Chapter one

Learning Objectives :

By the end of this module, learners will:

• Understand the meaning of “entrepreneurship” and “entrepreneur”

• Assess the qualities of an entrepreneur

• Understand the concept of perseverance

• Manage his/her time best

• Develop SMART goals and objectives

• Build self-confidence
DEFINITION OF CONCEPTS

Entrepreneurship

The word “Entrepreneurship” is derived from the French verb entreprendre which means
“to undertake”. The term entrepreneurship thus refers to the following:

• The process of identifying opportunities in the market place, arranging the resources
required to pursue these opportunities and investing the resources to exploit the
opportunities for long term gains. It involves creating wealth by bringing together
resources in new ways to start and operate an enterprise.

• The processes through which individuals become aware of business ownership then
develop ideas for, and initiate a business.

• “The art of identifying viable business opportunities and mobilizing resources to convert
those opportunities into a successful enterprise through creativity, innovation, risk-
taking and progressive imagination” ...ILO Youth Entrepreneurship Manual, 2009.

Entrepreneurship is a practice and a process that results in creativity, innovation and

enterprise development and growth. It refers to an individual’s ability to turn ideas into action
involving and engaging in socially useful wealth creation through application of innovative
thinking and execution to meet consumer needs, using one’s own labor, time and ideas.
Engaging in entrepreneurship shifts people from being “job seekers” to “job creators”,
which is critical in countries that have high levels of unemployment. It requires a lot of
creativity, which is the driving force behind innovation.

Entrepreneur

An entrepreneur is any person who creates and develops a business idea and takes the risk
of setting up an enterprise to produce a product or service which satisfies customer needs.
Entrepreneur refers to the person and entrepreneurship defines the process. Both men and
women can be successful entrepreneurs; it has nothing to do with gender. All
entrepreneurs are business persons, but not all business persons are entrepreneurs.
Think of a person who sits by the roadside leading to your home and who has
been selling the same type of food, from the same size of saucepan or pot, from
the same table top, and may not have been able to change their standard of living
to any appreciable extent. Such a person may be a business person but not an
entrepreneur.
An entrepreneur is therefore a business-minded person who always finds ways to improve
and grow in business. An entrepreneur can also be defined as a professional who discovers
a business opportunity to produce improved or new goods and services and identifies a way
in which resources required can be mobilized.

Finally, an entrepreneur is someone who constantly scans the environment looking for
changes that can provide opportunities for creating new growth-oriented businesses.

Entrepreneurs assume significant accountability for the risk and the outcomes of new
enterprises, ventures or business ideas. An effective and successful entrepreneur shows
creativity and innovation in business and is an example for other people.

• An entrepreneur is an individual who:

o has the ability to identify and pursue a business opportunity;

o undertakes a business venture;

o raises the capital to finance it;

o gathers the necessary physical, financial and human resources needed to operate
the business venture;

o sets goals for him/herself and others;

o initiates appropriate action to ensure success; and

o Assumes all or a major portion of the risk!

• An entrepreneur is a job-creator not a job-seeker.

• An entrepreneur is a person who:

o Has a dream.

o Has a vision.

o Is willing to take the risk

o Makes something out of nothing

Benefits/importance of entrepreneurship

• Entrepreneurship allows one to undertake different forms of self-employment.

• Entrepreneurs are their own bosses giving them an opportunity to get more job satisfaction
and flexibility of the work force.
 Encouragement of the processing of local materials into finished goods for domestic
consumption as well as for export

• Healthy competition encourages higher quality products in the market thereby making
more goods and services available to consumers.

• Development of new markets

• Promotion of the use of modern technology in small-scale manufacturing to enhance

higher productivity.

• Freedom from dependency on the jobs offered by others

• Possibility of achieving great accomplishments
There may be tax advantages
QUALITIES OF AN ENTREPRENEUR

In order to be successful, an entrepreneur should have the following qualities:

Opportunity-seeking

An opportunity is a favorable set of circumstances that creates a need for a new product,
service or business. It includes access to credit, working premises, education, trainings etc.
An entrepreneur always seeks out and identifies opportunities. He/she seizes an
opportunity and converts it into a realistic and achievable goal or plan.

Persevering

An entrepreneur always makes concerted efforts towards the successful completion of a

goal. An entrepreneur perseveres and is undeterred by uncertainties, risks, obstacles, or
difficulties, which could challenge the achievement of the ultimate goal.

Risk Taking

The best entrepreneurs tend to:-

• Set their own objectives where there is moderate risk of failure and take calculated risks

• Gain satisfaction from completing a job well

• Not be afraid of public opinion, scepticism

• Take responsibility for their own actions

Importance of risk-taking

• Build self confidence

• Create a feeling of leadership

• Create strong motivation to complete a job well

An entrepreneur needs to consider the following issues before taking a risk.

• Is the goal set realistic?

• How big is the potential reward for this risk?

• How big is the potential loss?

• What is the probability of failure with this risk?

 • How can I minimize the potential negative effects of taking this risk?

o Examples: starting a business based on market study, share, forming cooperatives or

associations etc

• What kind of support or resources do I need to have in place to help minimize or prevent
potential negative effects from this risk?

• What further information do I need before taking this risk?

• What past experiences do I need to review in order to inform the strategy for taking this
risk?

Demanding for efficiency and quality Efficiency

• Being efficient means producing results with little wasted effort.

Quality refers to:

• The ongoing process of education, communication, evaluation and constant improvement

of goods/services to meet the customer’s need in a way that exceeds the customer’s
expectations;

• A characteristic of the product or service that makes it fit to use. It makes a product,
Process or service desirable.

• The ability of a product or service to meet a customer’s expectations for that product or
Service.

The importance of quality management in entrepreneurship is reflected in the income

statement of the business. There is always a demand for quality products and efficient
services. Quality plays an important role in this new era of globalization because it confers
certain benefits, which include:

• Reduction of waste: Striving to maintain quality means examining all processes that
contribute to the creation of a product, to remove non-productive processes and waste. If
businesses keep to their standard of maintaining the quality of the product, the number
of defective products will be reduced. Consumers prefer to buy quality products. Hence,
the quality products/services help in increasing the share in market and ensure that
they will not be returned.

• Cost-effectiveness: Striving to ensure quality helps businesses to minimize the chances

that they will make mistakes. As a result, the costs of re-doing work or changing the
product after it has been sold are greatly reduced.

• An increase in market share: Customers prefer to buy the same product again and again
if they are satisfied with the quality. If they are satisfied with the quality of a product,
then they will not only purchase the product/services more than once, but they will
also recommend it to their friends. As a result, this contributes to an increase in the
company’s market share.
 • Better profitability: Better quality of product satisfies customers. Increased customers
means increase sales, increased shares in market and consequently increased profits.

• Social responsibility: By providing quality products and services, a company is more

likely to be able to fulfil its responsibility to the community and meet standards set by
government.

• Reputation: Quality of goods and services improves the reputation of the business for
Competition in the market and growth.

Time management

Refers to a range of skills, tools, and techniques used to manage time when
accomplishing specific tasks, projects and goals. Time management is about getting
more value out of your time and using it to improve the quality of your life.

• Initially time management referred to just business or work activities, but eventually the
Term broadened to include personal activities.

Information-seeking

Successful entrepreneurs do not rely on guesswork and do not rely on others for information.
Instead, they spend time collecting information about their customers, competitors, suppliers,
relevant technology and markets. Gathering relevant information is important to ensure that
the entrepreneur makes well informed decisions.

Types of information that are important for business

An entrepreneur should have sufficient information and seek additional information on various
factors that are relevant to his/her intended new business activity. The different types of
information required are indicated below.

Market

• Market segments for low, middle and high income groups

• Competitors and similar products

• Sales forecast

• Strategic business location

Supply

• Machines/equipment

• Raw materials

• Other assets like office furniture

• List of suppliers and prices

Infrastructure

• Business premises available

• Size of premises and rooms
 • Power, water & other facilities

• Transport facilities

Business Management

• Organizational form of the business

• Needs in accounting & accounting courses

• Availability of qualified personnel

• Training facilities for staff and owner

Finance

• Micro-finance loan conditions

• Government financial facilities

Legislation

• Commercial code

• Business registration process

• Tax obligations

• Tender procedures

Goal Setting

A Goal - is a general direction, or long-term aim that you want to accomplish. It is not
specific enough to be measured. It is large in scope, not necessarily time-bound, and is
something that people strive for by meeting certain objectives, which will hopefully add up to
eventually, achieving the goal.

Objectives - are specific and measurable. They can be output objectives, or they can be
attitudinal or behavioural. But most of all, they can be measured. They are concise. They
are specific. Think of the word object.” You can touch it, it’s there, it’s actual, and it’s finite.
An entrepreneur must have a goal and an objective, which is specific, measurable,
attainable relevant, and time bound (SMART).

• Specific: Great goals are well-defined and focused. The moment you focus on a goal,
your goal becomes a magnet, pulling you and your resources toward it. The more
focused your energies, the more power you generate.

• Measurable: A goal without a measurable outcome is like a sports competition

without a scoreboard or scorekeeper. Numbers are an essential part of business. Put
concrete numbers in your goals to know if you’re on track.

• Attainable: Far too often, entrepreneurs can set goals which are beyond their reach.
Dream big and aim for the stars but keep one foot firmly based in reality.
 • Relevant: Achievable business goals are based on the current conditions and realities of
the business climate. For example, you may desire to have your best year in business
or increase revenue by 50%, but if a national economic crisis is looming and three new
competitors just opened in your market, then your goals are not relevant to the realities
of the market.

• Time-Based: Business goals and objectives just don’t get done when there’s no time
frame tied to the goal-setting process. Whether your business goal is to increase
revenue by 20% or to find two new clients, it is important to choose a time-frame
to accomplish your goal.

Planning

Planning is making a decision about the future in terms of what to do, when to do, where to
do, how to do, by whom to do and using what resources. An effective entrepreneur
therefore usually plans his/her activities and accounts as best as they can for unexpected
eventualities..

Persuasion and networking

Persuasion is

• a way of convincing someone to get something or make a decision in your favor

• Inducing or taking a course of action or embracing a point of view by means of argument,

reasoning, or entreaty; to convince

• to succeed in causing a person to do or consent to something; to win someone over, as

by reasoning or personal forcefulness

• to cause to believe; to induce, urge, or prevail upon successfully

Importance of Persuasion in Business

We purchase goods from people

• We sell goods to people

• We need support from people

• We work with people.

• Without people be they suppliers, workers, and most importantly customers, there is no
business.
 Networking is an extended group of people with similar interests
or concerns who interact and remain in informal contact for
mutual assistance or support.

Business Networks

In a business environment where we are in, we network with

customers, suppliers, competitors, various firms, different
organisations, government offices and family, etc

Factors that affect persuasion and networking

• Socio-cultural background and perceptions

• Communication skills (both verbal and non-verbal).

• Negotiation skills

Building self-confidence

Self-confidence is the state of being certain that a chosen course of

action is the best or most effective given the circumstances.
Confidence can be described as a subjective, emotional state of
mind, but is also represented statistically as a confidence level
within which one may be certain that a hypothesis will either be
rejected or deemed plausible. Self-confidence is having confidence
in oneself when considering a capability. Overconfidence is having
unmerited confidence-believing something or someone is capable
when they are not.

Characteristics of a self-confident person

A person with self-confidence may exhibit some of the following characteristics:

• Risk-taking: willing to take risks and go the extra mile to achieve better
things.

• Independent: entrepreneurs like to be their own masters and want to be

responsible for
their own decisions.

• Perseverance: Ability to endure and survive setbacks and continue to

build confidence
in whatever you do in your business.

• Able to learn to live with failure. Entrepreneurs are going to make

mistakes. They are
human. But they learn from these mistakes and then move on.
 • Ability to find happiness and contentment in work.

• Doing what you believe to be right, even if others mock or criticise you for
it.

• Admitting mistakes and learning from them

Listening to others

An entrepreneur does not simply impose his/her idea on

others. Rather, he/she listens to other people in their sphere of
influence, analyses their input in line with his/her own thinking and
makes an informed decision.

Demonstrating leadership

An entrepreneur does not only do things by him/herself, but also

gets things done through others. Entrepreneurs inspire,
encourage and lead others to undertake the given duties in time.