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GST307-Introduction To Entrepreneurship Development Module 1

The document defines key entrepreneurship concepts like entrepreneurship, entrepreneurs, ideas, and sources of funding. It discusses traditional definitions of entrepreneurship and compares self-employment to wage employment. Seed funding is introduced as a source of capital for startups from owners, families, friends or angel investors.

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Lawal Olanrewaju
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Download as PPT, PDF, TXT or read online on Scribd
60 views

GST307-Introduction To Entrepreneurship Development Module 1

The document defines key entrepreneurship concepts like entrepreneurship, entrepreneurs, ideas, and sources of funding. It discusses traditional definitions of entrepreneurship and compares self-employment to wage employment. Seed funding is introduced as a source of capital for startups from owners, families, friends or angel investors.

Uploaded by

Lawal Olanrewaju
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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GST 307 INTRODUCTION TO

ENTREPRENURSHIP
DEVELOPMENT (MODULE ONE)

ENTREPRENEURSHIP AND SKILLS


DEVELOPMENT CENTRE (ESDC)
UNIVERSITY OF LAGOS
SUNDAY A. ADEBISI. PhD,
ACTING DIRECTOR
GST 307 INTRODUCTION TO
ENTREPRENURSHIP DEVELOPMENT (MODULE
ONE)
What is entrepreneurship?
Who is an entrepreneur?
What is an idea?
Where do great ideas come from?
Self employment vs Wage employment
Seed Funding
Sources of Capital
What is Entrepreneurship?

There is no universal definition of


entrepreneurship; however, many
authors have come up with
different definitions but with
common understanding based on
changing conditions. Some of
these definitions are :
What is entrepreneurship?

“Entrepreneurship is a process by “Entrepreneurship is about how,


which individuals pursue and by whom, and with what
exploit opportunities irrespective consequences opportunities to
of the resources they currently bring future goods and services
control” (Stevenson & Gumpert, into existence are discovered,
1985) created and exploited”
(Venkataraman, 1997)
“Entrepreneurship is the creation
of organizations, the process by
which new organizations come
into existence” (Gartner, 1988)
What is entrepreneurship?

The most common among these From these definitions; one can
traditional definitions is that, infer that entrepreneurship is a
entrepreneurship is the ability process-involving skill to identify
and enthusiasm of an individual opportunities,
to identify, develop, and run a • Entrepreneurship encompasses
business enterprise, majorly a willingness to develop and run
new venture with the aim of businesses,
achieving desired goals (profits or • It also contains taking calculated
social benefits) in the midst of its risks for profits or any other
inherent risks and challenges. predetermined objectives.
• In nutshell, the definition of
entrepreneurship comprises six
key elements: process, ability,
willingness, ventures, risks, and
goals.
What is entrepreneurship?
However, while these traditional definitions of
entrepreneurship focus on having new businesses
with the possible risks and profits, the new
dimension of entrepreneurship focuses on what
makes some persons to identify opportunities and be
able to turn them to profitable businesses while
others cannot, and how can innovation be brought
into the exiting opportunities for additional wealth
creation.
Who is an Entrepreneur?
In 1755, Richard Cantillon
described an entrepreneur as an
individual who buys raw material
at an identified price so as to sell
it at unidentified price. Cantillon
definition indicates that an
entrepreneur engages in business
activities with the aim of making
profit despite the unknown
circumstances.
An Entrepreneur Defined?
In 1815, Jean-Baptiste Say
Peter Drucker between 1909 and
identified innovation as a key
element in describing an 2005 described an entrepreneur as
entrepreneur. Therefore, an
someone who seeks out change,
entrepreneur is a person who
could do things in different ways responds to change, and makes
from others, or a person who
could add new things to the efforts to turn change to
exiting methods. opportunities.
In 1928, Joseph Alois
Schumpeter went further to
strengthen the relationship
between innovation and
entrepreneurs by describing an
entrepreneur as a person that can
exploit new opportunities.
An Entrepreneur Defined
In all these definitions, an
entrepreneur could therefore be
described as an individual that has
innovative ideas with the capacity
to convert the ideas not just into
profitable business ventures but a
sustainable functioning reality in
the face of challenges.
What is an Idea?

An idea is an intellectual concept


in the mind of someone which
can be translated to something
meaningful and valuable to
humankind.
Where do GREAT IDEAS come from?

Great ideas could come from


products, employees, feedback
from the consumers, government
regulations or policies,
distributors, traveling to a new
environment, group discussion,
seminars, research and
development (R&D) etc.
Self-employment vs Wage employment

Self-employment is a situation
where someone is not working
under anybody to earn money, but
is making his or her earning
through personal business or
businesses.
Self-employment vs Wage employment

In contrast, wage employment is


when someone is working under
another person or organization for
payment either on a daily
arrangement or on a fixed regular
period.
Self-employment vs Wage employment

Self-employment Wage employment


You are the boss Working under a boss
You are the owner of the proceeds The proceeds belong to the employer
You suffer alone for the loss The employer suffers for the loss
You earn from your profits The earnings are from salary
Taxes are deducted from profits Taxes are deducted from salary
You are an employer You are an employee
An employer of labour A supplier of labour
You are working for yourself You are working for another person
You cannot be sacked You can be sacked
The tendency to get rich within a The tendency is very low under wage
very short period is high employment
SOURCES OF CAPITAL FOR STARTUPS

What is seed funding?


Who qualifies for seed funding
Traditional sources of funding for entrepreneurs:
i.Friends and Families
ii.Thrift Collector
iii.Personal Savings
iv.Borrowing etc
Who are these two young men?
What are the problems?
Seed Funding
What is Seed Funding?
• As the name implies, seed funding is a form of capital to fund a new
business idea at the first stage.
• Seed funding is mainly used to build up business ideas to the stage it can
further attract investors for equity.
• The fund could come from the owner of the idea, family, friends or angel
investors.
• Historically, our fore-fathers used this method in olden days whereby yam
seeds were given to a young agile man who has been under the tutelage of
another man in farming to start having his own farm especially when the
young man was about getting married.
• Some still do it up till today (i.e. Igbos usually give certain amount of
money to a young man that has learned trading under a master for a period
to start a new business on his own, and this has made them more
enterprising than any other tribes in Nigeria till today).
The seed must SPROUT
However, what is important for
the receiver of the seed funds is
that he/she should make sure the
business grows beyond startup
because it is not every seed that is
planted that germinates; some
even germinate and wither owing
to scorching sun (hot weather),
while some survive it probably
because of rain or irrigation.
Who qualifies for seed funding? (1)
People with NEW IDEAS
Who qualifies for seed funding? (2)
People that have businesses at FIRST STAGE (to cover
business plan and operating costs)
Who qualifies for seed funding? (3)
People with relatively small investment
Who qualifies for seed funding? (4)
Startups
Traditional sources of funds for entrepreneurs

Traditional source of funds is a form of business


financing that does not require stringent conditions
or securities.
Friends and Family
This type of capital involves close
associates and immediate family
members to fund business ideas.
Thrift Collector
Thrift collector is someone who
engages in an informal
arrangement to collect money and
keep it on behalf of the person
called ‘contributor’ till the
matured date or period when the
accumulated money will be given
to the contributor based on agreed
participation charges. Hence, a
young entrepreneur can raise fund
from thrift collection method to
start a business after he/she has
made a reasonable contribution
over a period.
Thrift is about contributing small amount of
money over a period of time to achieve
something
Personal Savings
Personal savings can be regarded as disposable income after domestic
expenditures to be kept for a purpose over a period of time
Borrowing

Borrowing is a process of
sourcing for money from an
individual (friends or family
members) or financial institutions
with interest in the case of banks
or without interest from
individual but with agreement for
repayment. The money borrowed
for business can be regarded as
loan capital or debt equity
because it must be refunded with
interest or without interest as the
case may be whether the business
survives or not.

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