CHAPTER 6

ENTREPRENEURIA
L NETWORKING

LEARNING OUTCOMES
1. Describe three advantages of having
good networking
2. Explain two types of networking
3. Discuss six importance of networking
4. Explain seven techniques in
establishing and building confidence in
networking
5. Identify five barriers in network building

NETWORKING
Networking is a business tool that
plays a very significant role for the
entrepreneurs success
Networking with both internal and
external customers
Good networking relationships will
enable a good support and
cooperation from networking circles

 Networking skills will act as a

catalyst to achieve business goals
and objectives
Networking is both an outcome of
past relationship strategy and a
resource for future strategy

PA
ST
1st class

TOD
AY

FUTU
RE

4th class

Advantages Of Having
A Good Networking

Accessibility

Reputation

Expectations

a) Accessibility
Networking is very important for the
entrepreneur to gain either tangible or
intangible resources directly or
indirectly
Tangible: financial support, transfer of
technology, accessibility in gaining
information
Intangible: moral support, guidance

b) Reputation
It refers to the ability of the
entrepreneurs to exercise leadership or
to influence the decision making of other
network members based on the
expertise that they have
Attracting members in networking circles
to give priority towards their product or
services offered by other member

c) Expectations
it can both facilitate and restrict the
freedom of the companys actions
For example, network members could
have the expectation that a particular
company will effectively set prices for a
number of other companies
Eg; bus fare, price of egg, price of rice
set by the association

Type Of Networking
1. Formal networking
Is the existing relationships
between various people who
have a symbiotic relationship
with the entrepreneur
Symbiotic =

 Those who have networking

correlation are better prepared to take
the initiative for creating business
opportunities and solving the problems
they face in the networking chain
Eg; association of petrol station of
malaysia, pan malaysia bus owner
association, malaysian franchise
association

2. Informal networking
Is established through
relationships with childhood
friends, members of ones family
and people sharing common
interests or hobbies

 Provides opportunities for the

entrepreneur to gain new
information or exchange of
information
Enables an entrepreneur to discuss
his business informally without
making appointment

The Importance
Build confidence
Reduce bureaucracy
Increase information
Develop trust
Create an interdependent
situation
Source of creativity

ENTREPRENEURS AND
NETWORKING:
To be a successful entrepreneur in
networking environment,
entrepreneur must have the strength
to work together with others using
these
suggested
Ready
to listenstrategies;
Ready to compromise
Skills in giving
confidence
Very much in peace

Failure To Build Good

Networking
1. Increase cost
2. Waste time
3. Waste the resources of the
company; knowledge and energy
4. Damage the entrepreneurs
reputation
5. Damage the companys reputation
6. Create dilemmas whether to quit,
give commitment, be a non active
member

Techniques for Developing

Confidence Among
Entrepreneurs

As an entrepreneur we must have

the trust of many people.
People will have the confidence in us
if we show that we successfully do
the work given
These are the strategies that could
help us to be confident;

1. Communicate effectively and with

full confidence by preparing
accurate information and data
2. Prove our abilities to others by
managing changes and guiding
others to cope with the changes
3. Show concern for other people by
helping the person who needs help

4. Always be fair in mentoring, giving

helps, benefits and attention
5. Always be ready to admit our own
mistakes sincerely
6. Show teamwork spirit so we are able
to work together to solve problems
and make any changes
7. Be confident to others, and they will
confident in us

Barriers in Building Strategic

Networks
There are 5 main barriers which must
be avoided
Emotional
Physical
Pyschological
Behavioural
Negative expressions

1. Emotional
It caused by the following elements
or flaws in the personality of an
entrepreneur;
Overly aggressive, fearful,
carelessness in
actions, never being punctual,
unwilling to
admits ones mistake, arrogance,
being too

2. Physical
Physical barriers might arise from
our personal lack of confidence in
ourselves or from our inattention to
other important matter with respect
to manners and attire.
Example; improper attire, lack of self
management, nervous behaviour,
speaking in
unnecessary high tone or pitch, overly
expressive
body language, avoiding eye contact

3. Psychological
Psychological barriers affect an
entrepreneurs interactions with
other people. Some psychological
barriers are;

Nervousness, indecision, loneliness,

frustration, failure to achieve goals,
shyness, inability to discuss problems,
strong need for approval and
acceptance, failure to achieve goals

4. Behavioral
The way we behave will determine
whether we are closed or distant
from others. Some of the bad
behaviour
are;people, carelessness in
Slandering
other
making decisions, always wanting to be
the leader, teasing other people, making
other people appear foolish, pretending to
know everything, reluctance to accept
other peoples opinion and contributions

5. Negative expressions
The way we express ourselves is
important.
When we are careless about the way
we express ourselves, we might
easily
offend
others.
Examples are expressions that
indicating dominance, expression
indicating ridicule or mockery,
expressions indicating an inferiority
complex, expressions indicating an

Examples;
Expressions Indicating Dominance
you must finish the work given
you must manage to get
the tender..
why do you never finish
the work given..

Expressions Indicating Ridicule Or Mockery

Tomockis to poke fun at someone, often
by mimicking and caricaturing speech or
actions;
such easy work, but you cannot do it in two
days!
he doesnt know anything but he acts as if
he knows everything in front of the leader

Expressions Indicating An Inferiority

Complex

as a careless and poor person I dont

think I can do this business
who would help somebody like me in
this business?
who am I to be in love with you
saya sedar diri saya siapa, lulus
sekadar PMR je

Expressions Indicating An Egoistic

I can do
Nature
it why
dont you
!!!@#*

Im very sure that I can do this this

work since I have ten years of
experience
I can do that, its too kacang for me
I will complete the task by this noon,
Im very efficient compare to Phils

CHAPTER 7
EVALUATION OF
ENTREPRENEURIAL
OPPORTUNITIES

LEARNING OUTCOMES
1. Review six common pitfalls in the
selection of new ventures ideas
2. Explain eight critical factors
involved in new venture assessment
3. Describe three major factors that
underlie venture success

Evaluation of Entrepreneurial
Opportunities
The stage of transition from an idea to a potential
venture can be the most critical for understanding
new venture development
Entrepreneur need to have a very deep knowledge
and understanding on the common pitfalls in
selecting new ventures
There are six common pitfalls that an entrepreneur
may encounter in the process of selecting a new
venture;

No Real
Insight Into
The Market

Inadequate
Understandin
g Of
Technical
Requirement

Lack Of
Objective
Evaluation

Poor
Financial
PITFALLS
Understandin
g

SIX

Ignorance Of
Legal Issues

Lack Of
Venture
Uniqueness

Pitfalls in Selecting New

Ventures
1. Lack of objective evaluation
Many entrepreneurs lack objectivity
and do not investigate, evaluate and
study in details
Eg; Giant in Bercham, Tesco in Sri
Iskandar, Burger King in Ipoh,

2. No real insight into the market

Product life cycle & timing
Eg, importing date and mandarin
orange out of the festive season,
Nokia in the decline stage

3.

Inadequate understanding of
technical requirements
Should conduct a thorough study of
the project as it will increase the
cost
Eg; car service centre, vehicle
spraying centre, air conditioning
service & repair centre

4.

Poor financial understanding

Must conduct proper cost planning for

good estimation
Eg; sales projection, costs/expenses

5. Lack of venture uniqueness

Concept and design must be
attractive and differentiate from
competitors
Eg; proton (juara, tiara, arena),

6. Ignorance of legal issues

Legal requirements such safe
environment, quality control,
benefits, salary, copyrights, and
patents must not be overlooked
Eg, Mc Kandar vs Mc Donald case,
Restoran Nasi Vanggey, etc..

Critical Factors for New

Venture Development
Another thing we must consider in
new venture development is the
critical factors which covers eight
areas such;

1. Buyer decision in the venture

How much customer want to buy?
2. Marketing of the goods and services
Advertising expenses and person in
charge

3. Production of the goods and services

Manufacture or buy? Supplier of raw
materials?

4. Staffing decision in the venture

Qualification/competencies of staff

5. Control of the venture

When and type of approach/record
to use?
6. Financing the venture
How much needed and who will
provide it?

7. Basic feasibility of the venture

Can the product/service works?
Legality?
8. Competitive advantages of the venture
Specific offers compare to competitors
and what their respond?

Why New Ventures Fail

Many newly establish business
vanish/close/ shutdown within a year
or two and only small portion are
successful.
Managerial Problems

Product/Market Problems
Financial Difficulties

 There are 3 major causes;

1.Managerial problems
HR problems (recruitment, termination,
hiring, work schedule, payroll etc)
Weak team approach (promotion not
based on qualification/performance,
poor relationship with parent
companies etc)

HR
problems

team
approach
Managerial
Problems

2. Product/market problems

Poor timing, design problems, inappropriate

distribution, unclear business definition,
focus only one customer etc

3. Financial difficulties

Capital, allocation of fund, sources of fund

CHAPTER 8
STRATEGIC PLANNING FOR
EMERGING VENTURES

Learning Outcomes
1. Discuss the nature of strategic
planning
2. Discuss 5 reasons why
entrepreneurs do not carry out
strategic planning
3. Explain the benefits of strategic
planning

The Nature of Planning in

Emerging Ventures
According to Naffziger and Kuratko
(1991) most entrepreneurs do some
form of planning for their ventures
but it often tends to be informal and
unsystematic
The actual need for systematic
planning will vary with the nature,
size and structure of the business

3 Reasons Why Planning Must Be

In A Formal And Systematic
1. The degree of uncertainty/risks that
entrepreneur will face
2. The strength of competition/competitors
3. The amount and type of experience the
entrepreneur has. Lack of experience
will lead to misunderstanding.

Strategic Planning
It is the formulation of long range
plans for the effective management
of environmental opportunities and
threats in light of a ventures
strengths and weaknesses
There are 5 basic steps in strategic
planning

Examine The Environments

Formulation Of Strategies
Implement The Strategic Plan
Evaluation The Performance Of
The Strategy
Follow Up Action

The Lack of Strategic

Planning
The reasons for not implementing
strategic planning are;
Time scarcity
Lack of knowledge
Lack of expertise/skills
Lack of trust and
openness
Perception of high cost

Benefits of Implementing a
Strategic Plan
1. Company Benefits
Lead to greater interaction and
relationship among employees
Each department will try to fits into
overall system and know what the
corporate objectives are
Manager can understand where
cooperation is required
Manager able to rank the various
proposals in term of importance

2. Individual Benefits
Manager better understand the
direction and objectives of company
Proposals submitted will be consistent
with and relevant to their thinking,
enhancing prestige and career
prospect
Able to apply the planning process
used on their individual