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M.O.B. UNIT 2 MODULE 3: SMALL BUSINESS MANAGEMENT. The Nature and Characteristics of Entrepreneurship 11/2/09 . Objectives. Students should be able to: Explain the nature and characteristics of entrepreneurship. Describe the skills needed for managing a small business.

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m o b unit 2 module 3 small business management

M.O.B. UNIT 2MODULE 3: SMALL BUSINESS MANAGEMENT

The Nature and Characteristics of Entrepreneurship

11/2/09

objectives
Objectives
  • Students should be able to:
      • Explain the nature and characteristics of entrepreneurship.
      • Describe the skills needed for managing a small business.
      • Assess the challenges and opportunities faced by entrepreneurs in today’s world .
1 0 the nature and characteristics of entrepreneurship
1.0. The Nature and Characteristics of Entrepreneurship

1.1. Definition of Entrepreneurship

Entrepreneurship is the practice of starting new organizations, particularly new businesses generally in response to identified opportunities.

Refers to the set of skills a person needs in order to successfully start and run a small business. These skills include the ability to identify a need in the marketplace and to take risks.

Entrepreneur- Means a person who starts and/or operates a business which includes identifying opportunities in the market, taking risks with a view of being rewarded with profits

slide4

1.2 Characteristics of Successful Entrepreneurs

  • Primarily motivated by an overwhelming need for achievement and strong urge to build.
  • Driven by needs of independence and achievement.
  • Tough and pragmatic
  • Opportunistic and creative
  • Self-confident
  • Flexible
  • Enthusiastic vision, the driving force of an enterprise.
  • Shows persistence and determination
  • Take prudent risks.
  • positive thinker and a decision maker.
  • Willing to learn from others
  • Not afraid of failure
  • They seldom are willing to submit to authority
  • Orientation to the future
  • Leadership ability
slide5

1.3 Advantages of Entrepreneurship

  • Opportunity to gain control over one’s destiny
  • Enormous personal financial gain
  • Self-employment
  • Opportunity to reach one’s full potential
  • Opportunity to contribute to society and be recognized for one’s efforts

1.4.Potential Drawbacks to Becoming an Entrepreneur

  • Uncertainty of income
  • Risk of losing your entire invested capital
  • Long hours and hard work
  • Lower quality of life until the business gets established
  • Complete responsibility

1.4 Impact of Entrepreneurship on the Economy

  • Employment for others
  • Development of more industries
  • Encouragement of the processing of local materials into finished goods for domestic consumption as well as for export
  • Income generation and increased economic growth
  • Healthy competition thus encourages higher quality products
  • More goods and services available
  • Development of new markets
  • Emigration of talent may be stopped by a better domestic entrepreneurship climate
slide6

1.5 Types of Entrepreneurial Businesses

  • Home-based businesses
  • Family owned businesses
  • Part-time business
    • Micro, Small, Medium, large
2 0 major challenges faced by entrepreneurs
2.0. Major Challenges faced by Entrepreneurs

2.1. Identifying Successful Business Opportunities

  • Patents
  • Net working
  • Professionals
  • Trade magazines
  • Community
  • Franchises

2.2. Sourcing capital (finance)

  • Little or no capital
  • Weak collateral
  • Traditional lenders shun small businesses – risky, no track record.
  • High interest rate
  • Transactions cost/ red tape
slide8

2.3. Choosing a type of Business

  • Start- up vs. buying
  • Franchise
  • Sole trader
  • Partnership
  • Company

2.4. Determining location

  • Cost
  • Labour availability
  • Services
  • Proximity to markets
  • Raw material availability
  • Regulations and zoning laws
slide9

2.5 Globalization and Trade liberalization

  • Competition
  • Cheap imports
  • International agreements (WTO)
  • Access to foreign currency

2.6 E-Commerce

  • Computer literacy
  • Competition
  • Design web-page
  • Security of exchange