FSPQ 0012

CO-CURRICULUM
(ENTREPRENEURSHIP)
WEEK 1 LECTURE 1
TOPIC 1: OVERVIEW OF
ENTREPRENEURSHIP

Prepared by:
Siti Nur Shahida, AFHEA
PPI, SPACE-UTM
 LEARNING OBJECTIVES

• To describe the evolution and concepts of

entrepreneurship
• To discuss the importance of entrepreneurship
• To explain the development of entrepreneurship in
Malaysia
 INTRODUCTION
The study of entrepreneurship has emerged to be
very important in countries that practice free market
economy.

In most of these countries, entrepreneurial

development is an important agenda in nation
building.

Entrepreneurial activities are pillars of a nation’s

economic progress, growth and prosperity.

A society that has a great entrepreneurial culture will

be more productive, competitive and prosperous.

Successful entrepreneurs are rewarded with profit,

and many have become very rich when their small
businesses grow into big corporations.
 WHAT IS ENTREPRENEURSHIP?

Academic Definition Academic Definition Venture Capitalist

(Ariffin & Hamidon) (Stevenson & Jarillo) (Fred Wilson)
• Entrepreneurship is • Entrepreneurship is • Entrepreneurship is
the activity of the process by the art of turning an
setting up a which individuals idea into a
business or pursue business.
businesses and opportunities
taking on financial without regard to
risks in the hope of resources they
making profit. currently control.
BASIC ASPECTS OF ENTREPRENEURSHIP

Involves creating
something new of
value.
Requires devotion of
necessary time and
effort.
Assumes risks around
financial, psychological
and social areas.

Involves the rewards of

independence,
personal satisfaction
and monetary (a sign of
success).
THE EVOLUTION OF ENTREPRENEURSHIP

The Earliest The Middle The 17th

Period Ages Century

The 19th and

The 18th
20th 21st Century
Century
Centuries
 THE EARLIEST PERIOD

Once the
merchant
As a go-between, The merchant-
adventurer had
Marco Polo, who Marco Polo adventurer took
successfully sold
attempted to would sign a The capitalist the active role in
the goods, the
establish trade contract with a was a passive trading, bearing
profits would be
routes to the Far financier risk bearer. all the physical
divided between
East. (capitalist) to sell and emotional
the capitalist and
his goods. risks.
the merchant-
adventurer.
 THE MIDDLE AGES

In this century, the term This person merely The entrepreneur in this
entrepreneur was used managed the projects age was the person
to describe both an using the resources who was in charge of
actor and a person who provided by the great architectural
was in charge of and government. In this works, such as public
managed large case, he did not buildings and
production projects. assume any risks. cathedrals.
 THE 17TH CENTURY

The entrepreneur is regarded as

person who entered into a
In this century, there was a contractual arrangement with the
connection between risk and government to perform a service
entrepreneurship. or to supply stipulated products.
The contract price was fixed.
Therefore, any profits or losses
were the entrepreneur’s.

The entrepreneurs as observed

Richard Cantillon developed one
by Richard were merchants,
of the early theories of the
farmers, craftsmen and other
entrepreneur. He is regarded as
sole proprietors. They bought at
the founder of the term
a certain price and sold at an
“entrepreneur”. He viewed the
uncertain price, therefore
entrepreneur as a risk taker.
operating at a risk.
 THE 18TH CENTURY

In this century, the entrepreneur This happened because of the

was differentiated from the industrialisation that occurred
capital provider. throughout the world.

Both Eli Whitney and Thomas

Many of the inventions Edison were developing new
developed during this time were technologies and were unable
reactions to the changing world. to finance their inventions. Eli
For example, the case with the Whitney and Thomas Edison
inventions of Eli Whitney and were capital users
Thomas Edison. (entrepreneurs), not providers
(venture capitalists).
THE 19TH AND 20TH CENTURIES

In the late 19th and 20th centuries, entrepreneurs

were not frequently distinguished from managers.

In the middle of the 20th century, the notion of an

entrepreneur as an innovator was established.

The function of the entrepreneur is to reform or

revolutionise the pattern of production by exploiting
an invention or, more generally, an untried
technological possibility for producing a new
commodity or producing an old one in a new way.
 THE 21ST CENTURY

Many of them have used

In this century, entrepreneurs innovation and creativity to
are considered as the heroes build multimillion-dollar
of free enterprise. enterprises from fledgling
businesses.

Entrepreneurs have created Today, many people regard

new products and services entrepreneurship as
and have assumed the risks “pioneership” on the frontiers
associated with these of business (Kuratko &
ventures. Hodgetts, 2004).
 WHO IS AN ENTREPRENEUR?

• The term “entrepreneur” originates from the French word

“entreprende” which means “to do something”
(Swedberg, 2000) or “to undertake” the risk of new
ventures (Kuratko & Hodgetts, 2001).
• Someone who creates and runs a business.
– When an entrepreneur starts a new business, risk is
involved. Risk is the chance of losing something.
– Entrepreneurs work for themselves hence they risk
more than employees.
• Entrepreneurs assemble and then integrate all the
resources needed –the money, the people, the business
model, the strategy—needed to transform an invention
or an idea into a viable business.
 WHO IS AN ENTREPRENEUR? (CONT.)

RICHARD CANTILLON
(1755) JEAN-BAPTISTE SAY JOSEPH SCHUMPETER
Entrepreneur as economic ADAM SMITH (1900)
(1776) (1803)
agents who have the Entrepreneur as a person Entrepreneur as an
foresight and willingness to Entrepreneur as a person innovator who introduced
who acts as an agent in who shifts resources from
take advantage of realised transforming demand into an area of low productivity new innovation to replace
and unrealised profit supply. old products and old ways
to high productivity.
opportunities through of doing things.
buying and selling activity.
WHY BECOME AN ENTREPRENEUR?
Desire to be their own boss

Desire to pursue their own ideas

Financial rewards

Control over time

Fulfillment

Creation/ Ownership

Control over compensation

Control over working conditions

BENEFITS AND COSTS OF BECOMING AN
ENTREPRENEUR

BENEFITS COSTS

Independence Business failure

Satisfaction Obstacles
Do what you enjoy and to have fun Loneliness
at it Financial insecurity: Risk of losing
Financial reward: Reap impressive entire investment
profit Long hours/hard work
Self-esteem Strain on personal relationships
Contribution to society and be Uncertainty of income
recognized for efforts
Low quality of life until the business
Create your own destiny gets established
Make a difference High levels of stress
Reach full potential Complete responsibility
Discouragement
 ACTIVITY 1: ENTREPRENEURS IN HISTORY
(10 MINS)
• These are some well-known entrepreneurs who changed the world.
For what is each entrepreneur most famous?
 Thomas Edison
 Henry Ford
 Coco Chanel
 Steve Jobs
 Oprah Winfrey
 Walt Disney
 Estee Lauder
 Richard Branson
 Jeff Bezos
 Elon Musk
 Andrew Carnegie
ACTIVITY 1: ENTREPRENEURS IN HISTORY
(10 MINS) (CONT)
 Bill Gates
 Ray Kroc
 Anita Roddick
 Mark Zuckerberg
 Akio Morita
 Martha Steward
 Mary Kay Ash
 Henry J. Heinz
 Levi Strauss
 Ingvar Kamprad
 Nikola Tesla
 Sam Walton
ACTIVITY 2: YOUTUBE – CNBC Make It: When
to go from employee to entrepreneur

• Watch the video

• Find out what does it take for someone to go from an employee to an
entrepreneur. List out the responses received from the three people in the
video.
 IMPORTANCE OF ENTREPRENEURSHIP

Self-Development Family Development

• Opportunity to control • Increases family income

direction in life • Raises living standards
• Opportunity to maximize self- • Improves social status
potential
• Opportunity to obtain
unlimited financial rewards
 IMPORTANCE OF ENTREPRENEURSHIP
(CONT.)

Society/
National Spiritual
Community
Development Development
Development
• Improves the • Produces new • Opportunity to put
standard of living products of high religious/ spiritual
and lifestyle of the quality faith into practice
society • Creates large-scale • Opportunity to
• Opportunity to job opportunities continuously
contribute to society • Catalyst to national perform religious
• Fulfills society’s development obligations
needs and wants • Generates income
• Creates choices for the economy
through innovation • Backbone of heavy
and creative industries
production
techniques
 ACTIVITY 3: GROUP DISCUSSION &
PRESENTATION (15 MINS)

• You are an entrepreneur who is about to open a

franchise restaurant.
• What should you do before you start your business?
Present your ideas in class.
 ACTIVITY 3: GROUP DISCUSSION &
PRESENTATION (DEBRIEF)
• Conduct thorough research to identify franchise
Research opportunities that align with your interests, skills and
financial goals.
franchise • Consider factors such as the franchisor’s reputation,
opportunities franchise fees, ongoing support, training programs and
the potential for growth in your chosen market.

• Carefully review the franchise agreement, which outlines

the terms and conditions of the franchise relationship.
Understand the • Seek legal advice if needed to ensure you fully
understand the rights, obligations and restricted
franchise associated with the franchise.
agreement • Pay attention to important details such as territory
exclusivity, royalty fees, marketing requirements, and the
franchisor’s support obligations.

• Access your financial situation and create a

comprehensive business plan.
• Determine the initial investment required to open the
franchise, including franchise fees, equipment costs,
Financial planning lease agreements and working capital.
• Develop a financial forecast that outlines your expected
revenue, expenses and profitability.
• Consider obtaining financing if necessary and explore
potential funding options such as bank loans or investors.
 ACTIVITY 3: GROUP DISCUSSION &
PRESENTATION (DEBRIEF) (CONT.)

• Perform due diligence by researching the franchisor’s

background, financial stability and reputation.
• Speak with current and former franchisees to gain
Conduct due insights into their experiences with the franchisor and
diligence their satisfaction with the business model.
• Ask detailed questions about the support provided,
operational challenges, and overall franchisee
satisfaction.

• Create a detailed business plan that outlines your

goals, target market, marketing strategies,
operational procedures, staffing requirements and
Develop a financial projections.
business plan • This plan will serve as a roadmap for your franchise
business and will be essential for obtaining financing
and attracting potential investors.
 ACTIVITY 3: GROUP DISCUSSION &
PRESENTATION (DEBRIEF) (CONT.)
• Seek advice from professionals who specialise in franchise
law and financial matters.
Obtain legal and • An attorney experienced in franchise law can review the
franchise agreement, help negotiate terms and guide you
financial advice through the legal aspects of the franchise business.
• Additionally, a financial advisor or accountant can assist with
financial planning, budgeting and tax considerations.

• Take advantage of the training and educational resources

provided by the franchisor. Attend any required training
Training and programs or workshops to familiarize yourself with the
franchise system, operational procedures, marketing
education strategies and customer service standards.
• This will help you effectively manage your franchise business
and align with the franchisor’s brand standards.

• Secure a suitable location for your franchise business,

negotiate lease terms, and obtain any necessary permits
Prepare for or licences.
operations • Set up your operational infrastructure, including ordering
inventory, setting up accounting systems, hiring and
training staff and implementing marketing strategies.
 ENTREPRENEURSHIP DEVELOPMENT IN
MALAYSIA: THE HISTORY

• Entrepreneurship has existed in Malaysia

(Malaya) since the interaction of Malacca
with foreign traders.
• However, when the British colonized the
Malay Peninsular, they changed the
structure of the society and practiced the
“divide and rule” system:
– Malays (Administration and
agriculture)
– Chinese (Mining and business)
– Indians (Rubber plantations)
• As a result of this system, the Chinese
society was far ahead in business
compared to the Malays and the Indians.
 ENTREPRENEURSHIP DEVELOPMENT IN
MALAYSIA: PRESENT
• Entrepreneurship has been recognized as a crucial driver of economic
growth and development in Malaysia.
• Over the years, the Malaysian government and various organizations
have implemented initiatives to promote and support entrepreneurship
in the country.
• Some of the key developments in the field of entrepreneurship in
Malaysia are as follows:
– Government initiatives
– Start-up ecosystem
– Access to financing
– Education and skill development
– Digital transformation
– Support for social entrepreneurship
• These developments reflect Malaysia’s commitment to nurturing
entrepreneurship as a means to drive economic growth, innovation and
job creation. By providing a supportive ecosystem, access to financing,
education and promoting digital entrepreneurship, Malaysia continues
to create an environment conducive to entrepreneurial success.
GOVERNMENT INITIATIVES

The Malaysian government has launched

several programs and policies to foster
entrepreneurship.

For example, the Ministry of Entrepreneur

Development and Cooperative Malaysia
(MECD) focuses on creating an enabling
environment for entrepreneurs through
various schemes, grants and capacity-
building initiatives.

The government has also established

agencies like SME Corp Malaysia and
Malaysia Digital Economy Corporation
(MDEC) to provide support and resources
to entrepreneurs.
START-UP ECOSYSTEM

Malaysia has witnessed the growth of a

vibrant start-up ecosystem, particularly in
cities like Kuala Lumpur and Penang.

Co-working spaces, incubators, and

accelerators have emerged to provide start-
ups with infrastructure, mentorship and
networking opportunities.

Organizations such as MaGIC (Malaysian

Global Innovation & Creativity Centre) play
a significant role in nurturing start-ups and
connecting them with investors and industry
experts.
 ACCESS TO FINANCING

Additionally, the government-

Access to funding is crucial for
backed agencies like Malaysia
the success of start-ups.
Venture Capital Management
Malaysia has seen an increase
Berhad (MAVCAP) provide
in the availability of venture
funding support to early stage
capital firms, angel investors,
and high growth potential start-
and crowd funding platforms.
ups.
 EDUCATION AND SKILL DEVELOPMENT

Universities and educational

Entrepreneurship education and institutions offer entrepreneurship
skill development have gained programs and courses to equip
prominence in Malaysia. aspiring entrepreneurs with the
necessary knowledge and skills.

Entrepreneurship related events,

workshops and competitions are
also organized to foster an
entrepreneurial mindset among
students and the general
population.
DIGITAL TRANSFORMATION

The digital economy has been a focal point in Malaysia’s

entrepreneurship development.

The government’s initiatives, such as the Digital Free

Trade Zone (DFTZ) and the Malaysia Digital Economy
Blueprint, aim to drive digital innovation and
entrepreneurship.

The growth of e-commerce, fin-tech and other digital

industries has opened up opportunities for
entrepreneurs to tap into the digital space.
SUPPORT FOR SOCIAL
ENTREPRENEURSHIP

Social entrepreneurship, which combines business with

a social or environmental mission, has gained traction in
Malaysia.

The government, NGOs and social enterprise support

organizations provide resources, mentorship and
funding opportunities for social entrepreneurs who aim
to create positive social impact while running
sustainable businesses.
 REFERENCES

• Ariffin, S. & Hamidon, S. (2017). “Introduction to Entrepreneurship”.

Shah Alam: Selangor, Oxford Fajar Sdn. Bhd.
• Ariffin, S., Ab Wahab, I., & Hambali, Zarida (2013). “Fundamentals
of Entrepreneurship”. Shah Alam: Selangor, Oxford Fajar Sdn.
Bhd.
• Aman Shah, S. H., Sh’afie, S. Z., Teik Lan, C. S., Mokhtar, N. S., &
Mohamed, M. (2018). “Entrepreneurship”, 5th Ed., Shah Alam:
Selangor, Oxford Fajar Sdn. Bhd.
• Jamaludin, A., Mohd Yusoff, A.R., Mohd Rusli, M.H., Che Mat, S., &
Abdul Majid, Z. (2011). “Introduction to Entrepreneurship”.
Shah Alam: Selangor, Oxford Fajar Sdn. Bhd.