Faizan Khalid

(M.A) Management- University of Nottingham

Lahore School of Economics (BBA) Honors – Lahore School of Economics

BBA IV
Spring 2019
Monday, 14th January 2019 – Friday, 18th May 2019
- Entrepreneurship & SME Management - Human Resource Management
- Principles of Marketing - Business Policy
- Promotions & Brand Management - Industrial Marketing
- Consumer Behavior - OB & HRM
- Marketing Management
Course Name: Entrepreneurship & SME Instructor Name: Faizan Khalid
- Export Marketing
Management - Retail Management

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Course Instructor Core Reading List

• Bruce R. Barringer and R. Duane Ireland

Faizan Khalid “Entrepreneurship Successfully launching new ventures”
Head of Lahore School Incubation Lab
• Donald F. Kuratho and Richard M. Hodgetts
faizankhalid11@gmail.com “Entrepreneurship in the New Millenium”

• Thomas W. Zimmerer and Norman M, Scarborough

Office: Block FH - 9
“Essentials of Entrepreneurship and Small Business
Management” 5th Ed.

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Final Assessment Criteria Rules

• You will not be allowed to attend the class if you come to the class after 10
minutes of the class starting time.
• Final Exam 30%
• Please refrain from leaving the class or coming back during the lecture
• Mid Term 25% session or discussion session

• Absolutely no excuses will be tolerated for assignment submissions or quiz.

• Business Plan 20%
• Standard rules will be applied for everyone in the class.
• Quizzes 10%
• NAME PLATES are absolute necessary from Week 2 1st Class.
• Example: Bilal Ahmed - Bilal A.
• Assignments & Presentation 10%
• We start deducting 1% every time you miss a class after 5 classes. Your
name can be struck off for missing more than 8 classes
• Class Participation 5%
• All course material discussed in class is part of syllabus for Finals e.g.
• Articles, Case Study & other simulation exercises.

• Final exam consists of pre mid + post mid.

• A grade is at 85% & subsequent grades after every 5%. 6

What is Entrepreneurship?
What is a VC?
• Academic Definition (Stevenson & Jarillo)
– Entrepreneurship is the process by which individuals pursue
opportunities without regard to resources they currently
control.

• Venture Capitalist (Fred Wilson)

– Entrepreneurship is the art of turning an idea into a business.

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 Corporate Entrepreneurship

– Is the conceptualization of
entrepreneurship at the firm level.

– All firms fall along a conceptual

continuum that ranges from highly
conservative to highly entrepreneurial.

– The position of a firm on this

continuum is referred to as its
entrepreneurial intensity.

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 Corporate Entrepreneurship Why Become an Entrepreneur?

Entrepreneurial Firms Conservative Firms

• Proactive • Take a more “wait and see”

posture Desire to be their own boss
• Innovative
• Less innovative
• Risk taking
• Risk averse Desire to pursue their
own ideas

Financial rewards

Characteristics of Successful Entrepreneurs Characteristics of Successful Entrepreneurs

Four Primary Characteristics

• Passion for the Business
– This passion typically stems from the
entrepreneur’s belief that the business will
positively influence people’s lives.

• Product/Customer Focus
– An entrepreneur’s keen focus on products and
customers typically stems from the fact that
most entrepreneurs are, at heart, craftspeople.

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 Characteristics of Successful Entrepreneurs Facts of Successful Entrepreneurs

• Tenacity Despite Failure • Entrepreneurs Are Born, Not Made

– Because entrepreneurs are typically trying
something new, the failure rate is naturally high.
• Entrepreneurs Are Gamblers
– A defining characteristic for successful
entrepreneurs is their ability to persevere through
setbacks and failures • Entrepreneurs Are Motivated Primarily by Money

• Execution Intelligence
• Entrepreneurs Should Be Young and Energetic
– The ability to fashion a solid business idea into a
viable business is a key characteristic of
successful entrepreneurs • Entrepreneurs love the spotlight

Myths about Entrepreneurship

• Entrepreneurs Are Born, Not Made

• Entrepreneurs Are Gamblers

• Entrepreneurs Are Motivated Primarily by Money

• Entrepreneurs Should Be Young and Energetic

• Entrepreneurs love the spotlight

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 Common Myths About Entrepreneurs Common Myths About Entrepreneurs

Although no one is “born” to be an entrepreneur, there are common traits and

• Myth 1: Entrepreneurs Are Born, Not Made characteristics of successful entrepreneurs

• A moderate risk taker • Optimistic disposition

– Mistaken belief that some people are
genetically predisposed to be • A networker • Persuasive
entrepreneurs. • Achievement motivated • Promoter
• Alert to opportunities • Resource assembler/leverager
– The consensus of many studies is that no
one is “born” to be an entrepreneur; • Creative • Self-confident
everyone has the potential to become one.
• Decisive • Self-starter
• Energetic • Tenacious
– Whether someone does or doesn’t become
an entrepreneur is a function of their • Has a strong work ethic • Tolerant of ambiguity
environment, life experiences, and
• Lengthy attention span • Visionary
personal choices.

Common Myths About Entrepreneurs Common Myths About Entrepreneurs

• Myth 2: Entrepreneurs Are Gamblers • Myth 3: Entrepreneurs Are Motivated Primarily by Money

– Most entrepreneurs are moderate risk takers. – While it is naïve to think that entrepreneurs don’t seek financial
– The idea that entrepreneurs are gamblers originates from two sources: rewards, money is rarely the reason entrepreneurs start new firms.
• Entrepreneurs typically have jobs that are less structured, and so – In fact, some entrepreneurs warn that the pursuit of money can be
they face a more uncertain set of possibilities than people in distracting
traditional jobs.
• Many entrepreneurs have a strong need to achieve and set
challenging goals, a behavior that is often equated with risk taking.

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 Common Myths About Entrepreneurs Common Myths About Entrepreneurs

• Myth 4: Entrepreneurs Should Be Young and • Myth 5: Entrepreneurs love the spotlight
Energetic
– Some entrepreneurs are flamboyant ; however, the vast majority of
– Entrepreneurial activity is fairly easily spread out over age them do not attract public attention
ranges.
– While it is important to be energetic, investors often cite
the strength of the entrepreneur as their most important
criteria in making investment decisions.
• What makes an entrepreneur “strong” in the eyes of an investor is
experience, maturity, a solid reputation, and a track record of
success.
• These criteria favor older rather than younger entrepreneurs.

Types of Start-Up Firms Changing Demographics of Entrepreneurs

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Women Entrepreneurs

• There are a growing number of organizations that support and

advocate for women-owned businesses.

• Trend is changing from healthcare and professional services to

construction (30% increase), agricultural services (24%),
transportation (20%) and Communications (20%)

Senior Entrepreneurs

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 Changing Demographics of Entrepreneurs Economic Impact of Entrepreneurial Firms
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Young Entrepreneurs • Innovation

– Is the process of creating something new, which is central to
• Interest among young people in entrepreneurial careers the entrepreneurial process.
is high. – Several studies have found that small businesses outperform
• According to a Harris Interactive survey, 40% of people eight
their larger counterparts in terms of obtaining patents.
to 21 years old said they’d like to start their own business
someday.
• Job Creation
• A total of 59% of the 8- to 21- year olds said they know – Small businesses are the creators of most new jobs and
employ half of all private sector employees.
someone who has started their own business.
– According to a Kauffman Foundation survey, 92% of
respondents say entrepreneurs are critically important to job
creation.

Entrepreneurial Firms’ Impact on Society Small and Medium Enterprises (SME)

and Larger Firms
• Impact on Society • Employment size: Up to 250
– The innovations of entrepreneurial firms have a dramatic
impact on society.
• Paid up Capital: Up to Rs. 25 million
– Think of all the new products and services that make our
lives easier, enhance our productivity at work, improve our
health, and entertain us in new ways. • Annual Sales: Up to Rs. 250 million
– Adverse effects such as use of bar code scanners and bio
engineering e.g. VeriChip
• Impact on Larger Firms • Source: SMEDA

– Many entrepreneurial firms have built their entire business

models around producing products and services that help
larger firms become more efficient and effectivee e.g
TraceRegister Inc. helping Walmart

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 Significance of SME’s Significance of SME’s
•Constitute nearly XX% of enterprises in Pakistan •Constitute nearly 90% of enterprises in Pakistan

•Employ XX% of the non-agricultural labour force •Employ 80% of the non-agricultural labour force

•Share in annual GDP is XX% approximately •Share in annual GDP is 40% approximately

Significance of SME’s Problems faced by Pakistani SME Sector

• Assist in regional and local development since SMEs accelerate rural • Pakistan 's economy has amazing potential for development
industrialization by linking it with the more organized urban sector. but sadly, we haven't been able to derive optimal benefits.
• Help achieve fair and equitable distribution of wealth by regional
dispersion of economic activities. • High rate of failures, owing to economic slumps, institutional
malpractices, political motives and damaging activities of
• Contribute significantly to export revenues because of the low-cost labour labour unions.
intensive nature of its products.

• Have a positive effect on the trade balance since SMEs generally use
• Formal lending institutions are faced with huge infected
indigenous raw materials. portfolios

• Assist in fostering a self-help and entrepreneurial culture by bringing • Insufficient and low quality production to meet the demands of
together skills and capital through various lending and skill enhancement local and international markets, deficit in balance of payments
schemes.
and ever rising unemployment, etc.