Scarborough 10e ppt_ch01

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  • Scarborough 10e ppt_ch01

    1. 1. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall1-1-11Entrepreneurs: TheDriving Force BehindSmall Business
    2. 2. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-22The World of theThe World of theEntrepreneurEntrepreneur In the U.S., entrepreneurs start moreIn the U.S., entrepreneurs start morethan 6 million businesses a year!than 6 million businesses a year! Global Entrepreneurship Monitor (GEM)Global Entrepreneurship Monitor (GEM) Approximately 8% of the U.S. population isApproximately 8% of the U.S. population isactively involved in entrepreneurial activityactively involved in entrepreneurial activity Nearly 11% of people in 49 GEM countriesNearly 11% of people in 49 GEM countriesstudied are involved in starting a newstudied are involved in starting a newbusinessbusiness
    3. 3. Copyright ©2012 Pearson Education, Inc. publishing as Prentice HallChapter 1 Entrepreneurs 1-3
    4. 4. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-44What is anWhat is anEntrepreneur?Entrepreneur?One who creates a new business inOne who creates a new business inthe face of risk and uncertainty for thethe face of risk and uncertainty for thepurpose of achieving profit and growthpurpose of achieving profit and growthby identifying opportunities andby identifying opportunities andassembling the necessary resourcesassembling the necessary resourcesto capitalize on themto capitalize on them
    5. 5. What is an Entrepreneur?What is an Entrepreneur?An entrepreneur is someone whoAn entrepreneur is someone whois willing to work 16 hours a day tois willing to work 16 hours a day tokeep from working 8 hours a daykeep from working 8 hours a dayfor someone else!for someone else!Copyright ©2012 Pearson Education, Inc. publishing as Prentice HallChapter 1 Entrepreneurs 1-5
    6. 6. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-66Characteristics ofCharacteristics ofEntrepreneursEntrepreneursSurveySurvey: 61% of adults in the U.S. would: 61% of adults in the U.S. wouldlike to start their own businesslike to start their own business Willingness to take initiativeWillingness to take initiative Preference forPreference for moderatemoderate riskrisk Confidence in their ability to succeedConfidence in their ability to succeed Self-relianceSelf-reliance PerseverancePerseverance Desire for immediate feedbackDesire for immediate feedback
    7. 7. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-77 High level of energyHigh level of energy CompetitivenessCompetitiveness Future orientationFuture orientation Serial entrepreneursSerial entrepreneurs Skilled at organizingSkilled at organizing Value achievement over moneyValue achievement over moneyCharacteristics ofCharacteristics ofEntrepreneursEntrepreneurs
    8. 8. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-88EntrepreneurshipEntrepreneurship One characteristic of entrepreneursOne characteristic of entrepreneursstands out:stands out:Diversity!Diversity! AnyoneAnyone – regardless of age, race,– regardless of age, race,gender, color, national origin, or anygender, color, national origin, or anyother characteristic – can become another characteristic – can become anentrepreneur (although not everyoneentrepreneur (although not everyoneshould)should)
    9. 9. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-99How to Spot EntrepreneurialHow to Spot EntrepreneurialOpportunitiesOpportunities Creativity vs. InnovationCreativity vs. Innovation CreativityCreativity – the ability to develop– the ability to developnew ideas and to discover newnew ideas and to discover newways of looking at problems andways of looking at problems andopportunitiesopportunities InnovationInnovation – the ability to apply– the ability to applycreativecreative solutions to problems andsolutions to problems andopportunities to enhance or toopportunities to enhance or toenrich people’s livesenrich people’s lives
    10. 10. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-1010How to Spot EntrepreneurialHow to Spot EntrepreneurialOpportunitiesOpportunities Monitor trends and exploit them early onMonitor trends and exploit them early on Sonic MuleSonic Mule Take a different approach to an existingTake a different approach to an existingmarketmarket Poo Poo Paper CompanyPoo Poo Paper Company Put a new twist on an old ideaPut a new twist on an old idea Green Grass at LastGreen Grass at Last
    11. 11. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-1111How to Spot EntrepreneurialHow to Spot EntrepreneurialOpportunitiesOpportunities Look for creative ways to use existingLook for creative ways to use existingresourcesresources Greenfields CoalGreenfields Coal Realize that others have the same problemRealize that others have the same problemthat you dothat you do SkirtSportsSkirtSports Notice what is missingNotice what is missing Dogs on WheelsDogs on Wheels
    12. 12. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-1212Benefits of Small BusinessBenefits of Small BusinessOwnershipOwnershipThe opportunity to:The opportunity to: Control your own destinyControl your own destiny Make a differenceMake a difference Social entrepreneursSocial entrepreneurs Reach your full potentialReach your full potential Reap impressive profitsReap impressive profits Contribute to society and to be recognizedContribute to society and to be recognizedfor your effortsfor your efforts Do what you enjoy and to have fun at itDo what you enjoy and to have fun at it
    13. 13. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-1313Drawbacks of SmallDrawbacks of SmallBusiness OwnershipBusiness Ownership Uncertainty of incomeUncertainty of income Risk of losing your entire investmentRisk of losing your entire investment Long hours and hard workLong hours and hard work
    14. 14. Source: MasterCard Global Small Business Survey, 2007.Source: MasterCard Global Small Business Survey, 2007.Small Business Owners Work WeekNumber of Hours Worked per Week1 to 39 hours10%40 to 49 hours29%50 to 59 hours22%60 to 69 hours19%More than 70 hours20%Average workweek = 54 hoursCopyright ©2012 Pearson Education, Inc. publishing as Prentice HallChapter 1 Entrepreneurs 1-14
    15. 15. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-1515Drawbacks of SmallDrawbacks of SmallBusiness OwnershipBusiness Ownership Uncertainty of incomeUncertainty of income Risk of losing your entire investmentRisk of losing your entire investment Long hours and hard workLong hours and hard work Lower quality of life until the business getsLower quality of life until the business getsestablishedestablished
    16. 16. Source: National Federation of Independent Businesses and Wells Fargo Bank, 2002.Source: National Federation of Independent Businesses and Wells Fargo Bank, 2002.9.8%33.5%31.1%17.8%6.1%1.7%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%Under 25 25-34 35-44 45-54 55-64 65+AgeOwner Age at Business FormationCopyright ©2012 Pearson Education, Inc. publishing as Prentice HallChapter 1 Entrepreneurs 1-16
    17. 17. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-1717Drawbacks of SmallDrawbacks of SmallBusiness OwnershipBusiness Ownership Uncertainty of incomeUncertainty of income Risk of losing your entire investmentRisk of losing your entire investment Long hours and hard workLong hours and hard work Lower quality of life until the business getsLower quality of life until the business getsestablishedestablished High levels of stressHigh levels of stress Complete responsibilityComplete responsibility DiscouragementDiscouragement
    18. 18. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall1-1-1818Feeding theFeeding theEntrepreneurial FireEntrepreneurial Fire Entrepreneurs as heroesEntrepreneurs as heroes Entrepreneurial educationEntrepreneurial education Demographic and economicDemographic and economicfactorsfactors Shift to a service economyShift to a service economy Technological advancementsTechnological advancements OutsourcingOutsourcing Independent lifestylesIndependent lifestyles E-Commerce and the World WideE-Commerce and the World WideWebWeb International opportunitiesInternational opportunities
    19. 19. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-1919The Cultural DiversityThe Cultural Diversityof Entrepreneurshipof Entrepreneurship Young entrepreneursYoung entrepreneurs
    20. 20. Source: Kauffman Foundation, Kauffman Index of Entrepreneurial Activity, 1996-2009.Source: Kauffman Foundation, Kauffman Index of Entrepreneurial Activity, 1996-2009.Entrepreneurial Activity by AgeGroupCopyright ©2012 Pearson Education, Inc. publishing as Prentice HallChapter 1 Entrepreneurs 1-20
    21. 21. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-2121The Cultural DiversityThe Cultural Diversityof Entrepreneurshipof Entrepreneurship Young entrepreneursYoung entrepreneurs Women entrepreneursWomen entrepreneurs
    22. 22. Source: 2008 Kauffman Index of Entrepreneurial Activity.Source: 2008 Kauffman Index of Entrepreneurial Activity.Entrepreneurial Activity by GenderEntrepreneurial Activity by GenderCopyright ©2012 Pearson Education, Inc. publishing as Prentice HallChapter 1 Entrepreneurs 1-22
    23. 23. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-2323The Cultural DiversityThe Cultural Diversityof Entrepreneurshipof Entrepreneurship Young entrepreneursYoung entrepreneurs Women entrepreneursWomen entrepreneurs Minority-owned enterprisesMinority-owned enterprises
    24. 24. Source: based on Minorities in Business: A Demographic Review ofSource: based on Minorities in Business: A Demographic Review ofSmall Business Ownership, Small Business Administration, Office ofSmall Business Ownership, Small Business Administration, Office ofAdvocacy, April 2007.Advocacy, April 2007.Minority Business Ownership inMinority Business Ownership inthe United Statesthe United States01020304050607080901st Qtr 2nd Qtr 3rd Qtr 4th QtrEastWestNorthCopyright ©2012 Pearson Education, Inc. publishing as Prentice HallChapter 1 Entrepreneurs1-24
    25. 25. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-2525The Cultural DiversityThe Cultural Diversityof Entrepreneurshipof Entrepreneurship Young entrepreneursYoung entrepreneurs Women entrepreneursWomen entrepreneurs Minority-owned enterprisesMinority-owned enterprises Immigrant entrepreneursImmigrant entrepreneurs Part-time entrepreneursPart-time entrepreneurs
    26. 26. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-2626The Cultural Diversity ofThe Cultural Diversity ofEntrepreneurshipEntrepreneurship Home-based business ownersHome-based business owners Family business ownersFamily business owners CopreneursCopreneurs Corporate castoffsCorporate castoffs Corporate dropoutsCorporate dropouts Retired Baby BoomersRetired Baby Boomers
    27. 27. Source: Small Business Administration, 2009.Source: Small Business Administration, 2009.Small Business byIndustryCopyright ©2012 Pearson Education, Inc. publishing as Prentice HallChapter 1 Entrepreneurs 1-27
    28. 28. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-2828Small Businesses...Small Businesses... Make up 99.7% of all the 29.3 millionMake up 99.7% of all the 29.3 millionbusinesses in the U.S.businesses in the U.S. Employ 50.2% of the nation’s privateEmploy 50.2% of the nation’s privatesector workforcesector workforce Pay 45% of total private payrollPay 45% of total private payroll Create more jobs than big businessesCreate more jobs than big businesses SBA estimates they create 79% of all net newSBA estimates they create 79% of all net newjobs in the U.S.jobs in the U.S.
    29. 29. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall1-1-2929 Are leaders in offering training andAre leaders in offering training andadvancement opportunities to workersadvancement opportunities to workers Provide 67% of workers with their first jobsProvide 67% of workers with their first jobs Produce 51% of the nation’s private GDPProduce 51% of the nation’s private GDP Account for 47% of business salesAccount for 47% of business sales Key role in innovation:Key role in innovation: Produce 13 times more patents perProduce 13 times more patents peremployees than large companiesemployees than large companiesSmallSmallBusinesses...Businesses...
    30. 30. 100%81%65%54%46%40%36%32% 29% 27% 25%0%10%20%30%40%50%60%70%80%90%100%%ofSmallFirmsSurvivingNew 1 2 3 4 5 6 7 8 9 10# of Years in BusinessSmall Business Survival RateSource: National Federation of Independent BusinessesSource: National Federation of Independent Businesses Business Policy GuideBusiness Policy Guide,,2003.2003.Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 1-30Chapter 1 Entrepreneurs
    31. 31. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-3131Putting Failure intoPutting Failure intoPerspectivePerspective About 54% of new companies failAbout 54% of new companies failwithin 4 yearswithin 4 years Entrepreneurs areEntrepreneurs are notnot paralyzed byparalyzed bythe prospect of failurethe prospect of failure Failure – a natural part of the creativeFailure – a natural part of the creativeprocessprocess Successful entrepreneurs learn to failSuccessful entrepreneurs learn to failintelligentlyintelligently
    32. 32. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-3232Avoiding the PitfallsAvoiding the PitfallsofofSmall BusinessSmall BusinessFailureFailure Know your business in depthKnow your business in depth Prepare a business planPrepare a business plan Manage financial resourcesManage financial resources Understand financialUnderstand financialstatementsstatements
    33. 33. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-3333Avoiding the PitfallsAvoiding the PitfallsofofSmall BusinessSmall BusinessFailureFailure Learn to manage peopleLearn to manage peopleeffectivelyeffectively Set your business apart fromSet your business apart fromthe competitionthe competition Maintain a positive attitudeMaintain a positive attitude
    34. 34. Chapter 1 EntrepreneursChapter 1 Entrepreneurs CopyrightCopyright ©2012 Pearson Education, Inc. publishing as Prentice Hall©2012 Pearson Education, Inc. publishing as Prentice Hall 1-1-3434All rights reserved. No part of this publication may beAll rights reserved. No part of this publication may bereproduced, stored in a retrieval system, or transmitted,reproduced, stored in a retrieval system, or transmitted,in any form or by any means, electronic, mechanical,in any form or by any means, electronic, mechanical,photocopying, recording, or otherwise, without the priorphotocopying, recording, or otherwise, without the priorwritten permission of the publisher. Printed in the Unitedwritten permission of the publisher. Printed in the UnitedStates of America.States of America.Copyright ©2012 Pearson Education, Inc.Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall Publishing as Prentice Hall

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