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.

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INTRODUCTION TO
ENTREPRENEURSHIP
by Mohd Zaini Zainudin
CHAPTER 1
DPB2012 – ENTREPRENEURSHIP
POLYTECHNIC VERSION

2. LECTURER
Hi Everyone, you are in Entrepreneurship DPB2012 class!
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.
INTRODUCTION

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CASE STUDY
ANALYSIS
SEE MORE
ASSIGNMENT 1
Written report would be a case study that counts towards 10% of the final grade.
Analysis Method : SWOT Analysis
*INDIVIDUAL TASK.

4. TOPIC OUTLINES
Upon completing this course, students
should be able to :
1. Explain entrepreneurship.
2. Explain the competencies of entrepreneurship.
3. Define theories of entrepreneurship .

5. Upon completing this course, students
should be able to :
1. Explain clearly the concept of entrepreneurship and process in developing effective
business. (C2, LD1)
COURSE LEARNING OUTCOMES

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INTRODUCTION TO ENTREPRENEURSHIP
ENTREPRENEUR VS ENTREPRENEURSHIP

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

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ENTREPRENEUR VS ENTREPRENEURSHIP
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.

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ENTREPRENEUR VS 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.

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ENTREPRENEUR VS 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.

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ENTREPRENEUR VS 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
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
ENTREPRENEUR
Someone who
undertakes the
risk associated with
creating, organising,
and owning a business.
ENTREPRENEURSHIP
The recognition of an
opportunity to create
value, and the process
of acting on this
opportunity.
ENTREPRENEURIAL
PROCESS
• Idea Generation
• Idea Validation
• Idea Implementation

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ENTREPRENEUR VS ENTREPRENEURSHIP
Person. Process.
Organizer. Organization.
Innovator. Innovation.
Risk-bearer. Risk-bearing.
Motivator. Motivation.
Visualiser. Vision.

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INTRODUCTION TO ENTREPRENEURSHIP
DIFFERENTIATE ENTREPRENEUR AND BUSINESSMAN

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DIFFERENTIATE ENTREPRENEUR AND 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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INTRODUCTION TO ENTREPRENEURSHIP
4 QUADRANT OF CASH FLOW FOR FINANCIAL FREEDOM

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4 QUADRANT OF CASH FLOW FOR FINANCIAL FREEDOM
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.”

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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)

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INTRODUCTION TO ENTREPRENEURSHIP
EVOLUTION OF ENTREPRENEURSHIP

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EVOLUTION OF ENTREPRENEURSHIP : HUNTING STAGE
The primary stage of the evolution of the
economic life of man was hunting stage.
Wants were limited and very few in
numbers.
The family members themselves
satisfied problems of food, clothing and
shelter. Producers were the consumers
also. Robinson Crusoe, living in the
deserted island, satisfying his own
requirements had no knowledge of
business.
People in some parts of Africa and India
still lead this type of life. In this stage
problems of production and distribution
were not complexed since wants were
simple and limited.

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EVOLUTION OF ENTREPRENEURSHIP : PASTORAL STAGE
With the progress of mankind
gradually mental understanding
developed and people started
realizing that instead of killing
animals, they should breed and
rear them. Thus cattle breeding
encouraged the use of milk, and
they had to think in terms of
grazing areas for their cattle.
The surplus milk, meat and other
related products were spared of
exchange. This stage can be
termed as the first stage of
economic development and the
beginning of commerce.

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EVOLUTION OF ENTREPRENEURSHIP : INDUSTRIAL REVOLUTION STAGE

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EVOLUTION OF ENTREPRENEURSHIP : MEDIA STAGE

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EVOLUTION OF ENTREPRENEURSHIP : PRESENT INDUSTRIAL STAGE

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EVOLUTION OF ENTREPRENEURSHIP : PRESENT INDUSTRIAL STAGE

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INTRODUCTION TO ENTREPRENEURSHIP
SOCIAL REPONSIBILITIES

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SOCIAL REPONSIBILITIES
# Customers
# Society/community
# Suppliers
# Staff
# Competitors
# Country

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INTRODUCTION TO ENTREPRENEURSHIP
PERSONAL TRAITS OF AN ENTREPRENEUR

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PERSONAL TRAITS OF AN ENTREPRENEUR
# Integrity
# Conceptual Thinking
# Risk taking
# Networking
# Strategic Thinking

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PERSONAL TRAITS OF AN ENTREPRENEUR
# 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

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INTRODUCTION TO ENTREPRENEURSHIP
THEORY OF ENTREPRENEURSHIP

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

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THEORY OF ENTREPRENEURSHIP : 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”.

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THEORY OF ENTREPRENEURSHIP : PSYCHOLOGICAL PERSPECTIVE
An entrepreneur through the
behaviours and personality
traits possessed by successful
individuals.

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THEORY OF ENTREPRENEURSHIP : 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
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
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.

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THEORY OF ENTREPRENEURSHIP : MANAGEMENT PERSPECTIVE
An entrepreneur as a strategic
manager who strives to ensure the
business gains profit and expands.

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

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INTRODUCTION TO ENTREPRENEURSHIP
TYPES OF ENTREPRENEURSHIP

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TYPES OF ENTREPRENEURSHIP
# Lifestyle entrepreneurs
# Side businesses
# Startup founders
# Social entrepreneurs
We’re going to talk about
the different types of
businesses.
What suits you best?

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TYPES OF ENTREPRENEURSHIP
• 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
• 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.

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TYPES OF ENTREPRENEURSHIP
• “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
• 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
• 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
• 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.
• You can do this on top of other platforms, for
example, providing a service for Udemy users.
EXAMPLE :
Etsy, Fiverr, Ebay,
Mudah.my, Carousell.

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TYPES OF ENTREPRENEURSHIP
• 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."

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TYPES OF ENTREPRENEURSHIP
• 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
• 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.

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TYPES OF ENTREPRENEURSHIP
• 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
EXAMPLE :
Beras Faiza in
BERSAMAMU slot at TV3.
• “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.

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