an
Entrepreneur?
One who creates a new business in the face of
risk and uncertainty for the purpose of
achieving profit and growth by identifying
opportunities and assembling the necessary
resources to capitalize on them.
Simply Define:
Process of creating something new and
assuming the risks and rewards.
Robert D.Hisrich, M.P.Peters &
D.A.Shepherd
What is Entrepreneurship?
Academic Definition (Stevenson & Jarillo)
Entrepreneurship is the process by which individuals pursue
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Market Segmentation
Adamali Tapal segments market
Tea stall consumers
Tea brewed at home Family Mixture
interest in business
Business has grown and management control
remains with few employees
Both Father and Son reluctant to manage
business
Business Strategy
Avoiding direct competition with foreign
brands
Focus on ignored or overlooked niche
Introduction of colour coded packaging
Appointed distributors rather than vertically
integrating as was industry norm
Larger premises built in Korangi, financed by
sale of assets one at a time to avoid cash flow
problems
Introduction of mechanization
Acquisition of building in Jodia Bazar to
maintain contacts
Reorganization of job functions such as
finance, marketing etc
Employee leaves to open a competing business
Achievements
Pioneered in mechanized soft packaging for
tea in Pakistan
1st to introduce Kenyan tea; exporting tea to 5
continents, metal free tea bags; tea plantation
in Shinkiari, Northern Areas
Established Hum Qadam, an entrepreneurial
resource centre for the disadvantaged.
IFFAT RAZA
Company profile:Ideal Star
Business type:Plastic recycling
MESSAGE
Never say sky is the limit,the moon has foot
prints
SUCCESS STORY
Driven by courageous patience
At 45, single parent of four children
She had to chose her own destiny
2005, pet bottles crushing unit has her own
Characteristics of entrepreneurs
Desire for responsibility
personal responsibility for the outcome of their venture
o Future Orientation
Always searching for opportunities
Serial Entrepreneurs
Opportunity entrepreneur
Necessity entrepreneurs
o Skill at organizing
building a business from sketch .right people to accomplish goal
o Tenacity
Such is the case with Thomas Edison, whose most
memorable invention was the light bulb
Milton Hershey his first three candy making business failed he
created Lancaster caramel company which became very
successful.
Never say I have failed
Say I have not yet succeed
THE BENEFITS OF
ENTREPRENEURSHIP
Opportunity to create your own destiny
Doug Danforth flower shop
Oprah winfrey started reporter for radio station
..Harpo production, Harpo films, Harpo studios
He developed a two-prong
strategy of expanding
the market while
maintaining a strong
hold on competitors.
sales
Founders of MySpace.com
Registering 160,000 people per
Oprah Winfrey1954
Founders of YouTube
Broadcasts 100 million
Sold to Google
Opened Sanders
Court & Cafe in the
front room of a gas
station.
Colonel Sanders
began franchising in
1952.
Awarded the first
franchise to Pete Harman
in Salt Lak City, Utah.
Potential drawbacks of
Entrepreneurs
Uncertainty of income
Risk of losing your entire investments
Long hours and hard work
Lower quality of life until the business get established
High level of stress
Complete responsibility
Discouragement
Entrepreneurs as Heroes
Entrepreneurial Education
The services sector plays a vital role in sustaining the growth of Pakistans economy, with a share of
57% percent in GDP, and 44 percent (which includes construction sector) in employed labor force. A
cross-country comparison shows share of services sector in GDP is currently about 75 percent in
developed countries; within Asia, share of services in GDP was 65 percent in Singapore, followed by 54
percent in case of Sri Lanka, 57 percent for Pakistan, 52 percent for India and 42 percent for
Indonesia.
Technological Advancements
Young entrepreneurs :
Copreneurs
Co owners of business
personality conflicts
Common vision
Respect each other talent
Not superior and subordinate (full and equal partners)
Appreciate and acknowledge each other
Clear division of duties based on the skills of partners
Ability of encouragement
Social entrepreneurs:
Management Mistakes
Lack of experience
Uncontrollable Growth
Growth must be planned and controlled
Expansion requires changes in organization
structure
Financial controls and also managerial expertise.
Poor Location
Poor location without studying & investigation
Incorrect Pricing
How much cost to make, market, and deliver their
product
transition
capable
Babe Ruth
Baseball player
Record of home run in career for many years 714
BUT how many knows record for strikeouts
1330???
Working
decade
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SMALL BUSINESS IN
PAKISTAN
Contribute 40 % to GDP
Employs 80 % of non agricultural labor force
The Small and Medium Enterprise Development Authority (SMEDA) estimates that in Pakistan, small and
medium enterprises (SMEs) with less than 100 employees constitute nearly 90% of all 3.5 million private
firms that employ 80% of the non-agricultural labor force; and their share in the annual GDP is
40%9. Their firm structure is dominated by sole proprietorship and most are family run businesses with no
culture of taking it to the pubic (IPOs).
SME Definition
Enterprise Category
Up to 250
Up to Rs. 25 Million
Institution
Small
Medium
SME Bank
N/A
N/A
Punjab Industries
Department
Sindh Industries
Department
Entity engaged in handicrafts or manufacturing of consumer or producer goods with fixed capital
investment up to Rs.10 million including land & building
GEM Pakistan
Pakistan's estimated population in 2011 is over 187 million making it the world's sixth
the economy.
self-employment. Countries in this stage compete through lowcost efficiencies in the production of commodities or low valueadded products. Sole proprietorshipsi.e., the self-employed
probably account for most small manufacturing firms and service
firms. Almost all economies experience this stage of economic
development. These countries neither create knowledge for
innovation nor use knowledge for exporting.
To compete in the efficiency-driven stage, countries must
have efficient productive practices in large markets, which allow
companies to exploit economies of scale. Industries in this stage
are manufacturers that provide basic services.
The innovation-driven stage is marked by an increase in
knowledge-intensive activities (Romer 1990). In the innovationdriven stage knowledge provides the key input. In this stage the
focus shifts from firms to agents in possession of new
knowledge.s The agent decides to start a new firm based on
expected net returns from a new product. The innovation-driven
stage is biased towards high value added industries in which
entrepreneurial activity is important.
CHAPTER 1
THE FOUNDATION OF
ENTREPRENEURSHIP
END
Learning outcomes
Hope fully at the end of chapter you are able to answer following question.
Define the role of entrepreneurship in united states and across the world?
Describe the entrepreneur profile and evaluate your potential as an entrepreneur?
Describes the benefits and drawbacks of entrepreneurship?
Explain the cultural diversity of entrepreneurship?
Describe important role of small business play in our nation ?
Describe 10 deadly mistakes of entrepreneurship and explain how to avoid them?
Put failure into proper prospective
Explain how entrepreneurs can avoid becoming another failure statistics?
ASSIGNMEN
T NO 1