Entrepreneurship Lecture Notes Part 1

1. Entrepreneurship is the act of being an entrepreneur, which can be

defined as "one who undertakes innovations, finance and business
acumen in an effort to transform innovations into economic goods".
This may result in new organizations or may be part of revitalizing
mature organizations in response to a perceived opportunity.
The most obvious form of entrepreneurship is that of starting a new
outfit referred as new Business-Startup however, in recent years, the
term has been extended to include social and political forms of
entrepreneurial activity.
When entrepreneurship is describing activities within a firm or large
organization it is referred to as intra-preneurship and may include
corporate venturing, when large entities spin-off organizations.
2. Characteristics of entrepreneurship
Entrepreneurial activities are substantially different depending on the
type of organization and creativity involved.
Entrepreneurship ranges in scale from solo projects (even involving the
entrepreneur only part- time) to major undertakings creating many job
opportunities. Many "high value" entrepreneurial ventures seek venture
capital or angel funding (seed money) in order to raise capital to build the
business.
Angel investors generally seek annualized returns of 20-30% and more,
as well as extensive involvement in the business. Many kinds of
organizations now exist to support would-be entrepreneurs including
specialized government agencies, business incubators, science parks, and
some NGOs.
In more recent times, the term entrepreneurship has been extended to
include elements not related necessarily to business formation activity such
as conceptualizations of entrepreneurship as a specific mindset (see also
entrepreneurial mindset) resulting in entrepreneurial initiatives e.g. in the
form of social entrepreneurship, political entrepreneurship, or knowledge
entrepreneurship have emerged.
3. Some theory of Entrepreneurship
In the 20th century, the understanding of entrepreneurship owes much to
the work of economist Joseph Schumpeter in the 1930s and other Austrian
economists such as Carl Menger, Ludwig von Mises and Friedrich von
Hayek.
In Schumpeter, an entrepreneur is a person who is willing and able to
convert a new idea or invention into a successful innovation.
Entrepreneurship employs what Schumpeter called "the gale of creative
destruction" to replace in whole or in part inferior innovations across
 markets and industries, simultaneously creating new products including
new business models.
In this way, creative destruction is largely responsible for the dynamism of
industries and long-run economic growth. The supposition that
entrepreneurship leads to economic growth is an interpretation of the residual
in endogenous growth theory and as such is hotly debated in academic
economics.
An alternate description posited by Israel Kirzner suggests that the
majority of innovations may be much more incremental improvements such as
the replacement of paper with plastic in the construction of a drinking straw.
Schumpeter's View of Entrepreneurship Austrian economist Joseph
Schumpeter 's definition of entrepreneurship placed an emphasis on
innovation, such as:
new production methods
new markets
new forms of organization
Wealth is created when such innovation results in new demand. From this
viewpoint, one can define the function of the entrepreneur as one of combining
various input factors in an innovative manner to generate value to the
customer with the hope that this value will exceed the cost of the input factors,
thus generating superior returns that result in the creation of wealth.
4. Concept of Entrepreneurship
It has assumed super importance for accelerating economic growth
both in developed and developing countries.
It promotes capital formation and creates wealth in country.
It is the hope and dreams of millions of individuals around the world.
It reduces unemployment and poverty and it is a pathway to prosper.
Entrepreneurship is the process of exploring the opportunities in the
market place and arranging resources required to exploit these
opportunities for long term gain.
It is the process of planning, organizing, opportunities and assuming.
It is a risk of business enterprise. It may be distinguished as an ability
to take risk independently to make utmost
5. Entrepreneurship vs. Small Business Many people use the terms
"entrepreneur" and "small business owner" synonymously. While they
may have much in common, there are significant differences between the
entrepreneurial venture and the small business. Entrepreneurial
ventures differ from small businesses in these ways:
Amount of wealth creation - rather than simply generating an income
stream that replaces traditional employment, a successful
entrepreneurial venture creates substantial wealth, typically in excess of
several million dollars of profit.
 Speed of wealth creation - while a successful small business can
generate several million dollars of profit over a lifetime, entrepreneurial
wealth creation often is rapid; for example, within 5 years. Risk - the
risk of an entrepreneurial venture must be high; otherwise, with the
incentive of sure profits many entrepreneurs would be pursuing the idea
and the opportunity no longer would exist.
Innovation - entrepreneurship often involves substantial innovation
beyond what a small business might exhibit. This innovation gives the
venture the competitive advantage that results in wealth creation. The
innovation may be in the product or service itself, or in the business
processes used to deliver it.

RESOURCES:

Recommended Reading Peter F. Drucker:Innovation & Entrepreneurship

Course Outline

Students are introduced to the course, identify how to find trustworthy sources of information, and
learn about plagiarism and the correct use of citations. They download the software required for the
course.

Lesson 1: Using the Course

Lesson 2: Set Up Your Computer

Lesson 3: Files and Folders

Section 1: The Role of the Entrepreneur

Students learn the definition of entrepreneur. They learn about product- and service-based
businesses, producers and consumers, and how an economy is formed. They discover differences
among regional economies, the relationship between capitalism and entrepreneurship, and how
entrepreneurs contribute to the economic growth and development of the U.S. They learn about
future prospects for entrepreneurship and the role of the entrepreneur in the local community.

Lesson 1: Entrepreneurship Basics

Lesson 2: Producers and Consumers

Lesson 3: Entrepreneurs and the Economy

Lesson 4: Past and Future of Entrepreneurship

Section 2: Entrepreneurship as a Career

Students learn the advantages and disadvantages of self-employment, in particular, of teen

entrepreneurs. They learn characteristics of successful entrepreneurs, essential skills and education,
and reasons to become an entrepreneur. They assess their personal potential to become an
entrepreneur and identify potential career paths.

Lesson 1: Self-Employment

Lesson 2: Characteristics of Entrepreneurs

Lesson 3: Personal Potential for Entrepreneurship

Lesson 4: Career Paths for Entrepreneurs

Section 3: Economic Principles

Students learn about gross and net profit, value, loss, and startup costs. They learn how to increase
a company's net profit and identify the impact of profit motive on business. They look at direct and
indirect competition, price and non-price competition, and how a company can improve its
competitive position. They are introduced to supply, demand, and scarcity, and learn how land,
labor, capital, and entrepreneurship combine as factors of production.

Lesson 1: Profit and Loss

Lesson 2: Profit Motive and Competition

Lesson 3: Supply and Demand

Lesson 4: Factors of Production

Section 4: Production and Delivery

Students explore major fields of business activity, including extractive, manufacturing, wholesaling,
retailing, services, subcontracting, and cottage industries. They look at types of consumer goods,
services, and economic utility, including form, place, time, possession, and information utility. They
learn about economies and diseconomies of scale, market saturation, and the stages of the product
life cycle.

Lesson 1: Fields of Business Activity

Lesson 2: Product and Service Types

Lesson 3: Economic Utility

Lesson 4: The Product Life Cycle

Section 5: Small Business Basics

Students learn about production, finance, marketing, and customer service. They explore the factors
that contribute to small business success or failure. They look at issues of ethical behavior, social
responsibility, and legal issues. They learn how to identify conflicts of interest and explore the role of
the entrepreneur in promoting ethical business practices.

Lesson 1: Parts of a Business

Lesson 2: Success and Failure

Lesson 3: Business Ethics

Section 6: Business Ideas and Opportunities

Students learn to generate and evaluate business opportunities. They look at the role of small
business in the global economy, and changes and trends as a source of new business ideas. They
explore how personality, personal goals, background, interests, experience, abilities, and financial
resources will impact one's choice of business.

Lesson 1: Small Business Opportunities

Lesson 2: Developing Business Ideas

Lesson 3: Personality and Skills

Section 7: Defining Your Business

Students learn to define their business. They write mission and vision statements and business
plans. They learn to determine and focus the scope of a company's products and services.

Lesson 1: Setting a Purpose

Lesson 2: Your Business Plan

Lesson 3: Setting the Scope

Section 8: Business Organization

Students learn about personal liability, legal and tax issues, the three main types of corporations,
and franchising. They learn how to register trademarks, where to get business licenses and permits,
and how to register for taxes. They explore sources of assistance in planning and licensing a
business, different types of organizational charts, and records needed by small businesses. They
learn about factors that affect purchasing, ways to control inventory, and procedures for shipping
and receiving.

Lesson 1: Business Structures

Lesson 2: Corporations and Franchises

Lesson 3: Registering a Business

Lesson 4: Internal Organization

Lesson 5: Buying and Using Inventory

Section 9: Marketing Basics

Students learn about the factors that affect brand image, marketing and market positioning, and the
steps in developing a marketing message. They learn about market share and market penetration
strategy, market segmenting and research, and questions to ask in a customer profile survey.

Lesson 1: Brand Image

Lesson 2: The Marketing Mix

Lesson 3: Market Penetration

Section 10: Promoting Your Company

Students learn about promotional methods and costs, types of advertising media and their strengths
and weaknesses, and differences between institutional and product advertising. They learn how to
use emotions, desires, fears, and needs in advertising messages. The learn the components of a
marketing plan and how to coordinate diverse promotional activities.

Lesson 1: Promotional Methods

Lesson 2: Advertising Media

Lesson 3: Advertising Messages

Lesson 4: Creating a Balanced Plan

Lesson Scheduling

K12 Scope & Sequence documents for each course include:

Course Overview (as seen above)

Course Outline

Lesson Time and Scheduling

SELF CHECK: INTRODUCTION TO ENTREPRENEURSHIP

MULTIPLE CHOICES

DIRECTION: WRITE THE LETTER OF THE CORRECT ANSWER

1. Is the act of being an entrepreneur?

A. MANAGEMENT

B. ENTREPRENEURSHIP

C. ORGANIZATION

2. In what year the understanding of entrepreneurship owes much to the work

of economist Joseph Schumpeter.

A. 1920S

B. 1940S

C. 1930S

3. Who suggests that the majority of innovations may be much more

incremental improvements such as the replacement of paper with plastic in the
construction of a drinking straw?

A. Israel Kirzner

B. Israel Raman

C. Druncker Stien