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Faizan Khalid

(M.A) Management- University of Nottingham


(BBA) Honors – Lahore School of Economics

Entrepreneurship & SME Management


- Entrepreneurship & SME Management - Human Resource Management
BBA IV - Principles of Marketing - Business Policy
- Promotions & Brand Management
- Consumer Behavior
- Marketing Management
- Export Marketing
- Retail Management

Course Instructor Core Reading List

• Bruce R. Barringer and R. Duane Ireland


“Entrepreneurship Successfully launching new ventures”
Faizan Khalid
• Donald F. Kuratho and Richard M. Hodgetts
E-mail: faizankhalid11@gmail.com “Entrepreneurship in the New Millenium”

Office: Block H3 – Room No. 33 • Thomas W. Zimmerer and Norman M, Scarborough


“Essentials of Entrepreneurship and Small Business
Management” 5th Ed.

Final Assessment Criteria Rules

• You will be marked absent if you come to the class after 5 minutes of the
• Final Exam 30% class starting time.

• You will not be allowed to attend the class if you come to the class after 10
• Mid Term 25% minutes of the class starting time.

• Business Plan 15% • Absolutely no excuses will be tolerated for assignment submissions or quiz.

• Standard rules will be applied for everyone in the class.


• Quizzes 10%
• NAME PLATES are absolute necessary from Week 2 1st Class.
• Example: Bilal Ahmed - Bilal A.
• Assignments & Presentation 10%
• We start deducting 1% every time you miss a class after 5 classes.
• Class Participation 5%
• All course material discussed in class is part of syllabus for Finals e.g.
• Articles, Case Study & other simulation exercises.

• Class Presentation 5% • Final exam consists of pre mid + post mid.

• A grade is at 85% & subsequent grades after every 5%.

1
Entrepreneurship & SME Management

What is Entrepreneurship?
What is a VC?
• Academic Definition (Stevenson & Jarillo)
– Entrepreneurship is the process by which individuals pursue
opportunities without regard to resources they currently
control.

• Venture Capitalist (Fred Wilson)


– Entrepreneurship is the art of turning an idea into a business.

Corporate Entrepreneurship Corporate Entrepreneurship

– Is the conceptualization of Entrepreneurial Firms Conservative Firms


entrepreneurship at the firm level.

• Proactive • Take a more “wait and see”


– All firms fall along a conceptual
continuum that ranges from highly
posture
• Innovative
conservative to highly entrepreneurial. • Less innovative
• Risk taking
• Risk averse
– The position of a firm on this
continuum is referred to as its
entrepreneurial intensity.

2
Why Become an Entrepreneur? Characteristics of Successful Entrepreneurs

Four Primary Characteristics

Desire to be their own boss

Desire to pursue their


own ideas

Financial rewards

Characteristics of Successful Entrepreneurs Characteristics of Successful Entrepreneurs

• Tenacity Despite Failure


• Passion for the Business
– Because entrepreneurs are typically trying
– This passion typically stems from the something new, the failure rate is naturally high.
entrepreneur’s belief that the business will
– A defining characteristic for successful
positively influence people’s lives.
entrepreneurs is their ability to persevere through
setbacks and failures

• Execution Intelligence
• Product/Customer Focus – The ability to fashion a solid business idea into a
– An entrepreneur’s keen focus on products and viable business is a key characteristic of
customers typically stems from the fact that successful entrepreneurs
most entrepreneurs are, at heart, craftspeople.

Facts of Successful Entrepreneurs

• Entrepreneurs Are Born, Not Made

• Entrepreneurs Are Gamblers

• Entrepreneurs Are Motivated Primarily by Money

• Entrepreneurs Should Be Young and Energetic

• Entrepreneurs love the spotlight

3
Common Myths About Entrepreneurs
Myths about Entrepreneurship

• Entrepreneurs Are Born, Not Made • Myth 1: Entrepreneurs Are Born, Not Made

– Mistaken belief that some people are


• Entrepreneurs Are Gamblers genetically predisposed to be
entrepreneurs.
• Entrepreneurs Are Motivated Primarily by Money
– The consensus of many studies is that no
one is “born” to be an entrepreneur;
• Entrepreneurs Should Be Young and Energetic everyone has the potential to become one.

– Whether someone does or doesn’t become


• Entrepreneurs love the spotlight
an entrepreneur is a function of their
environment, life experiences, and
personal choices.

Common Myths About Entrepreneurs Common Myths About Entrepreneurs

Although no one is “born” to be an entrepreneur, there are common traits and


characteristics of successful entrepreneurs • Myth 2: Entrepreneurs Are Gamblers

• A moderate risk taker • Optimistic disposition


• A networker • Persuasive – Most entrepreneurs are moderate risk takers.
• Achievement motivated • Promoter – The idea that entrepreneurs are gamblers originates from two sources:
• Alert to opportunities • Resource assembler/leverager • Entrepreneurs typically have jobs that are less structured, and so
they face a more uncertain set of possibilities than people in
• Creative • Self-confident traditional jobs.
• Decisive • Self-starter • Many entrepreneurs have a strong need to achieve and set
challenging goals, a behavior that is often equated with risk taking.
• Energetic • Tenacious
• Has a strong work ethic • Tolerant of ambiguity
• Lengthy attention span • Visionary

Common Myths About Entrepreneurs Common Myths About Entrepreneurs

• Myth 3: Entrepreneurs Are Motivated Primarily by Money • Myth 4: Entrepreneurs Should Be Young and
Energetic
– Entrepreneurial activity is fairly easily spread out over age
– While it is naïve to think that entrepreneurs don’t seek financial
rewards, money is rarely the reason entrepreneurs start new firms. ranges.
– In fact, some entrepreneurs warn that the pursuit of money can be – While it is important to be energetic, investors often cite
distracting the strength of the entrepreneur as their most important
criteria in making investment decisions.
• What makes an entrepreneur “strong” in the eyes of an investor is
experience, maturity, a solid reputation, and a track record of
success.
• These criteria favor older rather than younger entrepreneurs.

4
Common Myths About Entrepreneurs
Types of Start-Up Firms

• Myth 5: Entrepreneurs love the spotlight

– Some entrepreneurs are flamboyant ; however, the vast majority of


them do not attract public attention

Changing Demographics of Entrepreneurs Changing Demographics of Entrepreneurs


1 of 2 2 of 2

Young Entrepreneurs
Women Entrepreneurs
• Interest among young people in entrepreneurial careers
• There are a growing number of organizations that support and is high.
advocate for women-owned businesses. • According to a Harris Interactive survey, 40% of people eight
to 21 years old said they’d like to start their own business
• Trend is changing from healthcare and professional services to someday.
construction (30% increase), agricultural services (24%), • A total of 59% of the 8- to 21- year olds said they know
transportation (20%) and Communications (20%) someone who has started their own business.

Senior Entrepreneurs

Entrepreneurial Firms’ Impact on Society


Economic Impact of Entrepreneurial Firms
and Larger Firms
• Innovation • Impact on Society
– Is the process of creating something new, which is central to – The innovations of entrepreneurial firms have a dramatic
the entrepreneurial process. impact on society.
– Several studies have found that small businesses outperform – Think of all the new products and services that make our
their larger counterparts in terms of obtaining patents. lives easier, enhance our productivity at work, improve our
health, and entertain us in new ways.
• Job Creation
– Adverse effects such as use of bar code scanners and bio
– Small businesses are the creators of most new jobs and
engineering e.g. VeriChip
employ half of all private sector employees.
• Impact on Larger Firms
– According to a Kauffman Foundation survey, 92% of
respondents say entrepreneurs are critically important to job – Many entrepreneurial firms have built their entire business
creation. models around producing products and services that help
larger firms become more efficient and effectivee e.g
TraceRegister Inc. helping Walmart

5
Small and Medium Enterprises (SME)
Significance of SME’s
• Employment size: Up to 250
•Constitute nearly XX% of enterprises in Pakistan

• Paid up Capital: Up to Rs. 25 million


•Employ XX% of the non-agricultural labour force
• Annual Sales: Up to Rs. 250 million
•Share in annual GDP is XX% approximately
• Source: SMEDA

Significance of SME’s Significance of SME’s


•Constitute nearly 90% of enterprises in Pakistan • Assist in regional and local development since SMEs accelerate rural
industrialization by linking it with the more organized urban sector.

• Help achieve fair and equitable distribution of wealth by regional


dispersion of economic activities.
•Employ 80% of the non-agricultural labour force
• Contribute significantly to export revenues because of the low-cost labour
intensive nature of its products.

•Share in annual GDP is 40% approximately • Have a positive effect on the trade balance since SMEs generally use
indigenous raw materials.

• Assist in fostering a self-help and entrepreneurial culture by bringing


together skills and capital through various lending and skill enhancement
schemes.

Problems faced by Pakistani SME Sector

• Pakistan 's economy has amazing potential for development


but sadly, we haven't been able to derive optimal benefits.
THE END
• High rate of failures, owing to economic slumps, institutional
malpractices, political motives and damaging activities of
Any questions? Please feel free to email me at:
labour unions.
faizankhalid@hotmail.com
• Formal lending institutions are faced with huge infected
portfolios

• Insufficient and low quality production to meet the demands of


local and international markets, deficit in balance of payments
and ever rising unemployment, etc.