Enterprise Creation & Development

Lecture 1

Challenge of Entrepreneurship

Week1 ECD/Apr06/gs
 CHALLENGE OF
ENTREPRENEURSHIP
• Entrepreneurship in KBE
• Who is the Entrepreneur?
• What is the Entrepreneurial Process?
• Social Responsibilities
• Why be an Entrepreneur?
• Entrepreneurial Attributes
• Why businesses fail?
• Myths of Entrepreneurship
• Checklist for Aspiring Entrepreneurs

Week1 ECD/Apr06/gs
 Recommended Reading
• Donald F Kuratko and Richard M Hodgetts,
ENTREPRENEURSHIP – THEORY, PROCESS
AND PRACTICE, 6th Edition, 2003, Thomson
South-Western, Chapters 1, 2, 3, 4 and 6.
• Jeffry A Timmons and Stephen Spinelli, NEW
VENTURE CREATION – ENTREPRENEURSHIP
FOR THE 21ST CENTURY, 6TH Edition, 2003,
McGraw-Hill, Chapters 1, 2, 7, 8 and 10.
• Megginson, Byrd, Megginson - Small Business
Management, an entrepreneurs guidebook, 5th
edition, Chapter 1

Week1 ECD/Apr06/gs
 ENTREPRENEURSHIP :
AN EVOLVING CONCEPT

“Most of what you hear about

entrepreneurship is all wrong. It’s not magic;
it’s not mysterious; and it has nothing to do
with genes. It’s a discipline and, like any
discipline, it can be learned.”
Peter F. Drucker
Innovation and Entrepreneurship

Week1 ECD/Apr06/gs
KNOWLEDGE-BASED ECONOMY

“What does Bill Gates own ? No

land, no gold, no oil, no buildings,
no machines. What he does is that
he controls knowledge, which
makes him the wealthiest person
in the world.”
Lester Thurow
Week1 ECD/Apr06/gs
The Entrepreneurial Process involves
____, ________, and _________ an
opportunity by overcoming the strong
forces that resist the
creation of
something new.

Week1 ECD/Apr06/gs
.
 1. Identify and
evaluate the Opportunity
opportunity

2. Develop Business
Plan

3. Determine and
Entrepreneur
attract resources 4. Lead and manage
required resulting enterprise

Resources
Organisation
Week1 ECD/Apr06/gs
Entrepreneurial Venture vs
Small Business
• Entrepreneurial Venture :
__________ and ______
• Small Business : ____________
owned and operated, is not
dominant in its field, and doesn’t
engage in new or innovative
practices.

Week1 ECD/Apr06/gs
 The Pyramid of Social
Responsibility
Contribute resources
PHILANTHROPIC to the community:
Goodwill improve quality
Be a good corporate of life.
citizen.

ETHICAL Responsibility
Be ethical.
Obligation to do what is right, just,
and fair. Avoid harm.

LEGAL Obligations
Obey the law.
Law is society’s codification of right and wrong.
Play by the rules of the game.

ECONOMIC Responsibility
Be profitable
The foundation upon which
Week1 all other levels rest.
ECD/Apr06/gs
 “To be able to contribute to
society and to help those in need
to build a better life, that is the
ultimate meaning in life. I would
gladly consider this to be my life’s
work.”

Dr Li Ka Shing

Week1 ECD/Apr06/gs
 Social Entrepreneur
• A pragmatic visionary who achieves
large scale, systemic and sustainable
social change through a new
invention, a different approach, a
more rigorous application of known
technologies or strategies, or a
combination of these.
• Combines the characteristics
represented by Richard Branson and
Mother Teresa.
• For more infoWeek1
: www.schwabfound.org
ECD/Apr06/gs
80%
72%
70%

60%

50%

40% Best things about

owning a business
30%

20% Control Others

10% 10% 8%
10% Survey by Padgett Business
Services USA Inc.
(Adopted from Small
0%
Business Management, 5th
Independence Satisfaction edn, Megginson, Byrd,
Megginson

Week1 ECD/Apr06/gs
 70%
63%
60%
50% 46%
% of very 40%
satisfied 30% 29% 27%
Self Employed
20%
Working for Others
10%
0%
Great United
Britain States

Week1 ECD/Apr06/gs
• Achieve
____________
• Obtain Additional
_______
• Help Their Families
• Provide Products Not
Available Elsewhere

Week1 ECD/Apr06/gs
 Managers
• Managers of large companies tend to
seek :
– ________

– ______

– _______

– _________
Week1 ECD/Apr06/gs
“one who shifts economic resources
out of an area of lower and into an
area of higher productivity and
greater yield “
Peter Drucker, guru on management theory

“..human, creative act that builds

something of value…pursuit of
opportunity…..requires a vision
and passion and commitment…..
calculated risks…”
Jeffrey Timmons, author of the
entrepreneurial mind
Week1 ECD/Apr06/gs
Key Elements in Entrepreneur’s Background
 Supportive childhood family
environment.
 Having a father who is self-
employed helps.
 Education is important.
 Aged 22-45 when starting
venture.
 Work history: dissatisfied with
company job but has technical
knowledge.

Bill Gates
 Successful Entrepreneurs
•Age : 34, Net Worth : • While in the Ph.D program in
US$90 million. computer science at Stanford
University, he met Sergey
•Son of Michigan State Brin and together they
University computer science developed and ran “ ? ”,
professor which began operating in
1998 and currently employing
•While following in his more than 1900 employees.
father's footsteps in
academics, he became an
honors graduate from the
University of Michigan, where
he earned a bachelor of
science degree in engineering,

?
with a concentration on
computer engineering

Week1 ECD/Apr06/gs
 Successful Entrepreneurs
• Age : 45, self made
• Value of company : S$270
mil.
• Adopted at birth by an
elderly woman, never knew
her biological parents
• Started company 15 yrs
ago, at age 28, with
$20,000 savings.
• Nominated MP and Her
World Magazine “Woman
of the Year 2002”.

• Hometown : Kampar, a poor

Malaysian mining town

• Worked her way through

college and graduated with a
B.Science (Hons) from NUS.
?
Week1 ECD/Apr06/gs
Week1 ECD/Apr06/gs
Week1 ECD/Apr06/gs
Entrepreneurship – Theory, Process, Practice Chap 4 pg 114-121

Week1 ECD/Apr06/gs
 Types of Skills Required in Entrepreneurship

Technical Business Personal

Management
Writing Planning Inner Control

Oral Leadership Risk Taking

Communication

Monitoring the Interpersonal Innovative

Environment

Using Technology Marketing Change-oriented

(Selling) visionary
Week1 ECD/Apr06/gs
 The Causes of Business Failures
Are Many and Complex
Other
Insufficient
Capital
Heavy Operating
Other Expenses
Economic,
Finance Burdensome
Debt
Inexperience
Insufficient
Profits
Neglect

Industry
Weakness

Week1 ECD/Apr06/gs
 Techniques taught in Entrepreneurship

Generate Identify your Raise $$$

opportunities market

Assess Entry Keep business

opportunities strategies afloat

Analyse Reach your Put vision on a

business customers Plan
environment
Exit Protect your Budgeting
Strategies business ideas
Week1 ECD/Apr06/gs
 MYTHS OF
ENTREPRENEURSHIP
Entrepreneurs are doers, not thinkers
Entrepreneurs are _____, not made
Entrepreneurs are always inventors
Entrepreneurs are academic and social
_______
“Entrepreneurship, Theory, Process and Practice” Chapter 2

“Entrepreneurship, Theory, Process and Practice, Chapter 2”

Week1 ECD/Apr06/gs
 MYTHS (continuation)
 Entrepreneurs must fit the “profile”
 All you need is ______ to be an entrepreneur
 All you need is _____ to be an entrepreneur
 Ignorance is bliss for an entrepreneur
 Entrepreneurs seek success but experience
high failure rates
 Entrepreneurs are extreme risk takers
(gamblers)

Week1 ECD/Apr06/gs
 Checklist for Aspiring
Entrepreneurs
• Do it for passion not money
• Do something you know about
• Don’t give up too early
• Have a mentor
• Have appropriate funding
• Be a good cash manager
• Build sales first
• Don’t try to rush
• Be wary of bad advice or suppliers

Week1 ECD/Apr06/gs
 Summary

• Entrepreneurial Process
• Different Entrepreneurial
Attributes
• Causes of Business Failures
• Checklist for Entrepreneurs
• Video Screening – The Makings
of an Entrepreneur

Week1 ECD/Apr06/gs