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INTRODUCTION TO ENTREPRENEURSHIP by Mohd Zaini Zainudin

MPU22012 – ENTREPRENEURSHIP POLYTECHNIC VERSION

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MOHD ZAINI ZAINUDIN LECTURER

Hi Everyone, you are in Entrepreneurship MPU22012 class!

INTRODUCTION Definition of an entrepreneur and entrepreneurship, differences between the concept of entrepreneur and businessman, the competency of successful entrepreneurship, the roles and social responsibilities of entrepreneur.

TOPIC OUTLINES Upon completing this course, students should be able to : 1. Discuss the entrepreneurial concept and theories. 2. Discuss the competencies of entrepreneurs. 3. Discuss the importance of entrepreneurship to self, family and society development. 4. Discuss ethics, professionalism and social responsibilities for entrepreneurs.

COURSE LEARNING OUTCOMES Upon completing this course, students should be able to : 1. Propose the value proposition of entrepreneurial idea using Business model Canvas. (A3, CLS 3B)

ENTREPRENEURIAL CONCEPT AND THEORIES

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ENTREPRENEURIAL CONCEPT AND THEORIES INTRODUCTION TO ENTREPRENEURSHIP

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ENTREPRENEUR VS ENTREPRENEURSHIP

ENTREPRENEUR VS ENTREPRENEURSHIP

INTRODUCTION TO ENTREPRENEURSHIP

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INTRODUCTION TO ENTREPRENEURSHIP

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ABOUT ENTREPRENEURSHIP A society that has entrepreneurs is considered to be a successful society. This is because entrepreneurs are individuals who are creative, dynamic and innovative. They are willing to take risks and face unpredictable and uncertain challenges by using their creativity and will power. Entrepreneurs would develop and penetrate new business areas in order to stay competitive in the industry. Then, more products or services being offered to the society, which would enhance the society’s economic development.

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ENTREPRENEUR VS ENTREPRENEURSHIP

DEFINE THE CONCEPT OF ENTREPRENEUR

The word entrepreneur is derived from the French word entreprendre which means 'to undertake or to try'.[Richard Cantallion 1775].

definition

a common of an entrepreneur is someone who establishes a new entity to offer a new or existing product or service into a new or existing market, whether it is for a profitable or non-profitable outcome.

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ENTREPRENEUR VS ENTREPRENEURSHIP

DEFINE THE CONCEPT OF ENTREPRENEUR An entrepreneur is an individual who is able to perceive an opportunity for a business and create an organization to develop and manage that business successfully. An entrepreneur is an individual who organizes, manages and assumes the risks of a business (Kuratko & Hodgetts,2001) In Malaysia the term “usahawan” is used for entrepreneur. 10

ENTREPRENEUR VS ENTREPRENEURSHIP

DEFINE THE CONCEPT OF ENTREPRENEURSHIP Entrepreneurship is the process of seeking businesses opportunities under conditions of risk. Entrepreneurship also refers to the process of creating something new of value by devoting the necessary time and effort, assuming the accompanying financial, physical and social risks and receiving the resulting rewards of monetary, personal satisfaction and indepedence. 11

ENTREPRENEUR VS ENTREPRENEURSHIP

DEFINE THE CONCEPT OF ENTREPRENEURSHIP According to Yep Putih, entrepreneurship is the ability, capability, and tendency to perform the following activities : i. Identify business opportunities. ii. Manage a business effort which brings profit to the enterpreneur and the public. iii. Obtain success and richness by fulfilling the society's needs. iv. Take calculated risks. v. Manage & utilize the factors of production to bring economical development and enhance social welfare. vi. Work hard and be prepared to make new changes that can increase production quantity and quality from time to time. 12

ENTREPRENEUR VS ENTREPRENEURSHIP

DEFINE THE CONCEPT OF ENTREPRENEURSHIP An individual’s preparedness to grab opportunities without considering the resources at hand (Stevenson, Roberts and Grousbeck). (Dollinger) defined entrepreneurship as the establishment of an economical firm that is innovative, profit oriented, willing to take risks, and face uncertainties in the environment. As a conclusion, entrepreneurship benefits the entrepreneur, the economy and the society. It is a process that creates and manages a business to achieve the entrepreneur’s desired goals.

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ENTREPRENEUR VS ENTREPRENEURSHIP

X-TRA! In 1970s, after the New Economic Policy (NEP), then entrepreneur was widely used in Malaysia. Common definition, “someone who establishes a new entity to offer a new or existing product/service into a new or existing market, whether it is for a profitable or a non-profitable outcome. An entrepreneur is an individual who is able to perceive an opportunity for a business and create an organization to develop and manage that business successfully. He is able to identify and seize the opportunity and bring in the necessary resources such as finance, workforce, and raw materials to develop and market the products or services. He takes proper action that is imaginative, creative, and innovative”.

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ENTREPRENEUR VS ENTREPRENEURSHIP

THE JOURNEY action

awareness

ENTREPRENEUR

ENTREPRENEURSHIP

Someone who undertakes the risk associated with creating, organising, and owning a business.

The recognition of an opportunity to create value, and the process of acting on this opportunity.

guide

ENTREPRENEURIAL PROCESS

• Idea Generation • Idea Validation • Idea Implementation

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ENTREPRENEUR VS ENTREPRENEURSHIP

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Relationship.

ENTREPRENEUR

ENTREPRENEURSHIP

Person.

Process.

Organizer.

Organization.

Innovator.

Innovation.

Risk-bearer.

Risk-bearing.

Motivator.

Motivation.

Visualiser.

Vision.

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DIFFERENTIATE ENTREPRENEUR AND BUSINESSMAN

DIFFERENTIATE ENTREPRENEUR AND BUSINESSMAN

INTRODUCTION TO ENTREPRENEURSHIP

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DIFFERENTIATE ENTREPRENEUR AND BUSINESSMAN

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Differentiate.

CHARACTERISTIC

ENTREPRENEUR

BUSINESSMAN

Time

Unlimited

Limited

Nature of job

Flexible

Rigid in adapting to changes

Decision making

Makes own decision

Follows decision made by others

Effort and commitment

Continuous

Low

Risk taker

Moderate

Low

Goal

Maximize s self potential by utilizing available opportunities

Solely for profit maximization

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TYPES OF ENTREPRENEURSHIP

THE TYPES OF ENTREPRENEURSHIP INTRODUCTION TO ENTREPRENEURSHIP

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TYPES OF ENTREPRENEURSHIP

TYPES OF ENTREPRENEUR We’re going to talk about the different types of businesses. What suits you best?

# Lifestyle entrepreneurs # Side businesses # Startup founders # Social entrepreneurs 20

TYPES OF ENTREPRENEURSHIP

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Lifestyle entrepreneurs. • A lifestyle entrepreneur is someone who will start a business with the explicit goal of making a certain amount of money that will enable them to live a certain lifestyle. • They’re mainly focused on keeping a certain quality of life and a certain level of wealth.

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TYPES OF ENTREPRENEURSHIP

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Lifestyle entrepreneurs. • They don’t need a huge business. They focus on what they need in order to live a certain lifestyle. • They focus on businesses that have a high ratio of Work : Revenue. • Spend as little time, earn as much as possible. 22

TYPES OF ENTREPRENEURSHIP

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Lifestyle entrepreneurs. • “The 4-hour Work Week” -Tim Ferriss. • He calls the lifestyle business a “muse“. • You need a lot of things in life to be happy, and it's hard to tackle all your needs when you don’t have money. • A “muse” is something that takes away that money aspect and gives you the resources you need in order to focus on other things.

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TYPES OF ENTREPRENEURSHIP

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Lifestyle entrepreneurs. • Lifestyle entrepreneurs are not interested in brand new markets, but not in too saturated markets either. • They are ok with spending a lot of time in the beginning, to get started, but if it takes too long to start earning money, it defeats the purpose.

EXAMPLE :

Udemy instructor, Airbnb host, drop-shipping, white labelling(OEM).

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TYPES OF ENTREPRENEURSHIP

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Side businesses.

• Side businesses are something you pursue in order to make some extra income. • These entrepreneurs are also employees.

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TYPES OF ENTREPRENEURSHIP

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Side businesses.

• Look for things that don’t require a lot of time commitment. • Think about something people need that you can supply. • There's little risk, but also little return. • Working online is a good idea.

EXAMPLE :

Etsy, Fiverr, Ebay, Mudah.my, Carousell.

• You can do this on top of other platforms, for example, providing a service for Udemy users.

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TYPES OF ENTREPRENEURSHIP

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Startup founders.

• They're called “founders” because they founded a company and took all the risk. • Startups are generally big ideas and ambitions. • Paul Graham (ycombinator): "A startup is any business that's designed to grow as fast as possible." 27

TYPES OF ENTREPRENEURSHIP

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Startup founders.

• Startup = Big idea + Big ambition + Big risk + Potential big reward. • Startups require 100% of the effort. • You have to devote everything you have towards it. • They're very risky, but the potential reward could be worth it. • A startup is exciting and challenging, and it can make a lot of money.

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TYPES OF ENTREPRENEURSHIP

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Social entrepreneurs.

• Social entrepreneurship: Starting a business that makes profit but it's focused on producing benefits for the common good of everyone. • They have similar goals with non-profit organizations. 29

TYPES OF ENTREPRENEURSHIP

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Social entrepreneurs.

• Social entrepreneurs are trying to deliver value to the community in different ways: -donating money -building a system that benefits other people and then they reinvest the money • “Beras Faiza“: A corporation that recognizes that you have to make profit, but you also have to deliver some value to the community. • Non-profits are constantly trying to get more money to keep doing their charity actions. • When you donate to these companies, most of the money go to keep the company functioning.

EXAMPLE :

Beras Faiza in BERSAMAMU slot at TV3.

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PROBLEM ANALYSIS

THEORY OF ENTREPRENEURSHIP

ENTREPRENEURSHIP THEORIES INTRODUCTION TO ENTREPRENEURSHIP

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THEORY OF ENTREPRENEURSHIP : ECONOMIC PERSPECTIVE

ECONOMIC PERSPECTIVE An Entrepreneur through the contributions and roles played in economic development such as allocating resources efficiently, creating job opportunities, and pioneering innovations. 33

THEORY OF ENTREPRENEURSHIP : ECONOMIC PERSPECTIVE

ECONOMIC PERSPECTIVE Richard Cantillon (1755) : Entrepreneurs as an important group in the society and key economic player in developing national economy. Adam Smith (1776) : An entrepreneur is a person who acts as agent in transforming demand into supply Alfred Marshall (1976) : The process of entrepreneurship or business development is incremental or evolutionary . It evolves from sole proprietorship to a public company. Jean Baptiste Say(1803) : Proposed that profits from entrepreneurship were separate from profits of capital ownership. Joseph Schumpeter (1934) : Described the entrepreneur as someone who is an innovator and someone who “creatively destructs”. 34

THEORY OF ENTREPRENEURSHIP : PSYCHOLOGICAL PERSPECTIVE

PSYCHOLOGICAL PERSPECTIVE An entrepreneur through the behaviours and personality traits possessed by successful individuals. 35

THEORY OF ENTREPRENEURSHIP : PSYCHOLOGICAL PERSPECTIVE

PSYCHOLOGICAL PERSPECTIVE McClelland (1951) : Concluded that a high need for achievement drives people become entrepreneurs. Julian rotter (1954) : An entrepreneurs tend to have a strong internal locus of control and strongly believe in their own ability to control.

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THEORY OF ENTREPRENEURSHIP : SOCIOLOGICAL PERSPECTIVE

SOCIOLOGICAL PERSPECTIVE Entrepreneurs as a generation or a group which adopts entrepreneurship as a career to improve the status.

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THEORY OF ENTREPRENEURSHIP : SOCIOLOGICAL PERSPECTIVE

SOCIOLOGICAL PERSPECTIVE Ibnu Khaldun (Abdul Rahman Mohamed Khaldun) (1406) : The entrepreneur is seen as a knowledgeable individual and is instrumental in the development of a city-state where enterprise will emerge. Max Weeber (1917) : An Entrepreneur as the beholder of an ‘instrumental rationality’. Everet Hagen (1957) : An entrepreneurs emerge from a low-income group that is not satisfied with the inequalities and disappointing services they receive from society. 38

THEORY OF ENTREPRENEURSHIP : MANAGEMENT PERSPECTIVE

MANAGEMENT PERSPECTIVE An entrepreneur as a strategic manager who strives to ensure the business gains profit and expands. 39

THEORY OF ENTREPRENEURSHIP : MANAGEMENT PERSPECTIVE

MANAGEMENT PERSPECTIVE Peter f. drucker (1985) : Described the entrepreneur as someone who maximizes opportunity and always searches for change.

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COMPETENCIES OF ENTREPRENEURS

2 INTRODUCTION TO ENTREPRENEURSHIP

COMPETENCIES OF ENTREPRENEURS

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PERSONAL TRAITS OF AN ENTREPRENEUR

PERSONAL TRAITS OF AN ENTREPRENEUR

INTRODUCTION TO ENTREPRENEURSHIP

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PERSONAL TRAITS OF AN ENTREPRENEUR

NEEDED # Integrity # Conceptual Thinking # Risk taking # Networking # Strategic Thinking 43

PERSONAL TRAITS OF AN ENTREPRENEUR

COMPETENCIES # Personal initiative # Seize opportunities # Endurance # Information-seeker # High work quality # Commitment towards work agreements # Efficient # Systematic-planning # Creative problem solving # Self-confidence # Assertion # Persuasion # Power and authority 44

IMPORTANCE OF ENTREPRENEURSHIP

3 INTRODUCTION TO ENTREPRENEURSHIP

IMPORTANCE OF ENTREPRENEURSHIP

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IMPORTANCE OF ENTREPRENEURSHIP

1 Self-development 2 Society-development 3 Family 46

IMPORTANCE OF ENTREPRENEURSHIP

1 Self-development OPPORTUNITY TO MAXIMIZE SELF-POTENTIAL Can maximize an individual's skills and capabilities. Always challenge his self-ability. Will not be satisfies with their current achievement and are prepared to work hard to be in a much better position in the future.

OPPORTUNITY TO OBTAIN UNLIMITED FINANCIAL REWARDS One of the aims is to obtain profits. Financial return is a reward as proof to his continuous effort in the business. Can increase the confidence of creditors and supplies to settle any loans and credits.

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IMPORTANCE OF ENTREPRENEURSHIP

2 Society-development IMPROVE THE STANDARD OF LIVING AND LIFESTYLE

FULFILLS SOCIETY'S NEEDS AND WANTS

CREATE CHOICES THROUGH INNOVATIVE AND CREATIVE PRODUCTION TECHNIQUES

Enhanced the quality of life. Entrepreneur are produce new products that are sophisticated enough to help society raise its standard of living.

Entrepreneurs are manufacturer or businessman who produce or supply various goods and services to fulfill the needs and wants of society.

Always identify opportunities in the environment and increase activities to benefits the society and get profits.

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IMPORTANCE OF ENTREPRENEURSHIP

3 Family INCREASE FAMILY INCOME

RAISES LIVING STANDARD

IMPROVE SOCIAL STATUS

Family choose full-time business, they not only gain profits, but also the freedom to manage the household without the constraints on a full-time job.

When a family's income increase, this will subsequently raise the livingstandard of the family.

Raises the honour and prestige of a family in society especially when thesuccess is obtained through hard work, dedication and honestly.

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IMPORTANCE OF ENTREPRENEURSHIP

1 Self-development 2 Society-development 3 Family 50

4 QUADRANT OF CASH FLOW FOR FINANCIAL FREEDOM

WHAT IS THE CASHFLOW QUADRANT? According to Kiyosaki,

“The Cashflow Quadrant is about the four different types of people who make up the world of business, who they are and what makes individuals in each quadrant unique.” 51

4 QUADRANT OF CASH FLOW FOR FINANCIAL FREEDOM

Employee

You work for someone. (i.e. teacher, nurse, legal assistant)

Self-Employed

You work for yourself. (i.e. plumber, photographer, web designer)

Business Owner

People work for you. (i.e. restaurant franchise owner, landscaping company)

Investor

Money works for you. (i.e. Investing money in your friend’s business, buying properties) 52

ETHIC PROFESSIONALISM AND SOCIAL RESPONSIBILITIES FOR ENTREPRENEURS

4 ETHIC PROFESSIONALISM AND SOCIAL RESPONSIBILITIES FOR ENTREPRENEURS INTRODUCTION TO ENTREPRENEURSHIP

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SOCIAL REPONSIBILITIES

SOCIAL REPONSIBILITIES

INTRODUCTION TO ENTREPRENEURSHIP

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SOCIAL REPONSIBILITIES

ROLES # Customers # Society/community # Suppliers # Staff # Competitors # Country

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LET’S PLAY

THANKS! Does anyone have any questions? [email protected]

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