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Ch 01 entrepreneurship
 

Ch 01 entrepreneurship

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Ch 01 entrepreneurship Ch 01 entrepreneurship Presentation Transcript

  • The Foundations ofThe Foundations of Entrepreneurship Entrepreneurship Prof Purshottam Patil
  • The World of the Entrepreneur  Every year in the U.S., entrepreneurs launch 850,000 new businesses.  Entrepreneurial spirit - the most significant economic development in recent history.  GEM study: 11.3 percent of adult population in the U.S. is actively involved in trying to start a new business.Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 2
  • The World of the Entrepreneur  GEM study  Globally 9.4 percent of adults are actively engaged in trying to start a business.  Men are twice as likely as women to start a business (exactly the opposite trend in the U.S., however).  Nearly one-third of global entrepreneurs are between the ages of 25 and 44.Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 3
  • What Is an Entrepreneur? One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them.Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 4
  • Characteristics of Entrepreneurs  Desire for responsibility  Preference for moderate risk – risk eliminators  Confidence in their ability to succeed  Desire for immediate feedback  High level of energy  Future orientation – serial entrepreneurs  Skilled at organizing  Value achievement over moneyChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 5
  • Entrepreneurship  One characteristic of entrepreneurs stands out: Diversity!  Anyone – regardless of age, race, gender, color, national origin, or any other characteristic – can become an entrepreneur (although not everyone should).Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 6
  • Benefits of Entrepreneurship The opportunity to:  Create your own destiny  Make a difference  Reach your full potential  Reap impressive profits  Contribute to society and to be recognized for your efforts  Do what you enjoy and to have fun at itChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 7
  • Drawbacks of Entrepreneurship  Uncertainty of income  Risk of losing your entire investment  Long hours and hard workChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 8
  • Small Business Owners Work Week Number of Hours Worked per Week More than 60 hours Less than 30 hours 17% 11% 30 to 40 hours 24% 51 to 60 hours 20% 41 to 50 hours 28%Source: Adapted from Dun & Bradstreet 21st Annual Small Business Survey Summary Report, 2002, p. 35.
  • Drawbacks of Entrepreneurship  Uncertainty of income  Risk of losing your entire investment  Long hours and hard work  Lower quality of life until the business gets establishedChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 10
  • Entrepreneurs Age at Business Formation 55 - 64 O ver 65 18 - 24 6.7% 1.0% 12.0% 45 - 54 17.4% 25 - 34 32.3% 35 - 44 30.6%Source: 2004 Global Entrepreneurship Monitor.
  • Drawbacks of Entrepreneurship  Uncertainty of income  Risk of losing your entire investment  Long hours and hard work  Lower quality of life until the business gets established  High levels of stress  Complete responsibility  DiscouragementChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 12
  • Feeding the Entrepreneurial Fire  Entrepreneurs as heroes  Entrepreneurial education  Demographic and economic factors  Shift to a service economy  Technological advancements  Independent lifestyle  E-commerce and the World Wide WebChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 13
  • U.S. Retail E-Commerce Revenues $250.0 $232.1 $199.3 $200.0 $169.5 Revenues (in Billions) $142.5 $150.0 $117.7 $94.0 $100.0 $50.0 $- 2003 2004 2005 2006 2007 2008 YearSource: eMarketer, 2005.
  • Feeding the Entrepreneurial Fire  Entrepreneurs as heroes  Entrepreneurial education  Demographic and economic factors  Shift to a service economy  Technological advancements  Independent lifestyles  E-commerce and the World Wide Web  International opportunitiesChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 15
  • The Cultural Diversity of Entrepreneurship  Young entrepreneurs  Women entrepreneursChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 16
  • Why Women Start Businesses Frustrated with Other reasons "glass ceiling" at 7% big companies Gain control over 23% my schedule 46% Saw a market opportunity and decided to pursue it 24%Source: Center for Women’s Business Research, 2004.
  • The Cultural Diversity of Entrepreneurship  Young entrepreneurs  Women entrepreneurs  Minority-owned enterprises  Immigrant entrepreneurs  Part-time entrepreneursChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 18
  • The Cultural Diversity of Entrepreneurship  Home-based businesses  Family businesses  Copreneurs  Corporate castoffs  Corporate dropoutsChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 19
  • Small Business by Industry O the r Fina nce 7.3% 8.0% M a nufacturing Serv ice 5.8% 39.2% Who les ale 7.4% C o ns tructio n 11.8% R eta il 20.5%Source: U.S. Small Business Administration, 2005.
  • Small Businesses...  Employ 51 percent of the nation’s private sector workforce.  Create more jobs than big businesses.  Are leaders in offering training and advancement opportunities to workers.Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 21
  • Small Businesses...  Produce 51 percent of the nation’s private GDP.  Account for 47 percent of business sales.  Create 13X more innovations per employee than large companies.  Zipper, FM radio, laser, air conditioning, escalator, light bulb, personal computer, automatic transmission, and many more!Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 22
  • Small Business Survival Rate 100% 100% 90% % of Small Firms Surviving 81% 80% 70% 65% 60% 54% 50% 46% 40% 40% 36% 32% 29% 30% 27% 25% 20% 10% 0% New 1 2 3 4 5 6 7 8 9 10 # of Years in BusinessSource: NFIB Business Policy Guide, 2003, p. 16.
  • Ten Deadly Mistakes of Entrepreneurship 1. Management mistakes 2. Lack of experience 3. Poor financial control 4. Weak marketing efforts 5. Failure to develop a strategic planChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 24
  • Ten Deadly Mistakes of Entrepreneurship 6. Uncontrolled growth 7. Poor location 8. Improper inventory control 9. Incorrect pricing 10. Inability to make the “entrepreneurial transition”Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 25
  • Putting Failure into Perspective  Entrepreneurs are not paralyzed by the prospect of failure.  Failure – a natural part of the creative process.  Successful entrepreneurs learn to fail intelligently.Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 26
  • Avoiding the Pitfalls of Small Business Failure  Know your business in depth  Develop a solid business plan  Manage financial resources  Understand financial statements  Learn to manage people effectively  Keep in tune with yourselfChapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 27