Ethiopian TVET System

Entrepreneurship and Employability skills

Module I

Module Title: - Developing Entrepreneurship and Employability skills

LG Code: ENT EMP M1 LO (1-4)
TTLM Code: ENT EMP M1 TTLM 0821V1
 Learning Outcome- 1 Understanding Entrepreneurship Skills

Introduction

This lesson discusses about Entrepreneurship and how to become an entrepreneur. It explains the
major steps to be followed in applying of entrepreneurship. It also discussed the similarities
between an entrepreneur and a manager. The roles of entrepreneurship in the economy and the
principles of entrepreneurship are elaborated.

This lesson also elaborates mindset in general and entrepreneurial mindset in particular. It also
emphasizes the importance of developing a positive mindset (attitude) for a person’s life as well
as for entrepreneurship. It indicates how trainees can develop an entrepreneurial mindset in order
to be future entrepreneurs.
This lesson discusses about the major competencies that should be developed by entrepreneurs in
order to be successful in their businesses. It also explains in environment in which the entrepreneur
performs his or her activities as a business owner. An entrepreneurial potential of an individual
and how it can be measured will be explained.
This learning guide is developed to provide you the necessary information regarding the following
content and topics:
 Basic Concepts of Entrepreneurship
 Developments of Entrepreneurial mindset
 Understanding Entrepreneurial Competencies and Environment
 Entrepreneurial motivation and Decision

Learning Objectives
This guide will also assist you to attain the learning outcome below. Specifically, upon completion
of this Learning Guide, you will be able to

 Understand Basic Concepts of Entrepreneurship

 Know Developments of Entrepreneurial mindset
 Develop entrepreneurial mindset
 Understand Entrepreneurial Competencies and Environment
 Identify Entrepreneurial motivation and Decision
Learning Instructions
1. Read the specific objectives of this Learning out come.
2. Follow the instructions described below 3 to 5.
3. Read the information written in the “Information Sheets Try to understand what
are being discussed. Ask you teacher for assistance if you have hard time
understanding them.

4. Accomplish the “Self-check” given at the end of each information sheet

5. If you earned a satisfactory evaluation, proceed to next information sheet.
However, if your rating is unsatisfactory, contact your teacher for further
instructions

Information Sheet 1 Basic Concepts of Entrepreneurship

1.1.1 Entrepreneurship
The word “Entrepreneurship” is derived from the French verb entreprendre which means “to
undertake”. The concept entrepreneurship refers “The process of identifying opportunities in the
market place, arranging the resources required for pursuing 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.”

I. Elements (steps in the implementation) of Entrepreneurship

1. Observing the environment/identifying gaps,

2. Identifying opportunities,

3. Gathering the necessary resources

4. Implementing the activity and

5. Receiving rewards for engaging in the activity

II. Entrepreneurial Functions in Business

1. Identify gaps in the market and turn these gaps into business opportunities.
2. Finances and mobilizes resources for the business
3. Organize and manage the business.
4. Bear /tolerate/ the uncertainties and risks of the business.
 5. Encourage competition
6. Self-employed and applying entrepreneurship

III. Economic Principles of Entrepreneurship

1. Works best in an open market economy

2. Promotes private enterprise
3. Adds value to products and services (creates wealth)
4. Providing needed products/service
5. Developing new markets
IV. Rewards for Being an Entrepreneur
1. Self-actualization /personal fulfillment
2. Feeling of freedom and independence
3. Providing jobs and benefits to others (investors, suppliers, bankers, subcontractors, work
force, and customers)
4. Economic goods (product/service, incomes for workers, profits for shareholders/partners)

V. Importance of entrepreneurship
The followings are the major benefits of entrepreneurship
1. Employment creation
2. Local resource utilization
3. Decentralization and diversification of business
4. Promotion of technology
5. Capital formation
6. Promotion of an entrepreneurial culture

VI. Meaning of Entrepreneur

Entrepreneurs are individuals who undertake an economic activity. On one extreme, an

entrepreneur is a person who brings change, possessing characteristics found in only a very small
fraction of the population. On the other extreme of definition, anyone who wants to work for
him/her is considered to be an entrepreneur.

VII. Types of entrepreneurs

Generally, there are four types of entrepreneurs as indicated here under:
 Personal achiever  Real manager
 Super-salesperson  Expert Idea Generator

Personal achiever
Personal achievers are the classic entrepreneurs. They are the types of people that we picture when
the term “entrepreneur” is used. They are the only types who must become entrepreneurs to
succeed in life. If they are placed in a non-entrepreneurial environment, they stand a good chance
of failure. They possess seven characteristics that relate to entrepreneurial success:

 Need for high achievement

 Need for performance feedback
 Desire to plan and set goals
 Strong individual initiative
 Strong personal commitment
 Internal locus of control

Super-salesperson
Generally, onlookers don’t view super sales people as having the potential for entrepreneurial
success. Their entrepreneurial strength is their approach to selling. They truly cater to the needs of
clients and customers, thus placing a strong stress on service. Super sales people are interested in
managing the customer into a sale, not in applying pressure tactics.
 Capacity to empathize
 Social interaction and relationships are important
 Need to have strong positive relationships with others
 Sales force is critical
 Background: less education, more experience

Real manager
Real managers exhibit some of the traits of established entrepreneurs and some of the abilities of
corporate managers. They possess the following traits
  Desire to be corporate leader
 Desire to compete
 Decisive
 Desire of power
 Desire to stand out in a crowd
Expert Idea Generator

Expert idea generators are people who have ideas for a business that can provide a real competitive
advantage. They become tremendously enthused about their ideas and spend a great deal of time
implementing them. Unlike personal achievers, who spend energy on an overall venture, expert
idea generators tend to focus on the idea exclusively. Very often, they will try to persuade others
to contribute to implementation and, if unsuccessful, they will abandon the idea. They possess a
majority of the following five characteristics:
 Desire to innovate
 Love of ideas, curious
 Belief that new products are crucial
 Intelligence is the competitive advantage
 Desire to avoid taking risks

VIII. Personal efforts to be an Entrepreneur

The nature of entrepreneurial activity requires the following extra efforts from an entrepreneur
 Works long hours
 Always concerned about the business
 Needs high energy
 Sacrifices other important aspects of life
 Limited social life
 Not much time with family and friends
 Financial investment
  Table 1: The relationship between entrepreneurship and entrepreneur

1.1.2 Entrepreneur and Intrapreneur

Intrapreneurs are individuals who notice opportunities and take initiative to mobilize resources;
however they work in large companies and contribute to the innovation of the firm. Intrapreneurs
often become entrepreneurs. Diagrammatically, the differences between entrepreneurs and
intrapreneurs are shown below

Table 2: The relationship between entrepreneur and Intrapreneur

1.1.3 Entrepreneur and manager
A manager is a person who plans, organizes, directs and controls the activities of an established
business. It is the manager who leads the business to its targets and who is responsible for the
business's success or failure. However, unlike the entrepreneur, a manager is not necessarily the
owner or the founder of the business.

Alternatively, the entrepreneur may or may not be the manager of the business. Even though it is
true that most entrepreneurs are the managers of their businesses, an entrepreneur may hire a
manager to run her/his business. Moreover, a manager may not have the qualities of an
entrepreneur while the entrepreneur may not have the skills to effectively manage an organization
like a good manager does. In fact, the problem many entrepreneurs face is leading their businesses
to success in today's dynamic environment.

The entrepreneur is the person who makes judgmental decisions under conditions of uncertainty
and who creatively turns the uncertainty into an advantage for the business she/he runs.

A manager is an employed person while an entrepreneur manages the enterprise for his/her
personal gain. The role of the entrepreneur and the manager may, however, overlap in many cases.
Generally, the major points of differences between the managerial and entrepreneurial qualities
are summarized below.
Table 3: Summarized differences between the entrepreneur and manager
Point of
Entrepreneur Manager
Distinction
He starts a venture by setting up a The main aim of a manager is to
Goal
new enterprise for his personal render his/her service in an enterprise
Management
satisfaction. already set up by someone.

Entrepreneur is the owner/founder of A manager is a servant in the

Status
the enterprise. enterprise.

An entrepreneur bears all risk and A manager does not bear any risk
Risk
uncertainty involved in the enterprise. involved in the enterprise.

Entrepreneurs for his/her risk bearing A manager receives salary as a

role he/she receives profits. The reward for services rendered which is
Rewards
reward is not only uncertain and fixed and regular. It can never be
irregular but can at time be negative. negative.
 As an innovator s/he is called as
A manager executes the plans of the
change agent who introduces goods
Innovation entrepreneurs/owners/founders of the
and services to meet changing needs
business.
of the customer.

1.1.4 Enterprise and Enterprising

Enterprise means always finding a way to keep yourself actively working towards your ambition.

Enterprise is two things. These are:

 Creativity
 The courage to be effective

An enterprise is considered to be any entity engaged in an economic activity, irrespective of its

legal form.
Meaning of Enterprising

An enterprising person is one who sees opportunity in all areas of life. To be enterprising is to
keep your eyes open and your mind active. It’s to be skilled, confident, creative and disciplined
to seize opportunities that present them regardless of the economy.

 Enterprising people always see the future in the present.

 Enterprising people always find a way to take advantage of a situation, not be

burdened by it.

 Enterprising people aren’t lazy. They don’t wait for opportunities to come to them,
they go after the opportunities.

Being enterprising doesn’t just relate to the ability to make money. Being enterprising also means
feeling good enough about yourself, having enough self-worth to want to seek advantages and
opportunities that will make a difference in your future. And by doing so, you will increase your
confidence, courage, creativity and self-worth which are aspects of an enterprising nature.”
Enterprising men and women exhibit the following characteristics
 E: Energy
N: Need to achieve
T: Task oriented
E: Empathy
R: Resourcefulness
P: Planning
R: Risk-taking
I: Innovation
S: Skills
I: Independence
N: Networking
G: Goal oriented
On a personal level/in its wider sense, enterprising can be any identified idea that a person can
translate into a planned and satisfactorily implemented activity. In the business sense/in its
narrower sense/, enterprising refers to a business venturing or undertaking. Practically all
undertakings can be referred to as enterprising if they fulfill the followings.
 Idea identification
 Planning
 Implementation,
 Successful completion of an activity and
 Receiving the rewards.

1.1.5 Identify the role of Entrepreneurship in Economic Development

Entrepreneurship helps to effectively utilize all the economic resources. More specifically,
human being can be better off, educated and modernized through entrepreneurship. Government
and individuals need to know that money can also be created when there
is entrepreneurial activity.
Entrepreneurship plays a key role in enhancing an economy in terms of the following:

 Creating jobs and additional wealth creation

 Promoting free enterprise and healthy competition
 Spreading prosperity and promoting economic growth
 Ensuring innovation and creativity
  Encouraging grassroots development
 Improving social and community conditions
Shifting the mind set of being employed to self-employment

Information Sheet – 2 Developments of Entrepreneurial mindset

1.2.1 Overview of mindset

“Success and failure begins in your mind and it starts today.” Robert van der Wolk
A mindset is the sum of your knowledge, including beliefs and thoughts about the world and
yourself in it. It is your filter for information you get in and put out. So it determines how you
receive and react to information. Mindset can be:
 fixed or
 growth oriented.
While a fixed mindset assumes your talents and abilities are set,

the growth mindset believes your talents and abilities can be developed.

It is pointed out that a mindset can change. Much of this occurs through developing a greater
awareness of your current mindset, and taking steps to purposely start thinking and reacting in new
ways.

Our current mindset guides the collection and interpretation of new information. To the extent
that this new information is consistent with the current mindset, it reinforces that mindset. From
time to time, however, new information appears that is truly novel and inconsistent with the
existing mindset. When this happens, we either reject the new information or change our mindset.
The likelihood that our mindsets will undergo a change depends largely on how explicitly self-
conscious we are of our current mindsets: the more the hidden and subconscious our cognitive
filters, the greater the likelihood of rigidity.

Thus, while our mindsets can be shaped by an intentional awareness, they are also largely driven
by our experiences and what we are (intentionally or unintentionally) exposed to. Yet, as mindsets
evolve through an interactive process, it is not simply a “one and done” effort. Rather, it must be
reinforced and practiced. In this sense, a mindset is a habit that requires practice.
1.2.2 Entrepreneurial mindset
An entrepreneurial mindset is a set of beliefs, thought processes, and ways of viewing the world
that drives entrepreneurial behavior. Typically, entrepreneurs firmly believe it’s possible to
improve their life situation and live life on their own terms. They also believe in their ability to
learn, grow, adapt, and succeed.

The mindset of successful entrepreneurs is different from mindset of traditional workers in many
ways. For example, if a traditional worker needs to earn more money they’ll often brush up their
resume and look for a better paid job. However, someone with an entrepreneurial mindset would
look for ways to earn money by starting or growing a business

Here’s the thing: Anyone can develop the mindset of a successful entrepreneur.

As the founder of Ford Motor Company, Henry Ford once said, “Whether you think you can or
think you can’t you’re right.”

A positive mindset helps motivate entrepreneurs to focus on desired activities and events and the
results they hope to achieve. The characteristics of the entrepreneurial mindset which are common
for all entrepreneurs are:

1. They passionately seek new opportunities.

2. They pursue opportunities with enormous discipline.

3. They pursue only the very best opportunities and avoid exhausting themselves and their
organizations by chasing after every option.

4. They focus on execution specifically, adaptive execution.

5. They engage the energies of everyone in their domain

The importance of an entrepreneurial mindset

The power of an entrepreneurial mindset is obvious when you think about it. Entrepreneurs
succeed like they do because they think, act, and view the world differently from most people

The factors that help entrepreneurs to develop a positive mindset include:

• Focus on opportunities to learn from each experience.

• Being involved in positive activities.
• Choose work objectives that are achievable and have an impact.
 • Make friends with other entrepreneurs.
• Acquire the thinking, mannerisms, and characteristics of successful entrepreneurs.
• Have successful entrepreneurs serve as role models and mentors.
• Avoid negative thoughts and ideas.
• Take advantage of opportunities to improve your situation, whether it is your personal
life, work life or life in the community.

Successful entrepreneurs need to develop a positive mindset and observe their environment. In
order to do this, the process described below in sequential order should be followed;

1. Attention (focus on something)

2. Retention (what observed must be retained)
3. Reproduction (behavior must be practiced again and again)
4. Motivation (learner must be motivated to learn from it)

1.2.4 Distinguishing characteristics of entrepreneurial mindset

know how successful entrepreneurs think.

1. Independent: Entrepreneurs don’t follow the crowd or look to others to be given instructions.
Instead,
2. Responsible: Entrepreneurs don’t blame others for their life situation they empower
themselves by taking responsibility for improving it.
3. Abundant: Entrepreneurs know they can improve a situation, make more money and
create new opportunity. The sky is always the limit.
4. Goal-Oriented: Entrepreneurial thinking is goal-orientated.
5. Not Afraid of Failure: When learning how to think like an entrepreneur, you need to
look at failure differently to most people.
6. Growth-Oriented: Entrepreneurs believe that they can grow as people, learn new things,
and develop new skills
7. Feedback-Seeking: they know that learning from feedback will help speed up the
process
8. Learning-Oriented: Most people spend their spare time seeking entertainment, whether
it’s social media, Netflix, gaming, reading novels, or hanging with friends

9. Forward-Thinking: If you want to learn how to think like an entrepreneur, you need to
think long-term. Successful entrepreneurs know that big goals take a long time to achieve.
 10. Self-Accepting: Many people struggle with self-acceptance. When you don’t like
something about yourself, it’s easy to devalue or even hate yourself.

11. Self-Aware: Entrepreneurs practice self-awareness. They pay close attention to their
strengths and weaknesses, which allows them to improve faster and play to their strengths.

12. Collaborative: Great businesses require teamwork after all; Jeff Bezos didn’t build
Amazon alone. So, if you want to think like an entrepreneur, you need to think in terms of
“we” instead of “I.”

13. Comfortable with Discomfort: Courage leads to an essential entrepreneurial mindset

characteristic: learning to be comfortable with discomfort. Growth and expansion require
you to move beyond your comfort zone. So, when developing an entrepreneurial mindset,
someone should overcome any uncomfortable feeling such as rejection.

14. Adaptable: Entrepreneurs have big goals, and they know it’s impossible to see the entire
staircase before climbing. But they climb anyway, safe in the knowledge that they can
always adapt to new developments.

15. Problem-Solving: Entrepreneurs look for problems and try to find ways to solve them.

16. Driven and Tenacious: Drive is an essential part of the entrepreneurial mind.
Entrepreneurs are self-motivated and driven to achieve their goals.

17. Focused: Successful entrepreneurs are focused on achieving their goals. They’re focused,
never procrastinate, and always prioritize the most important tasks

18. Action-Oriented: Entrepreneurs have a bias for action. They know that knowledge without
action is meaningless. As the entrepreneur Walt Disney said, “The way to get started is to
quit talking and begin doing.”

19. Decisive: The entrepreneurial mind is decisive. Entrepreneurs must confront problems and
make many decisions every day often with inadequate information to help.

1.2.5 Developing Positive mindset towards work

“Whether you think you can or think you can’t, you’re right”
“The best and most beautiful things in the world can’t be seen or touched ... but are felt in the
heart.”
Helen Keller - was a blind and deaf author and lecturer

“If you’re not aiming for success, than you’re either aiming for failure or not aiming at all”

Science today says that we can influence our outer world by influencing our inner world. Instead
of being passive observers, we now have the power to participate in the world by using our mind
at a level where it changes what we think and feel, what we believe and which emotions we
experience. You have the power to start making the changes you want and getting the kind of life
you’ve always wanted. And it all begins in one place; your mind. Because our mind is just like a
supercomputer: what you put in, you take it out. Having the right mindset makes all the difference
in the world.

Positive thinking means seeing opportunity where negative thinking means looking at what
is missing or what is wrong. Of course this doesn’t mean that positive thinking is all only
about seeing the nice and happy things in life and not focusing on the potential dangers.

If you choose between positive thinking and negative thinking, the only difference is that with
positive thinking your outcome will not be determined in either disappointment, feeling like a
failure or depression. So, if you choose to have a positive mindset, you make the absolute very
best choice.

It will change your self-image, will get you the best results and will allow you to make the best
choices in your life.

1.2.6 Positive mindset to work

The good news is that job satisfaction has much more to do with internal factors such as having
positive expectations, developing a healthy self-image, and being flexible than it does external
factors such as the work itself or the people it involves. Research confirms that we are only as
happy or unhappy as we make up our minds to be, therefore, we each have the power to choose if
we want to respond to our jobs and to the world around us positively or negatively.

The following are some tips for how you can develop a more positive mindset at work in general
 Pay attention to what you’re telling yourself throughout the day (Ex: “I hate my job,” “I
can’t believe I have to be here,” etc.) and recognize that thinking negatively about your job
doesn’t change anything about your situation.
 Look for other points of view. Keep in mind that you are viewing your situation from only
one perspective. While you may not think that your work situation is ideal, other people may
envy certain aspects of your job. Think about how you could view your situation differently.
 Be sure to take breaks. Of course, follow your workplace guidelines about timing and
duration, but make the most of your allotted time by physically removing yourself from your
work station, touching base with someone from the “outside world” (friend, family member,
etc.), or simply taking a few moments to breathe deeply and do nothing.
 Try out some new communication strategies at work. For instance, try matching a positive
comment to every negative comment you say or hear to set a more positive tone to the
conversation. You may be surprised to learn how contagious a positive outlook can be to
those around you.
 Your home should be a place in which you can safely leave behind the daily stresses of
your job. Use a ritual, such as stopping by the gym, going for a walk, changing out of your
work clothes, etc., that serves as a link between work and home.
 Improve your life outside of work. Pursue personal interests and hobbies outside of your
job, spend more quality time with your friends and family, and/or do something generous
for someone else.
 Explore your options. When you’re employed, you have the luxury of searching for a
position you really like, not just one that you need. Explore different positions with your
same employer, find out if a promotion is possible in your area, look for the same type of job
with a different employer, or look into a new career altogether.
 Design long-term goals. Instead of dwelling on how bad you think things are right now, focus
on what you would like your life to be like in five, ten, even twenty years. Write down where
you’d like to be professionally, financially, emotionally, spiritually, physically, and socially
and set attainable goals for yourself.

 1.2.7 Developing effective work habit (Culture)

 Work habits refer to a person’s characteristic approach to work, including such things as
organization; priority setting, and handling of paperwork and e-mail.
Employees with good work habits are more successful in their careers, and they are more
productive and attentive to quality than employees with poor work habits. For some, good work
habits come naturally. Others, however, easily slip into poor work habits and need a manager or
team leader’s intervention. These discussions are rarely easy; however with careful planning, they
can go smoothly and yield a positive outcome.

People with good work habits tend to achieve higher career success and have more time to invest
in their personal lives. They also enjoy their personal lives more because they are not preoccupied
with unfinished tasks. Effective work habits are also beneficial because they eliminate a major
stress or the feeling of having very little or no control over your life. Being in control also leads to
a relaxed, confident approach to work.

In order to develop effective work habits and became more productive person, things that should
be considered include
1. Overcoming procrastination
2. Developing attitudes and values that foster productivity.
3. Developing skills and techniques that lead to personal productivity.
4. Overcoming time wasters
Overcoming procrastination

The leading cause of poor productivity and career self-sabotage is procrastination. It is delaying
of a task for an unacceptable or weak reason. Procrastination is also the major work habit problem
for most workers and students.

People procrastinate for many different reasons. The common ones are
1. Thinking that the task to be done (such as quitting a job) is unpleasant.
2. Another reason we procrastinate is that we find the job facing us to be difficult
3. A fear of the consequences of our actions
4. Negative evaluation of your work
5. The fear of success
6. A way of rebelling against being controlled
7. To achieve the stimulation and excitement that stems from rushing to meet a deadline

Techniques for reducing procrastination

To overcome or at least minimize procrastination, we recommend a number of specific tactics.
 1. Calculate the cost of procrastination
You can reduce procrastination by calculating its cost. One example is that you might lose out on
obtaining a high-paying job you really want by not having your résumé and cover letter ready on
time. Your cost of procrastination would include the difference in salary between the job you do
find and the one you really wanted. Another cost would be the loss of potential job satisfaction.

2. Counterattack
Forcing yourself to do something difficult, frightening, or uncomfortable helps you to prove that
the task was not as bad as initially perceived. Assume that you have accepted a new position but
have not yet resigned from your present one because resigning seems so uncomfortable.

3. Jump-start yourself
You can often get momentum going on a project by giving yourself a tiny assignment simply to
get started. One way to get momentum going on an unpleasant or overwhelming task is to set aside
a specific time to work on it. If you have to write a report on a subject you dislike, you might set
aside specific day and time as your time to first attack the project.

4. Peck away from overburden task

A good way of minimizing procrastination is doing a task bit by bit, by breaking down to
manageable size and, therefore, not seem so overwhelming too much burden.

5. Motivate yourself with rewards and punishments

Give yourself a pleasant reward soon after you accomplish a task about which you would ordinarily
procrastinate. You might, for example, have a walk through the forest after having completed a
tough take-home exam. Punish yourself if you have engaged in serious procrastination.

6. Follow the WIFO principle This principle recommends that you use the technique of worst in, first
out (WIFO) for dealing with unpleasant tasks you would prefer to avoid. A related motivational
principle is that after completing the unpleasant task, moving on to a more pleasant (or less
unpleasant) task functions as a reward.
 Understanding Entrepreneurial Competencies &
Information Sheet 3
Environment
1.3.1 Identifying Personal Entrepreneurial competencies (PECs)
Competencies: are defined as a body of knowledge, a set of skills and a cluster of traits.

Knowledge: consists of a set or body of information stored, which may be recalled at an

appropriate time.

Skill: is the ability to apply knowledge.

Trait: is the total of peculiar qualities or characteristics that constitutes personal individuality.

Entrepreneurial competencies: refer to the key characteristics that should be possessed by

successful entrepreneurs in order to perform entrepreneurial functions effectively.

I. Levels of competencies required by entrepreneurs

There are three levels of competencies, which all entrepreneurs need:

1. Personal competencies: creativity, determination, integrity, persistence, emotional
balance and self-criticism.
2. Interpersonal competencies: communication, engagement, delegation, respect.
3. Business competencies: business vision, resource management, networking, negotiating
skills.

Personal Entrepreneurial Competencies (PECs) are specific characteristics/ traits that can be
achieved through education, hard work, and planning.

No Personal Entrepreneurial Competency Cluster

1 Opportunity seeking and initiative
2 Persistence
3 Fulfilling commitments Achievement
4 Demand for efficiency and quality
5 Taking calculated risks
6 Goal setting
7 Information seeking Planning
8 Systematic planning and monitoring
9 Persuasion and networking Power
 10 Independence and self-confidence

1. Opportunity seeking and initiative

An entrepreneur always seeks out and identifies opportunities.
The opportunities may include access to credit, working premises, education, trainings etc.

Quotes

 “Successful people move on their own initiative but they know where they are going
before they start.” – Napoleon Hill
 “What is not started will never get finished.” – Johann Wolfgang von Goethe

 A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in
every difficulty. Winston S. Churchill

2. Persistence

It is the ability or the determination to takes action in the face of significant obstacles and
challenges. True entrepreneurs take personal responsibility for the performance necessary to
achieve goals and objectives

Quotes
 “If you can’t fly, then run, if you can’t run then walk , if you can’t walk then crawl, but
whatever you do you have to keep moving forward” -Martin Luther King, Jr.
 “Success in life is not for those who run fast, but for those who keep running and always on
the move.” -Bangambiki Habyarimana

3. Fulfilling commitments

An entrepreneur makes a personal sacrifice and extraordinary effort to complete a job, pitches in
with employees, or takes their place if needed, to get a job done and strives to keep customers
satisfied and places long-term good will above short-term gain.

Quotes

 “If there is no struggle there is no progress” –Frederick Douglass

 “I never dreamed about success. I worked for it. –Estee Lauder

4. Demand for efficiency and quality

Efficiency refers to the means of producing results with little wasted effort while quality refers to
the standard of something as measured against other things of a similar kind; it is of excellence of
something.

In pursuit of demand for efficiency and quality entrepreneurs tend to:

 find ways to do things better, faster and cheaper
 act to do things that meet or exceed standards of excellence

 develop and uses procedures to ensure that work is completed on time and that work meets
agreed upon standards of quality.

Quotes

 “We are what we do repeatedly. Therefore, excellence is a habit, not an incident.” -

Aristotle

5. Taking calculated risks

Businesses face risk. Successful entrepreneurs take risks in business such as starting businesses
which have an equal chance of success or failure or resigning from a secure job to start a business.

. In short, the entrepreneur likes a difficult but achievable challenge

Quotes
 “If there is no risk, there is no reward.” -Christy Raedeke

“Life is all about risks. If you never take a risk, you will never achieve your dreams. Take risks: If you win,
you will be happy ;If you lose, you will be wise”

6. Goal setting

Goal setting is the process of deciding what you want to accomplish and devising a plan to
achieve those desired result. Successful entrepreneurs have the ability to set goals and
objectives which are personally meaningful and challenging and articulate clear and specific
long-term goals.

Quote

 “If you don’t know where you are going, you’ll end up someplace else.” ― Yogi Berra

 “The wind never helps the boat that has no clear destination.” Seneca
 7. 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, markets and they also consults experts for business or technical advice

Quotes
1) “Information means power” Unknown
2) “There are no foolish questions, only fools who do not ask questions.” Unknown

8. Systematic planning and monitoring

Systematic planning is a planning process that is based on the scientific method and includes
concepts such as objectivity of approach and acceptability of results; while Monitoring is the
systematic process of collecting, analyzing and using information to track a program's progress
toward reaching its objectives and to guide management decisions.

Successful entrepreneurs are good planners and monitors. They:

 plan by breaking large tasks down into sub-tasks with clear time-frame

 Revise plans in light of feedback on performance or changing circumstances

 Keep financial records and uses them to make informed decisions

Quote
 “By failing to prepare, you are preparing to fail.” ― Benjamin Franklin

 “Give me six hours to chop down a tree and I will spend the first four sharpening the
axe.” ― Abraham Lincoln

9. Persuasion and networking

Persuasion is a way of convincing someone to get something or make a decision in your favor. It
is inducing or taking a course of action or embracing a point of view by means of argument,
reasoning, or appeal; to convince; to succeed in causing a person to do or consent to something.

Networking is a socioeconomic business activity by which businesspeople and entrepreneurs meet

to form business relationships and to recognize, create, or act upon business opportunities, share
information and seek potential partners for ventures
Quotes
 “Everyone you will ever meet knows something you don’t.” Bill Nye
 “Networking is more about farming than it is about hunting.” Ivan Misner

10. Independence and 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 and independence may refer to the ability to do what one wants,
when s/he wants and where. Entrepreneurs want to be their own boss this is what we call
independence

Quotes
 “The best way to gain self-confidence is to do what you are afraid to do.”-Unknown

1.3.2 Assessing Entrepreneurial potential

Entrepreneurial potential is a set of attitudes, motives and knowledge that enables

entrepreneurial activity. Such a definition shows the place of entrepreneurial potential in the whole
process of becoming an entrepreneur.

A self-assessment (personal-assessment) is an evaluation of your actions and attitudes. Self-

assessments assist individuals get in touch with what their core competencies are and how those
may overlap with what's needed to take on running a business.

If you're starting or leading a company, it's beneficial to know yourself inside and out. Even though
you've been with yourself your whole life, it's hard to identify your qualities. Assessing your-self
with professional self-assessment tools can:
 Help you to understand how you perform your work, so you can make appropriate changes.
 Help your employees to understand what are your motivates and drives.
 Help you to recognize when you're in over your head difficulties and need someone’s help.
 Help you to recognize your strengths and weaknesses.

1.3.3 Understanding Entrepreneurship and Environment

Business environment refers to the factors external to a business enterprise which influence its
operations and determine its effectiveness. Business environment may be healthy or unhealthy.
  Healthy business environment means the conditions are favorable to the growth of
business.
 Unhealthy environment implies conditions hostile or unfavorable to business operations.
Business and its environment interact with each other. Economic system and other conditions in
the environment determine the success of business enterprises. Therefore, business enterprises and
their management have to adjust to the conditions prevalent around them.

I. Classification of Business Environment

Business environment may be classified into two broad categories; namely: external; and internal
environment

i. External Environment
It is the environment which is external to the business and hard to influence independently.
The following are the components of external environment:

1. Economic Environment
Economic environment is of multidimensional in nature. It consists of:
 the structure of the economy,
 the industrial, agricultural, trade and transport policies of the country,
 the growth and pattern of national income and its distribution,
 the conditions prevailing in industrial, agricultural and other sectors, t
 he position relating to balance of trade and balance of payments, and
 other miscellaneous conditions of the economy.
There is a close relationship between a business firm and the economic environment around it. The
success of a business enterprise depends significantly upon the State and growth of the economy.

2. Legal Environment
Business must function within the framework of legal structure. Therefore, adequate knowledge
of laws and rules is necessary for efficient managerial performance.

There are several business laws (such as law of contract, law of sales, law of agency, law of
bankruptcy, law of negotiable instruments etc) in our country. A working knowledge of these laws
is very helpful for the entrepreneur. Such knowledge will keep them away from innocent breaches
and resultant penalties.

Group Assignment 1
 Instruction: Prepare a brief note on the following types of business laws:
Law of contract
Law of sales
Law of negotiable instruments
Law of agency
Law of bankruptcy

3. Political Environment
Businessmen should learn to take public opinion into account in the decision-making process
because today's public opinion becomes tomorrow's legislation. Therefore, managers and
entrepreneurs should understand the working of the political system in order to discharge their
responsibilities to the satisfaction of the public.

4. Socio-Cultural Environment
It consist the social and cultural norms/customs of a society in a given period of time. The level of
rigidity/flexibility of a given society towards a new Product/service/concept depends on the socio-
cultural practices of that particular society such as values, beliefs, norms, fashions and fads. It is
important to protect traditional culture as long as it is not a hindrance to innovation, motivation,
and development.

5. Demographic Environment
It assesses the overall population pattern of a given geographical region.
It includes variables like age profile, distribution, sex, education profile, income distribution etc.
The demographic assessment can help in identifying the size of target customers.
ii. Internal Environment
Internal environment is the environment which is under the control of a given organization.
Following are the components of internal environment of a business:
1. Raw Material: It assesses the availability of raw material now and in the near future.
2. Production/Operation: It assesses the availability of various machineries, equipment, tools
and techniques that would be required for production/operation.
3. Finance: It assesses the total requirements of finance in terms start-up expenses, fixed
expenses and running expenses. It also indicates the sources of finance that can be
approached for funding.
 4. Human Resource: It assesses the kind of human resources required and its demand and
supply in the market. This further helps in estimating the cost and level of competition in
hiring and retaining the human resources.
Identifying Environmental Factors Affecting Entrepreneurship
A complex and varying combination of financial, institutional, cultural and personality factors
determines the nature and degree of entrepreneurial activity at any time. The following are some
of the environmental factors which hinder/delay entrepreneurial growth:
 Sudden changes in Government policy.
 Outbreak of war or regional conflicts.
 Political instability or hostile Government attitude towards industry.
 Excessive red-tapism and corruption among Government agencies.
 Ideological and social conflicts.
 Unreliable supply of power, materials, finance, labor and other inputs.
 Rise in the cost of inputs.
 Unfavorable market fluctuations.
. Non-cooperative attitude of banks and financial institutions

Information Sheet - 4 Entrepreneurial motivation and Decision

 1.4.1 Entrepreneurial Motivation

Figure 1: Entrepreneurial Motivation

Generally, motivation is the set of forces that cause people to do something. It is an inner state that
energizes and directs behavior toward goals. So, motivation is the set of intangible forces that
stimulate someone to take a desired course of action. Thus, we can say that entrepreneurial
motivation is the set of forces that energizes, directs and encourages a person to take initiative and
carry out entrepreneurial activities. It is defined as diverse factors arouse desires and activate
eagerness in entrepreneurs which make them accomplish an exacting goal.

The entrepreneurial motivation is the procedure that activates and motivates the entrepreneur to
make use of higher level of efforts for the accomplishment of his/her entrepreneurial goals.
Scholars have conducted various researches on entrepreneurial motivations and have come up with
numerous factors that motivate people to become entrepreneurs.

Motivating Factors:

some researchers have classified the factors motivating entrepreneurs into ‘push’ (compulsion)
and ‘pull’ (choice) factors, most of the researchers have classified all the factors motivating
entrepreneurs into internal and external factors as follows:

Internal Factors:

Among many internal factors motivating entrepreneurs;

1. Desire to do something new.
2. Become independent.
3. Achieve what one wants to have in life.
4. Be recognized for one’s contribution.
5. One’s educational background.
 6. One’s occupational background and experience in the relevant field.

External Factors:
1. Government assistance and support.
2. Availability of labor and raw material.
3. Encouragement from big business houses.
4. Promising demand for the product

1.4.2 Entrepreneurial Decision

As an entrepreneur, you must make different types of decisions on the everyday basis. You must
choose directions. Also, you must solve problems. You must take actions. The decision-making
process is one of the most critical processes in your company.

Simply, you as an entrepreneur will make decisions about everything.

Decision-Making Process

Decision-making process is one of the most critical processes in your business. You can see
different types of this process in reality, but generally, they all have the same purpose effective
and efficient decision that will bring results to your business.

The most common used approaching in the decision-making process is according the following
steps:

1.4.2 Entrepreneurial Decision

As an entrepreneur, you must make different types of decisions on the everyday basis. You must
choose directions. Also, you must solve problems. You must take actions. The decision-making
process is one of the most critical processes in your company.

Simply, you as an entrepreneur will make decisions about everything.

Decision-Making Process

Decision-making process is one of the most critical processes in your business. You can see
different types of this process in reality, but generally, they all have the same purpose effective
and efficient decision that will bring results to your business.

The most common used approaching in the decision-making process is according the following
steps:
1. Recognize the problem/the gap

Every decision-making process starts with the problem or some discrepancy that exist between the
desired and current state. You have the desired state, and you have an existing state. The difference
between these two is the gap or problem that you must solve through the decision-making process.

2. Analyze the problem

After you find possible problems that require solutions you can start with the analysis of already
defined problems. How these problems impact on the achievements of your small business?

At the end of this step, you will need to have a list of possible problems sorted by their urgency
for the solution. In your analysis, you need to find causes and how the problem impact on your
small business. If the impact of the problem is higher, also the importance of the problem will be
higher.

3. Define possible solutions

This is the step when you need to start brainstorming all possible solutions for a given problem, or
problem you want to solve with that solutions. For the most critical problems, you analyze in the
previous step, create possible solutions.

When you think about solutions, also think about the causes of the problems. If you don’t remove
the causes, your solutions will be only a temporary solution. Your decision-making process needs
to include possible causes of each identified problem.

4. Analyze all possible solutions

Because in the third step you come to more than one possible solution for a given problem, in this
step you need to analyze all proposed solutions to rank them and make a decision that you will
implement in the future. This step will need to give you the rankings of all possible solutions from
the best ones at the top to the worst ones at the end of your list for each problem you discover at
the beginning of the decision-making process.

5. Select the best solution for the application

Now is time for the real decision. The final result from the decision-making process is a selection
of the best possible solution to the problem. What will you implement as a solution for the given
problem? The answer to this question will be the decision you are making.

6. Implement the decision

We can’t talk about decision-making process without the implementation of the decision you have
made. You will not finish the job until you don’t implement what you have decided. Can you solve
the problem only by discovering the solution and making the right solution? No, you will not solve
your problem. You need to implement the solution and check the results to see if the specific
solution really solves the identified problem.

As you can see the overall process described above can be divided into the following four parts as
shown in the diagram below.

Figure 2: Decision making process elaborated in fish