2. What you’ll learn
The process of
entrepreneurship
The components of a new
venture organization
How businesses succeed
1.2 The Entrepreneurial Process
3. 1.2 The Entrepreneurial Process
Why it’s important
Understanding the
entrepreneurial process will
help you build a more
effective business that creates
value.
4. 1.2 The Entrepreneurial Process
Why it’s important
Learning the facts about
business success and failure
will help you make wiser
business decisions.
5. 1.2 The Entrepreneurial Process
Key Terms
environment
enterprise zones
opportunity
start-up resources
new venture
7. 1.2 The Entrepreneurial Process
I. ENTREPRENEURIAL
START-UP
The entrepreneurial start-up
process includes five key
components.
A. The entrepreneur
8. C. The opportunity
D. Start-up resources
E. The new venture
organization
1.2 The Entrepreneurial Process
B. The environment
9. 1.2 The Entrepreneurial Process
II. THE ENTREPRENEUR
A. The entrepreneur pulls
together the different
components involved in
creating a new business.
10. 1.2 The Entrepreneurial Process
B. The entrepreneur brings to
the business all the behaviors
and experience from his or
her life to that point.
11. 1.2 The Entrepreneurial Process
III. THE ENVIRONMENT
A. The business environment
refers to the variables
affecting it that are not
controlled by the
entrepreneur.
12. 1.2 The Entrepreneurial Process
B. There are four general
categories of environmental
variables affecting a new
venture.
1.The nature of the
environment (uncertain,
fast-changing, stable,
highly competitive etc.)
13. 1.2 The Entrepreneurial Process
2. The availability of resources
3. Ways to realize value
(favorable taxes, good
markets, supportive
government policies)
4. Incentives to create new
businesses, such as
enterprise zones
14. 1.2 The Entrepreneurial Process
Enterprise zones - Specially
designated area of a community
that provide tax benefits to new
businesses locating there and
grants for new product
development.
16. 1.2 The Entrepreneurial Process
IV. THE OPPORTUNITY
A. An opportunity is an idea that
has commercial value.
B. New businesses are founded
on recognized opportunities
in the environment.
17. 1.2 The Entrepreneurial Process
V. START-UP RESOURCES
A. The start-up resources an
entrepreneur needs to start a
business include the
following.
1. Capital
18. 1.2 The Entrepreneurial Process
2. Skilled labor
3. Management expertise
4. Legal and financial advice
5. A facility
6. Equipment
7. Customers
20. 1.2 The Entrepreneurial Process
VI. THE NEW VENTURE
ORGANIZATION
A. The new venture
organization is the shell
that surrounds all the
parts of a new business.
21. 1.2 The Entrepreneurial Process
B. The parts of a new business
include the following.
1. Products
2. Processes
3. Services
22. 1.2 The Entrepreneurial Process
C. Entrepreneurs are able to
create value for a business
through new venture
organization.
23. 1.2 The Entrepreneurial Process
VII. HOW BUSINESSES
SUCCEED
A. The myth that most new
businesses fail is not true.
24. 1.2 The Entrepreneurial Process
B. A recent study done by Dun
& Bradstreet found that
more businesses succeed than
fail.
25. C. The problem with most
reports on business failure is
that they don’t define failure
properly.
1.2 The Entrepreneurial Process
26. 1.2 The Entrepreneurial Process
VIII. WHAT IS BUSINESS
FAILURE?
A. A business failure is a
business that files for
bankruptcy or loses
money for creditors and
their investors.
27. 1.2 The Entrepreneurial Process
B. Businesses that disappear
from public lists are not
always failures.
C. Some businesses that
disappear from public lists
are discontinuances.
28. 1.2 The Entrepreneurial Process
D. A discontinuance is a
businesses that is either
operating under a new name
or has been purposely
discontinued to start a new
one.
29. 1.2 The Entrepreneurial Process
Discussion Starter
Name a business in the
community that is
considered a
discontinuance--not a
failure.
30. 1.2 The Entrepreneurial Process
E. Discontinuances are not
failures because they are
planned and cause no harm
to creditors.
31. 1.2 The Entrepreneurial Process
F. Failure is also sometimes
mistakenly reported when an
owner changes the legal
status of a business.
32. 1.2 The Entrepreneurial Process
IX. HOW CAN
ENTREPRENEURS
SUCCEED?
A. The chances of a new
business succeeding are
good with effective
planning.
33. 1.2 The Entrepreneurial Process
B. The number–one cause of
business failure is poor
management.
34. 1.2 The Entrepreneurial Process
C. Entrepreneurs can improve
their chances of success.
1. Learn how to build a new
business
2. Assemble a team that has
the expertise they need
