The Concept of Entrepreneurship

Entrepreneurship is the process of creating an enterprise or business venture. It involves the propensity of the mind to calculate risks and have confidence in achieving pre-determined business or industrial objectives.

Key Aspects

Individual Process

Entrepreneurship requires taking risks, making investments, innovating, planning, and making decisions to increase production.

Required Skills

  • Imagination and creativity
  • Readiness to take risks
  • Ability to utilize factors of production
  • Ability to mobilize scientific and technological advances
  • Acquiring required licenses, approvals, and financing

Being Your Own Boss

As an entrepreneur, you'll have the responsibility of using your own judgment and sense of ethics, with a responsibility to your community.

Starting a Startup

Startups are relatively easy to create, especially for young professionals, with the potential for rapid growth as an entrepreneur.

Characteristics of Successful Entrepreneurs

Responsibility and Control

Entrepreneurs have a desire for responsibility and control over resources to achieve self-determined goals.

Risk-taking

Entrepreneurs have a preference for moderate, calculated risk-taking.

Self-reliance

Entrepreneurs have a high level of self-reliance and willingness to take on multiple roles to make the business succeed.

Confidence

Entrepreneurs have confidence in their ability to succeed, even in the face of past failures.

Benefits and Drawbacks

Benefits

  • Gain control over one's life
  • Pursue unlimited profit potential
  • Contribute to society
  • Do what one enjoys

Drawbacks

  • Uncertainty of income, risk of investment loss
  • Long hours, hard work, and high stress levels
  • Lower quality of life until the business is established
  • Complete responsibility for decision-making

Design Thinking

Definition

An iterative, non-linear process with 5 phases - empathize, define, ideate, prototype, test. Stages can be carried out in parallel, repeated, and revisited at any point. Allows for continuous review, questioning, and improvement of initial assumptions and solutions. Widely adopted by leading global brands and taught at top universities.

Key Aspects of Design Thinking

  1. Empathize - Thoroughly understand the user within the context of the design challenge.
  2. Define - Identify the problem and define an actionable problem statement.
  3. Ideate - Generate as many ideas as possible to solve the problem.
  4. Prototype - Build sample models to learn quickly, cheaply, and early.
  5. Test - Collect user feedback to refine the problem, solution, and user needs.
See Mind Mapgoals

Business Plan Development

Definition

A written summary of the proposed business venture, including operational, financial, marketing, and management details. Serves as an entrepreneur's roadmap for building a successful business. Describes the company's direction, goals, and plans for achieving them. Reflects the specific strengths of the business model, team, culture, and entrepreneur's enthusiasm.

Purpose and Benefits

  • Guides entrepreneurs in launching and financing their business.
  • Offers a systematic, realistic evaluation of the venture's market success potential.
  • Identifies the principal risks facing the venture.
  • Provides a "game plan" for managing the business during start-up.
  • Allows for comparing actual results against targeted performance.
  • Serves as an important tool for attracting capital and financing.
  • Critical in today's competitive global environment.

Business Planning Tools

Software options (e.g. LivePlan, PlanMaker, PlanWrite, Canva, WordPress) provide templates, instructions, and guided plan development. Automates much of the business plan writing process to save time.

Entrepreneurial Skills

Conducting Myself

  • Confidence
  • Life management
  • Responsibility

Thinking

  • Creativity
  • Problem-solving
  • Decision-making
  • Observation
  • Needs-based actions

Interacting with People

  • Teamwork
  • Accepting diversity
  • Inclusion

Safety and Survival

  • Self-preservation
  • First aid
  • Drug abuse prevention

What I Can Do

  • Technical skills
  • Crafts
  • Hobbies
  • Intellectual pursuits

Identifying and Addressing Community Needs

Identifying Community Needs

Entrepreneurs should closely observe their local community to identify difficulties or problems that could be addressed. This involves understanding the specific needs and challenges experienced by the community. Recognizing unmet needs in the community is the first step towards developing a viable business idea.

Addressing Community Needs

Once needs are identified, the entrepreneur should determine what products or services could help overcome those difficulties. This requires evaluating how the entrepreneur's own skills and resources could be leveraged to meet the community's needs. Collaborating with colleagues to develop business ideas based on community needs is also suggested.

Aligning with Sustainable Development Goals

The 17 United Nations Sustainable Development Goals provide a framework for identifying community needs that align with global development priorities. Some key goals to consider include:

  1. No Poverty
  2. Zero Hunger
  3. Quality Education
  4. Clean Water and Sanitation
  5. Affordable and Clean Energy
  6. Industry, Innovation and Infrastructure
  7. Sustainable Cities and Communities
goals

Entrepreneurial Opportunity Identification

Analyzing the community's unmet needs and the entrepreneur's own skills/resources is key to developing promising small business ideas. Focusing on addressing genuine community difficulties increases the likelihood of identifying a viable, impactful opportunity. Aligning business ideas with broader sustainable development objectives can further enhance the venture's social and environmental value.

Defining and Assessing the Market

Defining the Market

The market consists of the people or groups who have a need for a product or service and are willing to pay for it. The size of the market is determined by the number of potential customers in the community. Competitors are other businesses providing similar products or services.

Assessing the Market

Conducting customer surveys is crucial to understand the market. Surveys should gather information on customer demographics (age, gender, income, etc.), customer preferences and reasons for liking/disliking the product, willingness to pay a commercial price, sustainability of customer demand (regular vs. seasonal/one-time), quantity of products/services customers need, and preferred locations for product availability. Identifying competitors and understanding their offerings is also important.

Using Market Information

Analyzing the survey data allows the business to estimate the size and characteristics of the potential market. This helps the entrepreneur determine whether there is sufficient demand to sustain the business, pricing that customers will accept, product/service features that meet customer needs, optimal locations for product distribution and sales, and competitive positioning and unique value proposition.

Importance of Market Understanding

Thorough market analysis is crucial for developing a viable business model and strategy. It helps the entrepreneur make informed decisions about product development, pricing, marketing, and operations. Strong market knowledge increases the chances of the business successfully meeting customer needs and competing effectively.

Defining Profit

Profit is the difference between the cost price and the selling price of a product or service. Profit allows the business to reinvest in its operations and grow. Profit should be calculated as a reasonable percentage of the cost price.

Factors to Consider when Setting Prices

  1. Cost of Production: Includes the direct costs of materials, labor, and other expenses to produce the product or deliver the service, as well as the entrepreneur's own salary or compensation.
  2. Overhead Costs: Indirect costs required to operate the business, such as rent, utilities, insurance, marketing, etc.
  3. Profit Margin: The desired profit as a percentage of the cost price. The profit margin should be reasonable and competitive.

Importance of Accurate Cost Calculation

Precisely calculating the various cost components is crucial to setting a realistic and sustainable selling price. Underestimating costs can lead to pricing that is too low to generate sufficient profit, while overestimating costs can result in prices that are uncompetitive in the market.

Pricing Strategies

Cost-plus pricing: Setting price by adding a markup percentage to the total cost. Competition-based pricing: Pricing in relation to competitors' offerings. Value-based pricing: Pricing based on the perceived value to the customer.

Maintaining Profitability

Regularly reviewing and adjusting prices as costs, competition, and market conditions change. Striving for an appropriate balance between covering costs, earning a reasonable profit, and remaining competitively priced.