ch06.pptx Bussiness management for small business Organ

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Part 2
Starting and
Growing Your
Business

Chapter 6
Starting Your Own
Business: The
Entrepreneurship
Alternative

6-3
Chapter Objectives
1. Define the term entrepreneur and distinguish among
entrepreneurs, small-business owners, and managers.
2. Identify three different types of entrepreneurs.
3. Explain why people choose to become entrepreneurs.
4. Discuss conditions that encourage opportunities for
entrepreneurs.
5. Describe the role of entrepreneurs in the economy.
6. Identify personality traits that typically characterize
successful entrepreneurs.
7. Summarize the process of starting a new venture.
8. Explain how organizations promote intrapreneurship.

6-4
Chapter Overview
People are increasingly choosing the path of
entrepreneurship
To become an entrepreneur, learn as much
as possible by:
Completing academic programs
Gaining practical experience working
Reading newspaper and magazine articles
and biographies of successful
entrepreneurs

6-5
What Is An Entrepreneur?
A person who seeks a profitable
opportunity and takes the
necessary risks to set up and
operate a business.
Websites
Entrepreneurial Leadership
Entrepreneur
EntreWorld

6-6
Categories of Entrepreneurs

6-7
Classic entrepreneurs—
person who identifies a
business opportunity and
allocates available
resources to tap that
market.

6-8
Intrapreneur—
entrepreneurially oriented
person who develops
innovations within the context of
a large organization.
Change Agent—manager who
tries to revitalize an established
firm to keep it competitive.

6-9
 Why People Become Entrepreneurs

6-10
 U.S. Adults Currently Engaged in Starting a
Business

6-11
Reasons to Choose Entrepreneurship
as a Career Path
Desire to Be Your Own Boss
Self-management is the motivation of
many entrepreneurs
Financial Success
Entrepreneurs:
Are wealth creators
Believe they won’t get rich working for
others
Path to riches can be long and uncertain

6-12
Reasons to Choose Entrepreneurship
as a Career Path
Job Security
Many workers lack job security
Growing percentage of Americans create
their own by starting their own firms
Quality of Life
Gives the founder some choice over when,
where, and how to work
Many work extraordinarily long hours . . .
often at the whim of their customers

6-13
 Factors Supporting and Expanding Opportunities
for Entrepreneurs

6-14
The Environment for Entrepreneurs
Globalization
Creates many opportunities
for entrepreneurs
Allows products to be sold
overseas
Provides international talent
pool

6-15
Education
Tremendous growth in educational
opportunity for would-be entrepreneurs
via:
College Classes
Business schools helping students
start businesses
Other organizations like the Center
for Entrepreneurial Leadership

6-16
Information Technology
Provided a big boost for entrepreneurs
Helps entrepreneurs work quickly and
efficiently, provide attentive customer
service, increase sales, and project a
professional image
Has created demand for new products
Internet is also a challenge for
entrepreneurs
Customers can go online, quickly get
needed information, and buy from
anywhere in the world

6-17
Demographic and Economic
Trends
Demographic trends create
opportunities
for new goods and services

6-18
Entrepreneurship around the
World
Growth of entrepreneurship is a
worldwide phenomenon
Level of entrepreneurship varies
considerably even among
industrialized nations

6-19
 Levels of Entrepreneurial Activity in 10 Countries

6-20
Influence of Entrepreneurs on
the Economy
American entrepreneurs have given the world
goods and services that have changed the
way people live, work, and play
Products include:
Ball-point pens
Netscape Navigator software
Fiberglass skis
Velcro fasteners
FedEx delivery service
MacDonald's

6-21
the Economy
Influence of Entrepreneurs on the Economy

6-22
the Economy
Innovation
Entrepreneurs:
Create new products
Build new industries
Bring new life to old industries
Since WWII, behind:
2/3rds of Inventions
95% of major innovations

6-23
the Economy
Job Generation
Vital source of new jobs
Typically hire small numbers of
employees per firm . . . spread
over many companies
See potential employees where
established firms overlook them
Gazelles

6-24
the Economy
Diversity
Entrepreneurship offers
excellent economic
opportunities for women and
minorities

6-25
Characteristics of Entrepreneurs

6-26
Vision
Have an overall idea for how to make
a business inspiration a success
High Energy Level
Willingly work hard to realize their
visions
Need to Achieve
Need to work hard because they want
to excel

6-27
Self-Confidence and Optimism
Believe in ability to succeed, and they
instill their optimism in others
Tolerance for Failure
Entrepreneurs view setbacks and
failures as learning experiences
Not easily discouraged or disappointed
when things don’t go as planned

6-28
Creativity
Entrepreneurs typically conceive new
ideas for goods and services
Devise innovative ways to overcome
difficult problems and situations
Tolerance for Ambiguity
Take the uncertainties associated
with launching a venture in stride

6-29
Internal Locus of Control
Believe that they control their
own fates
Take personal responsibility for
the success or failure of their
actions rather than believing in
luck or fate

6-30
Starting a New Venture
Selecting a Business Idea
Finding something you love to do
and are good at doing
Determining whether your idea can
satisfy a need in the market
Success also depends on your
offering being appealing to the
marketplace

6-31
Buying an Existing Business
Some prefer not to assume the
risks of starting a new firm
Buying a Franchise
Another less risky
way to begin a business

6-32
Creating a Business Plan
Online Resources for Preparing a Business
Plan

6-33
Finding Financing
Seed Capital—initial funding
needed to launch a new venture.
Debt Financing—borrowed funds
that entrepreneurs must repay.

6-34
Equity Financing—funds invested in
new ventures in exchange for part
ownership.
Venture Capitalists—business firm or
group of individuals who invest in new
and growing firms.

6-35
Angel Investors—wealthy
individuals who invest directly
in a new venture in exchange
for an equity stake.

6-36
Intrapreneurship
Intrapreneurship—process of promoting
innovations within the structure of an
existing organization.
Helps retain employees who might
otherwise leave to start their own
businesses
Intrapreneurship practiced in:
3M (e.g. skunkworks)
Thermo Electron
Xerox
Intuit

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