youth empowerment summit day one

YOUTH EMPOWERMENT SUMMIT

NURTURING MINDS, DEVELOPING LEADERS

ENTREPRENEURSHIP

MONDAY TALK

WHAT IS ENTREPRENEURSHIP

Entrepreneurship is the dynamic process of creating incremental wealth. The wealth is created by individuals who assume the major risks in terms of equity, time and/or career commitment or provide value for some product or service. The product or service may or may not be new or unique, but value must somehow be infused by the entrepreneur by receiving and locating the necessary skills and resources efficiently and effectively.


Entrepreneurship is thus considered as the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence that comes with it.

This definition stresses four basic aspects of being an entrepreneur regardless of the field. First, entrepreneurship involves the creation process, creating something new of value. The creation has to have value to the entrepreneur and value to the audience for which it is developed. This audience could be

1. the market of organizational buyers for business innovation,

2. the hospital’s administration for a new admitting procedure and software,

3.prospective students for a new course or even college of entrepreneurship, or

4. the constituency for a new service provided by a non-profit agency.


Secondly, entrepreneurship requires the devotion of the necessary time and effort. Only those going through the entrepreneurial process appreciate the significant amount of time and effort it takes to create something new and make it operational.

For the person who actually starts his or her own business, the experience is filled with enthusiasm, frustration, anxiety, and hard work. There is a high failure rate due to such things as poor sales, intense competition, lack of capital, or lack of managerial ability. The financial and emotional risk can also be very high. What, then, causes a person to make this difficult decision? The question can be best explored by looking at the decision process involved in becoming an entrepreneur.

ENTREPRENEURSHIP ESSENTIALS

Entrepreneurship is an essential element for economic progress as it manifests its fundamental importance in different ways by:

identifying, assessing and exploiting business opportunities;

creating new firms and/or renewing existing ones by making them more dynamic; and

driving the economy forward through innovation, competence, job creation and by generally improving the wellbeing of society.

Entrepreneurship is the active process of recognising an economic demand in an economy, and supplying the factors of production (land, labour and capital) to satisfy that demand, usually to generate a profit. High levels of poverty combined with slow economic growth in the formal sector have forced a large part of the developing world’s population into self-employment and informal activities. But this is not necessarily negative; microenterprises contribute significantly to economic growth, social stability and equity.

WHO IS AN ENTREPRENEUR

An entrepreneur is an enterprising individual who builds capital through risk and initiative

The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to help launch a new venture or enterprise and accept full responsibility for the outcome.

DEFINITION OF AN ENTREPRENEUR

Jean-Baptiste Say, a French economist, is believed to have coined the word “entrepreneur” in the 19th century. He defined an entrepreneur as one who undertakes an enterprise, especially a contractor, acting as intermediary between capital and labour.

Pickle & Abrahamson (1990) introduced a compact definition of an entrepreneur: “An entrepreneur is one who organizes and manages a business undertaking, assuming the risk, for the sake of profit. The entrepreneur evaluates perceived opportunities and strives to make the decisions that will enable the firm to realize sustained growth.”

An entrepreneur is an individual who establishes a firm. Entrepreneurs set up firms in response to economic incentives. In turn, firms create and operate markets that provide mechanisms of exchange for consumers. Firms also create and manage organizations that provide internal coordination and market interactions. The actions of entrepreneurs are the essential force that helps to drive the economy towards equilibrium.

ECONOMIC ROLE OF AN ENTREPRENEUR

The entrepreneur is, before anything, a consumer. The consumer becomes an entrepreneur by choosing to establish a firm. Consumers bring to the task of entrepreneurship their judgment, knowledge, and technology. Consumers decide to become entrepreneurs based on their personal characteristics and their judgment of available market opportunities. Entrepreneurs act rationally and purposefully based on maximizing their net benefits.

A firm is defined to be a transaction institution whose objectives are separate from those of its owners. All firms involve some combination of market mechanisms and organizational structures. A market is a transaction mechanism that brings buyers and sellers together. A market can be a store, a web site, a matchmaker, or an auction..

ECONOMIC ROLE OF AN ENTREPRENEUR

An organization is a mechanism for managing nonmarket transactions inside the firm, including those between owners and managers, between managers and employees, and between employees, and for managing the firm’s market transactions. An organization can involve hierarchies, bureaucracies, groups, teams, and networks

THE OBJECTIVES AND AIMS OF A FIRM

When an Entrepreneur sets up a business, they may have some unstated aims or objectives. Other businesses may wish to state exactly what they are aiming to do, such as Amazon, the Internet CD and bookseller, who wants to “make history and have fun” or Global Communications Nigeria (Glo) ‘rule your world’.

An aim is where the business wants to go in the future, its goals and aspirations. It is a statement of purpose. Corporate aims express the long-term intentions of an organisation to develop in a certain way.

TERM DEFINITION EXAMPLE MISSION Overall Purpose To be the best known for name for confectionery GOAL General Statement To be the market leader in confectionery sales OBJECTIVE Quantifiable Statement of the goal To increase sales by 10% per year

THE OBJECTIVES AND AIMS OF A FIRM

A mission statement sets out the business vision and values that enables employees, managers, customers and even suppliers to understand the underlying basis for the actions of the business.

Business objectives are the stated, measurable targets of how to achieve business aims. Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees.

The idea behind setting aims is to ensure that:

Everyone in the business has a clear focus of the direction that it is going in.

The entrepreneur can see or determine how much he has achieved after a given time.

They provide a framework within which business strategies can be drawn up

Having set long-term aims of the business, there is a need to communicate them to the stakeholders. This is done through a mission statement. The mission statements will outline the overall reason for the firm’s existence.

Aims and mission statements are long-term and therefore lack the detail for day-to-day decisions of running a business. However, this detail will be given in the firm’s objectives, which should set measurable targets. Many businesses set two types of objectives:

CHARACTERISTICS OF EFFECTIVE BUSINESS OBJECTIVES

The most effective business objectives meet the following criteria: (SMART)

S – Specific – objectives are aimed at what the business does, e.g. a hotel might have an objective of filling 60% of its beds a night during October, an objective specific to that business.

M – Measurable – the business can put a value to the objective, e.g. €10,000 in sales in the next half year of trading.

A – Agreed by all those concerned in trying to achieve the objective.

R – Realistic – the objective should be challenging, but it should also be able to be achieved by the resources available.

T- Time specific – they have a time limit of when the objective should be achieved, e.g. by the end of the year.

TRAILS OF AN ENTREPRENEUR

TRAILS OF AN ENTREPRENEUREntrepreneurial success depends on the management of your own self. For this you require certain traits, qualities or behavioural competencies.

Barreto (1982) presents four groupings of the critical traits of an entrepreneur; coordinator, arbitrage, innovation, and uncertainty-bearing. He further divides the last category into sub-groupings: He further divides the last category into sub-groupings: speculation, ownership, and decision-maker. These characteristics demonstrate the human elements of entrepreneurship.

Coordinator: An entrepreneur is a combiner and coordinator of productive resources. He is at the crux of the market system. This implies that the entrepreneur is the link of communication between the various classes of producer and consumer. He directs the business of production and is the center of many bearings and relationships

TRAILS OF AN ENTREPRENEURArbitrageur: The entrepreneur is someone with the ability to perceive profit opportunities and act upon them. He observes the opportunity to sell something at a price higher than that at which he may be willing to pay for it.

Innovator: Innovation is an outcome of new combinations created by the entrepreneur. These new combinations are created by the entrepreneur who develops new goods, quality, new methods of production, new markets or new organizations.

A speculator: The entrepreneur, in conducting his transactions buys at a certain price and sells at an uncertain price. He is a speculator and the key to the market system because of his willingness to bear risk.

Owner: The adoption of the entrepreneurial role carries with it the assumption of responsibilities in an uncertain business environment. The entrepreneur motivates production and becomes the responsible owner of the product.

P E R S O N A L C H A R A C T E R I ST I C S O F A N E N T R E P R E N E U R

Timmons (1994) describes entrepreneurial mind (which means the attitudes and behaviour of successful entrepreneurs) as those people who are capable of hard work, and are driven by an intense commitment and determined perseverance. They see the cup half full rather than half empty, they strive for integrity, they burn with competitive desire to excel and win. They use failure as a tool for learning and eschew perfection in favour of effectiveness. They believe they can personally make an enormous difference in the final outcome of their ventures and their life.

Successful entrepreneurs have many qualities in common with one another. They are confident and optimistic, disciplined self-starters. They are open to any new ideas which cross their path. Here are ten personal traits of a successful entrepreneur:

Passion: Passion is the most important attribute of successful entrepreneur. They genuinely love their work. They are willing to put in extra hours to make the business grow because there is a joy their business gives which goes beyond the money or profit. The successful entrepreneur will always be reading and researching ways to make the business better.


Disciplined: They are focused on making their businesses work, and eliminate any hindrances or distractions to their goals. Successful entrepreneurs are disciplined enough to take steps every day toward the achievement of their objectives.

Confidence: The entrepreneur does not ask questions about whether they can succeed or worthy of success. They are confidence with the knowledge that they will make their businesses succeed. They exude that confidence in everything they do.

Open Minded: Entrepreneurs realize that every event and situation is a business opportunity. Ideas are constantly being generated about workflows and efficiency, people skills and potential new enterprises. They have the ability to look at everything around them and focus it toward their goals. They update their knowledge continuously and seek information form a variety of sources.

Self-Starter: Entrepreneurs know that if something needs to be done, they should start it themselves. They set the parameters and make sure that projects follow that path. They are proactive, not waiting for someone to give them permission.


Competitive: Many companies are formed because of an entrepreneur knows they can do a job better than another. They need to win at the sports they play and need to win at the business that they create. An entrepreneur will always be willing to highlight their own company’s track record of success. The success of the entrepreneur will depend on the quality of their product or service.

Creativity: One facet of creativity is being able to make connections between seemingly unrelated events or situations. Entrepreneur often come up with solutions which are the synthesis of other items. They will repurpose products to market them to new industries.

Determination: Entrepreneurs are not thwarted by their defeats. They look at defeat as an opportunity for success. They are determined to make all their endeavours succeed, so they will try and try again until it does. Successful entrepreneurs do not believe that something cannot be done.

Strong people skills: The entrepreneur has strong communication skills to sell the product and motivate employees. Most successful entrepreneurs know how to motivate their employees so the business grows overall. They are very good at highlighting the benefits of any situation and coaching others to their success.

Strong work ethic: The successful entrepreneur will often be the first person to arrive at the office and the last one to leave. They will come in on their days off to make sure that an outcome meets their expectation. Their mind is constantly on their work, whether they are in or out of workplace.

INTE RP ERS ONAL SK ILLS OF AN E N TREP RE NE UR

These could be referred to as social skills. They are a set of skills that people use when interacting and communicating with one another. These skills show up in countless interactions, from public speaking, group projects and team presentations, to professional writing (work e-mails, contracts etc.) and talking with friends and business associates. Here are a few tips on how to improve your interpersonal skills:

ü Be an active listener– Take the time to listen and show others that you’re listening and understand their perspective-even if it is not in line with yours.

Body language– I don’t know many people who enjoy being around unhappy individuals or those who appear to be unhappy in any given moment. Make sure to smile, stand tall, make eye contact and do your best to give off a good vibe. Your body language introduces you to those around you before you even open your mouth.

Empathize– Try putting yourself in someone else’s shoes and understand their perspective. This will allow you to better respond to their feelings and it will show them that you care.

Humour– It is not all about business. After all, we are all human. Be spontaneous and say something at an appropriate time that you think will make the other person smile. If they smile, you know they’re probably working on their interpersonal skills, too.

INTE RP ERS ONAL SK ILLS OF AN E N TREP RE NE UR

Optimism– Be optimistic, open minded and have an overall positive attitude. Positive attitudes are contagious to those around you. Everyone knows someone who has a negative attitude and you definitely do not want to be one of them.

Think on your feet– It is important to be sharp, pick up on, and react to both verbal and nonverbal cues of others.

Be patient– Not everyone processes and understand concepts in the same way. Take the time to make sure that whoever you’re talking to understands what you’re saying.

Practice- The more interactions you have with others, the more progress you’ll make.

ENTREPRENEUR AND ENTREPRENEURSHIP

CREATIVITY AND INNOVATION

Sources of new ideas.

- consumers.

- Existing companies.

- Distribution channels.

- federal Government.

- Research and development.

Methods of generating ideas.

- Focus Groups.

- Brainstorming.

- Problem inventory analysis.

Creative problem solving.- Brainstorming.- Reverse

brainstorming.- checklist method.- Free association.- Forced relationship.- collective notebook

method.- scientific method.- value analysis.- Attribute listing.- matrix charting.- Big dream approach.- Parameter analysis.

INNOVATION AND ENTREPRENEURSHIP

Schumpeter has firmly expressed his opinion that the function of entrepreneurship is innovation.

Innovation of new product.

Innovation of new technology.

Innovation of new process of production methods.

Exploration of new markets.

Searching for the new sources and supply.

Innovation of industrial reconstruction method.