Entrepreneurship Do you have what is takes to be an entrepreneur?

What is an entrepreneur? A person who undertakes all the risks related to creating & operating an enterprise A person who undertakes all the risks related to creating & operating an enterprise Performs all business functions associated with a product or service; including: Performs all business functions associated with a product or service; including: Social responsibilities Social responsibilities Legal requirements Legal requirements A job creator not a job seeker A job creator not a job seeker From the French word Entre-prennez From the French word Entre-prennez Between jobs Between jobs But no longer the case But no longer the case

An entrepreneur is …. The person who has a dream The person who has a dream The person who has a vision The person who has a vision The person who is willing to take the risk The person who is willing to take the risk The person who makes something out of nothing The person who makes something out of nothing

Myths about entrepreneurs Entrepreneurs are born or are they made? Entrepreneurs are born or are they made? Entrepreneurship is limited by government policy environment Entrepreneurship is limited by government policy environment Entrepreneurs lack fundamental business skills Entrepreneurs lack fundamental business skills None of these is true … None of these is true … Entrepreneurs have particular behaviourial traits Entrepreneurs have particular behaviourial traits Characteristics or competencies others don’t have Characteristics or competencies others don’t have

Entrepreneurial Characteristics Achievement Drive Achievement Drive Looks for opportunities Looks for opportunities Takes calculated risks Takes calculated risks Problem solving Problem solving Persistent & dogmatic Persistent & dogmatic Commitment Commitment Efficient and effective Efficient and effective

Entrepreneurial Characteristics Uses Power & Influence Uses Power & Influence Is persuasive Is persuasive Networks Networks Has self confidence Has self confidence Is assertive Is assertive

Entrepreneurial Characteristics Develops Plans Develops Plans Sets realistic goals, objectives and targets Sets realistic goals, objectives and targets Makes short – medium term plans Makes short – medium term plans Has long term vision Has long term vision Monitors progress Monitors progress

Business Skills Managing Money Managing Money Preparing a budget Preparing a budget Borrowing money Borrowing money Managing People Managing People Delegating Delegating Motivating Motivating Directing Business Operations Directing Business Operations Legal requirements, licencing, regulations Legal requirements, licencing, regulations Accessing finance Accessing finance

Business Skills cont Marketing Marketing Knowing customers & competition Knowing customers & competition Selling & Salesmanship Selling & Salesmanship Knowing your product or service Knowing your product or service Choosing the right location Choosing the right location Managing the production Managing the production Knowing suppliers/raw materials Knowing suppliers/raw materials Knowing the technology/process Knowing the technology/process

Getting Assistance Manufacturing & Production Manufacturing & Production Plant, machinery and tools Plant, machinery and tools Location of equipment, production flow Location of equipment, production flow Materials handling Materials handling Goods inward and out ward, warehousing Goods inward and out ward, warehousing Marketing Management Marketing Management Identifying customers, knowing competitors Identifying customers, knowing competitors Selling plan, salesmanship Selling plan, salesmanship Developing products or services Developing products or services Pricing policy Pricing policy Distribution Distribution

Getting Assistance cont General Organization & Management General Organization & Management Managing human resources, conditions of employment Managing human resources, conditions of employment Performance management & measurement Performance management & measurement Motivation of staff & public relations Motivation of staff & public relations Legal matters Legal matters Planning – business, markets, production, finances Planning – business, markets, production, finances Financial Management Financial Management Start-up capital Start-up capital Understanding financial statements Understanding financial statements Understanding cost of credit Understanding cost of credit Financial record keeping Financial record keeping Profitability & tax planning Profitability & tax planning

Problem Solving Identify & define overriding problem Identify & define overriding problem Identify potential causes or barriers Identify potential causes or barriers Select most likely cause or barrier Select most likely cause or barrier Identify possible solutions Identify possible solutions Select most appropriate solution Select most appropriate solution Agree actions & prioritize Agree actions & prioritize Monitor & support Monitor & support

Problem tree analysis Solution Cause Effects Problem

Persistence & Commitment Persistence Persistence Takes actions to overcome obstacle Takes actions to overcome obstacle Examines causes of failure Examines causes of failure Changes strategy when confronted with failure Changes strategy when confronted with failure Takes personal responsibility Takes personal responsibility Commitment Commitment Makes a personal sacrifice to complete job Makes a personal sacrifice to complete job Assists others who are struggling to complete job Assists others who are struggling to complete job Strives to satisfy customers Strives to satisfy customers Long term good-will over short-term gain Long term good-will over short-term gain

Persistence Successful entrepreneurs have drive to complete task against great odds & significant obstacles Successful entrepreneurs have drive to complete task against great odds & significant obstacles Persistence can only be experienced by stretching horizons & set goals Persistence can only be experienced by stretching horizons & set goals If everything is easy If everything is easy Persistence is not an issue Persistence is not an issue

Persistence Takes repeated actions – Takes repeated actions – stubborness? stubborness? Or different actions – Or different actions – problem solving problem solving Makes personal sacrifice – Makes personal sacrifice – commitment commitment Sticks with own judgement – Sticks with own judgement – self confidence self confidence

Self confidence Entrepreneurs are honest with themselves … Entrepreneurs are honest with themselves … … they know their weakness … they know their weakness ….they do not cheat themselves ….they do not cheat themselves Confucius, he say … Those who know, know not … …those who know what they know not … …. are wise

Self Confidence Essential characteristic of an entrepreneur, but.. Essential characteristic of an entrepreneur, but.. It can be dangerous It can be dangerous Because decision are made too easily Because decision are made too easily There is a need to balance self-confidence with ability to distinguish good from bad risks There is a need to balance self-confidence with ability to distinguish good from bad risks If an entrepreneur thinks he is going to fail … If an entrepreneur thinks he is going to fail … …. he will …. he will Without self confidence …. Without self confidence …. … no one will try anything … no one will try anything

Risk Taking Easy task Easy task Limited effort, guaranteed success, no fear of failure – but no scope for development Limited effort, guaranteed success, no fear of failure – but no scope for development Difficult task Difficult task Requires strong effort, degree of confidence, high control, limited chance of success – but plenty of scope for frustration & failure Requires strong effort, degree of confidence, high control, limited chance of success – but plenty of scope for frustration & failure Moderate task Moderate task Calculated approach, learn from mistakes, corrective measures, unsure of result – but scope for development Calculated approach, learn from mistakes, corrective measures, unsure of result – but scope for development Success / failure Success / failure Not necessarily satisfying, depends on Not necessarily satisfying, depends on Challenge & prestige from success Challenge & prestige from success

Risk Taking Characteristics Best entrepreneurs tend to: Best entrepreneurs tend to: Set their own objectives Set their own objectives Where there is moderate risk of failure Where there is moderate risk of failure Take calculated risks Take calculated risks Gain satisfaction from doing better Gain satisfaction from doing better Are not afraid of public opinion, skepticism or failure Are not afraid of public opinion, skepticism or failure Take responsibility for own actions Take responsibility for own actions Don’t normally gamble, but like competition Don’t normally gamble, but like competition Main interest is the task Main interest is the task Money is only an indicator of success Money is only an indicator of success

Opportunity Seeking “Creativity comes from the elimination of all unnecessary assumptions” An entrepreneur challenges his own hidden assumptions An entrepreneur challenges his own hidden assumptions If there are no needs, no problems, then there would be no businesses If there are no needs, no problems, then there would be no businesses Therefore, every business arises from or responds to a need or problem Therefore, every business arises from or responds to a need or problem Successful entrepreneurs are ready & able to see & act upon the opportunities that needs & problems present Successful entrepreneurs are ready & able to see & act upon the opportunities that needs & problems present

Opportunity Seeking Entrepreneurs are driven by opportunities Entrepreneurs are driven by opportunities Needs of customers Needs of customers The market place The market place Competitive advantage & timing Competitive advantage & timing They are constantly alert to a potential opportunity They are constantly alert to a potential opportunity Every conversation Every conversation Every observation Every observation Every change Every change Disposed to see an opportunity Disposed to see an opportunity Unmet needs Unmet needs Under-utilization Under-utilization Waste products Waste products Potential opportunity

Opportunity Seeking ProblemNeedBusiness HungerFoodFarming DiseaseMedicineClinics BoredomEntertainmentKaraoke HeatVentilationFans TheftSecurityLocks

Information Seeking Successful entrepreneurs hate guesswork Successful entrepreneurs hate guesswork Don’t rely on others for information Don’t rely on others for information Spend time collecting information Spend time collecting information Customers Customers Competitors Competitors Suppliers Suppliers Technology Technology Markets Markets Plan information gathering exercise Plan information gathering exercise Gather quality information, against time frames Gather quality information, against time frames

Persuasion A way of getting something from someone A way of getting something from someone Bringing others to your way of thinking Bringing others to your way of thinking Being convincing Being convincing Countering objections Countering objections Getting others to do tasks Getting others to do tasks Delegation of duties & authority Delegation of duties & authority Maintaining responsibility Maintaining responsibility

Influence Knowing useful people Knowing useful people Use contacts & networks to get what you want Use contacts & networks to get what you want Developing friendships Developing friendships Getting people on your side Getting people on your side Involving others Involving others Identify who to bring into situations to positive advantage Identify who to bring into situations to positive advantage Use well-known people as references Use well-known people as references

Negotiation Process to reach an agreement Process to reach an agreement Meeting of minds Meeting of minds Both sides reaching a good outcome Both sides reaching a good outcome Win-win situation Win-win situation Successful entrepreneurs know what they want, are shrewd & good listeners - open to what the other side is looking for & try to accommodate that Successful entrepreneurs know what they want, are shrewd & good listeners - open to what the other side is looking for & try to accommodate that They identify key issues quickly, are creative, patient & seek common ground - have an empathy for people They identify key issues quickly, are creative, patient & seek common ground - have an empathy for people

Planning People don’t plan to fail; but, they fail to plan Why entrepreneurs plan their businesses? Why entrepreneurs plan their businesses? 60% increase likelihood of achieving 60% increase likelihood of achieving Helps to work smarter not harder Helps to work smarter not harder Helps anticipate, be alert & responsive to opportunities Helps anticipate, be alert & responsive to opportunities Sharpens strategies by testing on paper Sharpens strategies by testing on paper Increases motivation Increases motivation Measures accomplishment & progress Measures accomplishment & progress Helps manage & cope with stress Helps manage & cope with stress

Planning If you don’t know where you are going, any road will take you there Plans comprise: Plans comprise: Purpose – why in business, what results to expect Purpose – why in business, what results to expect Outputs – short term objectives to achieve purpose Outputs – short term objectives to achieve purpose Activities – actions & tasks needed to achieve outputs Activities – actions & tasks needed to achieve outputs Plans need to be flexible Plans need to be flexible High uncertainties High uncertainties Quick changing environment Quick changing environment

Demand for efficiency & quality Successful entrepreneurs are obsessed by quality Successful entrepreneurs are obsessed by quality Everything can be done better Everything can be done better There is always a better way There is always a better way Pride in what they do Pride in what they do Integrity in what they make/sell Integrity in what they make/sell Quality means care & consistency Quality means care & consistency It is a passion It is a passion It is a way of life It is a way of life Requires persistence Requires persistence

Demand for efficiency & quality If entrepreneurs do not believe in their product If entrepreneurs do not believe in their product They will have trouble persuading others They will have trouble persuading others Desire for quality is part & parcel of entrepreneurs drive Desire for quality is part & parcel of entrepreneurs drive Reflects integrity, pride & confidence Reflects integrity, pride & confidence

Demand for efficiency & quality Trade offs Trade offs Challenge is to get more quality for same cost & same time Challenge is to get more quality for same cost & same time Or same quality quicker & at lower cost Or same quality quicker & at lower cost Quality TimeCosts

Discussion Points Have you got what it takes to be an entrepreneur? Have you got what it takes to be an entrepreneur? How are entrepreneurs different from Us? How are entrepreneurs different from Us? Is there one quality that drives entrepreneurship? Is there one quality that drives entrepreneurship? How can we support entrepreneurs? How can we support entrepreneurs? Should entrepreneurs be left to their own devices? Should entrepreneurs be left to their own devices?