2. ENTREPRENEURSHIP
1. Definition
There are many definitions of entrepreneurship
Common terms used in these definitions
new, innovative, flexible ,dynamic, creative, risk
taking and opportunities etc
Entrepreneurship
Is the process of creating something different with
value by devoting the necessary time and effort,
assuming the accompanying financial, social and
psychological risks and receiving the resulting
rewards of monetary and personal satisfaction.
3. 2. Historical perspective on
entrepreneurship
Early in the eighteen century (between
early 1700s and late 1700s)
• Richard Cantillon was regarded as an originator
of the term Entrepreneur.
• Entrepreneur was considered as a person who
took an active risk bearing role in pursuing
opportunities
4. • He described an entrepreneur as a go-
between or between taker
• Entrepreneur saved as a bridge between
someone who had capital or money and who
chose not to pursue personally those
opportunities to someone who financed
pursuit of opportunities
• In late 1700s the concept of
entrepreneurship was expanded to include
bearing risk plans, supervising organising
and owning factors of production
5. Nineteenth century (1803-late 1800s)
• Jean Baptist Say (an economist) proposed
that the profit of an entrepreneur were
separate from profit of capital ownership
• That is profit rising from entrepreneurial
activities were separate from those arising
by just owning ad providing capital
• In late 1800s the distinction was made
between those who supplied funds and
earned interest and those who benefited
from entrepreneurial activities.
6. • That is an entrepreneur was considered different
from management of organisation
Twentieth century (1934-1984)
• Joseph schumpeter (also an economist) described
an entrepreneur as someone who is an innovator
and who creatively destructs (untried technology).
That is existing products, processes, ideas and
businesses are replaced with better ones.
7. • Peter Drucker (management author) in the
same period describes the entrepreneur as
someone who maximises opportunity. That is
an entrepreneur recognise and act on
opportunities, entrepreneur sees untapped
and undeveloped opportunities and act on
them
8. 3. Misconception about entrepreneurship
Successful entrepreneur needs only a great
idea
• Creating or having an idea is just part of the
qualities of a successful entrepreneur
One needs to also
• To understand demand of different phases of
entrepreneurial process
• Taking an organised approach to develop the
entrepreneurial venture (EV)
• Cope with the challenges of managing EV
9. Entrepreneurship is easy
• It is not that one has desire to succeed; it is going
to be easy. It takes commitment, determination
and hard work. Entrepreneurs often encounter
difficulties and setbacks
Entrepreneurship is a risk gamble
Because entrepreneurship involves pursuing new and
interested ideas, people think that it is a gamble
Not really, entrepreneurship involves calculated risks
and not unnecessary ones. There are time when
entrepreneurship means avoiding and minimizing
risks
10. Entrepreneurship is found only in small business
• Just because an organisation is small doesn't
automatically make it EV. Entrepreneurship can be
found any size of an organization
EV and small businesses are the same thing
Wrong, there is difference between EV and small
business
11. 4. Differences between small business (SB) and
EV
SB is one that is
• independently owned,
• operated and financed,
• has fewer than 100 employees,
• doesn’t engage in any new or innovative practices
and
• has relatively little impact on its industry.
12. EV on the other hand is
• an organization that is pursuing new opportunities,
• is characterized by innovative practices
• Willingness to take risks and
• has profitability and growth as main goals
5. Who is an entrepreneur
Someone who initiates and actively operates an EV.
• Entrepreneurs can be described by their
characteristics in terms of demographic profiles,
personal profiles or entrepreneurial intention
profiles.
13. Entrepreneurs engage in
Exploring the entrepreneurial context
Starting the venture
• Researching the venture feasibility
• Planning the venture
• Organizing the venture
• Launching the venture
Managing the venture
Managing people, process and growth and
entrepreneurial challenges
• So the entr. does the venture as well as dreams it up.
15. Cont…
Entrepreneurship has been:
Described 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.
16. Cont.….
• There are increased national and
international interest in entrepreneurs,
who are they and how they impact an
economy.
In spite of all these interest ,a concise,
universally accepted definition has not
yet emerged.
17. Entrepreneurs and Small business
Owners-Managers
Though some people use these terms
synonymously , but entrepreneurship
specialists attempt to delineate some
distinctions.
Small business owners-manager is one
that both owns and manages a small
firm or venture.
18. Cont.….
There is no agreed upon definition of
small firm. Instead, a number of
quantitative and qualitative criteria are
used.
19. Cont.…
These include:
. Number of employees
. Total assets
. Number of shareholders
. Market share
. Composition of management
. Degree of formalization
. Capital invested
. Turn over
20. Cont…
A small business is a firm with the following
features:
1. Its market share is relatively small
2. Capital is supplied and ownership is held
by an individual or small group
3. Area of operation is mainly local-Workers
and owners are in one community,but
market need not be local.
21. Cont…
3. Economically a small firm has relatively
small share of the market.
4. It is administered by its owners or part
owners in a personalized way rather than by
means of a formalized management
structure
22. Cont.….
5. Financially,it is independent in the sense that it
does not form part of a larger enterprise and
owner-managers are free from outside control in
taking their principal decision
6. It is apparent that a small firm in the UK and/or
USA might not be small in Tanzania, or
alternatively a large firm in Tanzania might not be
large in the above countries.
23. Tanzania Definition of SMEs
Category Employee Capital Invested in
Machinery(T sh.)
Micro enterprise 1 to 4 Up to 5Mil.
Small enterprise 5 to 49 Above 5Mil to 200
Mil
Medium enterprise 50 to 99 Above 200 Mil to
800 Mil
Large enterprise 100+ Above 800 Mil
24. Entrepreneurs Vs Managers
• Reward-Doing what they like .
Independence
• Activity- Direct involvement
• Risk –Moderate risk taker
• Status- Not concerned about
status symbols
• Mistakes- Deals and learn
from them
• Reward system-Corporate
rewards
• Activity-Delegates and supervises
• Risk- Avoid risk
• Status- Concerned about status
symbols
• Mistakes- Avoids or shifts blames
Entrepreneurs Managers
25. Cont…
• Decisions- Follows dreams
with decision
• Who serves-Customers and
self
• Relationship-Deal making
and reciprocity
• Time orientation-Long term
• Decision- Agree with those
above them
• Who serves- Others
• Relationship-Hierarchy
• Time orientation- Short
term
Managers
Entrepreneurs
26. Entrepreneurs Vs Small Business
Managers
There are three characteristics that distinguish
entrepreneurs and small business managers:-
1. Innovation
Small business may be new to a locality , but it is
not doing anything in a global sense.
2. Potential growth
Small business operates within a given market,
while the entrepreneurial venture is in position to
create its own market.
27. Cont.…
3. Strategic objectives
Objectives are futures of all businesses , but
the objective of entrepreneur ventures are
more strategic in nature , relating to:
i. Growth targets
ii. Market development
iii. Market share
iv. Market position
28. Creativity, innovation, and
entrepreneurship
• Creativity is the ability to develop new ideas and to discover new ways
of looking at problems and opportunities.There is no doubt that
creativity is the most important human resource of all. Without
creativity there would be no progress, and we would be forever
repeating the same patterns”
• In this context, it could mean
• new processes to help us do something better
• new ways of using existing products
• new services to supply to new or existing
customers etc.
• New ways of thinking about things
it is possible. just play your part 28
29. INNOVATION
• Innovations is the ability to apply creative
solutions to problems and opportunities to
enhance or to improve people’s lives.
Creativity is thinking new things and innovations is
doing new things
Innovation is the implementation of creative ideas
that is new and unique.
What matters for innovation is how it influences
survival chances, profit and growth opportunities.
it is possible. just play your part 29
31. Creativity is the ability to develop new ideas and to discover new ways of
looking at problems and opportunities.
Innovation is the ability to apply creative solutions to those problems
and opportunities in order to enhance people’s lives or to enrich
society.
Researchers believe that entrepreneurs succeed by thinking and doing
new things or old things in new ways .
Creativity, innovation and entrepreneurs
32. Entrepreneurship is the result of a disciplined, systematic
process of applying creativity and innovation to needs and
opportunities in the marketplace.
Entrepreneurs are those who marry their creative ideas with the
purposeful action and structure of a business.
Successful entrepreneurs come up with ideas and then find ways
to make them work to solve problems or to fill a need.
Innovation is the specific instrument of entrepreneurs
.
