M.

Madzorera

CHINHOYI UNIVERSITY OF TECHNOLOGY

Name

: Moses

Surname

: Madzorera

Registration number

: C14123471R

Faculty

: Accountancy

Semester

: 1.2

Course

: Principles of Entrepreneurship (CUEB201)

Due date

: 10 September 2014

Background
A financial organization which provides loan facilities to aspiring entrepreneurs is
conducting a seminar to assist successful loan applicants. Upon realization that
you are a student on attachment from Chinhoyi University of Technology whose
mandate is entrepreneurship, innovation and wealth creation. Your Chief
Executive Officer has requested you to be one of the facilitators.
Question
Make

convincing

entrepreneurship.

and

comprehensive

presentation

on

principles

of

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Of paramount importance in this presentation is to give the audience an insight into the
principles of entrepreneurship, their importance and consequences of not abiding by them.by
the end on the presentation the audience must be able to;

Identify the principles of entrepreneurship

Apply those principles
Should be able to identify the importance of principles of entrepreneurship
To help entrepreneurs have a better understanding of the concept of entrepreneurship
Awareness of the drawbacks for not complying with the principle of entrepreneurship

Introduction
You can never cross the ocean without losing sight of the shore. When one wants to become
an entrepreneur, they have to forgo something. In order for entrepreneurs to succeed in
business they have to be equipped for the business world through various principles which
were brought forward by yester year writers. These principles seek to develop the
entrepreneurial abilities of those involved. Being an entrepreneur is not always bringing a
new thing but also modifying existing methods to suit the current needs,
Henry Ford invented neither the automobile nor the division of labor but instead
applied the division of labor to the production of automobiles in new way, the
assembly line.
Entrepreneurship is not about new invents but also about merging the existing ways for the
better. Economist Joseph Schumpeter (1883-1950) focused on how the entrepreneur's drive
for innovation and improvement creates upheaval and change.
Definition of terms
Creativity is the ability to develop new ideas and to discover new ways of looking at
problems and opportunities. Developing creativity is a process of changing the way you look
at things. To do this you must look for different or unorthodox relationships between people
and things. Another way to be more creative is to view people and things in terms of how
they can be used to satisfy needs (both as resources and problem solvers).
The word entrepreneur is derived from a French expression which means to take up; this
refers to the trait of taking up new ideas, products and concepts in the marketplace. The basic
definition of an entrepreneur according to Jeanne Holden (2011) is a person who organizes

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and manages any enterprise. Stoner and Freeman (1989) define an entrepreneur as either the
originator of a new business venture or a manager who tries to improve an organizational unit
by initiating productive changes. (p697). Peter Drucker a renowned entrepreneur believes that
an entrepreneur is one who always searches for change responds to it and exploits it as an
opportunity. Innovation is the basic tool of entrepreneurship. It is the means by which they
exploit changes as an opportunity for a different business or service. Tracy Brian, The word
entrepreneur means one who undertakes the risks of a new venture in pursuit of profit."
Entrepreneurship is defined by Nikhil (1996) as a way of thinking, reasoning and acting that
is opportunity obsessed, holistic in approach and leadership balanced. He further explains
entrepreneurship as the capacity and willingness to develop, organize and manage a business
venture along with any of its risks in order to make a profit. According Kretchman et al
(1991), entrepreneurship involves bringing about change to achieve some benefit. The benefit
may be financial but also involves satisfaction of knowing you have changed something for
the better. Bo dell et al (1991) defines entrepreneurship as essentially the act of creation
requiring the ability to recognize an opportunity shape of a goal and take advantage of the
situation. Economist Joseph Schumpeter (1883-1950) viewed entrepreneurship as a force of
creative destruction .The entrepreneur carries out new combinations thereby helping render
old industries which are obsolete. Established ways of doing business are destroyed by the
creation of new and better ways.
A principle is a fundamental truth or preposition that serves as the foundation for a system of
belief or behavior or a chain of reasoning (oxford dictionary). A principle is a comprehensive
and fundamental law, doctrine or assumption that has numerous special applications across a
wide field. Therefore basing on the above definitions one can deduce that principles of
entrepreneurship refer to the knowledge or assumptions that a person who organizes and
manages any enterprise should have in order to help him establish and succeed in a business
venture they wish to undertake.
Innovation is the ability to apply creative solutions to those problems and opportunities in
order to enhance peoples lives or to enrich society. There are four distinct types of
innovation, invention described as the creation of a new product, service or process.
Extension the expansion of a product, service or process and duplication defined as
replication of an already existing product, service or process. Synthesis is the combination of
existing concepts and factors into a new formulation.

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Principles of entrepreneurship
Flexibility
Flexibility is the ability to move quickly in response to changing market needs (U.S.
Department of State/Bureau of International Information Programs, 2013). Flexibility has to
do with the ability of an entrepreneur to adapt to changing circumstances and thus remain a
profitable enterprise. Tawanda Nyambirai of the TN Bank at first was in furniture selling due
to market needs changed to banking sector which he creatively later infuse Econet project of
Ecocash cashing out facility. A business that is able to anticipate changes in consumer
preferences and alter production to meet those new expectations has a much better possibility
of continuing over the long term (Tatum, 2013). Flexibility is very important for a business
because changes must be made occasionally from plans to strategies. Being able to change
accordingly and always having the option to do so will make your business less vulnerable. In
order to correct mistakes, errors and inefficiencies swiftly, you must have the flexibility to do
so. Flexibility means having the power, authority and system to change accordingly with ease
(Kam ,2009).
Determination
Determination can be defined as the extremely strong desire to achieve success. It includes
persistence and the ability to bounce back after rough times. It persuades the entrepreneur to
make the 10th phone call, after nine have yielded nothing. Successful entrepreneurs believe
money is not the motivation. Success is the motivator; money is just the reward. A
determined entrepreneur is sure to succeed because he will never let go of what he wants
before he achieves it, just like Mr. Nigel Chanakira almost lost his shares in Kingdom Bank
to John Moxon of Meikles Africa, he was determined to keep his company hence he fought to
the extent of being admitted in a South African hospital due to stress but he did not give up
until he got his company back.
Creativity
The essence of successful business is innovation. This is the ability to find faster, better
cheaper, easier ways to deliver your products and services. Fortunately almost everyone is a
potential genius. One has more intelligence and ability that they could ever use. The only
task is to unleash this creativity and focus it, like a beam, on moving obstacles, solving

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problems and achieving your goals. The essence of creativity is contained in ones ability to
solve the inevitable problems and difficulties of the business life. Colin Powel once said,
Leadership is the ability to solve problems. Creativity is the ability of creation that is the
causing of a new thing to exist. This include going an extra mile in business for example
some Zimbabwe cross boarder bus companies like Translink Tours offers free ticket if you
travel with them for a consecutive period say for more than three trips . A thing that did not
exist before now does.
When Mr. Strive Masiiwas Econet introduced Ecocash, financial institutions were there
offering financial services but it was that touch of creativity that made them win the market
and it sky rocketed them to becoming the largest money transfer agent in Zimbabwe. It could
also be a product, like Champaign, wine that is fermented in a special way. A new advertising
campaign is certainly an act of creation. Naiman (2011) opines that, creativity is the act of
turning new and imaginative ideas into reality. Daniel Chingoma showed creativity when he
came up with his own design of a helicopter. Creativity is the ability to combine ideas in a
unique way or to make unusual associations between ideas as it is done in some of the stores
that if you buy more than five drinks you get one for free.
Leadership
According to Holden (2011), leadership is the ability to create rules and to set goals. It is the
capacity to follow through to see that rules are followed and goals are accomplished. A
Zimbabwean entrepreneur who through his leadership qualities achieved his goals is Nigel
Chanakira of Kingdom bank. He managed to adhere to expectations of Reserve Bank of
Zimbabwe in terms of banking regulations and rules even in times of economic meltdown.
Leadership can defined as the social and informal sources of influence that one use to inspire
action taken by others. Tapfuma Gutsa (a sculptor) is one of Zimbabwean sculptors through
his leadership managed to influence a lot of youths into sculpture. One of his products is
Washington Matafi who is doing well in art exhibitions in Chitungwiza. It means mobilizing
others to want to struggle toward a common goal .Artists in Zimbabwe at times find it very
difficult to market their products ,but through proper leadership they are making it through
even overseas. According to Free Dictionary (2013), Leadership is, organizing a group of
people to achieve a common goal. Effective leadership is the ability to successfully integrate
and maximize available resources within the internal and external environment for the
attainment of organizational or societal goals. Katz and Green (2007:627) stated that, if you

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are getting the job done, and you are keeping your people happy with each other and the firm,
then you have achieved the primary goals of leadership. A leader plans; the core of business
leadership is being proactive rather than reactive. Leadership involves identifying potential
problems and solving them before they reach crisis proportions and the ability to identify
and reap potential windfalls. So good leaders analyze and plan and adapt their plans to new
circumstances and opportunities. A leader has a vision. Vision is essential to good leadership.
Vision provides direction and without direction. A leader shares her vision. Sharing your
leadership vision helps your vision grows and your business leadership develop. Your
business leadership skills will grow as you and other people recognize you as a person with
leadership potential.
Dedication
When an entrepreneur wants their business to succeed they have to dedicate to the duties of
their business venture. Dedication leads to motivation of the entrepreneur to can work hard
even to the extent of 12 hours a day or more, even seven days a week, especially in the
beginning when most effort in order to get the endeavor off the ground is needed. It can be
concluded that dedication makes it happen and brings success if used together with other
principles. Through dedication to his work, Mr Phillip Chiyangwa recently graduated with a
PhD in Business Leadership from a Philippian university which will mean he is in an even
better position to manage his businesses as an entrepreneur, the businesses were doing well
but because he is dedicated to giving his businesses the best leadership there is, he furthered
his education.
Self confidence
According to Free Dictionary (2013), self-confidence relates to self-assuredness in one's
personal judgment, ability, power, etc., sometimes manifested excessively. Therefore it is
confidence in oneself or one's own abilities. Most Zimbabwean stone sculptures like
Washington Matafi showed self confidence in his exhibitions as cited on internet
(http://www.guruve.com) that he exhibited and excelled in the field of contemporary artists.
He was a finalist in the Young Sculptor Awards (organised by African Millennium
Foundation) and he was the winner of the men's section of the 'Creativity and Originality'
exhibition at Chitungwiza Arts Centre in 2006. Self-confidence comes from thorough
planning, which reduces uncertainty and the level of risk. Most Zimbabwean fine artists work

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through their artefacts confident enough that their works will be accepted by the art world
and will be conferred the art status. It also comes from expertise. Self-confidence gives the
entrepreneur the ability to listen without being easily swayed or intimidated (U.S. Department
of State/Bureau of International Information Programs 2013).
Passion
Passion is what gets entrepreneurs started and keeps them there. It is very easy for an
entrepreneur to hold onto something that they have wanted to do all their life. When things go
wrong and the entrepreneur has passion for something then they can hold on even when their
businesses are trading in the red. Passion gives entrepreneurs the ability to convince others to
believe in their vision. It can't substitute for planning, but it will help them to stay focused
and to get others to look at their plans. Mr Strive Masiiwa had a passion for
telecommunications and because of his passion he sold his engineering company which was
doing well those days just to establish Econet, a telecommunications company, his passion.
Integrity
Coyle.D. (2006) defined integrity as the respect gained from the public through service
provision for example being responsible, accountable, fair and transparent. According to
King Report (2002) integrity is defined as ethical standards that define the organizations
guiding values, create an environment that supports ethical sound behavior and stress a
shared accountability. In addition Eart.C. (1994) stipulates that integrity has to do with the
way you conduct your enterprise on a daily basis. These include making safe, good, quality
products, treating the customer right and operating in honesty. From the above definitions
integrity is all about being honesty, doing ethical things and has a strong moral principle in
order to be successfully in entrepreneurship. You have to abide with the rules and regulations
so that you are not caught at the wrong side of the law you have to practice ethical issues to
assure sustainability of your success.
Innovation
Innovativeness is concerned with supporting and encouraging new ideas, experimentation
and creativity likely to result in new products, services and processes Miller and Friensen
(1983). According to Jun and Descholmester (2003) the entrepreneurs innovativeness is
demonstrated by their willingness and capability to create a paradigm shift in science,
technology and market structure in an industry from a macro perspective. Successful

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entrepreneurial venture is based on a significant innovation. The innovation might be

technological services or managerial nature. The introduction of new sources of supply or
industrial re-organization. Innovation helps the entrepreneur to endow resources with a
capacity to create wealth. Innovation indeed creates a resource, there is no such a thing as a
resource until an entrepreneur finds a use for something in nature and thus endows it with
economic value.
Information seeking
A successful entrepreneur is always in search of new ideas and information from various
sources to help reach objectives or clarify problems. He can consult experts for business or
technical advice. She or he personally undertakes research, analysis or investigation on his
own to get information in realising the goals. Through information seeking the entrepreneur
will find gaps on the market and any other opportunities and will be able to exploit such
opportunities in time before competitors.
Making a lot of money fast is not the first goal of entrepreneurs
The most significant principle of entrepreneurship success is to commit oneself deeply with
the ideal of entrepreneurship itself, and then to a particular business model or service /
product. This double commitment helps start uppers to react to market fluctuations, moving
or abandoning business models, services or products that are not working well. Testing
several ideas or spending years searching for the right business idea is quite usual before
coming up with the right one that matches the consumer needs. Quite usual as well is the fact
of working for other startups, getting into consulting or venture capital firms, or following
more traditional careers in huge structures, before becoming an entrepreneur.
Find the right opportunity
The key challenge is to focus on finding customer problems first, and only then on searching
for solutions that customers greatly need or want, rather than solutions that are nice to have.
The right solution often comes from your personal or / and professional experience as well as
from your feelings, your sense of intuition and observation

Build successful teams

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Building great teams your most important asset is fundamental when starting a business.
It starts by picking the right founder and combining the best skills. Designing your team long
before starting your activity is essential. It is the only way to reach profitability with the right
people at the right place, altogether focused on the business model goals. Make sure that your
team has passion and love with its work in so far as strong passion is probably the first
quality which is required for getting motivation, determination, constancy and courage, not to
mention hard working and fin
Make sure that execution is critical
Entrepreneurship is difficult even when the idea is great, the team is good and conditions are
ideal. Executing well involves a combination of two factors: First, balance your
entrepreneurs confidence in your business goals with you ability to make your team build the
project step by step. Second, keep on learning to motivate and lead people. Leadership is
undoubtedly a huge issue in entrepreneurship. Two main qualities are required. The most
successful entrepreneurs can work alone and be a team player, whatever the size of the team
is. They can make a critical individual contribution to their venture and make that transition
to leading their team. The most successful entrepreneurs have the capacity for trusting their
intuition and theirs instincts, even when they hurt conventional rules or habits. In that way,
experiencing adversity develops self-confidence and a sort of visceral sense for the right way
to do things.
Real Human Capital Must Be Rented From Owners.
Lipsey and Crystal list labor as the most important factor of production hence it should
receive payment in the form of wages. Leach and Melichers first principle is based on that
fact, they believe the entrepreneur is also a worker to the business hence his services should
added to the salary bill. The concept of opportunity cost of his salary as expressed by Lipsey
and Crystal come to an agreement with Leach and Melichers view that the entrepreneur
should compensate himself but not more than what he would have got as his salary hence real
human capital should be rented from the owners. Just as Tawanda Nyambirai, the founder and
C.E.O. of TN Holdings does not help himself to the profits of the company but only receives
his salary as the C.E.O and dividends as an ordinary shareholder and the rest of the profits
credited to the company reserves.

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Risk and Expected Return Go Hand In Hand

There is a saying that goes high risk, high return. On this principle, Leach and Melicher
simply mean that when an entrepreneur goes into business, it is a risk they are undertaking
that will bring return in the entrepreneur who is the risk taker. The risk taken by the
entrepreneur should be one that he or she has foresight of a return on investment because risk
and return go hand in hand. When Mr. Tawanda Mutyebere went into the fast food with his
Slice Outlets (Chicken Slice, Pizza Slice and Creamy Slice), it was a risky move as the
market was largely dominated by Innscor food outlets (Chicken Inn, Creamy Inn, Bakers Inn
and Pizza Inn), even though it was risky, he succeeded in penetrating and it was the fore sight
of a return that made him to enter the market that was already dominated by someone else.
Being an entrepreneur is associated with benefits among these is creating your own destiny.
Owning a business provides entrepreneurs with the independence and the opportunity to
achieve what is important to them. They will run their businesses in ways they desire and
creating a long lasting legacy. There is also an impressive opportunity to reap profit.
Although money is not primary force driving entrepreneurs, the profits their businesses can
earn are an important motivating factor in their decisions to launch companies. If they can
earn large profits they will be motivated to invest in more risky escapades which can get
more return which would be entrepreneurs.
Entrepreneurs also get the opportunity to make a difference in a cause that is important to
them. Social entrepreneurs seek innovative solutions to some of the societys most vexing
problems. They may provide low cost, sturdy housing for families and establishing recycling
programs to preserve Earths limited resources. Some may make a difference in the whole
technological field for example Steve Jobs who redefined and reshaped the industry through
his Apple products.
There are also risks associated with being an entrepreneur, some may be attributed to not
adhering to principles and some are general. There is a very high risk of losing the entire
investment. Business failure can lead to financial ruin for an entrepreneur, and small
businesses failure rate is very high. There is an uncertainty of income. Opening and running a
business provides no guarantee that an entrepreneur will earn enough money to survive.
Conclusion

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All Multi-Nationals Companies were once small and unpopular businesses but every large
business had a starting point and that is entrepreneurship. Econet Wireless, Kingdom Bank,
TN holdings and Pinnacle Holdings were all small business at one time but because of the
principles mentioned above, they grew to the positions they are now. The process of being an
entrepreneur is a learning curve and these principles, though being fundamental are not all
that the knowledge the entrepreneur should apply to their business but they are just a starting
point for him. It is important for entrepreneurs to keep inquiring for knowledge as we now
live in a dynamic world that changes by each second hence the need for constant research by
entrepreneur even when the business is performing well.

References
Drucker, Peter F. (2007) Innovation and Entrepreneurship, Elsevier Ltd, London

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Emerson, Ralph, W. (1993) Self Reliance and Other Essays, Dover Publications, London
Jeanne Holden, (2011) American View, U.S Department of State Publications, Washington
Jim Collins (2005) Good to Great: Why Some Companies Make the Leap and Others Dont,
Harper Collins Publishers, Australia
Leach, J.C. and Melicher, R.W. (2009), Entrepreneurial Finance, (4th Ed), Cengage
Learning, Stamford
Lipsey R. and Crystal A. (2007) Introduction to Positive Economics (8th Ed), Oxford
University Press, New York
Maurer, M.S. (2012), 10 Principles of Entrepreneurship You Never Learned In School, IBJ
Custom Publishing,
Powell Collin, (2012), It Worked For Me: In Life and Leadership, Harper, New York
Schumpeter J. (1975) From Capitalism, socialism and Democracy, Harper, New York
Stoner, James A.F and Freeman, Edward R. (1989) Management (6thed) Prentice Hall,
London
Tracy Brian, (2012) Entrepreneurial Magazine, Entrepreneur Media Inc., South Africa
Wilken, Paul H (1979) Entrepreneurship: A Comparative and Historical Study, Ablex
Publishing Corporation, Norwood
www.businessdictionary.com/definition/principle
www.jimrohn.com
www.merrian-webster.com/dictionary/principle