ENTREPRENEURSHIP | 1ST QUARTER
Economist ( CONCEPT OF ENTREPRENEURS TODAY according to different field experts )
"It is someone who brings resources, labor, materials, and other assets into combinations that make their value greater than before; also, one who introduces changes, innovations, and a new order."
Entrepreneurial Mindset
"The ability to rapidly serve, act and mobilize, even under uncertain conditions." (Hisrich, Peters, And Shepherd)
Management ( CONCEPT OF ENTREPRENEURS TODAY according to different field experts )
"someone who identifies opportunities, plan, mobilizes resources, manages, and assumesthe risks of a business to have a positive impact on society."
Self-confidence ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
- they have full faith of their knowledge, skills and competence and not worried about future uncertainties.
Problem solver ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
- they will first of all understand the problem and then evolve appropriate strategy for overcoming the problem.
He was interested in learning how everyone fits into the economic system. The economy, according to Smith, is driven by self-interest in the marketplace.
Adam Smith
Entrepreneurs are rewarded in exchange for anticipating the effects of uncertainty and selling their products at a price that exceeds their input costs.
Adolph Reidel
He was a founding member of the neoclassical school of thought. The distinction between the term's capitalist, entrepreneur, and manager was one of his research topics.
Alfred Marshall
ATTRACTIVE ( FOUR ESSENTIAL QUALITIES OF OPPORTUNITY )
Appealing product.
Drucker (1985)
Behavior rather than personality trait. Its foundation lies in concept and theory rather in intuition.
Involves creation process. ( 4 ASPECTS OF AN ENTREPRENEUR )
Capability to think new ideas that will bring something useful to the community.
Ranked goods according to their causal connections to human satisfaction.
Carl Menger
INDUSTRY AND MARKET STRUCTURES ( 7 POTENTIAL SOURCES OF OPPORTUNITY )
Chances in technology, social value and customer's taste can change the structure of an industry and this will give entrepreneurs opportunities to innovate their product or services.
CHANGE ( 7 POTENTIAL SOURCES OF OPPORTUNITY )
Changes in perception get to the heart of people's PSYCHOGRAPHIC profile of what their value, what they believe in and what they care about. These changes create potential market opportunities to alert entrepreneurs.
SATISFACTION ( FOUR ESSENTIAL QUALITIES OF OPPORTUNITY )
Create or add value for its user or end user.
Gartner (1985)
Creation of new organizations.
EXTERNAL ( ENTREPRENEURIAL SOURCE OF STIMULATION )
Customer demands for new product and services.
His research focuses on the workings of the capitalist system. Manufacturers should borrow less and downsize their workforces if demand falls. They should do the opposite when demand is high.
David Ricardo
Sources of Capital
Different sources of capital are available; the only catch is determining the needed amount of funds where it will be sourced from. #### It can be from personal funds, family and friends, a retirement account, banks or financial institutions, a government loan, stock market.
Ronstadt (1984)
Dynamic process of creating incremental wealth. This wealth is created by individuals who assume the major risks in terms of equity, time, and/or career commitment of providing value or some product or service. The product or service itself may or may not be new or unique, but value must somehow be infused by the entrepreneur by securing and allocating the necessary skills and resources.
Kuratko (2009)
Dynamic process of vision, change and creation that requires an application of energy and passion toward the creation and implementation of new ideas and creative solutions.
Entrepreneurship Accelerates Economic Growth. ( Importance of Entrepreneurship )
Entrepreneurs are important to market economies because they can act as the wheels of the economic growth of the country. By creating new products and services, they stimulate new employment, which ultimately results in the acceleration of economic development.
Entrepreneurship Can Promote Social Changes. ( Importance of Entrepreneurship )
Entrepreneurs change or break the tradition or cultures of society and reduce the dependency on obsolete methods, systems, and technologies.
NEW KNOWLEDGE ( 7 POTENTIAL SOURCES OF OPPORTUNITY )
Entrepreneurs who come out with new product and processes that can compete with other products can manipulate this kind of knowledge.
The 17th Century
Entrepreneurship has become associated with risk.### risk. The entrepreneur was someone who would enter into a formal agreement with the government to provide products or services, it was common practice to agree on the price as part of the terms in the agreement. ### A prominent theorist during this period was Richard Cantillon (1680-1734), an economist who viewed the entrepreneur as risk taker and a bearer of uncertainty.
ENTREPRENEURIAL OPPORTUNITY
Favorable set of conditions that will enable the entrepreneurs to create new products or services by combining resourcesthat willresult, not only to a profit butfor the common good of the society and the environment:
He believes a manager crosses the threshold into entrepreneurship when "the exercise of his/her judgment is prone to error and s/he bears responsibility for its correctness."
Frank Knight
Profit is the reward that entrepreneurs get from assuming uninsurable risks.
Frank Knight
Involves rewards of being an entrepreneur. ( 4 ASPECTS OF AN ENTREPRENEUR )
Give something to yourself as an entrepreneur when you achieve something and it could help you to be more inspired in your next project.
21st Century
Hailed as the Dotcom era, entrepreneurs in the 21st century are considered the heroes of free enterprise.
The Earliest Period
He would enter into a formal agreement with a capitalist to sell his goods. He bore all the risks of possible damage or loss of the goods. After everything was sold, profits were divided between the capitalist and trader as agreed.
Requires devotion of time and effort. ( 4 ASPECTS OF AN ENTREPRENEUR )
If something is important to you, time and effort will be easy to give in.
THE PROCESS NEED ( 7 POTENTIAL SOURCES OF OPPORTUNITY )
It could be the process of discovery such as a process of research and development that even before the breakthrough. There will be numerous opportunities which could seized by entrepreneurs during the process.
THE INAPPROPRIATE ( 7 POTENTIAL SOURCES OF OPPORTUNITY )
It happens when inconsistencies occur.
DEMOGRAPHICS ( 7 POTENTIAL SOURCES OF OPPORTUNITY )
It is the statistical characteristics of human populations (such as age or income) used specially to identify markets
His studies resulted in something resembling a broad theory of entrepreneurship with three separate functions: "scientific understanding of the product; entrepreneurial industry - the application of information to a practical purpose; and productive industry - the human labor manufacturing of the item."
Jean-Baptiste Say
THE UNEXPECTED ( 7 POTENTIAL SOURCES OF OPPORTUNITY )
Opportunities can be found when situations and events are unanticipated that might be unexpected success/good news or unexpected failure/bad news.
Cole (1959)
Purposeful activity to initiate and develop a profit-oriented business.
He viewed innovation as arising from new combinations of materials and forces. He provided the following five cases of new combinations.
Schumpeter
Focus and Direction ( factors to consider before actually begin the enterprise )
Should have a clear and documented vision-mission and strategies to begin with. ### Have a very good objective for the business.
McClelland (1961)
Taking moderate risk
Technology ( Changing face of entrepreneurship )
Tech companies (e-commerce, software and technology) in the UAE made up 29% of new businesses, according to the 2017 MENA Venture Report. In the 1950s these were a distinct minority.
Location ( change of face of market )
Technology also means it's possible to work from anywhere, at great speed, and great scale.
The 18th Century
The entrepreneur was distinguished from the capitalist who simply provides money for the creation of products to be sold. ### Jean-Baptiste Say (1767-1832), a French economist and businessman, described the entrepreneur as a person who plays a central coordinating role both in producing and selling goods. He was someone who coordinates, leads. And manages all the activities of the firm.
The Middle Ages
The term entrepreneur was used to describe both an actor and a person who was in charge of and managed large production projects. ### This person merely managed large production projects using the resources provided by the government. In this case, he did not assume any risks.
WHAT IS WINDOW OF OPPORTUNITY?
The time when a firm realistically can enter into a market and attempt to establish a competitive position in the industry.
19th and 20th Century
There was a little distinction between entrepreneur and a manager. #### During this period that business expert Peter Drucker (1990-2005) came up with a behavioral concept of the entrepreneur-one who actually searches for change, respond to it, and exploits change as an opportunity.
INTERNAL ( ENTREPRENEURIAL SOURCE OF STIMULATION )
When an entrepreneur recognizes a problem or opportunity gap and decide to fill it.
Psychologist ( CONCEPT OF ENTREPRENEURS TODAY according to different field experts )
a person who "typically driven by certain forces such as the need to obtain or attain something, to experiment, to accomplish, or perhaps to escape the authority of others."
DURABLE ( FOUR ESSENTIAL QUALITIES OF OPPORTUNITY )
ability of a physical product to remain functional, without requiring excessive maintenance or repair, when faced with the challenges of normal operation over its design lifetime.
Buying an existing business
acquiring either the shares of an existing company or all of the assets of an existing enterprise.
Jean-Baptiste Say (1767-1832)
also from the French School ### also from the French School, ### he distinguished an entrepreneur from a manager. ###
Information seeker ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
always keep his eyes and ear open and is receptive to new ideas which can help him in realizing his goals.
Looking for opportunity ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
always on the look-out or searching for opportunity and ready to exploit it in the best interest of the organization.
Commitment to efficiency ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
are keen to evolve and try new methods aimed at making work easier, simpler, better and economical.
Commitment to work ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
are prepared to make all sacrifices for honoring the commitments they have made.
Entrepreneur
as someone who "creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying significant opportunities and assembling the necessary resources to capitalize on them" ### as someone who "creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying significant opportunities and assembling the necessary resources to capitalize on them" ### as someone who "creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying significant opportunities and assembling the necessary resources to capitalize on them"
Assertive ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
assertive person knows what to say, when to say, how to say, and whom to say. He believes in his abilities and ensures that other will fall in line with his thinking, aimed at promoting the interest of the organization.
Richard Cantillon (1680-1734)
born in France and belonged to the French School of thought although he was an Irish economist. ### He appears to be the person who introduced the term entrepreneur to the world. ### "According to Cantillon, the entrepreneur is a specialist in taking on risk, 'insuring' workers by buying their output for resale before consumers have indicated how much they are willing to pay for it" ### Cantillon described entrepreneurs as individuals who generated profits through exchanges.
Trading or Merchandising
business engaged in the buying and selling of goods. It includes the process of managing and marketing the product.
Enterprise ( OBJECT )
company or business, often a small one ### outcome of the actor and the act.
Start-up enterprise
company which is recently formed, where the founder establishes a completely new business from scratch.
Confidence ( 10 QUALITIES OF A SUCCESSFUL ENTREPRENEUR )
confident with the knowledge that they will make their business succeed.
Manufacturing
engaged in the production of items to be sold. It involves the purchasing and converting of raw materials to finished goods.
'entrepreneur' derives from a French word?
entrependre meaning 'to undertake'
Entrepreneurship Promotes Research and Industrial Development. ( Importance of Entrepreneurship )
entrepreneurs also promote research and development. They cultivate their ideas, shape them into a new form, and turn them into a successful business endeavor.
Education ( Changing face of entrepreneurship )
entrepreneurs can start out younger is the rise of entrepreneurial education.
Disciplined ( 10 QUALITIES OF A SUCCESSFUL ENTREPRENEUR )
focused on making their business work and eliminate and hindrances or distraction to their goal.
Adolph Reidel (1809-1872)
form the German School of thought ### thought, picked up on Cantillon's notion of uncertainty and extended it to theorize that entrepreneurs take on uncertainty so others, namely income earners, do not have to be subject to the same uncertainty.
Frank Knight (1885-1972)
founded the Chicago School of Economics and belonged to the American School of thought. ### He refined Cantillon's perspective on entrepreneurs and risk by distinguishing insurable risk as something that is separate from uncertainty, which is not insurable. ### According to Knight, entrepreneurs can't share the risk of loss by insuring themselves against uncertain events, so they bear these kinds of risks themselves, and profit is the reward that entrepreneurs get from assuming uninsurable risks
Alfred Marshall (1842-1924)
from the English School of thought ### one of the founders of neoclassical economics.### His research involved distinguishing between the term capitalist, entrepreneur, and manager. ### Marshall saw capitalists as individuals who "committed themselves to the capacity and honesty of others, when he by himself had incurred the risks for having contributed with the capital" ### Marshall recognized that the reward capitalists received for contributing capital was interest income and the reward entrepreneurs earned was profits. Managers received a salary
Passion ( 10 QUALITIES OF A SUCCESSFUL ENTREPRENEUR )
genuinely love their work and willing to put extra hours to make the business succeed.
Strong people skills ( 10 QUALITIES OF A SUCCESSFUL ENTREPRENEUR )
has strong communication skills to sell the product and motivate employees.
Requires assumption of necessary risk ( 4 ASPECTS OF AN ENTREPRENEUR )
having assumption will help the entrepreneur to be quite ready.
Effective strategist ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
he has the ability to evolve relevant strategy, aimed at safeguarding or promoting organizations interest.
Employee's welfare ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
he takes personal interest in solving problems, confronting workers and generates the feeling that there is interdependence of the interest of workers and management.
TIMELY ( FOUR ESSENTIAL QUALITIES OF OPPORTUNITY )
in demand or occurring at a favorable or useful time
Persistence ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
is never disheartened failures. He believes in the Japanese proverb "Fall seven times, stand up eight."
Initiative ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
it is the entrepreneurship who takes or initiates the first move towards setting up of an enterprise.
Persuasive ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
it's not physical but intellectual force he will use for convincing Others.
Self-starter ( 10 QUALITIES OF A SUCCESSFUL ENTREPRENEUR )
knows that if something needs to be done, they should start it themselves.
Entrepreneurship ( PROCESS OF ACTION )
process of discovering new ways of combining resources. ### The process of creating something new and assuming the risks and rewards.
Entrepreneurship Promotes Innovation ( Importance of Entrepreneurship )
producing new products and services or bringing innovation to existing products and services, entrepreneurship has the potential to improve peoples' lives.
Adam Smith (1723-1790),
published An Inquiry into the Nature and Causes of the Wealth of Nations in 1776. ### He was concerned with studying how all people fit into the economic system. ### Smith contended that the economy was driven by self- interest in the marketplace ###
Carl Menger (1840-1921)
ranked goods according to their causal connections to human satisfaction. ### Lower order goods include items like bread that directly satisfy a human want or need like hunger. Higher order goods are those more removed from satisfying a human need. ### Entrepreneurs coordinate these factors of production to turn higher order goods into lower order goods that more directly satisfy human wants and needs
Social ethics
recent shift has been the rise of 'ethical entrepreneurs. Touched by the social desire to stem corporate greed, and in line with the growing trend for conscious consumers and environmentalism, these people are no longer purely profit-driven. The aim is to build a socially conscious enterprise that returns something to society.
Quality consciousness ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
set high standards for themselves and then put up in their best for achieving these standards.
Diversity ( Changing face of entrepreneurship )
social progression, has opened up entrepreneurship to the masses. Today it is now much harder, if not impossible, to conjure up that above- mentioned picture of the 'typical' modern entrepreneur.
Creativity ( 10 QUALITIES OF A SUCCESSFUL ENTREPRENEUR )
the ability to produce new and valuable ideas
Entrepreneurship Develops and Improves Existing Enterprises. ( Importance of Entrepreneurship )
they also impact existing business. Since entrepreneurs think differently, they can come up with innovative ways to expand and develop the existing enterprises.
Proper planning ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
they believe in developing relevant and realistic plans and ensure proper execution of the same in their pursuit of attaining their goals.
Effective monitoring ( 15 Important Entrepreneurial Traits According to Divina Edralin, 2016 )
they ensure regular monitoring of the work so that the goals of the organization are achieved in the best possible manner.
Open-minded ( 10 QUALITIES OF A SUCCESSFUL ENTREPRENEUR )
they have the ability to look at everything around them and focus it toward their goals.
Determination ( 10 QUALITIES OF A SUCCESSFUL ENTREPRENEUR )
they look at the defeat as an opportunity for success.
Competitive ( 10 QUALITIES OF A SUCCESSFUL ENTREPRENEUR )
they need to win at the sports they play and need to win at the business they create.
Service
type of business operations engaged in rendering of services.
Schumpeter (1934)
viewed innovation as arising from new combinations of materials and forces. ### creative destruction ### to be destroyed - to enable a transformation through innovation to a new way of doing things.
Franchising
when the owner of the company that already has a successful product or service, licenses its trademark, trade name, and methods of doing business to others in exchange for initial franchise fee and royalty payments.
Strong work ethic ( 10 QUALITIES OF A SUCCESSFUL ENTREPRENEUR )
will often be the first person to arrive at the office and last person to leave.
