POKHARA UNIVERSITY

1. Strategic Issues in
Entrepreneurial Ventures
and Small Business
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2. What is Entrepreneurship?
Entrepreneurship
Strategic thinking and risk-taking behavior that results
in the creation of new opportunities for individuals
and/or organizations.
Entrepreneurs
Risk-taking individuals who take actions to pursue
opportunities and situations others may fail to
recognize or may view as problems or threats.
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3. The Global Entrepreneurship Monitor estimates that
15% of all working adults are self-employed, a number
they project is steadily growing. New entrepreneurial
ventures are recognized globally as key drivers of
economic development, job creation, innovation.
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4. Who is Entrepreneur?
Inventor Entrepreneur
Promoter Administrator
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Creativity
&
Innovation
Management Skills &
Business Know-How
High
Low
High

5. Difference between Small
Business & Entrepreneurship
Small business ownership and entrepreneurship are
two business terms often regarded as synonymous.
Interestingly, there is in fact a huge difference
between these two. In summary, small business
provides little growth and few opportunities for its
owners and employees because it is not really
designed for expansion. On the other hand,
entrepreneurship always has growth potential, and
with fast growth comes more income and more
wealth.
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6. Difference between Small Business &
Entrepreneurship(contd…)
More specifically, there are three things that
differentiate small business from entrepreneurial
venture, and they are;
1. Innovation
2. Risk
3. Wealth Creation.
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7. Difference between Small Business
& Entrepreneurship(contd…)
1. Innovation: As far as innovation is concerned, it is
the backbone of entrepreneurship, giving the
enterprise capabilities and resources to create wealth.
Entrepreneurs are said to be more innovative, perhaps
even addicted to it, than small business owners who
are usually settled with marketing the usual stuff
produced from the kitchen, home office or garage.
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8. Difference between Small Business &
Entrepreneurship(contd…)
2. Risk: Entrepreneurship involves more risks than in
the small business. Entrepreneurs take up risks that
are unusually high for most. High risks fuel the passion
of entrepreneurship, and when combined with
opportunities of huge profits, entrepreneurs take the
road less travelled. Increasingly, as more and more
entrepreneurs trail the same business idea, the risks
become low, opportunities of huge profits diminish,
and entrepreneurs would again seek out another
venture that presents opportunities for enormous and
fast wealth creation.
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9. Difference between Small Business
& Entrepreneurship(contd…)
3. Wealth Creation: Wealth creation in
entrepreneurship is quick and substantial. This
difference with small business is perhaps the most
apparent. With the lack of growth potential, the
wealth creation ability of a small business remains
small and limited, if not utterly slow. Entrepreneurial
venture, with the substantial risks involved, offers
plenty of opportunities to accumulate massive wealth
and at great speeds. Income generated from
entrepreneurship is considerably larger than what can
be generated from small business.
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10. Small Business Firm:
- Independently owned and operated
- Not dominant in field
- Not engaged in innovative practices
 Entrepreneurial Venture:
- Primary goals are profitability and growth
-Characterized by innovative strategic practices
Differences:
-Not in types of goods and services
-Fundamental views on innovation, risk and wealth creation
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11. What is special about small businesses?
Small businesses …
One with 100 or fewer employees.
Independently owned and operated.
50 percent of the private labour force works in
small businesses.
Are established by:
 Starting a new business.
 Buying an existing business.
 Franchising
 Inherently owned
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12. Entrepreneur :
–Ultimate strategist
–All 3 levels
•Corporate
•Business
•functional
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13. Degree of formality :
Process far more informal in small
companies than in large corporations
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14. Strategic decision-making process for
entrepreneurial ventures :
–Develop basis for business idea
•Product/service with target market/customers
–Scan external environment
•Locate factors of opportunity/threat
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15. Strategic decision-making process for
entrepreneurial ventures :
–Scan internal factors
•Relevant to the new business
–Analyze strategic factors
•Current situation using SWOT
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16. Strategic decision-making process for
entrepreneurial ventures :
–Decide “go” or “no go”
•Opportunity to go
–Generate business plan
•Transform idea into reality
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17. Advisory Boards :
–External business people – voluntary
–Discuss strategic and other issues
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18. Sources of Innovation:
–The unexpected idea
–The incongruity (strangeness)
–Innovation based on process need
–Changes in industry or market structure
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19. Sources of Innovation:
–Demographics differences
–Changes in perception, mood and meaning
–New knowledge
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20. Factors affecting new venture success :
–Structure of industry
–Business strategy of new venture
–Behavioral characteristics of entrepreneur
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21. Entrepreneurial Characteristics:
–Identify opportunities better
–Sense of urgency—action oriented
–Detailed knowledge
–Access to outside help
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22. Sub-stages of small business development
–Existence
–Survival
–Success
–Take-off
–Resource maturity
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24. Evaluation and Control:
–Line between debt and equity is blurred
–Lifestyle part of financial statements
–Standard financial formulas don’t apply
–Personal preference
–Banks combine personal and business wealth
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25. Thank You
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