ENTREPRENEURSHIP

Objective: explain the nature and

characteristics of entrepreneurs.
Do you think you're too young to start your
own business? If you said, "yes" take a
look at some of the famous people below
and their first start:
Dave Thomas, founder of Wendy's
Restaurants, started his food service
career at age 15.
Bill Gates, founder of Microsoft, started his
first business at the age of 15.
Oprah Winfrey, decided she was going to
earn her living by talking when she was
paid $500 at a church when she was only
12 years old.
 Who is an Entrepreneur?

According to Webster's, an Entrepreneur

is defined as, "One who undertakes to
start and conduct an enterprise or
business, usually assuming full control and
risk."
Characteristics of an
entrepreneur
There is no uniform, standardised,
universally accepted definition of
the entrepreneur. Neither, in all
probability, is there one
stereotypical model. However, it is
generally believed that the
successful entrepreneur possesses a
special set of personal abilities and
characteristics (traits). Amongst
these are;
 Passion
 Internal locus of control
 Need for independence
 Need for achievement
 Determination and
persistence (sticktuitive)
Orientation to goals and
opportunities
Taking initiative and personal
responsibility
Persistence in problem-solving
Have a sense of humour
Seeking and using feedback
Tolerance of ambiguity, stress and
uncertainty
Calculated risk-taking and risk sharing
Low need for status and power
Integrity and reliability
Decisiveness, urgency and patience
Coping with failure
Team builder and hero maker
People person
Motivating
Organising
High energy, health and
emotional stability
Creativity and capacity to
innovative
High intelligence and conceptual
ability
Vision and capacity to inspire.
It is important to note that while there is no
single set of characteristics that fit every
entrepreneur, they tend to exhibit a
number of the traits listed. These traits
can be learned and/or acquired.
 Exercise

Am I an entrepreneur? See handout

1 (questions 1-15).
 What is Entrepreneurship?

Entrepreneurship is the practice of

starting new enterprises in order to enter
into new or established markets generally
in response to identified opportunities.
It involves taking the risk of mobilising
resources (land, labour and capital) in
unique ways in order to make a profit.
Entrepreneurship is often a difficult
undertaking, as a majority of new
businesses fail.
Entrepreneurial activities are substantially
different depending on the type of
organization that is being started.
Entrepreneurship ranges in scale from
solo projects (even involving the
entrepreneur only part-time) to major
undertakings creating many job
opportunities.
 Types of Entrepreneurial
Businesses
Entrepreneurs have several types of
business units to choose from when
establishing an enterprise.
 Sole proprietorship
This is a business owned by one person.
It is simple to form, has few costs, and the owner
gets keep all the profits to his self. Sounds great,
right?
The problem is, of course, that a one-person
business can’t make as much money as a large
business, the owner will have to work very hard,
and if the business loses money, the loss is
bourn by the owner. He could loose his
personal assets.
 Partnership
This is a business that’s a lot like a sole
proprietorship, but more than one persons
owns it. Again, there are fewer costs and
regulations, but still it is difficult to raise as
much money as a larger business.
Also, the owners have unlimited liability,
as does a sole proprietor: any debts
incurred by the partnership must be paid
by the owners, even if they have to use
their own personal property.
 Limited partnership

This is, again, composed of one or more

partners, but some have only limited
liability. That is, they can only lose the
amount of money they invested. However,
these limited partners are not involved in
the day-to-day business of the company.
Note that atleast one partner must have
unlimited liability.
 Companies
A company is viewed as a separate "legal entity,"
meaning that the personal property of an owner is not at
stake as in unlimited liability. Companies have limited
liability, so owners only lose what they invest.
Companies typically have many different owners called
shareholders.
Companies are also able to raise much larger amounts
of money than partnerships. However, there are a few
downsides to corporations. They are usually very difficult
to get started in the first place, requiring adherring to
regulations and large amounts of money. Also, they are
subject to more taxation than partnerships.
The Importance of Entrepreneurship
Entrepreneurship is essential to the
economic development of every country.
Entrepreneurship is vital because:
new ideas and inventions are developed
and this enables the continual
improvement of industry and communities
and societies on a whole.
It creates new ventures. These new
ventures provide a variety of new,
improved products and service for
consumers to choose from.
It aids in finding new ways of making
products and services available to more
people.
It helps to create competition with each
other to be the ‘best’. This improves
production and keeps prices lower.
It help to create jobs
It increases the quantity of products and
services we produce in our economy.
It provides the spirit of energy for progress
in communities and countries on a whole
 Excersize

Handout 2
 Class work – section I - questions 1 – 25
 Home work – section II
Handout 3
 Types of businesses