ENTREPRENEURSHIP 6TH

EDITION
ROBERT D. HISRICH

Who is an Entrepreneur?

The word entrepreneur stems from French,

means between-taker or go between

An Entrepreneur is one who brings

resources, Labor, Materials and other assets
into combinations that make their value
greater than before, and also one who
introduces changes, innovations, and new
order.

Who is an Entrepreneur?

Entrepreneur is an individual who

takes initiatives to bundle
resources in innovative ways and is
willing to bear the risk and/or
uncertainty to act

What is Entrepreneurship?

Entrepreneurship is the process of

creating something new with value
by devoting the necessary time and
effort, assuming the accompanying
financial, Psychic, and social risks
and uncertainties, and receiving
the resulting rewards of monetary
and personal satisfaction.

What is Entrepreneurship?
This definition contains four
basic aspects of entrepreneurs
1. Creation of a new venture
2. Investing necessary time and effort
3. Accepting associated risks!
4. Enjoying resulting rewards!

What is an Entrepreneurial
Process?

It is the process of creating

something new with value by
devoting the necessary time and
effort, assuming the accompanying
financial, Psychic, and Social risks
and uncertainties and receiving
the resulting rewards of monetary
and personal satisfaction.

2-2

1.

2.
3.

4.

The Entrepreneurial
Process has 4 distinct
phases

Identification and evaluation of

the opportunity
Development of the business plan
Determination of the required
resources
Management of the resulting
enterprise

1. Identify and Evaluate

the Opportunity

Opportunity Assessment
Creation and Length of Opportunity
Real and Perceived Value of an
Opportunity
Risks and Returns of Opportunity
Opportunity vs Personal Skills and
Goals
Competitive Environment

2-3

Opportunity Analysis: Assessing

the Opportunity

What market need does it fill?

What personal observations have
you made?
What are the underlying social
conditions?
Examine the market research data.
Assess competition. Any patents?
Where is the money to be made?

2. Develop Business Plan

Title Page
Table of Contents
Executive Summary
Major Sections
1.
2.
3.
4.

Description of Venture
Description of Industry
Technology Plan
Marketing Plan

2. Develop Business Plan

5. Financial Plans
6. Production Plan
7. Organization Plan
8. Operational Plan
Appendixes (Exhibits)

3. Resources Required

Determining Resources Needed

Determine Existing Resources
Identify Resource Gaps and
Available Suppliers
Develop access to needed
resources

4. Manage the Enterprise

Develop the Management Style

Understand Key variables for
success
Identify problems and potential
Problems
Implement Control System
Develop Growth Strategy

How Entrepreneurs Think

Entrepreneurs thinks differently

than non-entrepreneurs and vary
in situation to situation and
environment to environment

Thought Process of an
Entrepreneur

Effectuation is a process that starts

with what one has (Who they are, What
they Know, and Whom they Know) and
select among possible outcomes.
Entrepreneurial Mind Set, it involves
the ability to rapidly sense, act, and
mobilize, even under uncertain
conditions

Thought Process of an
Entrepreneur

Cognitive Adoptability, it describes

the extent to which entrepreneurs are
dynamic, flexible, self regulating, and
engaged in the process of generating
multiple decision frameworks focused
on sensing and processing changes in
their environments and then acting
on them

Role of Entrepreneurship
in Economic Development
1.

2.

3.

Product Evaluation Process: for

developing and commercializing an
innovation.
Iterative Synthesis: The intersection
of knowledge and social need that
starts the product development
process
Ordinary Innovation: New products
with little technological change

Importance of
entrepreneurship in
economic
development
Increase per capita output/income

Initiating change in business/society

structure
Innovation stimulates new products/services
Innovation stimulates new investments in
new ventures (increased capital expands
capacity for economic growth)
Growth in economy stimulates additional
spending (increased demand)

What type of environment favors

entrepreneurial activities?

Culture that values independence,

being ones own boss
Failure not considered a disgrace
Available markets
Available capital sources
Critical mass of entrepreneurial talent
Strong educational base
Tax structure that favors new ventures
Government policies and programs
(facilitate technology transfer)