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Facilitator: Prof. Ziska Fields (UKZN) TIPED
Facilitator:
Prof. Ziska Fields (UKZN)
TIPED
ContentContent
Session 1: Entrepreneurship (12:00 - 12:30) Fourth Industrial Revolution Critical skills - Entrepreneurship and Creativity Entrepreneurial functions, characteristics and process
Session 2: SMME and Opportunities for growth (15:15 - 17:00) Growth entrepreneurship Defining and recognising opportunities Gap analysis Feasibility Business growth indicators and support for growth
Today…
Smart automation is changing the future of jobs
Low-skill jobs will continue to be automated and the trend will spread to middle-skill jobs.
Mass unemployment and inequality.
Skills are needed to harness the 4th Industrial Revolution benefits in the long-run
Should companies be entrepreneurial?
Entrepreneurship is to the company what speed is to the athlete
Quest for sustainable competitive advantage - lower costs, higher quality and better customer service are not enough
Companies must be faster, more flexible, more aggressive and more innovative - maintain competitive edge.
They must be more entrepreneurial
Corporate entrepreneurship describes entrepreneurial behaviour inside established mid-sized and large organizations
Corporate entrepreneurs remain in the corporate environment rather than starting their own ventures for three main reasons:
• The size of the resource base that they can tap into
• The potential to operate on a fairly significant scope and scale fairly quickly
• The security they enjoy when operating in an existing company1 - 18
Entrepreneurship
What is an intrapreneur?
One who creates a new business in the face of risk and uncertainty
for the purpose of achieving profit and growth
by identifying and exploiting opportunities and
assembling the necessary resources to capitalize on them.
1 - 18
Entrepreneurship
Entrepreneurship is the process ofcreating value by bringing together aunique combination of resources toexploit an opportunity and can occuranywhere.
What is an entrepreneur?
Functions of entrepreneurship
Entrepreneurship involves all the functions, activities, and actions associated with perceiving opportunities and creating organizations to pursue them.
These include:
Market and Customer Research
Service and Product Innovation (features, value)
Team Building
Finding and Managing Resources (people, capital, equipment)
Leadership
Taken together…
Opportunity
recognition
or creation
Creativity
Experience and
related knowledge
Opportunity
evaluation
Market valuation
Opportunity
exploitation
Logistics
“Fit”
analysis
Growth and
profit
Marshal
resources
The Tenets of the Timmons Model1) The Opportunity
Is there a clear customer need for the proposed product or service?
Is the timing right: is the team ready, is the market ready?
Ideas are a dime a dozen – it’s the combination of the factors above and the execution of the business plan that makes an idea an opportunity.
2) The Lead Entrepreneur and Management Team
Experience within the proposed industry can be essential to success.
Investors and other backers prefer to see a track record of driving growth and profits.
An ‘A’ team with a ‘B’ idea is almost always better than the opposite.
3) The Resources
Resources include capital, technology, equipment, and most importantly – people.
The entrepreneur’s mantra is one of Low Overhead, High Productivity, and Controlling but not Owning resources.
The best entrepreneurs are incredibly creative at finding ways to get things done inexpensively and effectively. You can always find ways to do things faster, cheaper, or better!
Bygrave & Zacharakis
Creativity – the ability to develop new ideas and to discover new waysof looking at problems and opportunities; thinking new things (ABILITY)
Source of competitive advantage!!
Innovation – the ability to apply creative solutions to problems or opportunities to enhance or to enrich people’s lives; doing new things
(APPLICATION)
CreativityCreativity – the key to entrepreneurship/ intrapreneurship?
Creativity is not a rare gift
Natural set of behaviours
• Behave in ways that you are creative
• Behave in ways to generate many fresh ideas
• Offer ideas to others
• Apply ideas in your study or work context
• Use divergent and convergent thinking – WHOLE
BRAIN
Creativity
Creativity – the key to entrepreneurship?
This process consists of six stages:
Identifying the opportunity Defining the business concept Assessing the resource requirements Acquiring the necessary resources Implementing and managing the concept Harvesting the venture
Entrepreneurial
processEntrepreneurial process
Connection between an awareness of emerging trends and the personal characteristics of the entrepreneur
Excursion: Dube Trade Port
Make a list of possible business ideas/ opportunities during the excursion
Entrepreneurial
processActivity
Group activity
1. Discuss the business ideas/ opportunities that you identified during the excursion.
2. Read the articles in the file
3. Give feedback on 1 and 2 as a group
An opportunity has four essential qualities
What is an opportunity?
A favourableset of circumstances that creates a need for a new product, service or business.
Two approaches to opportunities: Discovery versus creation
1. Opportunities exist apart from actors
2. “Know, then act”
3. Opportunities exist a priori
4. Differences between individuals lead to exploitation of opportunities
5. Information and knowledge known ex ante
6. “Expert” leadership
1. Opportunities do not exist apart from actors
2. “Act, then know”
3. Opportunities are enacted
4. The enactment process creates blind/myopic variation
5. Information and knowledge known ex post
6. “Charismatic” leadership
Environmental Trends
Suggesting Business or
Product Opportunity Gaps
Observing trends
Solving a Problem
Opportunities = noticing a problem and finding a way to solve it
Pinpointed through:
• observing trends or
• more simple means, such as intuition, coincidence, or change
Example - is finding alternatives to fossil fuels
Solving problems
Gaps in the Marketplace
o A gap = when a product or service is needed by a specific group of people but doesn’t represent a large enough market to be of interest to mainstream retailers or manufacturers
o Product gaps = represent potentially viable business opportunities
• In 2000 Tish Cirovolv realized there were no guitars on the market made specifically for women - Daisy Rock Guitars
Finding gaps in the Marketplace
1. Examine trends
2. Interview successful local entrepreneurs
3. Discuss ideas with family members
4. Look for created opportunities
5. Brainstorming
6. Look at daily frustrations
7. Examine patent files
Ways to identify more gaps
GapAnalysisBusiness
IdeaCategory
Our
Resources
Resources
RequiredDeficit
Printing Shop
High-quality,
commercial
Finances
Time
Nonfinancial
Risk
Competitors
Flower Shop
Family history
and support
Finances
Time
Nonfinancial
Risk
Competitors
Restaurant
Fast-food
cross with
service
Finances
Time
Nonfinancial
Risk
Competitors
GapAnalysisBusiness
IdeaCategory
Our
Resources
Resources
RequiredDeficit
Printing Shop
High-quality,
commercial
Finances
Time
Nonfinancial
Risk
Competitors
Savings / loan
Full time
Lack skills
Moderate
Moderate
Equipment
Full day
Expertise
Quick / cheap
Ads and sales
Medium
Low
High
Medium
High
Flower Shop
Family history
and support
Finances
Time
Nonfinancial
Risk
Competitors
Savings/family
Full time
Family skills
Low
Strong
Equipment
Full time
Design skills
Knowledge
differentiation
High
Low
Medium
Low
Low
Restaurant
Fast-food
cross with
service
Finances
Time
Nonfinancial
Risk
Competitors
Savings / loan
Full time
Lack skills
Heavy
Numerous
Equipment
Full time
Food skills
Unproven
Newness
High
High
High
High
High
Is not the same as a business plan - investigative tool
Is this a good business idea?
Serves as a filter, identifies ideas/ opportunities that lack the potentialfor building a successful business before an entrepreneur commits
Pre-Feasibility Study - Help sort our alternatives and determine if a
full-blown feasibility study is warranted
Feasibility Study
A feasibility study of an idea is conducted at three levels
o Operational Feasibility
• “Will it work?”
o Technical Feasibility
• “Can it be built?”
o Economic Feasibility
• “Will it make economic sense if it works and is built?”
• “ Will it generate PROFITS?”
Feasibility Study
A feasible business venture is one where the business will
o generate adequate cash flow and profits
o withstand the risks it will encounter
o remain viable in the long-term
o meet the goals of the founders
Feasibility Study
FINANCIAL – increase in turnover, costs, investments,
profits, assets, value
STRATEGIC – changes due to mergers or acquisitions,
exploiting new markets, obtaining a competitive
advantage
STRUCTURAL – changes in managerial roles, reporting
relationships, communication links
ORGANISATIONAL – changes in processes, org culture,
leadership style
IMAGE – changes due to becoming more formal, moving to
new premises, redecorating premises
Business Growth Indicators
Attitude and motivation - core to success – giving up is not an answer
Positioning is a strategic issue– distribution, marketing and
production
Sound financial and business model - selling price, cost, volume and
fixed expenses
Sales volume and market share – profit making
Positive Cash flow - makes venture desirable and keeps bank
manager happy
Core business factors that drive success
Supporting SMME Growth (some ideas) Locking in opportunities for growth and collaborating with market players to support
current SMME’s for new projects
Develop SMME’s for new markets/trends by skilling for the future (e.g. e-gov services etc.)
Recognizing excellence Grow SMME’s by enabling new entrants
Introduce new opportunities for growth
Reduce barriers to entry
SMME’s Help Desk to provide instant assistance
Mentorship and training
Platform for SMME’s to participate in research with academic institution
Development of new technological solutions to address South African related socio-economic challenges in line with Government priorities
