TOPIC 1: INTRODUCTION TO ENTREPRENUERSHIP SKILLS

Definition of terms
Entrepreneur
An entrepreneur is basically a person who identifies a business opportunity, harshness and
obtains the resources necessary to initiate a successful basis activity.
• The entrepreneur implements the idea
• Undertakes to operate the business
• An entrepreneur is therefore a central key individual in the society who makes
things happens for economic development.
Entrepreneurship
• In the broader sense entrepreneurship refers to the means of stimulating
innovative and creative undertakings for a better business community or world.
• Entrepreneurship is a French world meaning to undertake and focuses on a
business enterprise
• Entrepreneurship can exist in any situation – therefore it is the creation of
values through establishing a business enterprise.
• 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 o Look at the
opportunity as a process of creating, something that did not exist.

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 ✓ 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 at starting of a new business or revitalizing
existing businesses in response to identifying opportunities.
What is an Enterprise?
The term “enterprise” has two common meanings:
i. An enterprise is simply another name for a business. You will often come across the
use of the word when reading about start-ups and other businesses…“Simon Cowell’s
enterprise” or “Michelle set up her successful enterprise after leaving teaching”.
ii. The word enterprise describes the actions of someone who shows some initiative by
taking a risk by setting up, investing in and running a business.
A person who takes the initiative is someone who “makes things happen”. He or she tends to
be decisive.
A business opportunity is identified and the person does something about it. Showing
initiative is about taking decisions and being bold – not everyone is like that! Risk-taking is
slightly
different. In business there is no such thing as a “sure fire bet”.
All business investments carry an element of risk – which is the chance or probability that
things will go wrong. At the worst, the risk of an enterprise might mean the person making
the investment loses all his/her money or becomes personally liable for the debts of the
business.
The trick is to take calculated risks, and to ensure that the likely returns from taking a risk are
enough to make the gamble worthwhile. Someone who shows enterprise is an “entrepreneur”.
A business enterprise can also be looked as at:
Any type of operation that is involved in providing goods or services with the anticipated
outcome of earning a profit. Its broad nature allows the term
to be applied to any type of company or firm that is geared toward generating revenue by
selling products of any type. The Terms Company, firm, and business enterprise are often
used interchangeably.

Contribution of Entrepreneurship Towards National Development

i) Creates employment; Producers, warehousing, transport, insurance e.t.c
Which are basically levels of employment
ii) Facilitates use of local resources through which
▪ local and international transactions are established
▪ production of more goods and services
iii) Rural development which in effect.

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 ✓ Promotes change to the formal sector from informal sector
✓ Equitable development
✓ Reduced rural-urban migrations.
iv) Development of technology through
✓ establishment of research institutions
v) Government revenue
✓ through taxes
✓ from domestic borrowing (TBs)
vi) Facilitating community development through
✓ Establishment of small businesses
✓ Participation in community dev. Projects
vii) Providing a positive role model and facilitating.
✓ Competition between domestic entrepreneurship and imported
✓ Stimulating dev. Of entrepreneurship.
viii) Reducing dependence on imported goods and services.
ix) Stimulates competition through
✓ Quality production methods are adopted
✓ Quality products are produced
✓ Variety goods and services are produced.
x) Facilitated development of the financial sector through which;
✓ Capital accumulation is possible through savings
✓ Loaning is facilitated
✓ Development of the capital market.

Others
✓ Improvement of standard of living
✓ Development of infrastructure by the government in where there are
productive businesses
✓ Increased consumer choice because a variety of goods and services are
provided
✓ Stability of prices
✓ Reduced domination of certain sectors by foreigners
Self-Employment Verses Salaried (Paid) Employment

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Employed (Paid Employment)
Characteristics
i. Under control of another person (employer)
ii. Supply your labor only
iii. Cannot sub-contract the work
iv. Do not supply equipment/materials for the job
v. Receive fixed hourly/weekly/monthly wages
vi. Entitled to sick pay/holiday pay etc.
vii. Employer provides insurance cover
viii. Work set number of hours per week
ix. Employer deducts tax from wages under PAYE
Self-employed Characteristics
i. Own your own business
ii. Are exposed to financial risk
iii. Can subcontract the work
iv. No mutuality of obligation
v. Supply necessary equipment for the job
vi. Cost and agree a price for the job
vii. Not entitled to paid leave
viii. Provide your own insurance cover
ix. Control your own hours in fulfilling job
x. You are registered for Self-Assessment and are required to file your own
returns
Advantages of Self-Employment
i. Being self-employed means that you're your own boss. Being your own
boss means that you'll be in control of all of the decisions affecting your
working life. You'll decide on your business plan, your quality assurance
procedures, your pricing and marketing strategies-everything. You'll have
job security; you can't be fired for doing things your way. As you perform
a variety of tasks related to your work, you'll learn new skills and broaden
your abilities.
ii. If you're working for yourself, chances are you'll be doing work that you
enjoy. You'll get to pick who you'll work for or with, and in most cases
you'll work with your customers or clients directly--no go-betweens
muddying the waters. As a result, you may have days when it hardly feels
as if you're working at all. Such harmony between your working life and

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 the rest of your life is what attracted you to self-employment in the first
place.
iii. You'll even have the flexibility to decide your own hours of operation,
working conditions, and business location. If you're working out of your
home, your start- up costs may be reduced. You'll also experience lower
operating costs; after all, you'll be paying for the rent and utilities anyway.
If the location of your work writer or a consultant), you can live wherever
you want. At any rate, if you work at home, you'll greatly reduce your
daily commuting time and expense.
iv. If all goes well and you're making money, chances are you can make
more than you did working for someone else. And since you're
working for yourself, you may not have to share the proceeds with anyone
else. The fruits of your labor will be all yours, because you own the
vineyard.
v. You get to decide when to spend money to help your business grow. vi.
You can distribute income to family members by hiring them as
employees.
vi. Job satisfaction because one engages in a form of business that suits him
or her.
vii. Leads to improved living standards of the individual and those who
depend on him or her.
Disadvantages of Self-Employment
i. You must be willing to make sacrifices for the sake of the job.
ii. You're going to work long hours, which means that you won't have as
much time as you used to for family or leisure activities.
iii. If the cash flow becomes a trickle, you're going to be the last one to get
paid.
iv. When you're self-employed, particularly if you're starting your own
business, you may have to take on a substantial financial risk. If you need
to raise additional money to get started, you may need a cosigner or
collateral (such as your home) for a loan. Depending on how much or
little work you can line up, you may find that your cash flow varies from
a flood to a trickle. You'll need a cash backup so you can pay your bills
while you're waiting for business to come in or waiting to be paid for
completed work. Since you'll have to pay your own creditors first, this
means that sometimes you may eat cereal instead of steak.
v. Remember that you're not making any money if you're not working. You
don't have any employer benefit package, which means that it's going to be
hard for you to:
✓ go on vacation
✓ take a day off

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 ✓ Or even stay home sick without losing income.
It also means that you'll have to provide your own health insurance and retirement plan.
Remember, too, that you can choose your clients or customers, but you can't control their
expectations or actions. If you don't come through for them, or if you do something that
offends them, you might not get paid for your work.
vi. Social employed people are accorded low social status
vii. Leads to specialization which leads to boredom.No assurance of income.
viii. Limited skills in terms of business management.
Paid Employment Advantages
i. Job Security
ii. Income stability
iii. Predictable work life .
iv. Enjoys certain allowances e.g. house, medical and commuter allowances.
v. Provides room for socialization among employees
vi. Room for growth through promotions
vii. Some organizations provide training facilities to their employees through
seminars and workshops.
viii. Sponsorship opportunities to those who wish to further their studies
Disadvantages
i. You are only paid for your efforts and unlike the entrepreneur; your
brilliant ideas only receive commendation and little or no real monetary
rewards.
ii. You will simply be helping another man create wealth for himself while
you make do with your wages which might be meager
iii. Think of it as a case of not having your cake and eating it. iv. Paid
employment is like Financial Bankruptcy. v. It cages your mind from
soaring to the sky financially.
iv. No opportunity to make money to supplement current earning
v. The organization may not adequately recognize one’s ability
vi. One may not get an opportunity to involve in leisure
vii. No independence-follows orders from the boss
viii. One’s idea may not be easily be implemented by the organization
One may not be accorded adequate and challenging responsibilities that add to their
qualifications

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