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Entrepreneurship Notes
Entrepreneurship (Technical University of Kenya)
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MIGORI INSTITUTE OF BEAUTY AND
PROFESSIONAL STUDIES
ENTREPRENEURSHIP STUDIES
INTRODUCTION TO ENTREPRENEURSHIP
Definition of Terms
Definition of an entrepreneur
An entrepreneur is a person who identifies a business opportunity, harnesses and obtains the
resources necessary to initiate a successful business activity.
The entrepreneur implements the idea
Entrepreneurship meaning
The act or process of identifying business opportunities and gathering the necessary resources to
initiate a successful business activity.
Entrepreneurship means having an idea of one’s own and trying to implement the idea to create
values on it.
Entrepreneurship is a term which encompasses what entrepreneurs do i.e
□ Identifying a business opportunity of a particular demand
□ Look at the opportunity as a process of creating, something that did not exist.
□ Constantly searching/ harnessing ones environment and resources to implement the
activities.
□ Creating a totally new product and using it in as new.
Entrepreneurship there is the practice of starting a new business or revitalizing existing
businesses in response to identifying opportunities.
Self-Employment
Working independently and earning a living from it.
This is a concept that arises when the entrepreneur relies on revenues from his business as a
source of income
What is Unemployment? Advantages and disadvantages of Self Employment?
What is Salaried Employment? Advantages and Disadvantages of Salaried employment?
Enterprise
A business undertaking by an individual for the purpose of making a profit.
Factors impeding the growth of Entrepreneurship
High Taxation Levels
Corruption and Official Harassment
Unregulated competition from outside countries
Decline in personal incomes
The high cost of finance
Downloaded by Calvince Apollo Ngala ()
, lOMoARcPSD|35839156
Lack of entrepreneurial culture
Poor transport and communication networks
Lack of skills and knowledge
Explain the distinctions between an Entrepreneur and a Manager
Contribution of Entrepreneurship to National Development
The economic growth, the improved quality of life, the equitable distribution of resources and the
capacity of the economy to deal with economic, social and environmental development.
Main objectives of national development include:
□ Provide basic needs to every citizen:- food, shelter, health, security, education, clothing
□ Elimination / Reduction of poverty: reduce rural-urban migration □Provision of
opportunities for employment and personal advancement
□ Trying to narrow the income differences between the rich and the poor.
i) Employment Creation:
ii) Promotion of National Productivity: This is through production of goods and services within the
country and therefore they contribute to the Gross Domestic Product (GDP)
iii) Raising Standards of Living: It’s measured by the capacity of people of a country to buy goods and
services. Entrepreneurs contribute by employing people and giving them salaries or wages to buy
their necessities.
iv) Conservation of foreign Exchange: Entrepreneurs produce goods and services that are needed by
people and reduction in importing those goods and hence the government saves foreign exchange.
v) Export Promotion: Entrepreneurs who produce goods and services for export earn vi)Conservation
Agent: Entrepreneurs can contribute to conservation and utilization of resources e.g. manufacturing
a Jiko that uses sawdust instead of wood charcoal
vii) Rural development which in effect.
Promotes change to the formal sector from informal sector Equitable development
Reduced rural-urban migrations.
viii) Development of technology through
establishment of research institutions ii) education systems
ix) Government revenue
Through taxes. From domestic borrowing (TBs)
x) Facilitating community development through
Establishment of small businesses ii) Participation in community dev. Projects
xi)Providing a positive role model and facilitating.
Competition between domestic entrepreneurship and imported Stimulating dev. Of
entrepreneurship.
xii) Reducing dependence on imported goods and services.
xiii) Stimulates competition through
Quality production methods are adopted
Quality products are produced
Variety goods and services are produced.
xiv) Facilitated development of the financial sector through which;
Capital accumulation is possible through savings
Loaning is facilitated
Downloaded by Calvince Apollo Ngala ()
, lOMoARcPSD|35839156
Development of the capital market.
Entrepreneurial Behavior
Several theories have been developed to explain why entrepreneurs behave the way they do.
There has been debate on whether entrepreneurs are born or made
Born-hereditary, made-entrepreneurs are environmental influenced by where they are born.
These are;
i) Economic
The theory explains entrepreneurial behavior as influenced by economic factors through
which.
a) It is possible to introduce new methods
b) It is possible to find new sources of materials
c) It is possible to open new markets
The economic prospective is important since they create enabling environment for the
entrepreneur to combine the factors of production.
ii) Psychological factors
The theory states that entrepreneurs have unique values, attitudes and needs within which
drive them.
It is mostly concerned with personality traits as the main determinants of
entrepreneurial behavior
People are likely to become entrepreneurs because of high liking of say.
a) Independence
b) Attitude
c) Need to satisfy certain needs.
iii) Sociological factors
Maintains that environmental factors such as beliefs, culture, social structures determine
entrepreneurial behavior.
iv) Management factors
Emphasizes on the organization of resources in a specific way to attain profits
Leadership impacts on behavior and facilitates pioneership, achieving of goals and
provides vision.
The Functions of an Entrepreneur
i)The bearing of uncertainty is the primary function of the entrepreneur i.e losses or profits.
ii) The management of the business enterprise ie can delegate iii)
Provision of risk capital and invention.
iv) Identifying gaps in the market and turning such gaps to business opportunities i.e to
initiate a business.
v) Financing the businesses, through raising and mobilizing the necessary resources to
exploit opportunity.
vi) Searching for business opportunities through environmental scans. vii) Mobilization of
resources needed to start and run a business e.g. from
a) Personal savings
b) Friends & relatives
c) Financial institutions e.t.c
Downloaded by Calvince Apollo Ngala ()
Entrepreneurship Notes
Entrepreneurship (Technical University of Kenya)
Scan to open on Studocu
Studocu is not sponsored or endorsed by any college or university
Downloaded by Calvince Apollo Ngala ()
, lOMoARcPSD|35839156
MIGORI INSTITUTE OF BEAUTY AND
PROFESSIONAL STUDIES
ENTREPRENEURSHIP STUDIES
INTRODUCTION TO ENTREPRENEURSHIP
Definition of Terms
Definition of an entrepreneur
An entrepreneur is a person who identifies a business opportunity, harnesses and obtains the
resources necessary to initiate a successful business activity.
The entrepreneur implements the idea
Entrepreneurship meaning
The act or process of identifying business opportunities and gathering the necessary resources to
initiate a successful business activity.
Entrepreneurship means having an idea of one’s own and trying to implement the idea to create
values on it.
Entrepreneurship is a term which encompasses what entrepreneurs do i.e
□ Identifying a business opportunity of a particular demand
□ Look at the opportunity as a process of creating, something that did not exist.
□ Constantly searching/ harnessing ones environment and resources to implement the
activities.
□ Creating a totally new product and using it in as new.
Entrepreneurship there is the practice of starting a new business or revitalizing existing
businesses in response to identifying opportunities.
Self-Employment
Working independently and earning a living from it.
This is a concept that arises when the entrepreneur relies on revenues from his business as a
source of income
What is Unemployment? Advantages and disadvantages of Self Employment?
What is Salaried Employment? Advantages and Disadvantages of Salaried employment?
Enterprise
A business undertaking by an individual for the purpose of making a profit.
Factors impeding the growth of Entrepreneurship
High Taxation Levels
Corruption and Official Harassment
Unregulated competition from outside countries
Decline in personal incomes
The high cost of finance
Downloaded by Calvince Apollo Ngala ()
, lOMoARcPSD|35839156
Lack of entrepreneurial culture
Poor transport and communication networks
Lack of skills and knowledge
Explain the distinctions between an Entrepreneur and a Manager
Contribution of Entrepreneurship to National Development
The economic growth, the improved quality of life, the equitable distribution of resources and the
capacity of the economy to deal with economic, social and environmental development.
Main objectives of national development include:
□ Provide basic needs to every citizen:- food, shelter, health, security, education, clothing
□ Elimination / Reduction of poverty: reduce rural-urban migration □Provision of
opportunities for employment and personal advancement
□ Trying to narrow the income differences between the rich and the poor.
i) Employment Creation:
ii) Promotion of National Productivity: This is through production of goods and services within the
country and therefore they contribute to the Gross Domestic Product (GDP)
iii) Raising Standards of Living: It’s measured by the capacity of people of a country to buy goods and
services. Entrepreneurs contribute by employing people and giving them salaries or wages to buy
their necessities.
iv) Conservation of foreign Exchange: Entrepreneurs produce goods and services that are needed by
people and reduction in importing those goods and hence the government saves foreign exchange.
v) Export Promotion: Entrepreneurs who produce goods and services for export earn vi)Conservation
Agent: Entrepreneurs can contribute to conservation and utilization of resources e.g. manufacturing
a Jiko that uses sawdust instead of wood charcoal
vii) Rural development which in effect.
Promotes change to the formal sector from informal sector Equitable development
Reduced rural-urban migrations.
viii) Development of technology through
establishment of research institutions ii) education systems
ix) Government revenue
Through taxes. From domestic borrowing (TBs)
x) Facilitating community development through
Establishment of small businesses ii) Participation in community dev. Projects
xi)Providing a positive role model and facilitating.
Competition between domestic entrepreneurship and imported Stimulating dev. Of
entrepreneurship.
xii) Reducing dependence on imported goods and services.
xiii) Stimulates competition through
Quality production methods are adopted
Quality products are produced
Variety goods and services are produced.
xiv) Facilitated development of the financial sector through which;
Capital accumulation is possible through savings
Loaning is facilitated
Downloaded by Calvince Apollo Ngala ()
, lOMoARcPSD|35839156
Development of the capital market.
Entrepreneurial Behavior
Several theories have been developed to explain why entrepreneurs behave the way they do.
There has been debate on whether entrepreneurs are born or made
Born-hereditary, made-entrepreneurs are environmental influenced by where they are born.
These are;
i) Economic
The theory explains entrepreneurial behavior as influenced by economic factors through
which.
a) It is possible to introduce new methods
b) It is possible to find new sources of materials
c) It is possible to open new markets
The economic prospective is important since they create enabling environment for the
entrepreneur to combine the factors of production.
ii) Psychological factors
The theory states that entrepreneurs have unique values, attitudes and needs within which
drive them.
It is mostly concerned with personality traits as the main determinants of
entrepreneurial behavior
People are likely to become entrepreneurs because of high liking of say.
a) Independence
b) Attitude
c) Need to satisfy certain needs.
iii) Sociological factors
Maintains that environmental factors such as beliefs, culture, social structures determine
entrepreneurial behavior.
iv) Management factors
Emphasizes on the organization of resources in a specific way to attain profits
Leadership impacts on behavior and facilitates pioneership, achieving of goals and
provides vision.
The Functions of an Entrepreneur
i)The bearing of uncertainty is the primary function of the entrepreneur i.e losses or profits.
ii) The management of the business enterprise ie can delegate iii)
Provision of risk capital and invention.
iv) Identifying gaps in the market and turning such gaps to business opportunities i.e to
initiate a business.
v) Financing the businesses, through raising and mobilizing the necessary resources to
exploit opportunity.
vi) Searching for business opportunities through environmental scans. vii) Mobilization of
resources needed to start and run a business e.g. from
a) Personal savings
b) Friends & relatives
c) Financial institutions e.t.c
Downloaded by Calvince Apollo Ngala ()
