Entrepreneurship

Definitions, role, application

Innovation and CreativitySmall business

Job Shift...How to Prosperin a Workplace Without Jobs

• "Today's BUSINESS organization is rapidly being transformed from a structure built on jobs to a field of work needing to be done".

• "The new work arrangements (part time, temporary, team responsibility, contract work, outsourcing) are created to meet the productivity needs in an immediate but changing situation".

Job Shift...How to Prosperin a Workplace Without Jobs contd…

• "Your employability will depend on having the skills and attitudes that are needed in your industry."

• "Employees must learn to think like an external vendor who has been hired to accomplish a specific task."

• "You will need to live with high levels of uncertainty, bounce back quickly from disappointment, and find your own security."

Job Shift...How to Prosperin a Workplace Without Jobs contd…

• "Learn to look at every potential work situation as a market ...people who are looking for products and services even though they have no jobs available."

• "In the future you are going to get less mileage from a 'career plan' than out of a 'business plan' for your own personal enterprise."

RISK or OPPORTUNITY?• Only 1 in 7 of those businesses that

"disappear" actually "fail"

Of those who actually failed,

• 53% became owners of another business • 73.2% said they plan to start a business in

the future

WHAT ARE SOME OF THE REASONS BUSINESSES DISAPPEAR?

• Sold the idea to another person or company • Retired and closed the doors • Found a better idea for a business • Invented a different type of product • Moved the business to another state or country • Preferred to work for someone else instead • Actually failed/went bankrupt • The market for this type of business disappeared or

became too competitive • Owner died or became disabled

Remember......

NOT ALL CHANGE MEANS FAILURE

IF YOU MISS AN OPPORTUNITY.... . . IT MIGHT EVEN BE A BIGGER

FAILURE

ENTREPRENEURS BEHAVE DIFFERENTLY BECAUSE THEY...

• Risk their own money

• Must find customers to survive

• Organize their own work

• Are vulnerable to economic change

• Have income that varies with market success

• Make all the final decisions

• Need a wide range of management skills

• Handle diverse activities at the same time

• Depend on their own ability to market and sell

• Work longer hours...at least at first

• Are open to change as a necessity of existence

How is wealth created ?

• Investing surplus/savings

• Harnessing nature

• Getting means of production together

• Innovations and creativity

• Process/system changes

• Technology spread

Jamshetji Tata

• devoted himself setting up an iron and steel company, a world class learning institution and a hydro electric plant.

• The company started by Jamsetji Tata came to be known as the Tata Group

• Jamsetji, was a pioneer in his field and thought way ahead of his times.

• he also put in place very good labour practiceslong before any labour laws came into existence.

Various definitions

• French: “ go between” :

• “mixes” customer need and innovation

• Person bearing risks of profit/loss

• Separate profits of entrepreneur from that of Capital

• Peter Drucker: maximises opportunities

• Create something different; adds time and energy

Role of Entrepreneurship in Economic Growth

• critical in capitalist economy• An entrepreneur is not a “Gambler”

• He takes moderate risk , after due assessment

• Should have multiple Management skills as he will have limited support initially.

• Difference from Venture Capitalists: high risk+ high interest on capital

Essentials for entrepreneurs developing

• Role models

• Tax structure

• Free markets

• Risk capital availability

• Social acceptance

• Education and system support

• Legal protection on Innovations

Personal traits

• Seeks independence • Need for achievement• Believes in the idea• Willing to risk a failure• Graduate • Bangalore study: initial investment of Rs 5 L• Failure rate : 20 %• Multiple tries at success • 30 years +

Typical traits of an entrepreneur

Risk

• Probability of occurrence * likely cost of damage

• THREE TYPES OF UNCERTAINTY.

• Risk, which is measurable statistically

• Ambiguity: hard to measure

• True Uncertainty: impossible to predict

RISKS

• TECHNOLOGY

• MARKET

• FINANCIAL

• PEOPLE

• GOVERNMENT POLICIES

Creativity

• Ability to bring something new into existence

• Lateral thinking

• Multi-disciplinary approach

Some innovative ideas from Internet( to be taken with pinch of

salt)

The creative process

• Idea Germination

• Preparation

• Illumination

• Validation: check

Creativity is normal

Knowledge society

• Peter Drucker’s prediction

• Blue collar/ white collar/knowledge worker

• Human assets will predominate the worth of a Company in future

• Not more than 2 % of Microsoft’s worth is held in factories!

• Knowledge workers are paid for INNOVATIONS and Creativity!!!

Innovation

• Convert useful applications /ideas into new process/product

• A business instinct is essential for this conversion.

Process of Innovation

• An inventor does not necessarily become an entrepreneur

• Difference between an idea and Business Opportunity?

• Difference between Innovation and Invention

• Who is the link?

• An Entrepreneur identifies the window of opportunity

• Develops the business

• Plan:• Determine resources required:• Manage • Reap

New product ideas emerge from

• Consumers

• Walkman

• Existing Companies

• Distribution channels

• Laboratories: Research

• Government

Let us think of some new products

• Common “tricks”

• Lateral thinking

• “Pepsi Crow “

• “Kahan ja rahe ho?”

Intellectual property

• Definitions

• Protection

• Patent Laws

• Registration

• Trademarks

• Copyright

Extension of IP

• Licensing

• Franchising

• Contracts

• Serial Entrepreneurship

• Compete or complement large business

WHATEVR THE MIND CAN CONCEIVE AND BELIEVE

……….IT CAN ACHIEVE

Success is not in never failing

……….. but in rising every time you fall.

BUSINESS PLAN

• LIKE A JOURNEY

• WHERE DO YOU WANT TO BE

• LANDMARKS ?

• HOW TO TRAVEL

• STEER ROUND OBSTACLES

• RESOURCE USAGE

MARKETING PLAN

• Essential issues

• 4 P’s

• Product

• Price

• Place

• Promotion

Financial Plan

• Cash flow is critical

• Initial stages: receivables are low

• Cash support needed form various sources

• Scrutiny by lenders

• Collateral security

• Venture Capital

Financial Appraisal

• Necessary to know the basics of how banks/lending institutions appraise a proposal

• Is the idea sound?

• is the operation likely to be profitable in future?

• Are the promoters dependable/skilled to deliver?

Entrepreneurship vs. Small Business Ownership

• Innovation is the key difference

• Managerial issues remain the same

• Element of risk is different.

• Entrepreneurship is rarer.

Intrapreneurship

• Corporate Venturing

• Profit Centre concept

• Critical to Technology companies

• Research and Development effort

KEY INGREDIENTS FOR ENTREPRENEURSHIP

* PERSONAL CHARACTERISTICS

* TECHNICAL KNOW-HOW

* MARKETABLE IDEA

* CONTACTS FOR ASSISTANCE

* FINANCIAL RESOURCES

* POTENTIAL CUSTOMERS

* SUPPORTIVE LIFESTYLE

* LEADERSHIP EXPERIENCE

* PERSONAL MOTIVATION

APTITUDES ARE OPPORTUNITIES

•What Are Your Strengths?•Verbal or non-verbal communications

•Verbal comprehension•Logical thinking•Artistic activities

•Mechanical thinking•Numerical activities

•Clerical•Spatial

•Physical•Organizational

•Intellectual

How will your strengths help you find a business idea?

HOPE. . .• Helping Other People through Enterprise•Services to other businesses•Entertainment•Marketing the products of others•Repair services•New inventions•Products representing the culture•Value added to raw materials•New technologies•Buying out a business

????... PLEASE