GELECT 001 -

THE
ENTREPRENEURIAL
MIND
PRELIMINARY TERM LECTURE
BRIEF HISTORY OF ENTREPRENEURSHIP
Entrepreneurship is defined as the process of
starting a business. Today, entrepreneurs are
romanticized as being the cornerstones of a successful
capitalist economy.
But where did entrepreneurship begin? Who
were the first entrepreneurs? In a global economy
dominated by big businesses, what does the future
hold for entrepreneurship?
 THE BEGINNINGS OF ENTREPRENEURSHIP IN TRADE
Believe it or not, the first entrepreneurs can be traced
back to nearly 20,000 years ago. The first known trading
between humans took place in New Guinea, where locals
would exchange obsidian (a volcanic glass prized for its use in
hunting tools) for other needed goods – like tools, food, etc.

This early type of entrepreneurship continued for

millennia. Hunter-gatherer tribes would trade goods from
different parts of their respective regions to provide an overall
benefit for their tribe.
 ENTREPRENEURSHIP AND THE
AGRICULTURAL REVOLUTION
The first big shift in entrepreneurship took place
during the Agricultural Revolution, which occurred about
12,000 years ago.
In agricultural revolution, humans started to
domesticate plants and animals. Instead of having to roam,
forage, and hunt for their food in different regions
throughout the year, human populations could remain
stationary in one location and farm the land.
 This was a fundamental shift in human history.
Villages and towns started developing close to fertile
lands. There was no longer a need for everyone in
the community to be directly involved with food
production. People didn’t need to spend all day
hunting and gathering for their own sustenance – it
was more efficient to let a smaller number of farmers
handle food production while the rest of the
population focused on other tasks.
 By specializing in different professions, members of the
community could trade valuable goods for food. These were
the earliest entrepreneurs in human civilization. Some common
areas of specialization included:

 Hunting and gathering

 Fishing
 Cooking
 Tool-making
 Shelter-building
 Clothes-making
 Farmers could grow more food than they needed to
support their own families. Thus, they would sell food at the
market to say, a clothes-maker. The farmer’s family no longer
needed to make their own clothes. They could rely on the
specialized services within a community to provide for them.

Over time, these specialists became better and better at

their unique areas of specialization. Tricks of the trade would
be passed down through families. The pace of innovation sped
up. As specialists became better and better at their unique
roles, they brought increased benefits for the entire community.
 As time went on, new areas of specialization began to
emerge. Early entrepreneurs would work in areas like:

 Pottery
 Carpentry
 Wool-making
 Masonry

Standards of living continued to increase. Entrepreneurs

were constantly at the forefront of innovation. If a problem
needed to be solved, these early entrepreneurs recognized that
they could profit by solving that problem.
ENTREPRENEURSHIP AND THE INVENTION OF MONEY
One of the key developments in the history of
entrepreneurship (and in human history) was the invention of
money.
Prior to the invention of money, all entrepreneurship and
trade took place through the barter system. If John wanted 5
bars of iron, then he might have to sell 1 horse to get those bars.
Of course, he would also need to find an iron merchant who
needed a horse.
The limits of the barter system were known as a
“coincidence of wants.” Understandably, this vastly limited
trade and entrepreneurship in early history.
 Over time, paper money and coinage would be
developed. Currency gave entrepreneurs several important
things:

 It facilitated long-distance trade

 It acted as a medium of exchange
 It provided a way for entrepreneurs to store value
 Obviously, currency changed the fate of entrepreneurship
forever.
 MODERN ENTREPRENEURSHIP
Today, entrepreneurs are the lifeblood of economies
all over the world. Even in command economies like China,
entrepreneurs are valued for their contributions to the
economy and encouraged to innovate to compete with
companies around the world.
The global economy – combined with modern
infrastructure and communications – has introduced a new
age of competition to the world of entrepreneurship. No
longer are you competing with entrepreneurs in your tribe,
town, village, or city: you’re competing with entrepreneurs
all over the world.
Conclusion: Where Does Entrepreneurship Go
from Here?
Since the beginnings of history,
entrepreneurship has always been ruled by the
market forces known as supply and demand. Early
entrepreneurs in the Agricultural Revolution met the
needs of farmers by providing them with tools and
shelter. In exchange, they received food that could
feed their families.
 As years went by, the means of entrepreneurship
changed dramatically but the core reasons for entrepreneurship
remained the same. Everywhere in the world, entrepreneurs
arose to address demand by providing supply. They innovated
and invented new technologies to solve problems that nobody
had ever solved before.

At the same time, competition has ensured that the

entrepreneur’s self-interest doesn’t cause an overall negative
impact on society. Competition prevents entrepreneurs from
overcharging for goods or underpaying employees, for
example.
END
OF
DISCUSSION!
What is Entrepreneur and
Entrepreneurship?
 An ENTREPRENEUR is someone who
locates the need of society and tries to meet the
same, with his/her innovative idea.
On the other hand,
ENTEREPRENEURSHIP refers to the process
of establishing a business entity, intending to
get profit, as a return in the future.
 COMPARISON CHART
BASIS FOR
COMPARISON
ENTREPRENEUR ENTREPRENEURSHIP
Meaning An entrepreneur is an Entrepreneurship is a risky
individual or a team activity of commencing a
thereof, having an business usually a start up
innovative idea, and takes company, offering distinct
every step to turn the idea products and services to the
into reality, while bearing target customers, which may or
the risks. may not get success.
What is it? Person who has an idea Process which gives shape to the
and gives shape to it. idea.
 BASIS FOR
COMPARISON ENTREPRENEUR ENTREPRENEURSHIP
Represents An innovator, who A procedure through which
chased the dream, till it an innovation is done.
becomes true.
Business He/She is the one who It is the activity, which an
Venture sets up the business entrepreneur undertakes to
venture, to turn a set up the business venture.
concept into reality.
 DEFINITION OF ENTREPRENEUR
Entrepreneur refers to a person who conceives a creative
idea and takes all the necessary steps required to convert the
idea into reality, such as taking initiative to sets up a new
business enterprise by supplying sufficient capital, land, labor
and all the essential resources to produce the product, he/she
has in his/her mind and bearing all risks so as to gain profits in
future.
The qualities of an entrepreneur are:
SELF CONFIDENCE
Self-confidence is concerned with
how a person feels about his
ability. A successful entrepreneur
believes in his abilities. He is not
scared to explore un-chartered
territories, take risk and take
difficult decisions.
PASSIONATE AND
FOCUSED
Some entrepreneurs are
passionate for inventing: They
focus on identifying new
opportunities or creating new
products or services. Some
entrepreneurs are passionate for
founding: They focus on setting
up and nurturing the initial
venture.
RISK TAKING ABILITY
Risk taking enables and encourages
innovation, which can be an important
product/service differentiator. Failed
risks aren't always negative.
Sometimes, they provide the most
valuable business lessons an
entrepreneur can learn. Failure helps
shape future business strategies and can
eventually lead to business growth.
LEADERSHIP ABILITY
Leadership is an important function of
management which helps to maximize
efficiency and to achieve organizational
goals. Initiates action- Leader is a
person who starts the work by
communicating the policies and plans
to the subordinates from where the
work actually starts.
FUTURE ORIENTED
People who believe they control the
future and learn to think like
entrepreneurs make better employees.
They change lifestyles, technology,
communities, businesses and policy.
The future-oriented become innovators
and achievers wherever they are and at
whatever they attempt.
CREATIVE
Creativity enables entrepreneurs to
find some of the path-breaking
discoveries. That way, it's easier for an
entrepreneur to get new perspectives
towards solving a financial or
operational problem. Creativity lets an
entrepreneur connect distinct aspects
and extrapolate feasible solutions from
unrelated concepts.
 The company formed by an entrepreneur is usually a startup
enterprise, which can be understood as the live manifestation of
his/her idea.
So, an entrepreneur is:

 A beginner in the market, who has something new to offer to

society and starts right from scratch to establish and run the
enterprise.

 An innovator, who has a thought-provoking idea or concept in

his/her mind, that has the capability to lead the marketplace.

 A developer, who develops a business model, to give shape to

the idea.
 A leader, who provides guidance and support to his/her men, to work in
a specific direction or change the same (if required) so as to achieve the
target.

 An incharge who is accountable and responsible for the success or failure

of the venture, for the decisions made by him/her.

 A promoter, who takes all the relevant steps to turn the dream into
reality.

 A forecaster, who foresees, future opportunities and threats which can

affect the venture, positively or negatively.

 A risk taker, who has the ability to anticipate the risk in the future moves,
and take the risk, if they are beneficial to the enterprise.
END
OF
DISCUSSION!
 DEFINITION OF ENTREPRENEURSHIP
Entrepreneurship is the process or activity, of initiating,
developing, managing and operating a startup company, while
taking all the risks involved, so as to make profits. It is one of
the four factors of production, the other being land, labor,
capital.
Now, we have discussed the entrepreneurial process as
under:
1. DISCOVERY
An entrepreneurial process begins with the idea
generation, wherein the entrepreneur identifies and evaluates
the business opportunities. The identification and the
evaluation of opportunities is a difficult task; an entrepreneur
seeks inputs from all the persons including employees,
consumers, channel partners, technical people, etc. to reach to
an optimum business opportunity. Once the opportunity has
been decided upon, the next step is to evaluate it.
2. DEVELOPING A BUSINESS PLAN
Once the opportunity is identified, an entrepreneur
needs to create a comprehensive business plan. A business plan
is critical to the success of any new venture since it acts as a
benchmark and the evaluation criteria to see if the organization
is moving towards its set goals.
An entrepreneur must dedicate his sufficient time towards its
creation, the major components of a business plan are mission
and vision statement, goals and objectives, capital requirement,
a description of products and services, etc.
3. RESOURCING
The third step in the entrepreneurial process is resourcing,
wherein the entrepreneur identifies the sources from where the
finance and the human resource can be arranged. Here, the
entrepreneur finds the investors for its new venture and the
personnel to carry out the business activities.

4. MANAGING THE COMPANY

Once the funds are raised and the employees are hired, the
next step is to initiate the business operations to achieve the set
goals. First of all, an entrepreneur must decide the management
structure or the hierarchy that is required to solve the operational
problems when they arise.
5. HARVESTING
The final step in the entrepreneurial process is harvesting
wherein, an entrepreneur decides on the future prospects of the
business, i.e. its growth and development. Here, the actual
growth is compared against the planned growth and then the
decision regarding the stability or the expansion of business
operations is undertaken accordingly, by an entrepreneur.

The entrepreneurial process is to be followed, again and

again, whenever any new venture is taken up by an
entrepreneur, therefore, its an ever ending process.
 An entrepreneur uses several factors to turn his idea into
a profitable product. It would really be obvious that an
entrepreneur’s first investment in his business enterprise is an
idea.
An idea is simply something an entrepreneur has already
conceptualized or imagined, painting a more or less clear
picture in his mind, giving him a clear plan of action. In other
words, an idea is a clear blueprint in the entrepreneur’s mind.
Raw materials are the basic inputs that the entrepreneur
uses to come up with his products. These inputs comes from
his environment, and are usually found to be in their
unprocessed or natural states. Thus, the term ‘’raw’’.
 CAPITAL, on the other hand, refers to the building,
machinery, equipment and tools used in the course of
production. More often than not, an entrepreneur hires
laborers – people directly responsible in the production
process. The place where all these physical factors are found is
generally called a production plant. Having all these things
allows the entrepreneur to have what he calls a business
enterprise.
When these inputs are transformed into outputs or what
we call as finished products, the entrepreneur now brings
these finished products to his market. A market is simply the
buyers and users of the entrepreneur’s product. Technically,
people who buy the product are called consumers or end
CONTRIBUTION OF ENTREPRENEURSHIP
TO THE ECONOMY
First, entrepreneurship employs the various resources
present in the economy. Many of these resources tend to be
unutilized and unmaximized. Entrepreneurs, therefore, make
productive use of otherwise non-productive resources.
Second, entrepreneurs need manpower for their business
operations. They provide employment opportunities to various
individuals. Note that when these entrepreneurs hire people,
they also bear the burden of providing training for these
individuals. Professional growth and skills enhancement, are
also important contributions of entrepreneurs.
 Third, it is said that entrepreneurship is the backbone of
the economy. Contrary to popular belief, it is the small and
medium enterprises that make up the great bulk of the Gross
Domestic Product (GDP) of a country.

A fourth contribution of entrepreneurs is in their ability to

innovate goods and services. The root of the word
‘’entrepreneur’’ means to innovate and this is precisely what
entrepreneurs bring to society. They make life more comfortable
and convenient for us. They make products more accessible and
easier to use.
 A fifth contribution of entrepreneurs is their ability to
gain international popularity and prestige for their country.
This is true especially when these entrepreneurs are already
able to export their products or even bring their businesses
abroad. The entrepreneurs country of origin becomes known
while allowing the country to earn income via stronger
currencies.

A sixth important contribution of entrepreneurs is

their willingness to take risks, risks that society will
otherwise be hesitant to take. These people accumulate great
learning experiences, which may be passed on to other
business people through seminars, workshops, speaking
engagements and others.
END
OF
DISCUSSION!
 ADVANTAGES AND
DISADVANTAGES
OF BEING AN
ENTREPRENEUR
MIDTERM LECTURE
 ADVANTAGES OF BEING AN
ENTREPRENEUR
1. FREEDOM
It is one of the key advantages of being an entrepreneur.
Being your boss is the best feeling hence it comes at the top of the
advantages of the entrepreneurship list. You don’t have to wake up,
commute to the workplace, and listen to someone saying, Hey! You
are late again.
There is no one to report to except for yourself. Another benefit
of being an entrepreneur is you don’t need to follow instructions
from your superiors as you steer your business in the right direction
putting in your effort. In simple words, you do what makes you
happy and what feels right.
2. TIME EFFICIENCY
Startups are usually known for making the most
out of their time. Their workplace is their lounge,
bedroom, or even their café. There is only one thing
common among them, and that’s work.
With no limitation or probing supervisors above
you, you can discuss work anytime, as you enjoy your
meals. The biggest of the advantages of being an
entrepreneur is you always have to use your time as
efficiently as possible.
3. CONTROL
You get to control the hiring process, work
deadline, and even the financial ins and outs. Without
relying on your superior’s decisions on what to do
and how to do it, you get to choose how to deal with
emanating issues.
Being an entrepreneur means that you get to
choose the work you’re going to be doing using your
strengths in the way you believe are the best. Your
skills contribute to your earning potential because you
are in many ways in control of your destiny, including
your teams.
4. BUSINESS PROFITS
As you sow, so you reap; as you are the one who
invests into the venture, you are the one to ultimately
enjoy its profits. The profits earned for as long as the
business lasts will be yours to take. It’s something that
changes the whole picture as you are not obligated to
make your employers richer.
This success of your business means it’s your
success, and as your business grows, so does your
potential income. Financial stability can be incredibly
motivating for many new entrepreneur.
5. IT’S THE TIME TO POLISH YOUR
SKILLS
There's no better way to learn and earn as per your
potential and knowledge. New challenges help you derive new
solutions every day. The focus is only on the business and
sorting out how to build it from scratch with limited resources.
This ability can help you make tomorrow's millionaire, as
big things start from small ideas and places. In addition to that,
you get to learn to multitask and deal with pressure altogether
and an individual. Your determination and abilities get to solve
problems that others never get a chance to solve.
 DISADVANTAGES OF BEING AN
ENTREPRENEUR
1. BUSINESS RISK
It is one of major disadvantages of being an
Entrepreneur
No matter what sort of business venture you have, it’s always
circled by different types of risks. From market competition to
income sources, anything could lead to business failure if you
don’t have a contingency in place.
Usually, entrepreneurs put their savings into their
business thus, instead of your employer, it’s you who suffers
the loss in case things unexpected.
2. TOILING WORKLOAD
There’s too much to get done in too little time; workload
and extra working hours are the most feared disadvantages of
being an entrepreneur these days. Since you have to play
multiple roles simultaneously, expect more than just 8 hours a
day of work.
The early stages of setting up a business can be
cumbersome enough to turn you baffled. The mounting
workload of management, hiring, investment, and finding
space can be exhausting.
3. FINANCIAL PRESSURE
There’s a gamble in play when you put your
entire savings into the venture. Unlike a Joint Stock
Company or LLC, there are more financial risks
involved in Startup Companies.
Since there are no investors involved, you’ll have
to take the financial risks and be liable to such on your
terms in case of economic downturns. Many
entrepreneurs struggle to save enough money in good
times that they could use in bad times and get into
serious financial difficulties once crisis times hit.
4. ACCOUNTABILITY FOR EMPLOYEES
You’ll never want to go into the battle with blunt
weapons, would you? Employees play a pivotal role in taking
your dream venture to heights. Entrepreneurship demands
discipline and dedication. It would be hard to find the perfect
candidates to acclimate to the venture.
Their mistakes can cost you in the business and vice-
versa. There is not much time to experiment on hiring and
letting go; it’s your foremost priority to take full responsibility
for all things that might happen in your business.
5. IRREGULAR INCOME
It's a no-brainer that the initial days of your startup
business won't get you profit. The initial period is the most
difficult as well as a crucial time to survive. You need to have a
backup for rentals, bills, wages, etc., to keep the engines
running.
Also, many first-time entrepreneurs make the mistake of
planning their income on the good times instead of the bad
times without planning for the rainy day. Let's not forget that
income is the only thing that you can take home that won't be
stable initially. Unstable income can be among leading
disadvantages of entrepreneurship especially when you don’t
have enough saved.
 CONCLUSION ON ADVANATAGES AND
DISADVANTAGES OF BEING AN
ENTREPRENEUR
There’s the good, and there’s the bad about being an
entrepreneur. However, if you’ve got a business plan, a team of
like-minded ones and plenty of savings, the advantages of
being an Entrepreneur will certainly outweigh the limitations.
It’s also important to fully understand the Advantages
and Disadvantages of Being an Entrepreneur before making a
substantial financial and emotional investment.
 HOW TO IMPROVE
ENTREPRENEURIAL SKILL?
There can be many different methods that you
can use to develop your entrepreneurial skills. You
might take a class, attend a seminar or participate in a
networking workshop. You might also consider the
following steps to help you improve your skill set.
1. TAKE A COURSE
One highly effective method to improving your
skill set as an entrepreneur is to take a course on
business, marketing, financial planning or another
management aspect of developing your own brand.
Taking a business course, for example, can help you
develop the business management skills necessary to
achieve success as an entrepreneur.
2. ATTEND EVENTS AND
WORKSHOPS
You might also attend entrepreneurial
workshops and networking events. Many of these
types of events may have experienced business
owners and entrepreneurs speaking about business
and networking topics. Aside from the direct benefit
of learning, you can also gain valuable contacts, talk
with experienced brand owners and speakers and get
insight into your business.
3. SEEK OUT EXPERIENCED MENTORS
Much like asking questions in a class, seeking out
mentors can also be highly beneficial to developing your
entrepreneurial skills. You might shadow a brand owner for a
day to observe how they manage their business, or you might
meet with a professional group once a week to discuss how
you are implementing various skills and resources to build
your brand. Oftentimes, experienced and successful
entrepreneurs are more than happy to help mentor you and
offer their professional advice.
4. BUILD YOUR LEADERSHIP SKILLS
You might seek out opportunities to be the team
leader or manager to help you practice these skills. As
you perform in leadership roles, you might ask for
feedback from teammates and other colleagues to help
you further develop your management and leadership
skills.
5. LEARN HOW TO MANAGE FINANCES
Another key aspect of owning your own business
is that you will most likely be managing your
business's finances. You can usually employ a
financial planner for assistance, however, it can be to
your advantage to learn about the financial processes
that take place within a business.
END
OF
DISCUSSION!