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Entrepreneurship: Dr. Fonkam Nkam Mongwa
Entrepreneurship: Dr. Fonkam Nkam Mongwa
ASSUMPTIONS
• Existence of developed banking system to avoid scarcity of capital
• Existence of high level technology
• Existence of private initiative and broad based entrepreneurial
processes
• Walkers theory of profit. Also called rent throry of profit was says that
profit is regarded as a rent of differentitial ability that an entrepreneur
may possess over the others
Different views
• Peter Drucker: He extedned schumpters definition of entrepreneurs
as initiators of meta-events. He added the concepts of creative
imitation and entrepreneurial judo
Entrepreneurship: A Mindset
• Entrepreneurship is more than the mere creation
of business:
– Seeking opportunities
– Taking risks beyond security
– Having the tenacity to push an idea through to reality
Macro View
{ Environmental School of Thought
Financial School of Thought
Displacement School of Thought
{
Entrepreneurial Trait School
of Thought (People School)
Venture Opportunity School
Micro View of Thought
Strategic Formulation School
of Thought
Macro View (External locus of control)
a) The Environmental School of Thought
It Considers the external factors that affect a potential
entrepreneur’s lifestyle
b) The Financial/Capital School of Thought
– Based on the capital-seeking process—the search for seed
and growth capital.
• The Displacement School of Thought
– Alienation drives entrepreneurial pursuits
• Political displacement (laws, policies, and regulations)
• Cultural displacement (preclusion of social groups)
• Economic displacement (economic variations)
The Micro View (internal locus of control)
a) The Entrepreneurial Trait School of Thought
– Focuses on identifying traits common to successful
entrepreneurs.
• Achievement, creativity, determination, and technical
knowledge
b) The Venture Opportunity School of Thought
– Focuses on the opportunity aspect of venture
development—the search for idea sources, the
development of concepts, and the implementation of
venture opportunities.
• Corridor principle: New pathways or opportunities will arise that
lead entrepreneurs in different directions
c) The Strategic Formulation School of Thought
• Emphasizes the planning process in successful venture
development.
Ronstadt Views Strategic Formulation
as a Leveraging of Unique Elements
• Unique Markets: mountain gap strategies
• Unique People: great chef strategies
• Unique Products: better widget strategies
• Unique Resources: water well strategies
Process Approaches
• Integrative Approach
• Entrepreneurial Assessment
Approach
• Multidimensional Approach
• a) Integrative Approach
– Built around the concepts of input to the
entrepreneurial process and outcomes from the
entrepreneurial process.
– Focuses on the entrepreneurial process itself and
identifies five key elements that contribute to the
process.
– Provides a comprehensive picture regarding the
nature of entrepreneurship that can be applied at
different levels.
An Integrative Model of
Entrepreneurial Inputs and Outcomes
Inputs Outcomes
The •A going venture
Environmental Entrepreneurial Entrepreneurial •Value creation
opportunities Process Intensity
•New products,
Identify Number of events
Entrepreneurial services
Opportunity (and)
individuals degree of •Processes
Qualitative,
Quantitative,
Type Strategic, and Type
of Ethical of
Entrepreneur Environment
ASSESSMENTS
Individual(s)
Environment Organization
Process
Entrepreneurs in Cameroon
• Reasons for the exceptional entrepreneurial activity in
the Cameroon. include:
– A national culture that supports risk taking and seeking
opportunities.
– Cameroonians’ alertness to unexploited economic
opportunity and a low fear of failure.
– Cameroonian. leadership in entrepreneurship education at
both the undergraduate and graduate level.
– A high percentage of individuals with professional,
technological or business degrees who are likely to
become entrepreneurs.
Procedures of Business
creation in Cameroon
• The creation of an enterprise in Cameroon
requires the sponsor to fulfill certain
administrative and legal procedures.
• The procedures are found at the
Cameroon chamber of commerce mines
and industry or at
Administrative procedures
1) paying of taxes (patent) as follows
LEGAL PROCEDURES
The legal procedures comprise of two steps
This is governed by
This law led to the formation of many cooperatives and common initiative
groups
2) Other administrative formalities relating to the creation of industrial
and commercial companies
Acceptance
Acceptance
Flexibility
Flexibility of
of Risks
Risks
Aspects of Entrepreneurship
Venture
Financing
Corporate Social
Entrepreneurship Entrepreneurship
Trends in Women
Entrepreneurial
Entrepreneurship and Minority
Cognition
Research Entrepreneurs
Global
Entrepreneurial
Entrepreneurial
Education
Movement
Family
Businesses
Entrepreneurship Theory
• Entrepreneurs cause entrepreneurship.
– Entrepreneurship is a function of the entrepreneur:
– Entrepreneurship is the interaction of skills related to inner control, planning and goal setting, risk taking, innovation, reality perception, use of feedback, decision making, human
relations, and independence.
E f (e )
Typology of Entrepreneurial Styles
50
6-1
Becoming an Entrepreneur
.
51
WHAT DOES IT TAKE?
Entrepreneurs are more
• persistent • self-confident
• inquisitive • creative
• energetic • reliable
• goal oriented • competitive
• independent
Chapter 6 52
WHAT DOES IT TAKE?
(continued)
Entrepreneurs have
• problem-solving skills
• tolerance for ambiguity
• strong integrity
• personal initiative
• ability to secure resources
• capability to learn from failure
• willingness to work hard
Chapter 6 53
RISKS
Recognizing risks
• Lack of adequate capital
• Low sales
• Higher than expected expenses
• Competitive pressure
• An owner unprepared to manage a growing
business
• Operations requiring more time than the owner
is willing to commit
Chapter 6 54
55
Starting an Entrepreneurial
Firm
Starts with a viable business idea
Develop a business plan
Select a legal form of business
Determine financial resources
Tactics to become owner
56
SOURCE: Study conducted by Yankelovish Partners, reported in Mark Henricks, “The-Cast,” Entrepreneur (March 2000), 14-16.
62
SMALL BUSINESS
OWNERSHIP
• Description of a small business
– Owner is usually the manager
– Operates in one or very few locations
– Typically serves a small market
– Not dominant in its field
• Small business employment
• Ownership diversity
Chapter 6 63
Checkpoint >>
Answer
Smaller businesses are able to provide more personalized products
and services to their customers.
They are able to provide products and services where smaller orders
and projects are required and tend to fill unique customer needs,
which larger companies do not provide.
Chapter 6 64
COMMON REASONS FOR SMALL
BUSINESS FAILURE
• Not keeping adequate records
• Not having enough start-up money
• Lack of management experience
• Lack of experience with the type of business
• Not controlling operating expenses
• Poor location for the business
• Failure to manage credit offered to customers
Chapter 6 65
Checkpoint >>
Answer
not keeping adequate records
insufficient start-up money
lack of management experience
lack of experience with the type of business
not controlling operating expenses
poor location
failure to manage credit
Chapter 6 66
6-3
Starting a Small Business
Goals
Recognize important factors to be
considered when starting a
business.
Describe the elements of a
business plan.
Identify types and sources of
financing for a small business.
67
Key Terms
• business plan
• start-up financing
• short-term financing
• long-term financing
Chapter 6 68
THE BUSINESS DECISION
• An idea plus experience
• Right place and time
• Team approach
• Preparation and research
Chapter 6 69
Checkpoint >>
Answer
A team approach allows employees to feel valued and motivated to
take personal responsibility for the benefit of the business.
Owners cannot expect to be able to do everything alone. Building a
team will allow the business to increase productivity and, ultimately,
profits.
Chapter 6 70
WHAT IS A
BUSINESS PLAN?
• A business plan is a written description of
the business idea and how it will be
carried out, including all major business
activities.
Chapter 6 71
72
Business Plan
• Document specifying the business
details prepared by an entrepreneur
prior to opening a new business
Clear vision Sources & uses
Realistic financial of start-up funds
projections & operating
Target market funds
Industry and
competitors
Management team
Critical risks that could
threaten success
73
Writing the Business Plan
Description of the business and why it is unique
Profile of potential
High-Tech customers
Start-up Business and
Plan Basic market needs
Points
Chapter 6 75
ELEMENTS OF A
BUSINESS PLAN (continued)
• Description of Competition
– Characteristics of the industry
– Condition of the economy
– Strengths and weaknesses of major
competitors
Chapter 6 76
ELEMENTS OF A
BUSINESS PLAN (continued)
• Customer Analysis
– Description of customers
– Location, number, and resources of
customers
– Sales forecasts
Chapter 6 77
ELEMENTS OF A
BUSINESS PLAN (continued)
• Operations Plan
– Organization of the company
– Description of major operations
– Analysis of resources needed
– Human resource plans
Chapter 6 78
ELEMENTS OF A
BUSINESS PLAN (continued)
• Marketing Plan
– Description of major marketing activities
– Description of resources needed
– Schedule of marketing activities
Chapter 6 79
ELEMENTS OF A
BUSINESS PLAN (continued)
• Financial Plans
– Start-up costs
– Short- and long-term financial needs
– Sources of financing
– Budgets and financial statements
Chapter 6 80
STEPS IN DEVELOPING THE
BUSINESS PLAN
• Gather and review information
• Develop the strategic alternatives
• Write the plan
• Ask an expert to review the plan
Chapter 6 81
Checkpoint >>
Answer
Strategic alternatives are alternative plans for production, staffing,
financing, and so on.
Even the best business plan cannot predict every possible
circumstance.
An alternate plan allows a business to be prepared for the
unforeseeable.
Chapter 6 82
FINANCING
THE SMALL BUSINESS
• Types of financing
– Start-up financing
– Short-term financing
– Long-term financing
• Sources of financing
– Owner-supplied funds
– Borrowed funds
Chapter 6 83
Checkpoint >>
Answer
Borrowed money may come from banks, finance companies, or other
individuals, such as friends and family.
Some suppliers may also be willing to extend credit.
Chapter 6 84