Entrepreneurship

Dr. Sadia Akhtar

Email: [email protected]

Pak-Austria Fachhochschule: Institute of Applied Sciences and

Technology
 Entrepreneurship

 Course Contents:
 Introduction and Basics:
 What is entrepreneurship?
 Importance of entrepreneurial ecosystem especially in case of Pakistan
 The Entrepreneurial Mindset:
 Entrepreneurial models
 Goal-based and means based entrepreneurship
 Characteristics of entrepreneurs, Mythical vs common entrepreneur
 Idea Generation and opportunity recognition:
 Difference between idea and opportunity
 Feasibility analysis framework
 Business Model Canvas
 Innovation and design Thinking
 Entrepreneurship

 Course Contents:
 Marketing Essentials:
 Guerilla marketing
 Entrepreneurial marketing
 Setting up the Entrepreneurial Ecosystem:
 Strategies of collaboration with suppliers and customers
 Importance of E-Commerce
 Entrepreneurial Negotiations and Legal forms of organization
 Intellectual Property Rights
 Interview an Entrepreneur presentations
 Attracting Talent:
 Attracting Cofounders, key employees, and Advisors
 Hiring of employees by small businesses
 Entrepreneurship

 Course Contents:
 Managing your Finances:
 Importance of bootstrapping
 Angels, VCs, and Strategic investors
 Business Growth:
 Stages of business growth
 Family participation and professionalization
 Going Global
 Final presentations
 Entrepreneurship

 Recommended Books
 Steve Mariotti with tony towel, Entrepreneurship, Owing your future, Edited by Neelam Patel, Prentice Hall
 Steve Mariotti, Entrepreneurship, eleventh edition, Pearson publisher.
 Robart D. Hisrich, Michel P. Peter, Dean A. Shephard, Entrepreneurship. Mc-Graw Hill
 Entrepreneurship

 Course learning outcomes (CLOs)

 CLO1: Develop a business plan with an appropriate business model.

 CLO2: Demonstrate the ability to provide a self-analysis in the context of an entrepreneurial career.

 CLO3: Demonstrate the ability to find an attractive market that can be reached economically.
What is entrepreneurship?
 What is entrepreneurship?

• Entrepreneurship is the ability and willingness to

develop, organize and run a business enterprise,
along with any of its uncertainties in order to make a
profit.

• Entrepreneurship involves combining resources,

skills, and vision to bring forth new products,
services, or solutions that meet market demands and
create value.
What is business?
 What is a business?

• Business

• A business is an organization that provides products

or services, usually to make money.

• The term business refers to an organization or

enterprising entity engaged in commercial,
industrial, or professional activities.

• The purpose of a business is to organize some sort

of economic production of goods or services.

• The word business is derived from the term

“busyness”.
 How to determine company/business size

• Number of employees: how many people are recruited by the company.

• Revenue: how much money is made from selling goods or providing services.

• Production: how much volume of output is produced.

• Amount of invested capital: how much capital is owned by the company.

• Market capitalization: how much is the total value of the shares issued by the company.
 Business size

• The four common categories of businesses based on their size are:

• Micro-sized business: less than 10 employees

• Small-sized business: 10-49 employees

• Medium business: 50-249 employees

• Large-sized business: more than 250 employees

 Why is business size important?

• For the economy, the big business provides more output and jobs.

• Customers often view large companies positively.

• Investors consider the business size when allocating investment to a company’s stock or corporate debts.

• Workers are also more comfortable working in large companies because they offer better opportunities,
including salary or professional career paths.

• Governments may charge different tax rates according to the company size. Or, when providing subsidies or
grants, size may also be a consideration.

• Suppliers prefer large companies because they are more likely to get large orders.
Entrepreneurship Definition from
scholars point of view
 Characteristics of Entrepreneurship

• Process: Entrepreneurship is a systematic, purposeful, creative and continuous process, which an entrepreneur
undertakes to run the business smoothly.

• Innovation: Innovation is the key feature of the entrepreneurship, which creates a difference in the market
place.

• Development of network: Developing strong connections with the parties such as suppliers, distributors,
banks, investors and many more, which are directly or indirectly related with the business process, to have a
good worth, in the market.
 Characteristics of Entrepreneurship

• Profit potential: Profit is something, that keeps the organization going, in fact, it acts as a motivation for the
entrepreneur, to do better than before.

• Forecasting of Market Trends and future possibilities: The entrepreneur has to keep a close watch on the
market trends and future demands so that the enterprise could continuously work to improve the products or
services offered, and grow further.
 Characteristics of Entrepreneurship

• Risk Assumption: You might have heard the famous saying

“no risk, no gain”, which means that the profit of business

depends on the risk factor. So, risks and rewards are inherent

to the enterprise.
 Entrepreneurship flourishment conditions

Two conditions must exist for entrepreneurship to flourish

There must be freedom: freedom to establish an economic venture, and freedom to be creative and innovative
with that enterprise

There must be prosperity: favorable economic conditions that give an entrepreneurial organization the
opportunity to gain and grow.
 Pros of Entrepreneurship

• Work flexibility

• Entrepreneurship means self-employment, which comes with the ability to set your own schedule and work
where you want.

• Ability to follow your passion

• If your innovative idea is related to your passions or hobbies, entrepreneurship enables you to make a career
out of what you love.

• Total control

• Because they own their own businesses, entrepreneurs have complete control of their entrepreneurial
ventures, with the ability to make decisions quickly.
 Pros of Entrepreneurship

• Creativity

• Without the burdens of bureaucracy common in large, mature companies, entrepreneurs can solve problems
creatively and experiment often.

• Unlimited earning potential

• As famous entrepreneurs like Mark Zuckerberg or Bill Gates show, a startup entrepreneur with a successful
business idea can make millions or even billions of dollars.
 Cons of Entrepreneurship

• Financial risk

• Becoming an entrepreneur means putting money on the line for your idea. If it doesn't work out, you'll be responsible for
dealing with disappointed investors and outstanding bank loans.

• Long hours

• Between brainstorming new ideas, encouraging potential investors, and managing the day-to-day operations of the
businesses, many entrepreneurs work long and hard to make their dream a reality.

• Greater responsibility

• As the leader of own business, everyone will be looking to leader for vision and direction, which can cause tremendous
personal stress.
 Cons of Entrepreneurship

• High competition

• Just because your business idea is innovative doesn't mean you won't face stiff competition, whether from established
firms in your industry or other entrepreneurs looking to beat you to the finish line.

• Unreliable income

• While successful entrepreneurs may see a big payday, it won't happen overnight. In the meantime, expect lean times as
you invest all of your income into growing your business.
 What is an Entrepreneur?

• Employee: A person who works in a business

• Entrepreneur: someone who creates and runs a business

• Entrepreneurial: to think or act like an entrepreneur

 Employees and Entrepreneurs

• Risk is the chance of losing something.

• The rewards employees and entrepreneurs get from their

work can also be different.
 Why Be an Entrepreneur?

• Rewards of Being an Entrepreneur

• Making Your Own Rules: When you own a business, you are your own boss.

• Doing Work You Enjoy: People tend to stay more focused and motivated when they are passionate about
their work.

• Creating Greater Wealth: Entrepreneurs can also do more than just make a living from their yearly business
earnings.
Helping Your Community: Entrepreneurs help others by providing products or services needed by the
community. They also create jobs.
 Risks of Being an Entrepreneur

• Potential Business Failure: The flip side of getting to make all the business decisions is the possibility of
making the wrong ones.

• Unexpected Obstacles: Problems can happen that you don’t expect.

• Financial Insecurity: The amount of money you can pay yourself may go up or down, depending on how
well your business is performing.

• Long Hours and Hard Work: It’s not unusual for entrepreneurs to work a lot of extra hours to make their
businesses successful.
What are the differences among Entrepreneur,
Entrepreneurship and Enterprise?
Difference Between Entrepreneur and
Entrepreneurship
 Types of entrepreneurs

• The Independent • The Freedom Seeker

• They are independent and manage own company. • This type of entrepreneur wants something that fits

• Usually exhibit extensive entrepreneurial around their schedule, a business they get to control,

characteristics. rather than something that controls them.

• The Creative • The Opportunist

• The creative is someone who loves to use their
• The opportunist is someone who finds an
skills and imagination not only to make something
opportunity to fill a place in the market and be
new, but to inspire others to do the same.
the first to offer something newer and better.
 Types of entrepreneurs

• The Hustler
• They simply running a hobby business for a little extra
money or growing a company that can bring in serious cash
for savings or fun spending, like vacations.

• The Digital Nomad

• This type of entrepreneur is motivated by a desire

to work from home.

• The Legacy

• Some people start a business not just to find success

for themselves, but for their whole family.
Did you find your type?
 Increasing Your Potential

How you will increase your potential to become a successful entrepreneur?

 Increasing Your Potential

Increase your business and entrepreneurial potential by focusing on six specific areas.

Business Knowledge. Reading magazine and newspaper articles, search the Internet, and talk to business owners.

Financial Skills. Strengthen your math skills.

Career Exploration. Evaluate your strengths and weaknesses, explore your career’s interest.

Community Awareness. Look for volunteering opportunities and find out if any companies in your area provide

internship programs.

Education. Obtaining a good education benefits you personally and open doors to more career opportunities.

Relationships. Spend time with people who believe in you and inspire you.
The foundation of Entrepreneurship
 The foundation of Entrepreneurship

1. Characteristics of entrepreneur
 The foundation of Entrepreneurship

2. Economic Roles of Small Businesses

• They provide new jobs 3. Cultural Diversity

• They introduce new products • Young entrepreneur

• They meet the need of large industry/organizations • Women entrepreneur

• They add a considerable amount of money into the • Minority-owned enterprises

economy (how?) • Part-time entrepreneur

• Immigrant entrepreneur
• Home-Based Businesses
• Family Businesses
• Copreneurs
• Corporate Castoffs
• Corporate Dropouts
• Social Entrepreneurs
 The foundation of Entrepreneurship

4. Benefits of Entrepreneurship
• Stimulate demand in wider Economy
• Nurture Creativity, productivity, Innovation
• Develop community
• Promote Research and Development 5. Limitation of Entrepreneurship

• Enhance the living standard • Income uncertainty

• Risk of loosing entire investment
• Long hours and hard work
• Lower quality of life until the business get established
• High level of stress
• Complete responsibility
• Discouragement
 The foundation of Entrepreneurship

6. Expected Mistakes by an Entrepreneur

• Management mistakes
• Poor financial control
• Weak marketing efforts
• Failure to develop a strategic plan
• Poor location
• Improper inventory control
• Incorrect pricing
The Entrepreneurial Mindset
 Entrepreneurship Models

Small Business Entrepreneurship

• These people run or own their own business and hire family members or local employee.

• 75% of the businesses are part of the small entrepreneurship model, and their capital is raised by friends and
family.

• These businesses are a hairdresser, grocery store, travel agent, consultant, carpenter, plumber, electrician, etc.
 Entrepreneurship Models

Scalable Startup Entrepreneurship

• This start-up entrepreneur starts a business knowing that

their vision can change the world.

• The research focuses on a scalable business and

experimental models, so, they hire the best and the brightest
employees.

• One of the most famous examples of a scalable startup is

Facebook.
 Entrepreneurship Models

Large Company Entrepreneurship

• These huge companies have defined life-cycle.

• Most of these companies grow and sustain by offering new and innovative products that revolve around their main

products.

• The change in technology, customer preferences, new competition, etc., build pressure for large companies to create an

innovative product and sell it to the new set of customers in the new market.

• A classic example of large business entrepreneurship would be Apple or Samsung.

 Entrepreneurship Models

Social Entrepreneurship

• This type of entrepreneurship focuses on producing product and services that

resolve social needs and problems.

• Their only motto and goal is to work for society and not make any profits.

• Examples of this business model are microfinance institutions, co-operatives,

educational programs, and welfare services.

 Entrepreneurship Models

Innovation Entrepreneurship

• A business model that is based on finding gaps in the market.

• These entrepreneurs use innovative thinking and technology to develop products and services that can make life
easier for the people and something no one else has clocked on yet!

• This is ideal for people who are constantly thinking outside the box.

• IPhone and Tesla are real-world examples of innovation entrepreneurship done right.
Processes Involved in Entrepreneurship
 Opportunity based and Necessity based
entrepreneurship

Opportunity based entrepreneurship refers to individuals who choose to start a business because they identify a

viable opportunity in the market that they want to pursue.

Necessity based entrepreneurship refers to individuals who start a business out of necessity rather than

opportunity.