ENTREPRENUERSHIP

ENTREPRENUERSHIP
An unemployed man goes to apply for a

job with Microsoft as a janitor. The manager there arranges for him to take an aptitude test (Section: Floors, sweeping and cleaning). After the test, the manager says, "You will be employed at minimum wage, $5.15 an hour. Let me have your e-mail address, so that I can send you a form to complete and tell you where to report for work on your first

 day. Taken aback, the man protests that

he has neither a computer nor an e-mail address. To this the MS manager replies, "Well, then, that means that you virtually don't exist and can therefore hardly expect to be employed. Stunned, the man leaves. Not knowing where to turn and having only $10 in his wallet, he decides to buy a 25-LB flat of tomatoes at the supermarket. Within less than 2 hours,

ENTREPRENUERSHIP
he sells all the tomatoes individually at 100%

profit. Repeating the process several times more that day, he ends up with almost $100 before going to sleep that night. And thus it dawns on him that he could quite easily make a living selling tomatoes. Getting up early every day and going to bed late, he multiplies his profits quickly. After a short time he acquires a

ENTREPRENUERSHIP
cart to transport several dozen boxes of

tomatoes, only to have to trade it in again so that he can buy a pick-up truck to support his expanding business. By the end of the second year, he is the owner of a fleet of pick-up trucks and manages a staff of a hundred former unemployed people, all selling tomatoes. Planning for the future of his wife and children, he

ENTREPRENUERSHIP

decides to buy some life insurance.

Consulting with an insurance adviser, he picks an insurance plan to fit his new circumstances. At the end of the telephone conversation, the adviser asks him for his email address in order to send the final documents electronically. When the man replies that he has no e-mail, the adviser is stunned, "What, you

 don't have e-mail? How on earth have you

managed to amass such wealth without the Internet, e-mail and e-commerce? Just imagine where you would be now, if you had been connected to the Internet from the very start!" After a moment of thought, the tomato millionaire replied, "Why, of course! I would be a floor cleaner at Microsoft!"

ENTREPRENUERSHIP

Who is a Entrepreneur? What is Entrepreneurship? Whats the importance Role in any Economy???

IMPORTANCE OF ENTREPRENEURS
Historical Background

Growing income inequalities, Regional disparities, Urban & Rural imbalance and Huge backlog of unemployment makes the policy makers to concentrate on Entrepreneurship as a critical input in the process of devt.

ENTREPRENEURSHIP
What is Entrepreneurship? It is the process of mind to take calculated risk with confidence to achieve pre-determined objectives. Conventional view Entrepreneurs are born and it is hereditary Entrepreneurship is a monopoly of some communities and restricted to certain regions.

 Modern view

It does not belong to any particular region, community, education, sex, age etc., Definition J. S. Mill & Marshall define Profit as a compensation payable to the entrepreneur for his risk bearing function. Prof. Knight defines Profit as a reward for the uncertainty bearing capacity of entrepreneur

Working Definition

An entrepreneur is a person

who combines various factors of production, processes raw material, converts the raw material into a finished product and creates utility and sells the produce in the market to earn profit.

Salient Features
Entrepreneurship is need-based function

Production is not for self consumption

Profit oriented Entrepreneur posses distinct qualities like risk

bearing, goal setting, information seeking, time planning , maintaining good interpersonal relations, innovator and team builder

Continue.
He posses the different Ds for success. ie.,

Desire, Discipline, Determination, Dedication, Devotion, Dignity.

He is a creator of wealth

He takes decision about

What to produce --- Product selection How to produce --- Technology Where to produce --- Location When to produce --- Time planning/Duration For whom to produce --- Target consumers/ Market

Misconceptions about Entrepreneurs

Entrepreneurs are born They are profit-hungry They are dishonest They are favored by luck. Only rich people can become entrepreneurs It is a monopoly of certain communities

 Most of what you hear about entrepreneurship,

says Americas leading management thinker, is all wrong. Its not magic; its not mysterious; and it has nothing to do with genes. Its a discipline and, like any discipline, it can be learned.
- Peter F. Drucker

Distinction between Entrepreneurs and Managers

Entrerpreneur : 1. Entrepreneurial function is organising production 2. Decision making & calculated risk bearing 3. Has all round responsibility 4. Public relation skills & team building 5. High level of achievement and motivation 6. Innovative, creative, imaginative soul 7. Challenges established values and attitudes

Continue.

1.
2. 3. 4. 5. 6.

Managers : Managers are employees (specific role) Limited scope for innovation & creativity Managerial jobs are transferable Managers do not bear risk Managers Need team building & leadership role Managers need knowledge, insight and expertise

BENEFITS OF ENTREPRENEURSHIP
Provides a vehicle for using your gifts and talents to help others Promotes independence and the opportunity to make your own business decisions Provides flexibility in that you are able to set your own pace and schedule

Provides an opportunity to achieve financial independence

Provides self-fulfillment Improves economic and financial literacy Increases self-esteem and respect Economic Development Employment Opportunities Regional Balances Rural Development Improvement in Financial System of country

Pros and Cons of Entrepreneurship

PROS:
Excitement: Due to its high capacity for risk, there is a lot of adventure. Rules and regulations: Work in a current job is difficult to do because of all the "red tape" and consistent administration approval needed. Originality: Some people feel that they can offer a new service/product that no one else has offered before. Competition: Employees feel they can offer their current company's product/service at a lesser expense to the public. Independence: Some people wish to be their own boss and make all the important decisions him/herself. Salary potential: Generally, people want to be paid for the
amount of work they do in full; they do not want to be "shortchanged."

 Flexibility: Entrepreneurs can schedule their work hours to spend quality time with family or any other reason. Rational salary: They are not being paid what they're worth and would rather work on their own and earn the money they should be earning for their efforts. Freedom: Entrepreneurs can work whenever they want, wherever they want, and however they want

 CONS

Salary: Starting your own business means that you must be willing to give up the security of a regular paycheck. Benefits: There will undoubtedly be fewer benefits, especially when considering that your business will be just starting off. Work schedule: The work schedule of an entrepreneur is never predictable; an emergency can come up in a matter of a second and late hours will have to be put in.

 Administration: All the decisions of the business must be made on your own; there is no one ranked higher than you on the chain of command in YOUR business.\ Incompetent staff: Often times, you will find yourself working with an employee who "doesn't know the ropes" as well as you do due to lack of experience. Procedures: Many times during your entrepreneurial life, you will find that many policies do not make sense, nor will they ever make sense.

Inside the Entrepreneurial Mind: From Ideas to Reality

Creativity, Innovation, and Entrepreneurship Creativity is the ability to develop new ideas an to discover new ways of looking at problems and opportunities. Innovation is the ability to apply creative solutions to problems and opportunities to enhance or to enrich peoples lives. (Creative destruction)

In a nutshell, creativity is thinking new things, innovation is doing new things.

Creativity A Necessity For Survival A paradigm is a preconceived idea of what the world is, what it should be like, and how it should operate. Paradigms act as logjams to creativity since they are immovable blocks to creative thinking.

Creative Thinking
The right brain is creative and intuitive lateral thinking
The left brain is logical and rational vertical thinking

Those who use their right brain are more likely to be different and challenge traditional mindsets (paradigms), which leads to innovation (also known as creative destruction) Basically Right brain = Intuitive Innovation = Creative destruction Innovators = Being different

Barriers to Creativity
Searching for the one right answer
Most educational systems teach that there is one right answer to a problem. This is a boon to creativity since it acts as a block to brainstorming.

Focusing on being logical

Being logical is valuable when evaluating ideas and implementing them, however, focusing too much effort on being logical in the early imaginative phases discourages the use of intuition.

Blindly following the rules

Often times, creativity depends on our ability to break existing rules so we can find new ways of doing things.

Constantly being practical

Suspending practicality for a while frees the mind to consider creative solutions that, otherwise, might never arise.

Barriers to Creativity (cont)

Viewing play as frivolous
Play gives us the opportunity to reinvent reality and to reformulate established ways of doing things.

Becoming overly specialized

Defining a problem as one area of specialty limits the ability to see how it might be related to other issues.

Avoiding ambiguity
Ambiguity encourages us to think something different. Ambiguous situations force us to stretch our minds beyond their normal boundaries and to consider creative options we might otherwise ignore.

Barriers to Creativity (cont)

Fearing looking foolish
Creative thinking is no place for conformity. New ideas are rarely born in a conforming environment. People tend toward conformity to avoid looking foolish.

Fearing mistakes and failure

Trying something new often leads to failure, however, failure should not be seen as an end; but rather as pit stops toward success.

Believing that Im not creative

One who believes they are not creative will likely behave in the same way, thus making the belief a reality. Everyone has the potential to be creative, however, one must tap into that potential first.

How to Enhance Creativity

Expecting creativity
One of the best ways to communicate the expectation of creativity is to give employees permission to be creative.

Expecting and tolerating failure

Creative ideas will produce failures as well as successes. Creativity requires taking chances, and managers must remove employees fear of failure.

Encouraging curiosity
Constantly asking what if questions and taking a maybe we could attitude allows one to break out of the assumptions that limit creativity.

Viewing problems as challenges

Every problem offers the opportunity for innovation. Dumping ones problems on employees desks to be fixed does nothing to develop creativity within employees.

How to Enhance Creativity (cont)

Providing creativity training
What separates the average person form Edison, Picasso, or even Shakespeare isnt creative capacity its the ability to tap that capacity by encouraging creative impulses and then acting upon them. Training can help everyone learn to tap their creative capacity.

Providing support
One must give employees the tools and resources they need to be creative. One of the most valuable resources is time.

Rewarding creativity
Monetary rewards, praise, recognition, and celebration can be powerful incentives.

Modeling creative behavior

Entrepreneurs who set examples of creative behavior, taking chances, and challenging the status quo will soon find their employees doing the same.

1. Preparation

2. Investigation

:: Prepare the mind for creative thinking (formal education, work experience, etc)
:: Develop a solid understanding of the problem or decision :: View the similarities and differences in the information collected :: Give the subconscious time to reflect on the information (daydream, relax, etc) :: The creation of an innovative idea the Eureka factor stage :: Validate the idea is accurate and useful (conduct experiments, prototypes, etc) :: Transform the idea into reality

3. Transformation
4. Incubation

5. Illumination
6. Verification

7. Implementation

The Creative Process (cont)

Convergent thinking is the ability to see the similarities and connections among various data and events.
Divergent thinking is the ability to see differences among various data and events.

Techniques for Improving the Creative Process

Brainstorming is a process in which a small group of people interact with very
little structure with the goal of producing a large quantity of novel and imaginative ideas.

Mind-mapping is a graphical technique that encourages thinking on both sides of

the brain, visually displays the various relationships among ideas, and improves the ability to view a problem from many sides. This is often referred to as flipflopping.

Protecting Your Ideas

A patent is a grant from the federal governments Patent and Trademark Office (PTO) to the inventor of a product giving them the exclusive right to make, use, or sell their invention in this country for 20 years. Approximately 98% of all inventors rely on patent experts to steer them through the convoluted process. Legal fees for filing a patent range from $3,000 to $10,000 depending on the products complexity.

The average cost of a patent infringement lawsuit is about $600,000 if the case goes to trial. About half of the parties settle before going to trial. Of the trials, more than 60% of those holding patents win.

Protecting Your Ideas (cont)

A trademark is any distinctive word, phrase, symbol, design, name, logo, slogan, or trade dress that a company uses to identify the origin of a product or to distinguish it from other goods on the market. Today, 1.5 million trademarks are registered in the United States, and 900,000 of them are in use. A copyright is an exclusive right that protects the creators of original works of authorship such as literary, dramatic, musical, and artistic works. A copyright lasts for the life of the creator plus 50 years after their death. A copyright lasts 75 to 100 years if the holder is a business. Experts estimate that the U.S. software industry looses $15 billion each year to pirates who illegally copy programs.

Out-of-Box, In-the-Box, New-Box, Other-Box, NoBox Thinking

Robert Alan Black, Ph.D. believes that there are more thinking systems than simply out-of-box and in-the-box thinking. In fact, he marks that simply jumping out of a box or tearing down the box can eliminate ideas and solutions that can come from staying in-the-box. These new thinking systems are: New-Box
New-Box thinking is a controlled form of out-of-the-box thinking. Vertical thinking is comparable to digging the same hole deeper to find the treasure. Horizontal or lateral thinking can be comparable to digging new holes in many locations (new boxes).

Other-Box
Other-Box involves leaving yours and entering someone elses once again with the Whats good about it? philosophy. For example, sending people to work in other departments to learn what the grass on the other side is like.

No-Box
No-Box might mean complete open thinking with no limits or virtual/transparent-box thinking. This thinking challenges the greatest majority of people since tremendously potential risks are involved. Anything can go wrong at any time.

Discussion Questions
2. How are creativity, innovation, and entrepreneurship related?

Creativity is thinking new things, innovation is doing new things. Successful entrepreneurs have the ability to both come up with new ideas and are able to then find ways to make them work to solve a problem or fulfill a need.

4. One entrepreneur claims, Creativity unrelated to a business plan has no value. What does he mean? Do you agree?

This statement essentially means that an idea is essentially useless unless it is acted on and made into a reality and marketed. I definitely agree with this statement since the philosophy of an entrepreneur is ready, aim, fire, not ready, aim, aim, aim. Creativity is a trait that everyone has. Therefore, everyone has the potential to be creative. Creativity cannot be necessarily taught, instead, one can be taught how to tap into their creative potential.

6. Can creativity be taught or is it an inherent trait? Explain.

Discussion Questions (cont)

8. Briefly outline the 10 mental locks that can limit individual creativity. Give an example of a situation in which you subjected yourself to one of these mental locks.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Searching for the one right answer :: When taking tests for school, we were usually brought to believe there is only one right answer. Focusing on being logical :: At times I have rejected ideas because I thought of them as being illogical. Blindly following the rules :: At a young age, we all are taught not to color outside of the lines. Constantly being practical :: Impractical ideas are often shot down by the logical side. Viewing play as frivolous :: Often times people view games as being counter-productive. Becoming overly specialized :: Tunnel vision can often times limit the ability to think of ideas from another point of view. Avoiding ambiguity :: It is often hard to consider at least two different, often contradictory notions at the same time. Fearing looking foolish :: Often times refrain from expressing ideas to avoid criticism. Fearing mistakes and failure :: Nobody wants to make mistakes or fail, therefore often times people are apprehensive about taking risks that may result in failure. Believing that Im not creative :: Often times people think that creativity is a trait inherited by certain individuals. The truth is that everyone has creative potential, but just needs to learn how to tap into that potential.

Discussion Questions (cont)

10. Explain the steps of the creative process. What can an entrepreneur do to enhance each step?
1. Preparation :: Prepare the mind Adopt the attitude of a lifelong student Read more Discuss ideas with others Investigation :: Investigate the problem or decision Study information related to the field that the idea is in Transformation :: Observe similarities and differences in the information collected Evaluate the parts of the situation several times Rearrange the elements of the situation Incubation :: Give the subconscious time to reflect on the information collected Walk away from the situation Take the time to daydream Relax Illumination :: Eureka factor moment This moment will come randomly, just be ready to act on it when it comes Verification :: Validate that the idea is accurate and useful Conduct experiments Run simulations and tests Build prototypes Implementation :: Make the idea become a reality Take your product to the stage, dont get caught up in the planning stage

2. 3. 4.

5. 6.

7.