Entrepreneurship & intrapreneurship

What is an Entrepreneur?

• An entrepreneur is a person who:

  • Organizes, operates, and assumes the risk for a business venture.

  • Takes the risk in starting a new business.

UK Small Businesses

• Breakdown of UK small businesses by size:

  • Micro: 1-9 employees

  • Small: 10-49 employees

  • Medium: 50-249 employees

  • Large: 250+ employees

• The number of people in a partnership affects capital.

The Role of the Entrepreneur

• Key roles of entrepreneurs:

  • Spotting business opportunities - identifying gaps in the market.

  • Being innovators through making profits out of business ideas.

  • Being responsible for organizing the factors of production (Land, Labour, Capital).

  • Making all the important decisions in a business.

  • Taking ‘calculated’ risks with money that has been invested into the business, especially in niche markets.

Risk vs Reward for Entrepreneurs

• Risks:

  • Business failure.

  • Losing personal wealth.

• Rewards:

  • Increasing personal wealth.

  • Chance to do something different.

  • Working for yourself.

• Many entrepreneurs fail in their first businesses but learn from their mistakes and start over.

• There is an opportunity cost when someone leaves their job to become an entrepreneur, especially when they have invested their own capital into the business.

How an Entrepreneur Finds a Business Opportunity

• Sources of business opportunities:

  • Previous business experience.

  • Personal experience, e.g., hobby or interest.

  • Observations.

  • Franchise opportunity.

  • Spotting a gap in the market.

  • Personal skills.

  • Lifestyle choices.

Setting Up a Business: The Process

1. Business Idea

2. Research & Planning:

   • Seeking advice, market research, analyzing competition, writing a business plan.

3. Financing:

   • From personal wealth, banks, and grants.

4. Location:

   • Near to the customers or low-cost premises? Close to supply routes?

5. Resources:

   • Equipment, people, suppliers, utilities, advertising etc.

6. Launch:

   • Open event? Advertising

When the Business Is Up and Running

• The entrepreneur will be involved in:

  • Managing finance.

  • Administration.

  • Marketing.

  • Purchasing.

  • Managing people.

  • Production.

• As the business grows, the entrepreneur may recruit managers to specialize in these tasks.

Intrapreneurship

• Intrapreneurship involves employees within a business creating or discovering new business opportunities.

• This leads to the creation of new parts of the business or even new businesses.

• Characteristics of intrapreneurship:

  • No financial risk for the intrapreneur.

  • Can enable ‘self-actualization’.

  • The business can further develop new ideas & products or ‘spin-off’ the new initiative into a new business.

• Importance of knowing the difference between intrapreneurship and entrepreneurship.

Intrapreneurship Examples

• Lists product innovations developed by intrapreneurs at various companies.

Barriers to Entrepreneurship

• Barriers include:

  • Lack of finance.

  • Lack of entrepreneurial capacity.

  • Becoming an employer.

  • Legal barriers (red-tape).

  • Lack of ideas.

  • Fear of failure.

  • Aversion to risk.

• Solutions to overcome barriers include:

  • Creating a good business plan.

  • Acquiring necessary skills through training or employing someone with those skills.

  • Conducting thorough market research.

  • Developing determination.

Anticipating Risk & Uncertainty

• Anticipating risk:

  • Entrepreneurs need to know the risks and minimize them through market research, credit checks, and seeking advice and help from experts.

• Anticipating uncertainty:

  • There will always be uncertainty, but anticipating what might happen is helpful.

  • Examples include economic downturns and changes in government rules.

  • Tools like SWOT (Strengths, Weaknesses, Opportunities, Threats) & PESTLE (Political, Economic, Social, Technological, Legal, Environmental) can be used to anticipate uncertainty and plan to mitigate the impacts.