To describe the major pathways that may lead to entrepreneurial ventures To examine bootstrapping and minipreneurship as fast lanes to gaining entrepreneurial experience To identify and discuss what is involved in acquiring an established venture that already has some entrepreneurial momentum To outline key questions to ask when buying an ongoing venture that is already generating value To define a franchise and outline its structure To examine the benefits and drawbacks of franchising To look at the route social entrepreneurs take to creating new ventures

1. Entrepreneurial
pathways
• Which way for you?
• Different pathways to
experiencing
entrepreneurship
• Each has its own
disadvantages and
difficulties
• Don’t rush your decision

3. Chapter 5
Pathways to entrepreneurial ventures

4. Objectives
1. To describe the major pathways that may lead to
entrepreneurial ventures
2. To examine bootstrapping and minipreneurship as fast lanes
to gaining entrepreneurial experience
3. To identify and discuss what is involved in acquiring an
established venture that already has some entrepreneurial
momentum
4. To outline key questions to ask when buying an ongoing
venture that is already generating value
5. To define a franchise and outline its structure
6. To examine the benefits and drawbacks of franchising
7. To look at the route social entrepreneurs take to creating
new ventures

5. But first
• Assuming you have the desire and
enough money to make either choice,
which would you prefer?
• Are you more likely to establish your
own business ‘from scratch’ or
• take over running an established
business?
• Why?
?

6. Six common
business
creation pathways
1. Bootstrapping
2. Minipreneurship
3. A new business start-up
4. Acquiring an existing venture
5. Buying a franchise
6. Establishing a social venture
7. Taking over the family business
(Chapter 7)
8. Starting a business for your
employer (Chapter 8)

7. Pathway 1:
Bootstrapping
• “Highly creative acquisition”
• Using other people’s resources
• Relies on:
– Networks, trust &
– cooperation
– wise use of existing resources.
• No debt / don’t give away equity
• Look for ‘low hanging fruit’
• Use a copycat idea
• Find quick, break-even, cash-
generating products
• Keep growth in check
• Focus on cash for healthy,
immediate returns
• Avoid loss-making strategiesSee dozens of bootstrapping ideas in Chapter 5.

8. Pathway 2: Business assistance funding
• Access to funds to support
start-ups and development of
small businesses
• Often from government
• Not just about funding, also:
– business information
– training programs, workshops
and seminars
– business referrals and networks
– mentoring support
See URL list in Chapter 5 “Business
Development Assistance in the Asia-
Pacific”

9. Pathway 3:
Minipreneurship
• Do you create rather than consume
goods or services?
• eBay for product placement and
marketing
• PayPal for accepting secure
payments.
• Niche is the new mass.
• Consumerism is now about
standing out rather than conforming
to trends.

10. Selling to the long tail
Chocolate
Dark Chocolate
How to make chocolate
Fairtrade and organic beans
Where to buy cocoa beans
How to get cocoa beans
from Samoa
Niche is the new
mass. You only need
a few thousand people
in the entire world to
be interested in what
you offer.

11. Can you give your own
examples of long tail products
?

12. What are the main drivers
behind trend towards
minipreneurship?
• Entrepreneurs now have access
to resources and technologies
previously only available to large
companies
• 24/7 access to the marketplace
• Access to marketplaces
• Access to manufacturing
• Partnering with top talent
• Self-sufficiency, with a huge
support network Australian Murray River Pink
Flake Salt is available for sale 24/7.

13. Pathway 4: Classic start-up
• Entrepreneurs launch a
business when they can:
– drive less innovative products
out of the market
– advance the product frontier
– lower prices
– satisfy untapped demand or
– broaden market penetration.
• Two ways to do this:
– create a unique product or
service
– adapt or extend something that
is currently on the market

14. The new-new approach
• Identify trends that could become
products
• Try making a list of annoying
products you deal with over a week
(PITA products)
• Common sources of ideas are prior
jobs, hobbies/interests and
personally identified problems
• Most business ideas tend to come
from people’s experiences.

15. The new-new approach
1. Think about the last few days.
Identify a product you have used
which left you annoyed.
What could be done to fix it?
2. Identify a current social or
educational trend.
If people were caught up in the
trend, what products or services
would they want?
?

16. The new-old approach
• Rather than a totally new idea,
piggyback.
• Bring an existing idea to a new
place.
• Choose a product or service
which is difficult to copy (to
minimise or delay competition).

17. Opportunity trends
• Food: Gourmet chocolate, powdered alcohol drinks,
special needs food, culinary tourism
• Green products: fibres and textiles, solar and wind,
miniature power
• Business and analytics: Group buying, crowd sourcing,
location-based marketing
• Personal and healthcare: niche gyms, wearable
technology, medical marijuana
• Mobile: bump exchange, translators, locators, ultra-private
technologies.
• See Table 5.2 for many more

18. The cost of start-up
• How much will it cost to stay in business for the first year?
• How much revenue will the organisation generate during this time period?
• If outflow of cash is greater than inflow, how long will it take to ‘turn the corner’?
• Is the return adequate in terms of risk?
Start-up expense calculator on p. 164.
Salaries and wages
Rent
Advertising
Delivery expenses
Supplies
Telephone
Insurance
Taxes,
superannuation and
other employee on-
costs
Interest
Maintenance
Legal and professional
Start-up costs
Fixtures and equipment
Starting inventory
Legal and professional
fees
Advertising and
promotion

19. Go or no-go decisions
• What is the ‘upside gain’ and
‘downside loss’?
• What is the risk versus reward?
• Analytic tools covered in this book
– Opportunity analysis (Chapter 9)
– Feasibility analysis (Chapter 12)
– Sensitivity analysis (Chapter 15)
– Business planning (Chapter 16)

20. Advantages
• Future success is likely
• Reduced time and effort
• Possibly, a good price
Key questions to ask
• Why being sold?
• Current physical condition of the
business?
• Condition of inventory?
• How many of the employees will
remain?
• What type of competition does the
business face?
• What does the company’s financial
picture look like?
Pathway 5: acquiring an existing venture

21. Pathway 5:
buying a franchise
• Combining independence with
the larger umbrella of a
corporation.
• 1/3 of all retail sales generated
by franchises.
• The franchisee is generally
legally independent, but
economically dependent.
Jim's Group, started in Perth in
1982, is now the world's largest
home franchise business.

22. Franchisee
• A financial investment
• Obtains standardised inventory
• Maintains quality of
performance
• Pays franchise fee and a
percentage of revenues
Franchisor
• Allows use of the
company name
• Provides management
training
• Sells merchandise at
wholesale
• Continued support
Advantages
• Training and guidance
• Brand-name appeal
• A proven track record
• Financial assistance
Disadvantages
• Franchise fees
• Franchisor control
• Unfulfilled promises

23. Examples of green franchises
• Sustainable home energy
• Carbon neutral dry cleaning
• Ecological car cleaning and
detailing services
• Pizza that use hybrid cars for
delivery
• Rubbish removal companies
that completely recycle the
waste
• Eco-friendly auto tune-ups
• Organic lawn care
• Chemical-free carpet
cleaning
• Energy doctors to reduce
heating and cooling costs
• Printer cartridge recycling

24. Social venturing
How would establishing a social
venture be different to the preceding
pathways?
?

25. Pathway 6:
social venturing
• For the entrepreneur driven by a
desire to find solutions to social
injustice or environmental problems.
• Double challenge:
– A strategy for accomplishing lasting social
change
– A viable profit-making business model
• Apply business skills to solve real-
world challenges and capture
opportunities in new market niches.
Global social venture competition

26. Models of
social venturing
• Social-purpose business to
support or create economic
opportunities for a particular
target population, while with
reference a financial bottom
line.
Non-profit
enterprise
Social-
purpose
Business-
develop-
ment
service
Micro-
finance
institution
Cooperat-
ive

27. Key concepts
(close your books)
1. Name the six pathways.
2. Which pathway(s) would appeal
to you and why?
?

28. Key concepts
Six common pathways:
1. Bootstrapping
2. Minipreneurship
3. A new business start-up
4. Acquiring an existing venture
5. Buying a franchise
6. Establishing a social venture
• Don’t forget we’ll be covering
two more pathways:
– Taking over the family business
(Chapter 7)
– Starting a business for your
employer (Chapter 8)