Entrepreneurs: The Driving Force Behind Small Business

Entrepreneurs: The
Driving Force Behind

Small Business
Chapter 1 Entrepreneurs Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 1
Course Objective:
1. Understand the concept of business and
entrepreneurship
2. Know the skills that contribute to entrepreneurship and
recognize them in oneself
3. Know the basic requirements for launching a small
business
4. Know how to translate a commercial idea into a
business plan
5. Explain entrepreneurship and discuss its importance.
6. Discuss the three main reasons that people decide to become
entrepreneurs.
7. Identify main characteristics of successful entrepreneurs.
What is a business?
 The origin of the word ‘ business’ was

“busy-ness”; the state of being busy!
 Business are activities that provide
goods and/or services in exchange for
money or other goods and services.
What is a business?
 Business—buying and selling

products and services.
 Product—something tangible that
exists in nature or is made by people.
 Service—intangible work that
provides time, skills, or expertise.
Introduction to
Entrepreneurship
There is tremendous interest in
entrepreneurship around the world
According to the GEM 2014 study, about
330 million people, or 14% of the adults
in the 35 countries surveyed, are
involved in forming new businesses
Origin of the Word “Entrepreneur
Earlier Viewpoints ”
The word entrepreneur originates from the

French word, ENTREPRENDRE, which
means "to undertake." In a business
context, it means to start a business.
The word was originally used to describe
people who “take on the risk” between
buyers and sellers or “undertake” a task
such as starting a new venture
Some facts about entrepreneur
says
E:xamine needs, wants, and problems to see
how they can improve the way needs and
wants are met and problems overcome
N: arrow the possible opportunities to one
specific “best” opportunity.
T:hink of innovative ideas and narrow them to
the “best” idea.
says
R:esearch the opportunity and idea carefully.
E:nlist the best sources of advice and assistance
that they can find.
P:lan the business enterprise and look for
possible problems that might arise.
R:ank the risks and the possible rewards.
says
E:valuate the risks and possible rewards and
make their decision to act or not to act.
N:ever hang on to an idea, no matter how
much they may love it, if research shows it
won’t work.
E:mploy the resources necessary for the
venture to succeed.
says
U:nderstand that they will have to work long and
hard to make their venture succeed.
R:ealize a sense of accomplishment from their
successful ventures and learn from their failures
to help them achieve success in the future.
DEFINITION
Entrepreneurship is the process by which
individuals pursue /hunt opportunities without
regard to the resources they currently control.
The fundamental nature of entrepreneurial
behavior is identifying opportunities and
putting useful ideas into practice.
Entrepreneurship is the process of starting new
businesses, generally in response to
opportunities.
DEFINITION
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
DEFINITION
 Employees work for someone else’s

business.
 Entrepreneurs start their own

businesses and work for themselves.
What Is an Entrepreneur?
An entrepreneur is someone who
is willing to work 16 hours a day
to keep from working 8 hours a
day for someone else!
A true opportunity exists only for
the entrepreneur who has the
interest, resources, and
capabilities required to succeed.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Why Become an Entrepreneur?
There are three primary reasons that people

become entrepreneurs and start their own firms
a.Desire to be their own boss & Control over time
b.Desire to pursue their own ideas (either no one heard

their ideas or they have a long time hobby to apply)
c.Financial rewards :and its typically secondary the other
two are Pasic
The desire to make money, alone, is not a good enough
reason to start one’s own business.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Qualities, and Characteristics
of an Entrepreneur
 . Entrepreneurs are innovators
 They observe an opportunity.
 They create new goods and services.
 They improve existing products.
 . Entrepreneurs provide choice
They add goods and services to the marketplace.
Qualities, and Characteristics of an
Entrepreneur
 Willingness to take initiative: entrepreneur is
a person who is willing and able to convert a new
idea or invention into a successful innovation.
 Risk Taker and Preference for moderate risk
(good Entrepreneurs become risk reducers, and one of the best ways
to minimize the risk is to create a sound business plan)
 Inner Drive to Succeed and Confidence in their
ability to succeed
They tend to be optimistic about their chances for success,
and usually their optimism is based in reality .
Chapter 1 Entrepreneurs 17
Entrepreneur
 Desire for immediate feedback
‘Entrepreneurs like to know how they are doing
and are regularly looking for reinforcement’
 Hardworking and High level of energy
‘Entrepreneurs are more energetic than the average person
that energy may be a critical factor given the incredible effort
required to launch a start-up company’ . Entrepreneurs need a
great deal of energy to see a venture start and succeed
Chapter 1 Entrepreneurs 18
Entrepreneur
 Competitive by Nature
Successful entrepreneurs increase on competition.

The only way to reach their goals their self is to
compete with other successful businesses
 Skilled at organizing and Strong people
skills: Entrepreneurs know how to put the right
people and resources together to accomplish a
task . Most successful entrepreneurs know how to
motivate their employees so the business grows
overall.
Entrepreneur
 Goal-setting and Value achievement

over money (Achievement is the
primary motivating force behind
entrepreneurs) Entrepreneurs are
motivated by the excitement of staring
a new business. Once achieved, they
seek out new goals or ventures to try.
Entrepreneur
 Accepting of Constructive Criticism and

Rejection
Innovative entrepreneurs are often at the
forefront of their industry so they hear the
words "it can't be done” Also, the best
entrepreneurs know that rejection and
obstacles are a part of any leading business
and they deal with them appropriately.
Entrepreneur
 Passion:
They actually love their work. They are
willing to put in those extra hours to
make the business succeed because
there is a joy their business gives
which goes beyond the money.
Entrepreneur
 Imaginative and Future orientation :

Entrepreneurs are creative. They imagine
solutions to problems that encourage them to
create new products and generate ideas (Big
Dreams may came true).
 Persistent: True entrepreneurs face
bureaucracy, make mistakes, receive criticism,
and deal with money, family, or stress
problems. But they still stick to their dreams
of seeing the venture succeed.?
Entrepreneur
 Flexible: Entrepreneurs must be flexible

in order to adapt to changing trends,
markets, technologies, rules, and
economic environments.
Entrepreneur
 One characteristic of entrepreneurs

stands out:
Diversity!
 Anyone – regardless of age, race,
gender, color, national origin, or any
other characteristic – can become an
entrepreneur (although not everyone
should)
Entrepreneurial
Incentives
How to Spot Entrepreneurial
Opportunities
 Creativity vs. Innovation
 Creativity – the ability to develop new
ideas and to discover new ways of
looking at problems and opportunities
 Innovation – the ability to apply
creative solutions to problems and
opportunities to enhance or to enrich
people’s lives
 Take a different approach to an
existing market

Benefits of Small Business
Ownership
 Opportunity to create your own destiny:
Owing a business provides entrepreneurs the
independence and the opportunity to achieve
what is important to them
 Opportunity to make difference: Because they
see an opportunity to make difference in a
cause that is important to them.
 Opportunity reach your full potential
Benefits of Small Business
Ownership
 Opportunity to do what you enjoy and have
fun at it (Interest in them)
 Opportunity to contribute to society and be
recognized for your effort:
 Opportunity to reap extraordinary profits:
most of entrepreneurs become super-rich and
do become quite wealthy
Drawbacks of Small
Business Ownership
 Uncertainty of income
 Risk of losing your entire investment
 Long hours and hard work
 Lower quality of life until the business gets established
 High levels of stress

 Complete responsibility
 Discouragement
Behind the Boom: What’s Feeding
the Entrepreneurial Fire
The rapid increase in entrepreneurs has
been a result of
 Demographic and economic factors
 Considering Entrepreneurs as heroes
 Entrepreneurial education
 Technological advancements/ business
and the Internet
The Cultural Diversity
of Entrepreneurship
 Immigrant entrepreneurs
 Part-time entrepreneurs
Young entrepreneurs
Women entrepreneurs
The 10 deadly mistakes of
entrepreneurship
 Management mistakes: poor
management(Poor planning, organizing,
leading, controlling)
 Lack of Experience: Small business
managers need to have experience in the
field they want to enter.
 Poor Financial Control: Business success
requires having a sufficient amount of
capital on hand at the start up.
entrepreneurship
 Failure to develop a strategic plan:
If business do not develop a strategic plan,
there is no clear strategy serving to
maintain competitive edge in the market
place
 Weak Marketing efforts: Business needs
much of effort in marketing that building a
powerful marketing plan.
entrepreneurship
 Uncontrolled Growth: Growth means a
natural, healthy and desirable part of any
business enterprise. It must be planned and
controlled. When there is an expansion of
business, what happen?
 Poor Location :
If location business is chosen without proper
study, investigation, and planning, the result will
be …
entrepreneurship
 Improper Inventory Control
Managerial responsibilities play an important
role. Shortage stock, over stock
 Incorrect pricing
 Must understand how much it costs:
 High Price
 Low Price
entrepreneurship
 Inability to make the entrepreneurship
transition
After start-up the business growth will
different styles of management.
How to avoid the pitfalls
 Know your business in depth: Right types of
experience in the business you plan to start. Get the
best education in business area
 Develop a solid business plan
Well-written business plan is a essential element in
preparing for business success
 Manage financial Resource: Have an adequate of
capital for start-up
“ Estimate how much capital you need to get the
business going and then double that figure”
- Have enough cash to pay the bills and obligations
How to avoid the pitfalls
 Learn to manage people effectively:

 Well training
 Well motivated employees
 Attracting talented and skillful employees
 Keeping the best employees
 Maintain a positive attitude
 Understand financial statements
Questions
Task -1 (individual)
Why are some Somali small
business organizations fail?

Entrepreneurs: The Driving Force Behind Small Business

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Entrepreneurs: The

Driving Force Behind

 The origin of the word ‘ business’ was

 Business—buying and selling

The word entrepreneur originates from the

 Employees work for someone else’s

 Entrepreneurs start their own

There are three primary reasons that people

b.Desire to pursue their own ideas (either no one heard

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Successful entrepreneurs increase on competition.

 Goal-setting and Value achievement

 Accepting of Constructive Criticism and

 Imaginative and Future orientation :

 Flexible: Entrepreneurs must be flexible

 One characteristic of entrepreneurs

 High levels of stress

 Learn to manage people effectively:

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