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Topics of Difference Manager Entrepreneur

VIEWS: 6 PAGES: 35

									Chapter One
What is Entrepreneurship?
Generally to express the desire to do something
  after getting new ideas about something new
  is called entrepreneurship.
 It is the process of creating something new with
  value by devoting the necessary time and effort,
  assuming the accompanying financial, psychic and
  social risks, and receiving the resulting rewards of
  monetary and personal satisfaction and
  independence.
    What is Entrepreneurship?
According to Webster Dictionary, “Organize the
  economical organizations and the ability of taking
  risk is called entrepreneurship."
According to Basu and Moulik, "Entrepreneurship
  means –
a. To employ economic opportunities properly;
b. To establish institutions; and
c. To make the institution profitable by maintaining it
  effectively."
.
What is Entrepreneurship?
 In final it can be said that, to establish a new
  institution, new invention in the establishment, taking
  the risk and the desire and power to take steps to
  maintain the institution is called entrepreneurship
Definition of Entrepreneur
 The term entrepreneur has derived from the French word
 Entreprendre that means to take the responsibility or initiative
 of doing something. In 17th century the word entrepreneur was
 used to mean the architects and contractors of the Public
 Works. In 16th century someone who successful did something
 in the field of military service was called an entrepreneur. At the
 end of 18th century Oxford Dictionary defined an entrepreneur
 who worked as a director in a music institution. After that
 century the term began to change and started to use in the field
 of economy.
Definition of Entrepreneur
An entrepreneur is s/he who utilizes capital, labor and
  other wealth is such a way that their price and
  importance increase than before.
Jean Baptist says, "An entrepreneur is the most
  important agent of production who provides
  continuing management and brings together the
  factors of production. S/he must have judgments,
  perseverance, the knowledge of the world as well as
  that of business."
Is Entrepreneur a manager?
 An entrepreneur is such a person who takes initiatives
 to do something new which adds new dimension to
 society. A manager is such a person who is involved
 with supervising all daily activities of an institution.
 The differences between managers and entrepreneurs
 are given below:
Manager vs. Entrepreneur

Topics of Difference     Manager                    Entrepreneur

1.Times consideration:   1.Managers want to do       1. S/he works for long
                         everything immediately.         time. S/he makes
                         S/he uses daily, weekly,        policies to achieve
                         monthly, and yearly             growth for the year
                         reports to evaluate results     three to ten.
                         of works.
                                                     2. S/he does not depend
2.Enforce of power on    2. S/he depends on others       on others and wants
others:                  and applies power on            to succeed depending
                         others.                         on themselves.
Topics of Difference   Manager                    Entrepreneur

3. Risk:               3. S/he takes less risk.   3. S/he adopt medium
                       S/he is somehow a          type risk. S/he evaluates
                       conservative and wants     risk and take the
                       development of             opportunity of getting
                       organization.              more profit.
4. Structure:                                     4. S/he always believes in
                       4. S/he depends on         the improvement of
                       organization structure     structure. S/he
                       s/he conducts activities   determines structure by
                       on the basis of formal and adjusting structure with
                       line structure.            environment.
5. Thought                                        5. Their through are
                       5. Their thought are       relative or unlimited,
                       specific or limited in     more tolerant and works
                       scope less to learnt, and  with uncertainly. They are
                       them works with security creative and imaginative
Topics of Difference        Manager                       Entrepreneur

                            6. S/he likes one faced       6. S/he communicates in
6. Communication:           communication in most         the double faced way. S/he
                            cases. S/he wants favorable   is ready for both favorable
                            reply.                        and adverse reaction.

                            7. His managerial             7. Their managerial
7. Managerial Efficiency:   efficiency is very high.      efficiency is low. They are
                            They used to having formal    generally expert in complex
                            management training.          or technical
                                                          aspect of business.
                            8. Them communication or
8.Activities:               relation is existent in       8. They are to take decision
                            different levels of the whole relating to all activities of
                            organization.                 the institution. omplex or
                                                          technical
Four Aspects of an Entrepreneur
 I) Creating something new of value
 2) Devotion of time and effort
 3) Assuming the Necessary risks
 4) Rewards of being an entrepreneur: independence,
 personal satisfaction, money
The Entrepreneurial Decision Process
 1.1 to 1.9 million new companies formed each year.
 Despite recession, inflation, high interest rate, lack
  of infrastructure, economic uncertainty, and high
  probability of failure.
 Entrepreneurial decision process entails a
  movement from a present lifestyle to forming a
  new enterprise.
Decisions for a Potential Entrepreneur
                    Form new enterprise
Change from         Desirable
present lifestyle   1. Cultural
Work environment    2. Sub-cultural
                    3. Family
Disruption
                    4. Teachers
                    5. Peers
                    Possible
                    1. Government
                    2. Background
                    3. Marketing
                    4. Financing
                    5. Role models
Change from Present Lifestyle: Work
Environment
 Research & Development: individuals develop new
  product ideas and processes and often leave to form
  their own companies.
 Marketing: individuals have become familiar with the
  market and customer’s unfilled need, and leave to start
  new business to fill these needs.
Change from Present Lifestyle: Disruption
 Companies are formed by people who have retired,
  relocated or fired.
 Completion of educational degree is another form of
  disruption ( not receiving the desired promotion after
  completion of MBA degree).
Form New Enterprise
 The decision to start a new business occurs when an
 individual perceives it both desirable and possible.
Desirability of New Venture Formation:
Culture
 A culture that values entrepreneurship
 American culture places high value on being one’s
  boss, having individual opportunities, being a
  success and making money-all aspects of
  entrepreneurship.
 Some cultures do not value new businesses highly
  and failure is disgraceful.
Desirability of New Venture Formation: Sub-
culture
 Many subcultures that shape value systems operate
  within cultures.
 Pockets of entrepreneurial sub-cultures within USA:
  Route 128 (Boston), Silicon Valley (California),
  Cleveland, Austin.
 These subcultures support and promote
  entrepreneurship as the best occupation.
Desirability of New Venture Formation:
Family
 Founders of many companies had parents who valued
  independence.
 Independence achieved by company owners,
  professionals, artists, professors, or farmers permeates
  their family life.
Desirability of New Venture Formation:
Teachers
 Teachers can influence individuals to regard
  entrepreneurship as desirable and viable career
  path.
 The number of entrepreneurship courses a person
  takes increases the probability of starting a
  venture.
 MIT and Harvard are located near Route 128,
  Stanford in Silicon Valley facilitates
  entrepreneurship.
 An areas having a strong education base is strong
  support factor for entrepreneurial activity.
Desirability of New Venture Formation:
Peers
 Entrepreneurial pool and meetings where people can
 discuss ideas, problems, and solutions spawns more
 new companies.
Possibility of New Venture Formation: Govt.
 The government contributes by providing
  infrastructure to help and support a new venture.
 Roads, communication and transportation systems,
  utilities, and economic stability.
 Tax rate.
Possibility of New Venture Formation:
Background
 Formal education and previous business experience.
 Individuals will be more successful in forming
 businesses in fields where they have worked.
Possibility of New Venture Formation:
Marketing
 Presence of sufficient market size is not enough to
  succeed, marketing know-how matters.
 Putting together the best total package of product,
  price, distribution and promotion.
 Companies are more easily formed when driving
  force is more from the market demand than a
  technology push.
Possibility of New Venture Formation: Role
Models
 Seeing someone else succeed makes it easier to picture
  oneself in similar activity.
 “ If that person can do it, so can I”
Possibility of New Venture Formation:
Financial Resources
 Start up money for a new company comes from
  personal savings, credit, friends, and relatives.
 Risk capital availability plays a role in growth of
  entrepreneurial activity.
Types of Start-Ups
 Lifestyle Firm: A small venture that supports the
  owners and usually does not grow.
 Foundation Company: A type of company formed
  from research and development that usually does
  not go public.
 High-potential venture: A venture that has high
  growth potential and therefore receives great
  investor interest.
Role of Entrepreneurship in Economic
Development
 Increasing per capita output and income.
 Involves initiating and constituting change in the structure of
    business and society.
   This change is accompanied by growth and increased output,
    which allows for more wealth to be divided by the various
    participants.
   Innovations stimulate investment interest in the new venture.
   This new investment works on both the demand and the
    supply side of the growth equation.
   The new capital created expands the capacity for growth
    (supply side), and the resultant new spending utilizes the new
    capacity and output (demand side).
Intrapreneurship vs. Entrepreneurship
 Intrapreneurship is entrepreneurship within an
  existing business culture.
 Existing businesses have the financial resources,
  business skills, and the marketing and distribution
  systems to commercialization innovation
  successfully.
 However, bureaucracy, focus on short term profits
  and highly structured organization inhibit
 creativity and prevent new products from
 development.
Intrapreneurship vs. Entrepreneurship
 Entrepreneurship bridges the gap between innovation
    and marketplace.
   Entrepreneurs may lack managerial skills, marketing
    capability or financial resources.
   Their inventions are often unrealistic, requiring significant
    modifications to be marketable.
   They also do not know how to interface with the necessary
    entities: banks, suppliers, customers, venture capitalists,
    distributors, and advertising agencies.
   Yet, entrepreneurship is presently the most effective
    method for bringing new products and services to the
    market place.
The Drawbacks of Entrepreneurship:
 Uncertainty of Income
 Risk of losing your entire Investment
 Long Hours and Hard Work
 Lower Quality of Life until the business
  get established
 High level of stress
 Complete Responsibility
Ten Deadly Mistakes of Entrepreneurship:


    Business entrepreneurship fail because:-
     Management Mistakes
     Lack of Experience
     Poor financial control
     Weak marketing efforts
     Failure to develop a strategic and effective
      plan
 Uncontrolled Growth
 Poor location

 Improper inventory control

 Incorrect or unsuitable pricing

 The inability of to move into
  entrepreneurial thinking mindset
  from the previous secured permanent
  managerial position held.
How to avoid failure in a Entrepreneurial
business?

     Know your business in depth.
     Develop a good, effective and solid Business Plan.
     Manage your financial resources effectively.
     Have a thorough and complete financial statement.
     Learn hire and manage people effectively.
     Keep physically fit, consume healthy foods, and avoid
     addictive consumption cigarettes and alcohol.

								
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