CHAPTER 1

THE BASIC OF
ENTREPRENEURSHIP AND
BUSINESS

Prof. Madya Dr. Shuhairimi Abdullah

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 Entrepreneurship
“…The scientist who cannot understand the way
entrepreneurs think will find it extremely difficult to employ
the business tools required to commercialize his or her
technology. Entrepreneurs are not bound by formulas, rules,
linear patterns of thinking…”

Kathleen Allen
 Learning Objectives
After studying this chapter you should be ready to
describe:
 The Basic of Entrepreneurship and It’s Risks
 Types of Business Organizations

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 Types Of Entrepreneur According To Business Activity
 Identifying, Analyzing, Evaluating and Choosing
Business Opportunity.

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ENTREPRENEURIAL CONCEPT
THE DEFINITION OF ENTREPRENEUR
LAYMAN’S TERM

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French word ‘Entreprende’, “willing to take responsibility or
willing to try something new”.

Malay word ‘Usahawan’. “which means effort or willingness

to do or complete a task.

Oxford dictionary, “someone who is handling a business and

taking business risk

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DEFINITION OF ENTREPRENEUR

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Kirzner (1979) Entrepreneurs are individuals who are always
alert about the business opportunities that have
not be seen by others

Kuratko and Entrepreneur is one who undertakes to organise,

Hodgets (1992) manage and assume the risk of business

Daft (1997) He or she who assumes the financial and legal risks
of ownership and receives the business profits

Peter Drucker Entrepreneur as someone who actually searches

(1985) for change , responds to it, and exploits change as
an opportunity

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DEFINITION OF ENTREPRENEURSHIP

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Barringer Entrepreneurship is the process by which
(2008) individuals pursue opportunities without regard to
resources they currently control
Schumpeter Entrepreneurship as a firm that operates and
(1934), and implements combinations of new activities such as
Dollinger (1995) product development, market research, sourcing for
raw materials, manufacturing approaches and new
organizational structures.

Cole (1969) Entrepreneurship as activities that result in benefits

through the development of profit-oriented
business.
Stevenson, Entrepreneurship as individual preparedness to
Roberts and compete for opportunities without considering the
Grousbeck resources in hand
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(1989)
WHY SOCIETY NEEDS ENTREPRENEURS

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• To utilise production factors such as land, capital, technology in
producing effective product
• To identify opportunities from the environment by increasing
the activity that will be beneficial to the society
• To select the best approach to utilise all the production factors
in order to minimise waste in entrepreneurship activities
• For the benefit of future generations by providing a good
platform such as infrastructure an environment.

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 CONTRIBUTION OF ENTREPRENEUR
• Developing New Market

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• Discovering New Source of Material
• Mobilising Capital Resources
• Introducing New Technologies, Industries and Products
• Creating Employment

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 10

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ENTREPRENEURIAL
PROFILE
 Gallup's research proves that the best business
builders use some mix of these 10 talents to start
or grow a business:
 Business Focus: You make decisions based on observed or anticipated
effect on profit.

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 Confidence: You accurately know yourself and understand others.
 Creative Thinker: You exhibit creativity in taking an existing idea or
product and turning it into something better.
 Delegator: You recognize that you cannot do everything and are willing
to contemplate a shift in style and control.
 Determination: You persevere through difficult, even seemingly
insurmountable, obstacles.
 Independent: You are prepared to do whatever needs to be done to
build a successful venture.
 Knowledge-Seeker: You constantly search for information that is
relevant to growing your business.
 Promoter: You are the best spokesperson for the business.
 Relationship-Builder: You have high social awareness and an ability to
build relationships that are beneficial for the firm's survival and
growth.
 Risk-Taker: You instinctively know how to manage high-risk situations. 11
 WHAT MOTIVATES PEOPLE TO BE AN
ENTREPRENEURS
• Be Their Own Boss

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• Pursue Financial Rewards
• Involve In All Aspect of Business
• Prestige
• Opportunity to Build Equity
• Opportunity to Make Contribution

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DREAMS OF ENTREPRENEURS

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10 D’S
• DREAM
• DECISIVENESS
• DOERS
• DETERMINATION
• DEDICATION
• DEVOTION
• DETAILS
• DESTINY
• DOLLARS
• DISTRIBUTE

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The Characteristic of an Entrepreneur

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 Other Characteristic of an Entrepreneur

o Commited to his/her work

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o Always strive for excellence,
o Focus on his/her work,
o Confident to do business
o Discipline
o Innovative and creative
o Able to lead and manage
o Responsible and trustworthy
o Has a mission and vision
o Dare to take risk and never give up

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Characteristic of Successful Entrepreneurs
(ADDED KNOWLEDGE)

Passion for the Product/

business customer

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focus

SUCCESSFUL
ENTREPRENEUR

Tenacity despite Execution

failure intelligent
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ENTREPRENEUR’S PERSONALITY
• Self Confident

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• Willingness To Take Risk
• A & B Personalities
• Proactive Personality
• Locus of Control
• Machiavellianism

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 Common Myths About Entrepreneurs
(ADDED KNOWLEDGE)

 Myths 1: Entrepreneurs Are Doers, Not Thinkers.

 Myths 2: Entrepreneurs Are Born, Not Made.

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 Myths 3: Entrepreneurs Are Always Inventors.
 Myths 4: Entrepreneurs Are Academic and Social
 Misfits.
 Myths 5: Entrepreneurs Must Fit the Profile.
 Myths 6: All Entrepreneurs Need Is Money.
 Myths 7: All Entrepreneurs Need Is Luck.
 Myths 8: Entrepreneurship Is Unstructured and
Chaotic.
 Myths 9: Most Entrepreneurial Initiatives Fail.
 Myths 10: Entrepreneurs Are Extreme Risk
Takers or The Gamblers.
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 Risks Of Being An Entrepreneur
(ADDED KNOWLEDGE)
1. Uncertainty of Income

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2. Risk of Losing Entire Investment
3. Long Hours and Hard Work
4. High Stress Level
5. Difficulty in Obtaining Customers
6. Complete Responsibility
7. Difficulty in Obtaining Loans
8. Discouragement

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Entrepreneur VS Businessman
(ADDED KNOWLEDGE)

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Entrepreneur Businessman
Profit Plan and focus for Focus on short
long term profit term profit

Risk High level Low level

Opportunity Create and invent Follow business
new business trend
trend

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