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  1. 1. Entrepreneurship <ul><li>T he practice of starting new organizations or revitalizing mature organizations , particularly new businesses generally in response to identified opportunities. </li></ul><ul><li>Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating many job opportunities. </li></ul><ul><li>Many &quot;high-profile&quot; entrepreneurial ventures seek venture capital or angel funding in order to raise capital to build the business. Angel investors generally seek returns of 20-30% and more extensive involvement in the business. </li></ul><ul><li>Many kinds of organizations now exist to support would-be entrepreneurs, including specialized government agencies, business incubators , science parks , and some NGOs . </li></ul>
  2. 2. An entrepreneur <ul><li>is an innovator who establishes a new business offering new or existing products or services for the reward of profit. </li></ul><ul><li>Entrepreneurs have strong beliefs about market opportunities and willingly accept a high level of personal, professional and financial risk. </li></ul><ul><li>An entrepreneur possesses a variety of different characteristics that provide a skill set for achieving success and a high level of reward. </li></ul>
  3. 3. What Do Experts Say About Entrepreurs <ul><li>D avid McClelland (1961) : entrepreneur I s primarily motivated by an overwhelming need for achievement and strong urge to build. </li></ul><ul><li>Collins and Moore (1970) studied 150 entrepreneurs and concluded that they are tough, pragmatic people driven by needs of independence and achievement. They seldom are willing to submit to authority. </li></ul><ul><li>Bird (1992) sees entrepreneurs as mercurial, that is, prone to insights, brainstorms, deceptions, ingeniousness and resourcefulness. they are cunning, opportunistic, creative, and unsentimental. </li></ul><ul><li>Cooper, Woo, & Dunkelberg (1988) : entrepreneurs exhibit extreme optimism in their decision-making processes. In a study of 2004 entrepreneurs they report that 81% indicate their personal odds of success as greater than 70% and a remarkable 33% seeing odds of success of 10 out of 10. </li></ul><ul><li>Busenitz and Barney (1997) : entrepreneurs are prone to overconfidence and over generalisations. </li></ul><ul><li>Cole (1959) found there are four types of entrepreneur: the innovator, the calculating inventor, the over-optimistic promoter, and the organization builder. These types are not related to the personality but to the type of opportunity the entrepreneur faces. </li></ul>
  4. 4. Other characteristics include <ul><li>The entrepreneur has an enthusiastic vision, the driving force of an enterprise. </li></ul><ul><li>The entrepreneur's vision is usually supported by an interlocked collection of specific ideas not available to the marketplace. </li></ul><ul><li>The overall blueprint to realize the vision is clear, however details may be incomplete, flexible, and evolving. </li></ul><ul><li>The entrepreneur promotes the vision with enthusiastic passion. </li></ul><ul><li>With persistence and determination, the entrepreneur develops strategies to change the vision into reality. </li></ul><ul><li>The entrepreneur takes the initial responsibility to cause a vision to become a success. </li></ul><ul><li>Entrepreneurs take prudent risks. They assess costs, market/customer needs and persuade others to join and help. </li></ul><ul><li>An entrepreneur is usually a positive thinker and a decision maker. </li></ul><ul><li>An entrepreneur needs inspiration, motivation and sensibility. </li></ul>
  5. 5. Why Promoti ng E ntrepreneurship <ul><li>P otential to support economic growth and social cohesion </li></ul><ul><li>M any governments work to develop a culture of entrepreneurial thinking by: </li></ul><ul><li>integrating entrepreneurship into education systems, </li></ul><ul><li>legislating to encourage risk-taking, </li></ul><ul><li>and national campaigns. </li></ul>
  6. 6. <ul><li>Top Ten Myths of Entrepreneurship . January 10, 2008 </li></ul><ul><li>By A. Malachi Mixon Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of seven books including The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By . </li></ul><ul><li>It takes a lot of money to finance a new business. Not true. The typical start-up only requires about $25,000 to get going. </li></ul><ul><li>Venture capitalists are a good place to go for start-up money. Not unless you start a computer or biotech company. VCs only fund about 3,000 companies per year and only about one quarter are in the seed or start-up stage. T he odds a start-up company will get VC money are about one in 4,000. </li></ul><ul><li>Most business angels are rich. If rich means being an accredited investor –a person with a net worth of more than $1 million or an annual income of $200,000 per year if single and $300,000 if married – then the answer is “no.” 32% have a household income of $40,000 per year or less and 17% have a negative net worth. </li></ul><ul><li>Start-ups can’t be financed with debt. Actually, debt is more common than equity. According to the Federal Reserve’s Survey of Small Business Finances, 53% of the financing of companies that are two years old or younger comes from debt and only forty-seven percent comes from equity. </li></ul><ul><li>Banks don’t lend money to start-ups. </li></ul><ul><li>Most entrepreneurs start businesses in attractive industries. Sadly, the opposite is true. Most entrepreneurs head right for the worst industries for start-ups. The correlation between the number of entrepreneurs starting businesses in an industry and the number of companies failing in the industry is 0.77. </li></ul><ul><li>The growth of a start-up depends more on an entrepreneur’s talent than on the business he chooses. T he industry you choose has a huge effect on the odds that it will grow. Over the past 20 years, about 4.2 % of all start-ups in the computer and office equipment industry made the Inc 500 list of the fastest growing private companies in the U.S. 0.005 percent of start-ups in the hotel and motel industry and 0.007 percent of start-up eating and drinking establishments made the Inc. 500. That means the odds that you will make the Inc 500 are 840 times higher if you start a computer company than if you start a hotel or motel.. </li></ul><ul><li>Most entrepreneurs are successful financially. The typical profit of an owner-managed business is $39,000 per year. Only the top ten percent of entrepreneurs earn more money than employees. </li></ul><ul><li>Many start-ups achieve the sales growth projections that equity investors are looking for. . Of the 590,000 or so new businesses with at least one employee founded in this country every year, data from the U.S. Census shows that less than 200 reach the $100 million in sales in six years that venture capitalists talk about looking for. About 500 firms reach the $50 million in sales that the sophisticated angels, like the ones at Tech Coast Angels and the Band of Angels talk about. In fact, only about 9,500 companies reach $5 million in sales in that amount of time. </li></ul><ul><li>Starting a business is easy. Seven years after, only 1/3 have a new company with positive cash flow greater than the salary and expenses of the owner for more than three consecutive months. </li></ul>
  7. 7. Suggested Websites <ul><li>􀂾 Famous Entrepreneurs: http://entrepreneurs.miningco.com/od/famousentrepreneurs/ </li></ul><ul><li>􀂾 Famous Inventors: http://inventors.about.com/library/bl/bl1_1.htm </li></ul><ul><li>􀂾 Success Stories: An Annotated Bibliography of Famous Entrepreneurs: http://www.dwc.edu/library/entrepreneurs.shtml </li></ul><ul><li>􀂾 Biography.com: http://www.biography.com/search/index.jsp </li></ul>
  8. 8. Public Sector Entrepreneurship <ul><li>What are local public administrators expected to do in an era of tax base decline, diminishing state and f ederal support, and intensified public demand for more and better services? </li></ul><ul><li>Perlmutter and Cnaan argues that a policy of fund raising and development is one solution to this dilemma. </li></ul><ul><li>The authors acknowledge that private support for public services is not a new idea or practice; however, an institutionalized policy of capital campaign and donation seeking from private sources on an on- going basis to fund traditional public services is the essence of this new policy. </li></ul><ul><li>A case study of the Department of Recreation in the city of Philadelphia which, through the proactive leadership of a new commissioner, took on the mission of establishing a development unit and annual fund campaign. </li></ul>
  9. 9. The E ngineering M odel <ul><li>views public management as a process of supervising the execution of a previously defined governmental goal. </li></ul><ul><li>The public manager is, in this view, an instrument of public policy, a master of technique. Just as the civil engineer takes as given the decision to dam or bridge a river, so the public manager takes as given the social goals of the programs he administers. As the bridge designer must know the expansibility and tensile strength of steel, so the public manager must understand the inner workings of complex personnel rules as well as the inner motivations of civil servants. The counterpart of the engineer's blueprint is the public administrator's management control system. </li></ul>
  10. 10. The E ntrepreneurial M odel <ul><li>casts public management in a very different light. It conjures up a kind of frontier image of the public manager alone in the political wilds, surrounded by concealed pitfalls and drawn by undiscovered wealth. Entrepreneurial ad- ministration is self-promotion, power politics, risk-taking, broken-field running. </li></ul><ul><li>Unlike his engineering cousin, the manage- rial entrepreneur defines rather than accepts goals. He is less a technician than a broker, a connecting link in a world where information is power, and power is the measure of success. The pedigree of the entrepreneurial school is not so long as that </li></ul>
  11. 11. Public Sector Entrepreneurship <ul><li>Occurs whenever a political actor is alert to and acts on potential profit opportunities, thus moving the system in which the actor is embedded toward equilibrium. </li></ul>