Lesson 1: CRITICAL THINKING SKILLS OF ENTREPRENEUR

Lesson Objectives:
At the end of this lesson, you will be able to:
 Identify the critical thinking skills of an entrepreneur
 Explain why an entrepreneur should think critically
 Discuss the characteristics of an entrepreneurial mindset

Getting Started:
Do you think critically? In what situation must we have critical thinking skills? How would
you define your current mindset?

Discussion:
Welcome to TEM 202 or The Entrepreneurial Mind! You are one of the fortunate students who have
the opportunity to be a better individual. This course will inspire you to do more in your life and help
you build your own career path despite all the life circumstances. It aims to develop young students
like you to think entrepreneurially and innovatively.
The entrepreneurial journey of one person starts with his or her mind. And an aspiring entrepreneur
must possess critical thinking skills. Critical thinking is the ability to apply reasoning and logic to new
or unfamiliar ideas, opinions, and situations. This important skill allows people to look past their own
views of the world and to better understand the opinions of others. The ability to think critically is
essential as it creates new possibilities in problem solving. Being “open-minded” is a large part of
critical thinking. We must not only seek out all possible answers of a problem, but to also accept an
answer that is different from his or her expectations. Open-minded thinking means not assuming that
your views or perspectives are always right. An entrepreneur must be ready for all types of ideas and
opinions. Another aspect of critical thinking is the ability to approach a problem or situation using
rational considerations. Rationality requires analyzing all known information and making judgments or
analyses based on fact or evidence rather than opinion or emotion. Critical thinking often relies on
empathy or the ability to view the world in a way that does not focus on the self. Empathizing with a
person usually involves a thinker trying to put himself or herself in the place of someone else.
Communication skills, teamwork, and cooperation are typically improved through empathy, which
makes it valuable in many professional fields. Effective critical thinking often begins with a thinker
analyzing what he or she knows about a subject, with extra effort made to recognize what he or she
does not know about it. This forms an initial knowledge base for consideration. When someone
applies this approach to his or her own life, he or she often places more emphasis on finding
prejudices and preconceived notions he or she holds. Someone struggling with a fear of heights, for
example, might strive to determine the cause of this fear in a rational way. By doing so, he or she
might be able better able to deal with the root cause directly and avoid emotional responses that
could prevent self-improvement. Critical thinking is used in many situations. Members of a debate
team frequently think critically about a subject to form a strong argument and anticipate points their
competitors might make. Many people use open-mindedness and empathy in their professional lives,
allowing them to work better with others and complete tasks more effectively. Develop Critical
Thinking Skills Skills in critical thinking bring precision to the way you think and work. You will find that
practice in critical thinking helps you to be more accurate and specific in noting what is relevant and
what is not.
Critical thinking involves the development of ancillary skills such as:
 Observation
 Analysis
 Reasoning
 Judgment
 Decision-making
 Persuasion
It is likely that you already possess some or all of these skills in order to cope with everyday life or
work However, the more advanced the level of study or the professional area, the more refined
theses skills need to be. So you need to have a realistic self-appraisal to know your current skill level
and where you should improve.Developing critical thinking should also include emotional self
management. Critical thinking sounds like a dispassionate process but it can engage emotions and
even passionate responses. Being able to manage your emotions under such circumstances is a useful
skill. If you can remain calm, and present your reasons logically, you will be better able to argue your
point of view in a convincing way. Need for Critical Thinking One of the great things about critical
thinking is its versatility. It is valuable at all levels of our thinking. At the Level of Practical Decision
Making. This is thinking about the means to use to accomplish our goals. It is problem solving of the
most authentic kind. This is an important level of critical thinking, one that addresses all those
ordinary decisions we make. At the Level of Meaningfulness. Learning to think critically also helps
people deal with the much larger issues of living their life. At the Level of Concepts. We think in terms
of concept, and these inevitably shape our life to a considerable degree. Mindset It has traditionally
been defined as “the established set of attitudes held by someone.”

Two Different Types

1. Fixed mindset, people perceive their talents and abilities as set traits. They believe that brains and
talent alone are enough for success and go through life with the goal of looking smart at all times.
They take any constructive criticism of their capabilities very personally and tend to attribute others’
success to luck or some sort of unfair advantage. People with a fixed mindset will tell themselves they
are no good at something to avoid challenge, failure, or looking dumb.
2. Growth mindset, people believe that their abilities can be developed through dedication, effort,
and hard work. They think brains and talent are not the key to lifelong success, but merely the
starting point. People with a growth mindset are eager to enhance their qualities through lifelong
learning, training, and practice. Unlike people with fixed mindsets, they see failure as an opportunity
to improve their performance, and to learn from their mistakes. Despite setbacks, they tend to
persevere rather than giving up.

The Mindset for Entrepreneurship

Entrepreneurial mindset is the ability to quickly sense, take action, and get organized under uncertain
conditions. This also includes the ability to persevere, accept, and learn from failure, and get
comfortable with a certain level of discomfort. The entrepreneurial mindset involves employing
numerous cognitive strategies to identify opportunities, consider alternative options, and take action.
Because working in uncertain environments “goes with territory” in entrepreneurship, the
entrepreneurial mindset requires constant thinking and rethinking, adaptability, and self-regulation—
the capacity to control our emotions and impulses.

Passion and Entrepreneurship

In the context of entrepreneurship passion can be defined as an intense positive emotion, which is
usually related to entrepreneurs who are engaged in meaningful venture or tasks and activities, and
which has the effect of motivating and stimulating entrepreneurs to overcome obstacles and remain
focused on their goals.

Entrepreneurship as a Habit
A Habit is a sometimes unconscious pattern of behavior that is carried out often and regularly. Good
habit can be learned through a “habit loop”- a process by which our brain decides whether or not a
certain behavior should be stored and repeated. Application:
Lesson 2: EVALUATING PROBLEMS AND OPPORTUNITIES

Lesson Objectives:
At the end of this lesson, you will be able to:
 Learn the problems an entrepreneur faces
 Evaluate entrepreneurial opportunities that best fits your mindset
Discussion:
In general sense, the term opportunity implies a good chance or a favorable situation to do
something offered by circumstances. In the same vein, business opportunity means a good or
favorable change available to run a specific business in a given environment at a given point of time.
The term ‘opportunity’ also covers a product or project. Hence, the identification of an
opportunity or a product or project is identical and, therefore, all these three terms arose as
synonyms The process at times create a situation, or say, dilemma resembling ’Hen or Egg’
controversy. That is, at one point, the intending entrepreneur may find one product or project as an
opportunity and may enchant and like it, but at the other moment may dislike and turn down it and
may think for and find other product or project as an opportunity for him/her.
To mention the important ones, the entrepreneurs selected their products or projects based on:
A. Their own or partner’s past experience in that business line.
B. The Government’s promotional schemes and facilities offered to run some specific business
enterprises;
C. The high profitability of products;
D. Which indicate increasing demand for them in the market?
E. The ability of inputs like raw materials, labor, etc. at cheaper rates;
F. The expansion or diversification plans of their own or any other ongoing business known to
them;
G. The products reserved for small-scale units or certain locations.

Idea Generation
Sources of Ideas
In a sense, opportunity identification and selection are akin to, what is termed in marketing
terminology, ‘new product development.’ Thus, product or opportunity and selection process starts
with the generation of ideas, or say, ideas about some opportunities or products are generated in the
first instance.
The ideas about opportunities or products that the entrepreneur can consider for selecting the
most promising one to be pursued by him/her as an enterprise, can be generated or discovered from
various sources- both internal and external.
These may include:
(i) Knowledge of potential customer needs.
(ii) Watching emerging trends in demands for certain products,
(iii) Scope for producing substitute product,
(iv) Going through certain professional magazines catering to specific interests
like electronics, computers, etc.,
(v) Success stories of known entrepreneurs or friends or relatives,
(vi) Making visits to trade fairs and exhibitions displaying new products and
services,
(vii) Meeting with the Government agencies,
(viii) Ideas given by the knowledgeable persons,
(ix) Knowledge about the Government policy, concessions, and incentives, list of
items reserved for exclusive manufacture in small-scale sector,
(x) A new product introduced by the competitor, and
(xi) One’s market insights through observation.
In nutshell, a prospective entrepreneur can get ideas for establishing his/her enterprise from
various sources.
Consumers
An entrepreneur needs to know what the consumers actually want so that he/she can offer the
product or service accordingly. Consumers’ wants can be known through their feedback about the
products and services they have been using and would want to use in the future.

Existing Products and Services:

One way to have an enterprise idea may be monitor the existing products and services already
available in the market and make a competitive analysis of them to identify their shortcomings and
then, based on it, decide what and how a better product and service can be offered to the consumers.
Many enterprises are established mainly to offer better products and services over the existing one.

Distribution Channels
Distribution channels called, market intermediaries, also serves as a very effective source for new
ideas for entrepreneurs. The reason is that they ultimately deal with the ultimate consumers and,
hence, better known the consumers’ wants. As such, the channel members such as wholesalers and
retailers can provide ideas for new product development and modification in the existing product.

Government
At times the Government can also be a source of new product ideas in various ways. Besides,
there are some Governmental agencies that assist entrepreneurs in obtaining specific product
information. Such information can also become basis for enterprise information.

Research and Development

The last but no means the least source of new idea is research and development (R&D)
activity. R&D can be carried out in-house or outside the organization. R&D activity suggests what and
how a new or modified product can be produced to meet the customers’ requirements.

Methods of Generating Ideas

This involves a process including first generating the ideas and then scrutinizing of the ideas
generated to come up with an idea to serve as basis for a new enterprise formation. The
entrepreneur can use several methods to generate new ideas. However, the most commonly used
methods of generating ideas are: focus groups, brainstorming, and problem inventory analysis.

Focus Groups
A group called ‘focus group’ consisting of 6-12 members belonging to various socio-
economic backgrounds are formed to focus on some particular matter like new product idea. The
focus group is facilitated by a moderator to have an open in-depth discussion. The mode of discussion
of the group can be in either a directive or a non-directive manner.

Brainstorming
Brainstorming technique was originally adopted by Alex Osborn in 1938 in an American
Company for encouraging creative thinking in groups of six to eight people. According to Osborn,
brainstorming means using the brain to storm the issue/problem. Brainstorming ultimately boils
down to generate a number of ideas to be considered for dealing with the issue/problem.
However, brainstorming exercise to be effective needs to follow a modus operandi involving four
basic guidelines:
1. Generate as many ideas as possible.
2. Be creative, freewheeling, and imaginative.
3. Build upon piggyback, extend, or combine earlier ideas.
4. Withhold criticism of other’s ideas.
There are two principles that underlie brainstorming. One is differed judgment, by which all ideas are
encouraged without criticism and evaluation. The second principle is that quantity breeds quality. The
brainstorming session to be effective needs to work like a fun, free from any type of compulsions and
pressures.
Problem Inventory Analysis
Problem Inventory Analysis though seems similar to focus group method, yet it is somewhat
different from the latter in the sense that it not only generates the ideas, but also identifies the
problems the product faces. The procedure involves two steps: One, providing consumers a list of
specific problems in a general product category. Two, identifying and discussing the products in the
category that, suffer from the specific problems.
However experiences available suggest that problem inventory analysis method should better be
used for generating and identifying new ideas for screening and evaluation. The results derived from
product inventory analysis need to be carefully screened and evaluated as they may not actually
reflect a genuine business opportunity.
For example, General Foods’ introduction of a compact cereal box in response to the problem that
the available boxes did not fit well on the shelf was not successful, as the problem of package size had
little effect on actual purchasing behavior. Therefore, to ensure the better if not the best results,
problem inventory analysis should be used primarily to generate product ideas for evaluation.

Opportunity/Product Identification
After going through above process, one might have been able to generate some ideas that can be
considered to be pursued as one business enterprise.
Imagine that someone have generated the five ideas as opportunities as a result of
above analysis:
1. Nut and bolt manufacturing (industry)
2. Lakhani Shoes (industry)
3. Photocopying unit (service-based industry)
4. Electro-type writer servicing(service-based industry)
5. Polythene bags for textile industry (ancillary industry)
An entrepreneur cannot start all above five types of enterprises due to small in size in terms of
capital, capability, and other resources. Hence, he/she needs to finally select one idea which he/she
thinks the most suitable to be pursued as an enterprise. How does the entrepreneur select the most
suitable project out of the alternatives available? This is done through a selection process discussed
subsequently. Having gone through idea generation, also expressed as ‘opportunity scanning’ and
opportunity identification, we can distinguish between an idea and opportunity. We are giving below
the two situations that will help you understand
and draw the line of difference between an ‘idea’ and an ‘opportunity’
Situation I Situation II

Having completed their Master of On completion of hid engineering

Business Administration (MBA), Mrinmoy degree, Tridip got a job in Assam State
and Chandan met after about six Transport Corporation. He was the in-
months. The two were conversing with charge of the purchase department.
each other about who is doing what. Having worked in the purchase
Mrinmoy is running his business of department for over ten years, he had
travel agency and Chandan is still gained good idea about which
searching for a job. Mrinmoy suggests components have more demand and
Chandan to start some business. who are the buyers of these parts in
Observe and read the market scenario bulk. He, therefore, thought good
and produce what the consumers prospects of manufacturing of some of
actually want. the components having good demand in
bulk.

Now, it is clear that, in the above mentioned two situations, situation I is at the ‘idea stage’ and
situation II at the ‘opportunity stage’. At the idea stage, there is simply an idea about what to do. But
at the opportunity stage, idea has actually been germinated about what to start/do. The
understanding of such a difference between an ‘idea’ and ‘opportunity’ is very important for the
intending entrepreneurs who are seriously trying to identify an ‘opportunity’ to be pursued as an
enterprise.
Lesson 3: IMPLEMENTING ENTREPRENEURIAL IDEAS

Lesson Objectives:
At the end of this lesson, you will be able to:
 Know how to implement entrepreneurial ideas
 Recognize one’s entrepreneurial intentions

Discussion:
Entrepreneurs’ ideas and intentions form the initial strategic template of new organizations
and are important underpinnings of new venture development.
Entrepreneurs’ intentions guide their goal setting, communication, commitment,
organization, and other kinds of work. Although behavior can result from unconscious and
unintended antecedents, what is of interest here is a conscious and intended act, the founding of a
firm.
The study of entrepreneurial intentions opens new arena to theory-based research. It directs
attention toward the complex relationships among entrepreneurial ideas and consequent outcomes
of these ideas, and it directs attention away from previously studied entrepreneurial traits (example,
personality, motivation, and demographics) and context (example, displacements, prior experience,
markets, and economics).

Nature of Entrepreneurial Intentions

Intentionality is a state of mind directing a person’s attention (and therefore experience and action)
toward a specific object (goal) or a path in order to achieve something (means). As a psychological
process, intention has been examined by a number of theorists and researchers. William James
construed will (a more general term which includes intention) as an independent faculty of the mind,
operating through person’s attention (holding the intended image in mind) and consent. Some
modern theorists describe intention as one variable within larger psychological models Miller,
Galanter, and Pribram include intentional control over those mental images and values which guide
behavior as a factor in their cybernetic model of behavior.
Entrepreneurial intentions are aimed at either creating a new venture or creating new values in
existing ventures. Katz and Gartner observed that intentions include a dimension of locution: the
entrepreneur’s intention (internal locus) and intentions of other stakeholders, markets, and so forth
(external locus).
Another dimension of entrepreneurial intentions is that of rationality versus intuition. Figure 3
shows how personal and social contexts interact Kith rational and intuitive thinking during the
formulation of entrepreneurial intentions.
First, a person’s rational, analytic, and cause and-effect-oriented processes structure and intention
and action. These psychological processes underlie formal business plans, opportunity analysis,
resource acquisition, goal setting, and most observable goal-directed behavior.
Goal setting, usually defined in an interpersonal context, involves hierarchically oriented behavior
(i.e., goal setting between superior and subordinate, where subordinate control over goals is seen as
employee participation). In traditional approaches, the person setting the goals has obvious “partial
inclusion,” a condition that is not apparent in new venture start-ups where the entrepreneur is fully
invested and identifies with the venture. Thus, goal setting concepts, as addressed in current
literature, are too narrow to capture the unique aspects of initiating, directing, and organizing new
ventures. Intentionality is the larger framework which includes not only goal setting but also a greater
degree of freedom and expanded creativity for the entrepreneur (participation is total and usually not
negotiated in start-ups except where partnerships are formed).
Second, intuitive, holistic, and contextual thinking frames and structures an entrepreneur’s
intention and action. Inspired by vision, hunch, an expanded view of untapped resources, and a
feeling of the potential of the enterprise, the entrepreneur perseveres.
Impact of Intentions
Entrepreneurial intentions have a significant impact on all organizations. In existing firms,
executives’ personal values have been found to affect corporate strategy, intuition has been shown to
play an important role in executive problem solving and planning, and the beliefs and perceptions of
top managers have been found to directly affect the organizations they lead.
It follows, then that the impact of the leader’s intentions will be even greater at the birth of the
organization, when the influences of external stakeholders, corporate structure, politics, image, and
culture have not yet been established. There is some that the ambitions and skills of the founder(s)
determine the size and growth potential of the venture and the culture that emerges. A good example
is the development of culture at Kollmorgen Corporation, where the personal values of Robert and
Jim Swiggett influenced the firm’s strategy and subsequent adjustments.

The founder’s intentions determine the form and direction of an organization at its inception.
Subsequent organizational success, development (including written plans), growth, and change are
based on these Intentions, which are either modified, elaborated, embodied, or transformed. Thus
intentions affect a venture’s success, here defined as the firm’s survival and growth.

Model Development
The model presented here is based on discovery-oriented inquiry. Through interviews with 20
entrepreneurs (seven in service, eight in manufacturing, and five in publishing who had2-40 years’
experience as entrepreneurs), distinct patterns of thought and behavior emerged.
The Intentional Process
The intentional process begins with the entrepreneur’s personal needs, values, wants, habits, and
beliefs, which have their own precursors. Figure 4 depicts these five antecedents, three in traps chic
activities (creating and maintaining a temporal tension, sustaining strategic focus, and developing a
strategic posture) which are at the core of intentional and behavioral outcomes which contribute to
the creation of a new organization and, in turn, affect the entrepreneur’s needs, values, wants, habits,
and beliefs.

Sustaining Temporal Tension

The most obvious dimension of temporal tension among Western entrepreneurs involves linking
the present (the way it is, the “way we do it around here) to the future, which is not yet manifest. The
farther into the future that one has visions, the greater the uncertainty and the greater the temporal
tension as one attempts to draw that future into the present.

Future Time Horizon

In organizations, the time horizon is the “amount of time in the organizational
future.” (The one’s most important decisions will affect the firm). Related organizational
constructs include the time span of feedback, which refers to the time lag between
performance and results, and the time span of discretion, which refers to the time
between work reviews by hierarchical superiors

Hierarchical time specialization in bureaucracies is based on the time span of discretion. Time
spans range from less than3 months to more than10 years, and they are related to both task and
individual development (i.e., job satisfaction and performance are affected by the “match” between
role demand sand temporal capacity). Time span of discretion also correlates with perceptions of fair
pay (more pay for longer time spans). Jaques proposed that operators (example, typists, machine
operators, laboratory assistants) perform tasks that have a time span of less than3 months, whereas
those who design new methods, procedures, or policies operate in a 2-5 year time span, and chief
executives of large organizations operate in a 5-10 year time span. Entrepreneurial Time.
Entrepreneurs’ functions are a mix of operations, management, promotion, and leadership activities,
ranging from stuffing envelopes to running a machine, making sales calls, analyzing competition,
meeting with bankers and forming strategic alliances. In addition, the hierarchical position of the
entrepreneur is less well established than that of traditional executives. Entrepreneurs, their partners,
investors, and employees organize themselves, often in an ad hoc way, into “terms” that can be
described as having flat or star-shaped configurations, reflecting the centrality of the entrepreneur as
well as his or her status.
Time Complexity

Entrepreneurs are markedly now-oriented people. They live in the present, plan rarely for the future,
and reflect minimally on the past. Although many entrepreneurs formulate strategies, and some
conduct formal planning, overall, they believe that opportunities to create are vested in the present.
Their time is best spent in doing, not in dreaming or retrospective sense making.
Even though entrepreneurs are anchored in the here-and-now, they also envision what is to
come. Like charismatic leaders, entrepreneurs use images to guide their organizations into the future,
toward ideals and situations that do not yet exist. In a study of entrepreneurial executives, Rockey
found that visualization played an important role in helping these executives to clarify the
organization’s purpose, to dispel the negative thoughts of others, to plan facilities, to hire employees,
and so forth. The entrepreneur’s visualization, together with his or her persistent efforts, are thought
to sustain the new venture during its early vulnerable years (depending on the source, 30- 50% of new
ventures cease operations with the first five years).

Fast dancing
Another aspect of entrepreneurial time is the necessity for entrepreneurs to make quick decisions
in order to adjust to the environment (example: markets, government,labor).
For entrepreneur, there are four possible time lags (a) time between environmental change and
when information about the change by the entrepreneur, (b) time between the receipt of that
information and when the decision is made, (c) time between deistic and action; and (d) time
between action and results, such as increased productivity, increase value of the firm, and better
quality Entrepreneurs apparently shorten the first three segments, adding speed to their responses
through vigilance, updated expertise, and intuitive anticipation, or the ability to see beyond the
present.
Additionally, entrepreneurs in fast-changing markets, such as computer technology,
biotechnology, defense contracting, and health services, are very sensitive to environmental music or
outside timing Entrepreneurs develop confidence that their “fast dancing” and new products will
harmonize or synchronize with external conditions (example, being first into the market).

Sustaining Strategic Focus

Entrepreneurs’ intentions tend to be directed toward goals, which are desired end- states, rather
than toward means of conduct, although both ends and means can be intentional. An entrepreneur’s
goals are economic-survival and growth of the organization, although personal wealth and
organizational finances are often more a means of keeping score than highly valued ends in
themselves.
Means and Ends Orientations. Entrepreneurs tend to be opportunistic about how they reach goals
such as breaking even, becoming profitable, and experiencing high business growth. They develop
instrumental and transactional strategies to achieve goals, prefer renting resources and
subcontracting work, rather than buying resources or hiring full time workers, and prefer hiring
employees to sharing the business with partners.
Although most entrepreneurs are ends-oriented some are means or process-oriented. Process-
oriented entrepreneurs choose self-employment as a means to achieve satisfying work and a
comfortable life. They are also called “craftsman entrepreneurs,” those who begin ventures in order
to use their technical skills autonomously.

Entrepreneurial Factors: The Entrepreneurial Zoom Lens

The apparent equivocality of focus pertains to the complexity of their jobs. They move between
operations (where details are important) and strategy (where the “big picture” or vision is important.)
The effective entrepreneur responds to this complexity by developing a psychological, social, and
strategic “zoom lens.”
Developing an Intentional Posture

An intentional posture involves the position of an individual in relation to his or her values, needs, and
so forth, and the outer world. Two variables considered here are valuable to the entrepreneur:

Alignment – a configuration of parts such that all parts are contributing to a

single purpose and direction. This means that our many “inner voices”
which reflect different and conflicting needs, values, memories, and wishes,
need to agree on one direction.
Attunement – the readiness to send and receive information, influence, or
meaning from other sources. It requires vigilance, open-mindedness,
extroversion, and the ability to learn from mistakes on the simplest level.
Lesson 4: BUSINESS RESOURCES AND IDEAS FOR AN ENTREPRENEUR

Lesson Objectives:
At the end of this lesson, you will be able to:
 Know about the business resources and ideas for an entrepreneur
 Explore the application of entrepreneurship ideas in action

Discussion:
A successful entrepreneur has driven, passion, energy and stamina. But an entrepreneur needs
one more ingredient to go along with these key traits-a business idea that works. Select a business
that excites you, has low start-up costs and a simple set-up. You always can expand on the business
later once you have a client base and generate revenue regularly.

Essential Entrepreneur Resources

When you’re starting a business, where do you go to get the help, advice and tools you need? There
are plenty of resources out there so many, in fact, that you might have trouble sorting through them
all. We cut through the clutter, selecting multiple essential resources for startup small-business
owners.
Factors that Influence Entrepreneurship
Entrepreneurial efforts are like biological experiments in nature: Many variations are tried, but
only small percentages of those go on to thrive. You, however, have an advantage over nature. As an
entrepreneur, you can set up your experiment with forethought. Entrepreneurs work under the
constraints of their environment the political economy.
Five factors will be key to entrepreneurial success:
Creativity Leadership
Risk tolerance Rights
Responsiveness
Entrepreneurs Control Resources
The most basic way to leverage your resources is through your marketing. While social media
captures a lot of attention, do not neglect other resources. Determine what your customers and
prospects want and focus your marketing toward that end. Develop a mission statement that
expresses your vision and values. Promote the vision with the most appropriate media that will
capture the attention of your target market. Turn an Idea into a startup: Begin with a Business
Concept statement
For entrepreneurs, it is often easier to come up with a variety of ideas for new businesses and
more difficult to actually implement those concepts. A business concept is a bridge between an idea
and a business plan. If focuses one’s thinking so that the entrepreneur can identify the specifics of
his/her. Converting an idea into a business concept requires thinking about how the product or
service will be sold and who will buy it the benefits of the product or service, how it is differentiated
from similar ones, and methods of delivery.
For example, it is not sufficient to say “I want to start a management consulting company. “This
tells the listener little. Instead, one might say, “I plan to start a management consulting company that
provides strategic planning services to mid-sized businesses in the Southeast. Each consulting team,
tailored to meet the unique needs of the client, will provide assessment and planning services to help
clients improve efficiency and institute processes for innovation and change, resulting in cost
reductions and sales increases.”
This version tells the listener much more than the first statement and helps the potential client
visualize the business and its offerings. When describing his/her business idea, the entrepreneur
should answer the following questions:
 What is my product/service?
 What does my product/service do?
 How it is different or better than other products/services?
 Who will buy the product/service?
 Why will they buy the product/service?
 How will the product/service be promoted and sold/offered?
 Who are my competitors?
Lesson 5: ENTREPRENEURSHIP IDEAS IN ACTION

Lesson Objectives:
At the end of this lesson, you will be able to:
 Put entrepreneurship ideas into actual work
 Develop your own business plan

Discussion:
Aspiring entrepreneurs are faced with the challenge of coming up with a unique vision that sets
their company apart from the rest. Although hatching a creative idea for a potential business is no
easy feat, transforming that same idea into a product is even more difficult. To find out how
entrepreneurs can develop and refine their ideas for possible future businesses, we asked a few
experts what they learned from launching a startup.
Pursue the Passions and Interests.
 Build Positive Relationships and Reach Out When Necessary.
 Think About What Needs Improvement in Your Industry.
 Keep An Open Mind.
 Have Capacity for Growth.
 Draw Inspiration from Brands and Companies You Respect.
 Avoid Perpetual Planning.
 Don’t Let the Fear of Failure Hold You Back.

Become an Entrepreneur
The benefits of being an entrepreneur are being one’s own boss and having the freedom and
flexibility to directly handle problems and be creative. While the realities of being an entrepreneur are
often glorified, there is some truth to the stereotype. Reporting to no one but clients, having the
freedom to adopt pet projects, and being able to drop the task at hand for something more important
are benefits people around the world strive for. These benefits are usually acquired by becoming an
entrepreneur or at least thinking outside the boxlike one.
Being one’s own boss is a major benefit of being an entrepreneur. In fact, many say they cannot
imagine working the standard nine-to-five job. Becoming self-employed means having a lot of
freedom and flexibility, but it is also a practice in self-discipline. It is common to hear business owner’s
state that they put in a full-time job’s worth of hours for months or even years before their businesses
began to thrive, usually for little income. People who lack the drive to work hard often fail at starting
or maintaining the business.
Entrepreneurs in a Market Economy
Entrepreneurs are optimistic and future oriented; they believe that success is possible and are
willing to risk their resources in the pursuit of profit. They’re fast moving, willing to try many different
strategies to achieve their goals of profits. And they’re flexible, willing to change quickly when they
get new information.
As an entrepreneur, you are extremely important to your world. Your success is vital to the
success of the nation. To help you develop a better business, one that contributes to the health of the
economy, nowhere suggest that you take some time to sit down, answer the following questions, and
implement the following actions:
Identify the steps you could take immediately to operate your business more efficiently,
especially regarding internal operating systems.
Tell yourself continually “Failure is not an option.” Be willing to move out of your
comfort zone, to take risks if necessary to build your business.
 Use your creativity rather than your money to find new, better, cheaper ways to
sell your products or reduce your costs of operation. What could you do
immediately in one or both of these areas?
 Imagine starting over. Is there anything you’re doing today that, knowing what you
now know, you wouldn’t get into or start up again?
 Imagine reinventing your business. If your business burned to the ground today,
and you had to start over, what would you not get into again? What would you do
differently?
Develop a Business Plan
Business plan is an integral part of the management of a financial institution. It should build the
institution’s aims and objectives. It is a documented conclusion of how the business will create its
resources to achieve its goals and how the institution will evaluate progress.
Business plan is an inclusive plan, which is the outcome of comprehensive panning by the
institution’s managers and management. It should practically predict market demand, customer base,
and competition, ecological and economic conditions. The plan must mirror sound banking standards
and illustrate practical assessment of risk with respect to the economic and competitive conditions in
the market to be served.

Pre-Feasibility Study
A feasibility study provisions as a filter, cleaning and screening of ideas with absence of potential
for building a successful entrepreneurship. An entrepreneur promises the required resources for
constructing a business plan. On the other hand, business planning is a “planning tool or machinery
used for converting an idea into reality.

Criteria for Selection of Product

Mostly, it is preferred to select a bunch of criteria depending on which selection of the product
could depend on. Ranks or costs or weights are allocated to each criteria to achieve an objective
examination.
There are three basic stages or steps in selection of products or services.
1. Idea Generation
2. Evaluation
3. Choice

Ownership
Owning a business is the first decision to be made in constructing business. The main reasons to
own a business are---
 Being the sole trader
 Being a partner
 Being a shareholder or stakeholder

Capital
In terms of entrepreneurship, capital can be described as a region’s funding with factors conducive
to the construction of new entrepreneurship and it creates a positive impact on the region’s
economic output.
Higher level of entrepreneurship capital regions express higher levels of output and productivity, in
contrast to those lacking entrepreneurship capital that tend to produce lower levels of output and
productivity. The result of entrepreneurship capital is powerful than that knowledge capital.
Entrepreneurs are expected to hold three types of capital to acquire success in
starting a new venture –
1. Social capital – it is the quality acquired from the structure of an individual’s
network relationships. Social capital ensures the relationships by which an
entrepreneur receives opportunities to utilize human and financial capital.
2. Human capital - it indicates attributes possessed by individuals like personality,
education, intelligence, and job experience. Creating value by the acquisition of
human capital, specifically building a management team tends to be the biggest
challenge for seed stage founders and investors of new ventures. A start-up with an
experienced management team will receive a higher valuation by investors.
3. Financial capital – it is any economic resource scaled with respect to money used
by entrepreneurs and businesses to purchase what they need to make their
products, or to facilitate their services to the sector of the economy upon which
their operation is based, like retail, corporate, investment banking, etc.
Knowledge Required to Succeed as an Entrepreneur
Manager of the enterprise should be generalist and gain basic skills and knowledge in
managerial functions such as planning, organizing, leading and controlling. Manager also should have
an overview of finance, marketing and market development,competitions and so on. If he/she does
not pay enough attention to these issues,eventually he/she cannot delegate responsibility for
particular areas and will fail under the burden of undiscovered and emerging problems.

Fundamental Management Knowledge for Entrepreneurs

There are certain personal abilities, which can predict the future efficiency and success of manager.
 Creativity – ability to search and find new solutions.
 Intuition – be able to predict future development from own experience without
analysis.
 Goal-oriented – be able to set real goals and respect the goal’s hierarchy.
 Responsibility – sense for achieving set goals and objectives.
 Self-confidence – belief in own strength and ability to achieve goals.
 Initiative – an effort to look for new possibilities and solutions for reaching set
goals.
 Independence – the courage to make decision based on own judgment.
 Cautiousness – be able to make decision under stress and unsure conditions.
 Scrupulosity – support social values and norms.
 Discipline – self-control and regulation of own behavior.
 Persistence – tenacity needed to overcome barrier when achieving goals.
 Optimism – orientation towards positive goals and things in connection with faith in
success.
 Fantasy – creation of visions and imaginations about future.
Every man has hidden potential of certain kind inside. It is important how one can utilize this
potential. Manager needs to use and influence behavior of people around to reach the goals of the
enterprise. In doing so manager use the managerial
functions – planning, organizing, leading and control; while “playing” the following
roles in the enterprise.
 Interpersonal roles – Figurehead, Leader, Liaison
 Information roles – Monitor, Disseminator, Spokesperson
 Decision making role – Entrepreneur, Disturbance handler, Resource Allocator,
Negotiator
In fulfilling their duties managers use managerial skills. These skills directly affect the
results of the manager, but they can be learned and gained by training. The criteria
for dividing the skills can vary but these are considered to be the basic managerial
skills, which are needed for an effective managerial work:
 Technical – ability of the manger to use specific methods and techniques in
doing the managerial work. However these technical skills are not related to
technology, such as skills of engineer. The technical skills for managers
represent the usage of methods like break even analysis in planning or ability to
prepare for and conduct a structured interview.
 Interpersonal – people are most valuable resource of any enterprise and
manager needs to know how to lead people. Abilities include motivation of
workers, solving work conflicts, communication and working with people.
Therefore interpersonal skills are essential on every level of management.
 Conceptual – these skills are must for middle or top manager. This is the ability
to “grasp the whole picture”. See the organization as one whole intertwined
with the surrounding environment with the relevant priorities and important
issues.
 Communication – manager needs information for decision making. Ability to
disseminate and receive information is thus important tools for manager. It is
not only verbal communication, but the, manager should be able to distinguish
nonverbal signals, mood and feelings to filter the right information.