ENTREPRENEURSHIP SKILLS.

Is the process of creating something new with value by devoting the

necessary time and effort, assuming the necessary risks (financial,
psychological, and social) and receiving the resulting rewards of monetary,
personal satisfaction and independence.

Entrepreneurship definition stresses 4 basic aspects of being an entrepreneur.

1. the entrepreneurship involves the creation process- creating

something new of value. The creation has to have value to the
entrepreneur and to the audience for which it is developed.
2. the entrepreneur requires the devotion of the necessary time and
effort. Only those going through the entrepreneur process
appreciate the significant amount of time and effort it takes to
create something new and make it operational.
3. Assuming the necessary risks.
4. Rewards of being an entrepreneur eg independence, personal
satisfaction, NB
for profit entrepreneurs, the monetary reward also come into play.

For some money becomes the indicator of the degree of success. For the
person who actually starts his/her own business, the experience is filled with
enthusiasm, frustration, anxiety and hard work. There is high failure rate due
to such things as poor sales, intense competition, lack of capital, or lack of
managerial ability. The financial and emotional risk can also be very high.

The question can be best explored by looking at the decision process

involved in becoming an entrepreneur. Entrepreneurs operate within a
process that starts with a perceived opportunity and output something of
recognized value. Within the process the entrepreneur creates, innovates and
builds.

Deciding to become an entrepreneur by leaving present activity entails a

movement from a present lifestyle to forming a new enterprise. The decision
to leave a career or lifestyle is not an easy one. It takes a great deal of energy
and courage to change and do something new and different.
Although individuals tend to start business areas that are familiar, again
work environments have been particularly good for spawning new
enterprises.

Another incentive for leaving a present lifestyle to create something new

comes form a negative force – disruption eg, retired, fired, transfer,
Completion of an educational degree and not promoted.etc

The decision to start a new company occurs when an individual perceives

that forming a new enterprise is both desirable and possible.

Desirability of new venture formation- aspects of a situation that make it

desirable to start a new company. The perception results from an
individual’s culture, subculture, family, teachers and peers.

Possibility of new venture formation- factors making it possible to create a

new venture.
-government-contributes by providing the infrastructure to help and support
a new venture – roads, communication and transfer systems, utilities and
economic stability.

-background- education and previous business experience gives the potential

entrepreneur the skills needed to form and manage a new enterprise.

-marketing-a company is more easily formed when the driving force is more
from market demand than a technology push.

-role models-to see someone else succeed makes it easier to picture yourself
engaged in a similar activity – of course even more successfully.

-finances resources- must be readily available.

TYPES OF START UPS.

1. lifestyle firm.
- a small venture that supports the owners and usually
- does not grow. Is privately held and usually achieves only
modest growth due to the nature of the business, the objectives
and the limited money devoted to research and development.
 - Exists primarily to support the owners and usually has little
opportunity for significant growth and expansion.
2. foundation company.
- a type of company formed from research and development that
private investors only not the venture capital community.

3. High potential venture.

-A venture that has high growth potential and therefore receives
great investor interest.

4. Gazelles- very high growth ventures.

Intrapreneurship- entrepreneurship within an existing business structure.

Entrepreneurship as a field of business seeks to understand how

opportunities to create something new arise and are discovered or created by
specific persons, who then use various means to exploit or develop them,
thus producing a wide range of effects.
Entrepreneurship is an activity carried out by specific persons, involves the
key actions, identifying an opportunity, one that is potentially valuable in the
sense that it can be exploited in practical business terms and identifying the
activities involved in actually exploiting or developing this opportunity, also
involves being able to run a business successfully after it has come into
existence.

Entrepreneurship involves recognizing an opportunity to create something

new and that something does not have to be a new product or service.

WHY TURN TO ENTREPRENEURSHIP?

1. the media- are filled with glowing accounts of successful

entrepreneurs such as Bill Gates, Chandaria, etc. as a result the role
of entrepreneur has taken on a very positive and attractive field.
2. there has been a fundamental change in what has often been
 3. termed “ the employment contract” Many individuals feel little
loyalty to their current employers. “ I would be better off working
for myself”
4. change in basic values. - in the past, security was a dominant
theme for many people. They wanted a secure job with steady
increments in salary. Now surveys indicate that young people
especially prefer a more independent lifestyle. This has translated
into the creation of hundreds of new businesses employing
millions of people.

THE ENTREPRENEURIAL PROCESS.

The process through which a new venture is created by an

entrepreneur. The process has 4 distinct phases.

1. Identify and evaluate the opportunity.

-opportunity identification – the process by which an entrepreneur
comes up with the opportunity for a new venture. It is quite a difficult
task; most good opportunities do not suddenly appear but rather result
from an entrepreneur’s alertness to possibilities or in some cases the
establishment of mechanism that identify potential opportunities.
- the opportunity must fit the personal skills and goals of the
entrepreneur. An entrepreneur must believe in the opportunity so much
that he or she will make the necessary sacrifices to develop and manage
the organization.
- an opportunity analysis plan includes the following-
- a description of the product or service
- an assessment of the opportunity
- an assessment of the entrepreneur and the team
- Specifications of all the activities and resources needed to translate
the opportunity into a viable business venture, and the source of capital to
finance the initial venture as well as its growth.

The most difficult and critical aspect of opportunity analysis is the

assessment of the opportunity.

2. Develop a business plan- the description of the future direction of the

business. A good business plan must be developed in order to
 exploit the defined opportunity. It is also important in
determining the resources required, obtaining those resources and
successfully managing the resulting.
3. determine the resources required-this process starts with an appraisal
of the entrepreneurs present resources. Care must be taken not

underestimate the amount and variety of resources needed. An

entrepreneur should strive to maintain as large an ownership
position as possible, particularly in the start up stage. As the
business develops, more funds will probably be needed to finance
the growth of the venture.
4. manage the enterprise.- after resources are acquired, the entrepreneur
must employ them through the implantation of the business plan.
The operational problems of the growing enterprise must also be
examined. This involves implementing a management style and
structure, as well as determining the key variables for success. A
control system must be identified so that any problem areas can
be carefully monitored. Some entrepreneurs have difficulty
managing and growing the venture they created. This is one
difference between entrepreneurial and managerial decision
making.

LOCUS OF CONTROL
One concern people have when they consider forming a new venture is
whether they will be able to sustain the drive and energy required to
overcome the challenges in forming something new and manage the new
enterprise and make it grow.

-An attribute indicating the sense of control that a person has over life.
-Feelings about independence and need for achievement- need for
independence – being one’s own boss – one of the strongest needs of an
entrepreneur.
-need for achievement- an individuals need to be recognized.
-risk taking- risk taking – whether financial, social, psychological- is part
of the entrepreneurial process.
ENTREPRENEURIAL BACKGROUND AND CHARACTERISTICS.
1. childhood family environment-include birth order, parents’
occupations, and social status, and relationship with parents. Social
status- the level of which an individual is viewed by society.
- eg, parents of entrepreneurs need to be supportive and
encourage independence, achievement, and responsibility. This
supportive relationship of the parents particularly the father
appears to be the most important for female entrepreneurs, they
tend to be similar to their fathers in personality.
2. Education. - education is important in the upbringing of the
entrepreneur. It continues to play a major role in helping to cope with
problems entrepreneurs confront. Education is important it provides a
good background especially if related to the field of the venture. The
ability to deal with people and communicate clearly in the written and
spoken word is also important in any entrepreneurial activity.
3. Personal values- eg winning attitude, honesty, integrity, - helps
him/her to create and enhance the new venture.
4. Age- most entrepreneurs initiate their entrepreneurial careers between
the ages 22-45. {nb requires experience, financial support, and a high
energy level in order to launch and manage a new venture.
5. work history- the past work experience of an individual while
dissatisfaction with various aspects of one’s job- lack of challenge or
promotional opportunities, frustration and boredom, often motivated
the launching of a new venture. Previous technical and industry
experience is important once the decision to launch has been made.
Experience is the following areas is particularly important.
- financing, product or service development, manufacturing, and
development of distribution channels, and preparation of a
marketing plan. As the venture becomes established and starts
growing, managerial experience and skills become increasingly
important.

MOTIVATION.
Motivation- what causes people to do something. What motivates an
entrepreneur to take all the risks and launch a anew venture, pursuing an
entrepreneurial career against the overwhelming odds of failure?

The most common reason for becoming an entrepreneur is independence-

not wanting to work for anyone else. This desire to be one’s boss is what
drives both male and female entrepreneurs around the world to accept all
the social, psychological, and financial risks and to work the large
number of hours needed to create and develop a successful new venture.

Money is the second reason for starting a new venture for men.

Job satisfaction, achievement, opportunity, and money are the reasons in

rank order for women.

ROLE MODELS AND SUPPORT SYSTEMS

Role models influencing an entrepreneur’s career choice and style. Role
models can be parents, brothers, sisters or other relatives or other
entrepreneurs.
Role models can also serve in a supportive capacity as mentors during
and often the launch or a new venture. An entrepreneur needs a strong
support and advisory system in every phase of a new venture.

MORAL SUPPORT NETWORK.

It is important for each entrepreneur to establish a moral support of
family and friends-a cheering squad. This cheering squad plays a critical
role during the many difficult and lonely times that occur throughout the
entrepreneurial process, eg a wife supports a husband.

NB. Moral-support network – individuals who give psychological

support to an entrepreneur.

PROFESSIONAL–SUPPORT NETWORK- individuals who help the

entrepreneurs in business activities. The entrepreneur needs advice and
counsel throughout the establishment of the new venture. This advice can
be obtained from a mentor, business associates, trade associations- all
members of a professional support network.

EIGHT ENTREPRENEURIAL PROFILES.

These are several personality types that have a difficult time in
successfully creating and managing a new venture. These characteristics
can lead even the brightest entrepreneur with the best idea into
bankruptcy, a concern of resource providers such as venture capitalists,
bankers, suppliers, and customers.

PROFILE. DESCRIPTION.
1 shortgun Sam. An entrepreneurial type quickly
identifies new promising business
opportunity but rarely, if ever follows
through on the opportunity to create a
successful new venture.

2. Simplicity Sue. An entrepreneurial type who always

thinks everything is a lot simpler and
feels one can create a successful
business through one or two easy
solutions.

3. Prima Donna Paul. An entrepreneurial type so in love

with his own idea that he feels
everyone is out to take his idea and
take advantage of him. No trust.

4.palph the Rookie. An entrepreneurial type who is well

grounded in theory but lacks real-
world business experience.

5. Meticulous Mary. A perfectionist entrepreneur type who

is so used to having things under
control that she cannot manage during
a crisis and cannot handle periods of
ambiguity and chaos. (being a
perfectionist)

6.underdog Ed. An entrepreneurial type who is not

comfortable with actually
transforming the invention into a
tangible business success. This
entrepreneurial type likes to attend
seminars and discuss problems but
does not like putting things into
action, so needs a strong managerial
 team. (lacking the ability to put things
into concrete action).

7.Hidden Agenda Harry. An entrepreneur who does not have

the right motives and objectives for
developing and expending a new
enterprise.

8.invetor Irving. An inventor more than an

entrepreneurship, who is more
concerned with the inventor itself
rather creating and expediting a
business.

ENTREPRENEURSHIP NOTES
Opportunity identification is central to the domain of entrepreneurship. It has
been argued that understanding the opportunity identification process is one
of the primary challenges within the domain of entrepreneurship research.
The first step for any entrepreneur is the identification of “a good idea”.

Sources of innovative ideas

Potential entrepreneurs must always be alert to the opportunities that lie in
the external and internal environments in which they live. This alertness will
allow an entrepreneur to create an idea from what others cannot simply
recognize.
1. TRENDS – trends signal shifts in the current thinking of the major
population. Trends need to be observed in society, technology,
economy, and government.

Examples
Society trends- aging demographic, health, fitness growth, senior
living
 Technology trends- mobile technology, ecommerce, internet advances
Economic trends- inflation, career families
Government trends-increased regulation, petroleum prices, terrorism
2. UEXPECTED OCCURENCIES- these are successes of failures that are
not planned, often prove to be a major innovative surprise to
everyone.
3. INCONGRUIETIES-occur when a gap or difference exists between
expectation and reality. What is needed and the way business is
currently being conducted.
4. PROCESS NEEDS- these occur when an answer to particular need is
required. Venture capitalists often refer these needs as “pain” that
exists in the market place. Eg creation of new medical devices, health
foods, and time-saving innovations.
5. INDUSTRY AND MARKET CHANGES- due to consumer attitudes,
technology advancement, and industry growth.
6. DEMOGRAPHIC CHANGES
7. PERCEPTUAL CHANGES
8. KNOWLEDGE –BASED CONCEPTS- inventions are knowledge based,
they are the product of new thinking, new methods and new
knowledge.

CREATIVITY- creative thinking is important in the innovation process.

Creativity is the generation of ideas that results in the improved efficiency or
effectiveness or a system.
Two important aspects of creativity exist, process and people. The process is
goal oriented, it is designed to attain a solution to a problem. The people are
the resources that determine the solution. The process remains the same but
the approach that the people use will vary.
Creativity is the ability to combine ideas in a unique way or to make unusual
associations between ideas. An organization that stimulates creativity
develops unique ways to work or novel solutions to problems.
The creative climate
-creativity is most likely to occur when the business climate is right. No
enterprise will have creative owners and managers for long if the right
climate is not established and nurtured.
Characteristics of this climate
-a trustworthy mgt that does not ever control the personnel
-open channels of communication
-considerable contact and communication with outsiders
-a large variety of personality types
-a willingness to accept change
- an enjoyment in experimenting with new ideas
-little fear of negative consequences for making a mistake
-the selection and promotion of employees on the basis of merit
-the use of techniques that encourage ideas, including suggestion systems
and brainstorming.
-sufficient financial, managerial, human and time resources for
accomplishing goals.

Adapters innovators
Employs a disciplined, precise, methodical approach. Approaches tasks
from unusual angles.

Is concerned with solving, rather than finding, problems. Discovers

problems and avenues for solutions.

Attempts to refine current practices. Questions basic assumptions

related to current practices
Ten

ds to be means oriented. Has little regard for means, is

more interested in ends.
Is capable of extended detail work. Has little tolerance for routine
work
Is sensitive to group cohesion

and cooperation. Has little or no need for

consensus, often is insensitive
to others.
INNOVATION- is a key function in entrepreneurial process. Innovation is
the process by which
entrepreneurs convert
opportunities (ideas, into
marketable solutions. It is the
process of taking a creative idea
and turning it into a useful
 product, service or work
method. It is the means by
which they become catalysts
for change. Innovation is a
combination of the vision to
create a good idea and the
perseverance and dedication to
remain with the concept though
implementation. Most
innovations result from a
conscious, purposeful search
for new opportunities.

TYPES OF INNOVATIONS
1. IINVENTION- the creation of a new product, service or process
2. EXTENSION- the expansion of a product, service or process already in
existence. Such concepts make a different application of a current
idea.
3. DUPLICATION – the replication of an already existing product, service
or process. It involves the entrepreneur adding own creative touch to
enhance or improve the concept and beat the competition.
4. SYNTHESIS- the combination of existing concepts and factors into a
new formulation. This involves taking a number of ideas or items
already invented and finding a way that they can form a new
application.

PRINCIPLES OF INNOVATION
NB. Potential entrepreneurs need to realize that innovation principles exist.
They can be learned and when combined with opportunity, can enable
individuals to innovate.
1. Be action oriented. Innovators always must be active and searching
for new ideas, opportunities, or sources of innovation.
2. Make the product, process or service customer –based. Innovators
always must keep the customer in mind. The more an innovator has
 the end user in mind, the greater the chance the concept will be
accepted and used.
3. Make the product, process or service simple and understandable-
people must readily understand how the innovation works.
4. Start small. They should begin small and then develop, allowing for
planned growth and proper expansion in the right manner and at the
right time.
5. Aim high-innovators should aim high for success by seeking a niche in
the marketplace.
6. Try/test/revise. Innovators always should follow the rule of try, test,
and revise. This helps work our any flaws in the products, process or
service.
7. Learn from failures. Innovation does not guarantee success. More
important, failures often give rise to innovations.
8. Follow a milestone schedule. Every innovator should follow a
schedule that indicates milestone accomplishments. Although the
project may run ahead or behind schedule, it is still important to
have a schedule in order to plan and evaluate the project.
9. Reward heroic activity. This principle applies more to those involved
in seeking and motivating others to innovate. Innovative activity
should be rewarded and given the proper amount of respect. This
also means tolerating and to a limited degree, accepting failures as a
means of accomplishing innovation. Innovative work must be viewed
as a heroic activity that will reveal new horizons for the enterprise.
10.Work, work, work. This is a simple but accurate exhortation with
which conclude the innovation principles. It takes work, not genius or
mystery- innovate successfully.

Adapters are concerned in solving, rather than finding problems. Innovators

discovers problems and avenues of solutions.

TIPS FOR BUSINESS

Don’t quit a well-paying job if you haven’t planned your next step.
Read about your chosen venture

Look for sacco loans- are cheaper than bank loans.

Have a plan B.

Consolidate your skills.

Use your family – support but don’t let them control your business.

Its not about the money.

Be disciplined- if you don’t put hours, the money wont come to you.

“ I had to come to terms with reality, I had not thought through the skills
necessary to run the company successfully”

The entrepreneurial ego.

In addition to the challenges of risk and stress, the entrepreneur also may
experience negative effects of inflated ego. The certain characteristics that
usually propel entrepreneurs into success also can be exhibited to their
extreme.

1. An overbearing need for control

-entrepreneurs are driven by a strong desire to control their venture

and their destiny. This internal locus of control spills over into a
preoccupation with controlling everything. This may have a serious
implication for networking in an entrepreneurial team, since
entrepreneurs can visualize the external control by others as a threat of
subjection or infringement on their will.
2. Sense of distrust – as they study the business environment, they try to
anticipate and act on developments that others might recognize too
late. This distrustful state can result in their focusing on trivial things,
causing them to lose sight of reality.
3. Overriding desire for success- this may make the entrepreneur to rise
up as a defiant person who creatively acts to deny any feelings of
 insignificance. The entrepreneur is driven to succeed and takes pride
in demonstrating that success- can demonstrate that in destructive
ways eg, a big office, buildings- then the danger exists that the
individual will become more important than the venture itself. Losing
perspective like this can of course be the destructive side of the desire
to succeed.
4. Unrealistic optimism- when taken to extreme, this optimistic attitude
can lead to a fantasy approach to the business. A self-deceptive state
may arise in which entrepreneurs ignore trends, and reports and
delude themselves into thinking everything will turn out fine. This
type of behavior can lead to an inability to handle the reality of the
business world.

BUSINESS IDEA-PRACTICLE
NAME OF YOUR BUSINESS
LOCATION
PRODUCT/SERVICE
BUDGET
MOTTO/PHILOSOPHY
HOW TO CREATE AND SUSTAIN COMPETITVE ADVANTAGE. -
POSITION YOURSELF IN THE MARKET.