Entrepreneurship and Negotiation TAB Wk 1-2

Group Tutorial: Class Presentation Starting from: 10 Sept 2009 Discuss examples of successful entrepreneurs from different continents around the world History Their success stories Profile Facts and figures about these entrepreneurs The products and businesses they are involved Other relevant information

Group Tutorial: Class Presentation Starting from: 10 Sept 2009 Groups of 4 members [except one group of 5] Power point slides [15-20 slides] Time allocated for each group: 25 minutes 5 minutes for Q & A] Each and every group member must present

Group 1 and 2 2 entrepreneurs European Continent [at least one from France]

Group 3 and 4 2 entrepreneurs North American Continent

Group 5 and 6 2 entrepreneurs Asian Continent

Group 7 and 8 2 entrepreneurs African Continent

Group 9 and 10 2 entrepreneurs Middle East/Gulf states

1. Demonstrated an understanding of the characteristics and driving forces necessary in developing innovative business ideas in enterprises 2. Developed a capacity for informed critical understanding of environmental conditions and the ability to analyse Learning Outcomes

3. Demonstrate entrepreneurial activities and competence in team building 4. Able to communicate, deliver and justify effectively a business plan 5. Developed the capacity to analyse and apply negotiating techniques and skills. Learning Outcomes

How assessed? (100% in-course assignment) A group based formally written BUSSINESS PLAN weighted at 50% A Group PRESENTATION weighted at 30% A JOURNAL (diary of development issues) weighted at 20% Total: 100% Lecturer Hand out date: Week 6 [12 Oct 2009] Student Hand in date: Week 10 [9 Nov 2009] Copyright © A.B.Teoh 2008

Module Topics Define the need of entrepreneurial activities and its relationship to innovation Copyright © A.B.Teoh 2008

Module Topics Identify the nature, complexity and extent of the entrepreneurial process in the modern society and also the form of business opportunity Copyright © A.B.Teoh 2008

Module Topics Understanding of key success factors for various ventures and how to identify them. Copyright © A.B.Teoh 2008

Module Topics Format and styling of a business plan Copyright © A.B.Teoh 2008

Module Topics Financial planning and identify the various sources of funding available to the entrepreneur Copyright © A.B.Teoh 2008

Module Topics Strategies for growth in the short term and long term time periods. Copyright © A.B.Teoh 2008

Module Topics Integrative and Distributive approaches to negotiation and their differences Copyright © A.B.Teoh 2008

Ground Rules [Lectures or Tutorials] 1. Attendance taken anytime may be verified again if necessary will be considered absent if leave after attendance has been taken Classified as absent if not physically in lecture room 80% attendance to mark your incourse assignment 2. Laptop NOT to be used 3. Mobile phone NOT to be used 4. No sleeping in class 5. No horse playing 6. No talking during lecture 7. No doing other work 19

My question for the class Name the subjects you have already covered in high school and up till now. Copyright © A.B.Teoh 2009

Copyright © A.B.Teoh 2008

Contemporary Entrepreneurship Definition of the nature of entrepreneurship, innovation and the entrepreneurial process in the modern society Copyright © A.B.Teoh 2008

Evolution of the term: Entrepreneurship

entreprendre Copyright © A.B.Teoh 2008

18 th Century - In France 18 th France when economist Richard Cantillon associated the “risk bearing” activity in the economy with the entrepreneur. The word “entrepreneur” is derived from the French entreprendre, meaning “to undertake.” Copyright © A.B.Teoh 2008

18 th Century – In England In England, the Industrial Revolution was evolving with entrepreneur s playing a visible role in risk taking and the transformation of resources. Copyright © A.B.Teoh 2008

19 th Century Until the 1950s, the majority of definitions and references to entrepreneurship had come from economists. Copyright © A.B.Teoh 2008

20 th Century 20 th Century, the word entrepreneur became synonymous or linked with free enterprise and capitalism. Copyright © A.B.Teoh 2008

21 st Century 21 st Century, entrepreneurs are now considered the heroes of free enterprise Copyright © A.B.Teoh 2008

Definition: Entrepreneurship Entrepreneurship—a dynamic process of vision, change, and creation requiring an application of energy and passion toward the creation of and implementation of new ideas and creative solutions Copyright © A.B.Teoh 2008

Definition: Entrepreneur Entrepreneur—an innovator or developer who recognizes and seizes opportunities converts those opportunities into workable/marketable ideas adds value through time, effort, money, or skills assumes the risks of the competitive marketplace to implement these ideas. Copyright © A.B.Teoh 2008

RCAA Entrepreneur—an innovator or developer who RCAA

What Is an Entrepreneur? A person who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on those opportunities.

Monday 17 Sept 2009 To continue from here

Entrepreneur—an innovator or developer who RCAA 1.Recognizes and seizes opportunities 2.Converts those opportunities into workable/marketable ideas 3. Adds value through time, effort, money, or skills 4. Assumes the risks of the competitive marketplace to implement these ideas. Copyright © A.B.Teoh 2008

Entrepreneurial management Entrepreneurial management—an entrepreneur can exist in an existing large institution or can be an individual starting his or her own new venture single- handedly. Copyright © A.B.Teoh 2009

Entrepreneurs: The Driving Force Behind Small Businesses

The Age of the Entrepreneur A new business is born in the U.S. every 11 seconds. Study of influential Americans: THE defining trend of the 21 st century: Entrepreneurship! One of every 25 adults is actively engaged in trying to start a new business.

The Age of the Entrepreneur Entrepreneurs launch 3.5 to 4.5 million businesses a year in the U.S. Survey of college seniors: 49% of men and 31% of women said they were interested in pursuing entrepreneurship after graduation.

Country Percentage of Adult Population Working to Start a New Business Finland1.4% Japan1.6% France1.8% Denmark2.0% Germany2.2% Great Britain3.3% Italy3.4% Israel5.4% Canada6.8% United States8.5% Source:Global Entrepreneurship Monitor

Characteristics of Entrepreneurs Desire for responsibility Preference for moderate risk Confidence in their ability to succeed Desire for immediate feedback High level of energy Future orientation Skilled in organization Value achievement over money

Source: Yanjelovich Partners and Pitney Bowes.

Benefits of Small Business Ownership The opportunity to: gain control over your own destiny make a difference reach your full potential reap unlimited profits contribute to society and to be recognized for your efforts do what you enjoy

Drawbacks of Small Business Ownership Uncertainty of income Risk of losing your entire invested capital

Drawbacks of Small Business Ownership Uncertainty of income Risk of losing your entire invested capital Long hours and hard work Lower quality of life until the business gets established

Drawbacks of Small Business Ownership High levels of stress Complete responsibility Discouragement  Uncertainty of income  Risk of losing your entire invested capital  Long hours and hard work  Lower quality of life until the business gets established

Feeding the Entrepreneurial Fire Entrepreneurs as heroes Entrepreneurial education Economic and demographic factors Shift to a service economy

Feeding the Entrepreneurial Fire Technological advancements Independent lifestyles E-Commerce and the World Wide Web International Opportunities

Minority enterprises Immigrant entrepreneurs Part-time entrepreneurs Home-based businesses Trends in Entrepreneurship  Young entrepreneurs  Women

Trends in Entrepreneurship Family businesses Corporate castoffs Corporate dropouts

In Malaysia Entrepreneurs to the Malaysian economy

They contribute 32% to the country’s GDP and employ 56% of the country’s workforce (excluding the Government). Furthermore, they make up nearly 20% of Malaysia’s total exports. SME’s contribution to the Malaysian economy

GDP contribution to increase from 32% in 2005 to 37% with the bulk of the growth targeted to come from the services sector, making up 23% of GDP by 2010 Employment (excluding Government) to increase from 56% in 2005 to 57% of total employment Exports from 19% to 22%, with SMEs in the manufacturing sector contributing to 12% of the total exports. Malaysian’s Manufacturing SME in 2010

National SME Development Council, chaired by Prime Minister has set a objective for SMEs: at least half 1/2 of GDP A third1/3 of employment And fourth 4 th of export. Malaysia’s Objective for SME

Malaysia’s definition of SME SMEs – Small and Medium Enterprises Approved on 9 June 2005, the National SME Development Council [NSDC] Applied across economic sectors and adopted by all Government Ministries, their agencies as well as financial institutions. Source: National SME Development Council Secretariat [To be transferred from BNM to SME Corp – SMIDEC on 2 Jan 2009]

Malaysia’s definition of SME SMEs – Small and Medium Enterprises Approved on 9 June 2005, the National SME Development Council [NSDC] Applied across economic sectors and adopted by all Government Ministries, their agencies as well as financial institutions. Source: National SME Development Council Secretariat [To be transferred from BNM to SME Corp – SMIDEC on 2 Jan 2009]

60 Definition of SMEs - Based on number of f/t employees Size & Sector Mftg incldg agro-based & MRS* Primary Agriculture Services Sector incldg ICT** Micro SMEs 1 to 5 Small SMEs 5 to 50 5 to 19 Medium SMEs 51 to to 50

61 Definition of SMEs - based on annual sales turnover Size & Sector Mftg incldg agro-based & MRS* Primary Agriculture Services Sector incldg ICT** Micro SMEs < RM 250k < RM 200k Small SMEs RM 250k to < RM 10M RM 200k < RM 1M RM 200k to < RM 1M < RM 1M Medium SMEs RM 10M to RM 25M RM 1M to RM 5M

Definition of SME * MRS – Manufacturing Related Services ** ICT – Information and Communications Technology

In the USA

A Profile of Small Business by Industry

Small Businesses... make up 98.5% of all the businesses in the U.S. employ 52% of the nation's private sector workforce. create more jobs than big businesses. lead the way in training workers for jobs.

Small Businesses... produce 51% of the nation's GDP. account for 47% of business sales. create 4X more innovations per R & D dollar spent than medium- sized firms and 24X as many as large companies.

The Small Business Failure Record 24% of new businesses fail after two years. 51% fail within four years. 60% fail within six years.

Nine Deadly Mistakes of Entrepreneurship Management incompetence Lack of experience Undercapitalization Poor cash management Lack of strategic management

Nine Deadly Mistakes of Entrepreneurship Weak marketing effort Uncontrolled growth Poor location Lack of inventory control Inability to make the “entrepreneurial transition”

Putting Failure Into Perspective Failure is a natural part of the creative process. Failures are simply stepping stones along the path to success. The “secret” to success is the ability to fail intelligently, learning why you failed so that you can avoid making the same mistake again.

How to Avoid the Pitfalls Know your business in depth. Prepare a business plan. Manage financial resources. Understand financial statements. Learn to manage people effectively. Set your business apart from the competition. Keep in tune with yourself.

Essential Recommended Books Schaper M. & Volery T. (2007) Entrepreneurship and Small Business: 2 nd Pacific Rim edition John Wiley, Australia (ISBN ) Copyright © A.B.Teoh 2008

Q & A Question and Answer Session

Merci Beaucoup Thank You! Copyright © A.B.Teoh 2008

Recommended Books [Reference Only] Kuratko (2009) Introduction to Entrepreneurship 8 th Edition. South Western (ISBN 13: ISBN10: )

Recommended Books [Reference only] Birley S. & Muzyka D. (1997) Mastering Enterprise (Financial Times). Pitman Publishing (ISBN ) Bridge S, Oneill K. & Cromie S (2003) Palgrave Macmillan (ISBN X) Deakins D. & Freel M. (2003) Entrepreneurship and Small Firms. Publisher: McGraw Hill (ISBN ) Sara S. (2003) Small Business Guide. 16th edition. Press Vitesse. (ISBN ) Lewicki, R. Saunders, D. & Minton, (2001), Negotiation, Irwin McGraw-Hill, Singapore. Copyright © A.B.Teoh 2008