INTRODUCTION TO ENTREPRENEURSHIP

There is a high rate of unemployment in Uganda especially among the youth; therefore, entrepreneurship is seen as the best option to equip you with the hands on skills, knowledge and competences required for starting and operating a successful business.

Entrepreneurship will also enable you become a job maker as you exploit and utilize the abundant resources in the environment through creativity and innovation. The 21st century requires people with critical skills that are necessary for gainful production.

Defining an entrepreneur.

There is no single definition that explains the meaning of entrepreneur. Some scholars have argued that a single universally accepted definition of an entrepreneur is not important because entrepreneurs by nature strive for change, thus creating a large diversity of characters that end up being referred to as entrepreneurs.

Richard Cantillion a French economist was the first to use the word entrepreneur in the form it is used to day. He was borrowing the French word “entreprendre”, which literally means “to undertake” it also has another connotation that means “an in between taker –some one who gets between a supplier and the market and takes a profit by facilitating the exchange process.” He describes an entrepreneur as “a risk taker” who bought at a certain prices and sold at uncertain prices.

According to Jean Baptist, an entrepreneur is the one who possess certain art and skills of creating a new economic enterprise in society. Entrepreneurs thus influence society by creating new enterprises and at the same time are influenced by societies to recognize needs.

DEFINING ENTREPRENEURSHIP.

The definitions of entrepreneurship are varied and not very useful in their diversity.

The attempts to over come this limitation, some scholars have moved from trying to define entrepreneurs to describing what entrepreneurs do. What entrepreneurs do is called entrepreneurship and people who engage in entrepreneurship are called entrepreneurs. The consensus among researchers is that entrepreneurship is not a personality but a process.

Holt H David (2001). Entrepreneurship seeks to reform or revolutionalize the pattern of production by exploiting untried technological possibility for producing a new commodity or producing an old one in a new outlet for products. Entrepreneurship, as defined essentially consists in doing things that are not generally done in the ordinary course of business routine.

Entrepreneurship is a process of organizing all the factors of production and start up a business with the aim of making profits.

Entrepreneurship refers to the spirit of taking a risk to set up a business or an enterprise to produce and sell goods or services in order to meet the customers’ needs with an aim of earning profits.

Below are examples of entrepreneurship:

Entrepreneurship involves doing new things or doing those things already being done but in a new and better way. Studying Entrepreneurship will enable you to develop a positive attitude towards work and business.

Purpose of Entrepreneurship Education

Meaning of Entrepreneurship Education

Entrepreneurship education is the process of imparting knowledge, skills and values in the learners to identify opportunities around them and undertake business activities with a view of earning profits.

The following are some of the purposes for studying Entrepreneurship Education:

1. To provide learners with knowledge and skills needed to succeed in the business environment.
2. To enable learners to identify business opportunities in which they can invest capital and operate successfully.
3. To enable learners to acquire practical skills which can make them job creators rather than being job seekers.
4. To emphasize and help students to develop their imaginative and risk taking abilities in business.
5. To enable instructors teach the elements of Entrepreneurship that have been considered unteachable for long and hence break the myth of entrepreneurs being born and not made.
6. To create a sense of creativity and innovativeness among students
7. To equip students with necessary skills that can enable them to manage and handle their finances effectively
8. To encourage students to use the available resource in their community, this helps to avoid idle resources

An entrepreneur. This is a person who takes up a risk to produce or sell products to meet the customer’s needs with the hope of earning profits. This is a person who produces new or better goods or services with a view of selling them to customers and making profit. An entrepreneur commits his/her resources such as money, time, land, machines and labour to start and operate a business venture.

PERSONAL ENTREPRENEURIAL CHARACTERISTICS

This refers to the qualities/ attributes which an entrepreneur possess in order to be successful in his or her day today business operations.

• This is the ability to make decisions on your own or not depending on others for ideas, solutions and opinions.
• Time consciousness. This means keeping time and meeting desired targets on time
• Eager to win.
• This ability to think and come up with ways of doing things differently.
• Ability to improve on existing products to make them better
• This means taking a lead in solving problems and doing things
• Goal setting this refers to the ability of an entrepreneur to set clear goals and objectives
• Information seeking. this is  having  the  rage  to  look  for  the  required information in order to make informed decisions
• Systematic planning and monitoring. this is the ability to develop plans that will be used in implementing, monitoring and evaluating the progress of the business
• Opportunity seeking. This is where an entrepreneur sees and acts on new business opportunities even where other people see nothing but problems.
• Commitment to work contract . Entrepreneurs should be committed to their work. this is because customers expect them to honor their commitments e.g. a taxi driver has to take his /her passengers to the final destination
• Persistence. This is where an entrepreneur is determined to have a job at all costs i.e. not giving up easily.
• Risk taking. Entrepreneurs are people who level taking manageable risks, however, before they commit their resources, they assess the risks that are associated with the business opportunity
• Efficiency and quality; this is what enables an entrepreneur to do things that meet or go beyond existing standards or improve on performance.
• Persuasion; this is the ability to make the public aware of the goods and services produced and also encouraging them to buy. This is to help expand the market for the goods and services.
• Networking; this is ability to link convince and influence other individual and agencies in order to maintain business contacts at a high level
• Self-confidence; this refers to having a strong belief in oneself and the ability to complete a difficult task to overcome challenges
• Entrepreneurial self-awareness; This aims at enabling a person to become aware of his /her weaknesses and strength, achievements, motivation, accentuation, fears and aspirations

Activity

Study the explanations in the table below, copy it in your exercise book and write a suitable quality of an entrepreneur corresponding to each.

Entrepreneurial resources

These are assets both tangible and intangible that are mobilized by entrepreneurs in the building process of a business, organizations or other initiative

• Skills or human skills (labour). This is the aggregate of all human physical and mental efforts used in creation of goods and services. Labour is a primary factors of production, the size of a nations labour force is determined by the size of its adult population.
• Time of the start of new business.
• Information regarding the new business. Information is valuable because it can affect behavior or an outcome. For example if a manager is told his/her company’s net profit decrease in the past month, he/she may use this information as a reason to cut financial spending for the nest month.
• Is a wealth in the form of money or assets, taken as a sign of financial strength of an individual, organisation and assumed to be available for development or investment.
• Materials / inputs. Factors of production are inputs to the production process. Finished goods are the output. The inputs determine the quality of human activity.
• Equipment and technology. The purposeful application of information in design, production and utilization of goods and services and in the organisation of human activity.
• Natural resources. These exist naturally and may be very influential in all the determining of business survival at all costs. They are considered as the most critical and vital needs in the business organisation.

GENERAL TYPES OF ENTREPRENEURS IN UGANDA

• Pull entrepreneurs. Are those who are lured by their new venture idea and initiate venture activity because of the attractiveness of the business idea and its personal implication.

• Push entrepreneurs. Are those whose dissatisfaction with their current position unrelated to their entrepreneurial characteristics, pushes them to start a venture.
• Innovative entrepreneurs. Assemble a large variety of information and of a range of factors experimentally to produce new possibilities in terms of market, techniques or products. Countries with  a very under developed industrial base hardly produce this type of entrepreneur, because of lack of the necessary infrastructure
• Imitative entrepreneurs. They imitate and adopt the technology and techniques innovated by others. They are particularly important in underdeveloped countries although not highly regarded in more developed economies. However imitative entrepreneurs also need to be creative in order to modify innovations to suit their special conditions
• Opportunistic entrepreneurs. They constantly look for and exploit many opportunities because of their wide skills and knowledge accumulated from a wider educational back ground, experience or exposure.  They start by exploiting a series of, often varied, opportunities as they grow. Their ambitions involve building large organizations are not afraid of borrowing to achieve this growth.
• Visionary entrepreneurs. They have almost similar characteristics to the opportunistic entrepreneurs however, while opportunistic entrepreneurs pursue many business opportunities, the visionary entrepreneurs concentrate on the un wavering pursuit of a single powerful opportunity.
• Craft man entrepreneur. They own the business in which they operate, but tend to restrict their business to their individual skills and experiences usually accumulated from limited education and exposure. They have minimal growth ambitions, keeping their enterprises small as a means of maintaining control.
• Drone entrepreneurs. They are entrepreneurs that will not change under any circumstances, slowly but surely, these entrepreneurs will be forced to close.
• Fabian. Are also reluctantly to change, but are sometimes forced by circumstances to change. They respond very slowly to changes in the market, and this affects their growth and competitiveness.
• Solo entrepreneurs those who got their ideas from social networks, and develop them using the networks (network entrepreneurs) are found
• Co-preneurs. Couples work together as co-owners of an enterprise. Although some scholar consider business co-ownership a recipe for divorce, some researchers have described it as an exciting proposition that involves nurturing and growing a business with someone you love – much like raising a child. It is important, however, to first build a successful relationship before launching the enterprise
• Individual and institutional entrepreneurs. Most startup firms are dominated by entrepreneurs acting individually or coming together individually, however as the business grows and become more complex, it becomes imperative to develop the entrepreneurial skills through a corporate body
• Part time entrepreneurs. Start business on a part time basis is a popular gateway to entrepreneurship. That allows one to get the best world by getting the benefits of entrepreneurship and the security of a regular salary.
• Corporate cast offs and drop outs. Are produced by retrenched and retiring employees and have become an important source of entrepreneurial activity.

An enterprising person

An enterprising person is someone who takes on imaginative and risky projects. He is ambitious and energetic.

Characteristics of enterprising persons

1. He keeps his eyes open and mind active.
2. He is confident enough to take on any risky venture.
3. He is disciplined enough to seize opportunities that present themselves as being profitable.
4. He has positive attitude in whatever he does.
5. He always sees the future not present.
6. He always finds a way to take advantage of a situation and it is not burdened by it.
7. They are not lazy i.e. they do not wait for opportunities to come to them instead they go after the opportunities.
8. They always find a way to keep themselves actively working towards their goals.

Therefore one needs creativity to see what is out and to shape it to one’s advantage and also to look at the world differently and take different approach.

ROLES OF AN ENTREPRENEUR IN DEVELOPMENT.

• Helps in creation of employment opportunities through the establishment of business enterprises that need people to work in the different departments e.g. accountants, managers, etc.
• Creation of wealth by mobilizing capital and turning it into business thus adding value to the growth of domestic products.
• They are a source of government revenue by paying taxes.
• They help in the development and provision of infrastructure e.g. good roads, telecommunication services, etc.
• They help in the provision of goods and services through the establishment of industries.
• They help in the promotion of export trade by producing goods and services in large quantities that could not all be consumes locally therefore exporting the surplus.
• They provide linkages between sectors ie using raw materials from the agricultural sector and the agricultural sector proving market to the industrial sector.

CAUSES OF EARLY FAILURE OF ENTREPRENEURIAL BUSINESSES IN UGANDA

• Death of an entrepreneur
• Poor timing
• Poor management or poor managerial skills
• Heavy taxes that are charged by the government.
• Some people start business without a business plan or total lack of business planning
• Lack of sufficient capital
• Competition from existing companies especially with globalization
• Uncertainties like weather, wars which at times destroys the entrepreneurs’ businesses.
• Inadequate market
• Poor financial management, planning e.g some business don’t keep financial records, over investment in fixed assets, poor inventory control, poor financial control
• Government policies many have negative impact on economy e.g increased taxes on second hand clothes
• Poor location of business
• Arrogance of entrepreneurs with their new products and don’t accept new bright ideas

Measures have been under taken to boost entrepreneurship in Uganda

• Carrying out adequate market research
• setting up credit societies, reducing interest rate and increasing loan repayment periods
• training Capable local advisers or making them available to handle issues like project viability
• providing Technical education and support
• Referring to successful role models constantly to solved social stigma
• using Market contacts and updates
• setting up local companies for research and come up with viable ventures
• ensuring that the nation is politically stable to encourage investment
• improving on the infrastructures to ease flexibility of flow of goods and services

Factors promoting / facilitating entrepreneurship in Uganda.

• Presence of market ie availability of customers and consumers to buy the products.
• Favourable government policies of rewarding entrepreneurial effort e.g tax holidays by the government that promotes the enterprising spirit.
• Availability of financial institutions that provide the capital required in form of borrowed funds to form and run businesses.
• favourable political climate and presence of security in the country
• Existence of good transport networks that ease movement of both resources and goods to the market.
• Government support e.g through the Entandikwa and Bonnabagagaware schemes that provide initial capital to begin businesses.
• Possession of entrepreneurship skills like creativity, risk taking, endurance, flexibility etc.
• Mobility and exposure which offers the entrepreneurs the chance to develop new ideas which shape creativity that saves entrepreneurship.
• Command of business and existence of technical skills in marketing, finance, management etc which helps to effectively exploit the full potential of business.
• presence of role models in the community
• presence of resources like raw materials, labour and capital

Is an entrepreneur a manager?

To be able to understand whether an entrepreneur is a manager or not, it is very important if one understands the role, the functions of a manager and that of an entrepreneur.

Who is a manager?

A manager is a person who directs and controls the affairs of the business so as to ensure that the business` set targets are achieved. Therefore a manager may not be an entrepreneur as much as entrepreneurs are managers. Manager carries out the following functions.

FUNCTIONS OF A MANAGER

1. Planning, this involves setting of goals and objectives and determining the ways in which they are to be achieved.
2. Organizing, this involves the identification of what activities are to be done, grouping of these activities into department and delegating them to particular individuals.
3. Staffing, this refers to the process recruiting, training and developing employees who actually carry out the tasks of the business.
4. Coordination, Managers always coordinate different activities within an enterprise to ensure that every activity gets the necessary support as required and performed as expected.
5. Leading,This involves guiding the employees about procedures and work methods in the enterprise.
6. Controlling and maintaining, Ensuring that every activity in an enterprise is done as expected so as to produce desired results as per the time set.
7. Motivation,This refers to the process of encouraging employees to give in their best towards the achievements of the desired targets.
8. Communication, This involves passing over information from one person to another so as to have a moving organization.
9. Budgeting, This refers to the process of accounting for resources received and estimating what is needed in the business at a given period of time.
10. Evaluation, This involves making analysis of the performance of the business against the set targets.

Functions of an entrepreneur

• Identifying his /her needs, analyses them in relation to what he /she would wish to be in future (goals in life)
• Scanning the environment to identify business opportunities that would help him/her to set goals in life.
• Conducting market survey to determine the feasibility and viability of the identified business opportunities in order to come up with the best one.
• Calculating the risks involved in doing the selected business to find out if they can easily managed or else to find an alternative that can be easily managed.
• Mobilizing the necessary resources needed to start and operate the selected business.
• Setting up an organisation or arrangement through which the business will be operated.
• Monitoring the operations and performance regularly to find out whether it is performing towards achieving the set goals and objectives or not.
• Carrying out innovation ie doing things in business or doing of things that are already being done but in a unique way, like launching a new product, creation of new markets, discovering new raw materials, new technology etc
• Carrying out decision making regarding the setting the business goals, acquisition of the necessary resources, marketing strategy decisions etc.
• Management, which involves the business operations, day to-day activities, direction of men, machinery, materials etc.
• He/She is a role mentor, an entrepreneur mentors other individuals as he takes on business with a lot of confidence

REWARDS / BENEFITS FOR BEING AN ENTREPRENEUR

• It leads to feeling of freedom and independence e.g. in terms of decision making.
• It leads to increased income. People in the business society earn income which in turn improves their standards of living.
• It encourages the development of self-confidence due to the high levels of independence that exists i.e. the owner is the leader of him/herself.
• It enables one to invest his/her resources and skills fully and productivity. This leads to self-employment.
• It allows one to become creative and innovative as he/she can come up with the new ideas and implement them for the success for his/her business.
• It leads to respect and recognition by the society.
• It ensures maximum job security.

CHALLENGES/COSTS/DISADVANTAGES OF BEING AN ENTREPRENEUR

• It makes an entrepreneur work for long and irregular hours with a lot of hard work so as to succeed. This leads to fatigue and exhaustion.
• It leads to uncertainty of the income i.e. business is associated with both profits and losses.
• It is associated with low life style as a result of working for long and irregular hours especially at the beginning.
• It is associated with a lot of risks. The entrepreneurs face all the risks of his business alone.
• It ensures personal responsibility for the business failures i.e. in case of failure of the business. The entrepreneur stands personally liable for such failure.

profits as a reward to an entrepreneur

An entrepreneur is rewarded by profits or loses to appreciate him or her for having taken the risk.

A profit in business term refers to the difference between the sales and the cost of sales.

Types of profits

• Net profit,This refers to the net earnings to an entrepreneur after all operating expenses have been met.
• Normal profits,These are earnings for an entrepreneur which is just enough to cater for the expenses and not capable of attracting other entrepreneur to join the business or the industry.

THE ROLE OF PROFITS TO AN ENTREPRENEUR

1. It is a source of government tax revenue i.e. entrepreneurs pay taxes such as corporate tax, company tax etc. to government.
2. It is a reward to an entrepreneur for risks and uncertainties i.e. the time taken while waiting for the business activities to yield income.
3. It’s used as an indicator for resource allocation i.e. an entrepreneur allocates more resources to activities where he/she drives a lot of profits.
4. They are used by an entrepreneur to expand or improve on the existing enterprise i.e. they are used to purchase items that are needed in the business.
5. It is a source of reward to other factors of production in an enterprise e.g. out of profits an entrepreneur is able to pay wages and salaries pay interest on capital etc.
6. It is used to motivate workers in an enterprise. It is where the entrepreneur drives income to increase workers’ salaries, improve their welfare of assistance etc.

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