What Is Entrepreneurship? 1... · What you will learn . . . The History of Entrepreneurship The Entrepreneurial Start-up Process New Business Success and Failure Entrepreneurship
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EntrepreneurshipEntrepreneurship
What Is Entrepreneurship?What Is Entrepreneurship?
1.2 What is the Entrepreneurial Process1.2 What is the Entrepreneurial Process
What you will learn . . .What you will learn . . .
� The History of Entrepreneurship
� The Entrepreneurial Start-up Process
� New Business Success and Failure� New Business Success and Failure
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The History of EntrepreneurshipThe History of Entrepreneurship
� Started with the American Revolution and the innovative colonists who created new products and services.
� Small businesses were the norm and provided for basic needs.
� The Industrial Revolution brought the rise of large companies in steel, railroads and manufacturing.
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The History of Entrepreneurship, The History of Entrepreneurship,
cont.cont.
� 1960’s – large companies were common. Job security was provided due to lack of overseas competition. Employees spent entire lives with one company.entire lives with one company.
� 1970’s – inflation, high prices, high interest rates caused borrowing and spending to slow. International competition occurred. Technology caused whole product categories to become obsolete.
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The History of Entrepreneurship, The History of Entrepreneurship,
cont.cont.
� 1980’s – “Decade of Entrepreneurship” Large companies were suffering and new, smaller companies were stepping in. Outsourcing became popular and new jobs Outsourcing became popular and new jobs became available.
� 1990’s – The Internet has changed how businesses operated and instigated many new entrepreneurial ventures.
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The Entrepreneurial EvolutionThe Entrepreneurial Evolution
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The Entrepreneurial StartThe Entrepreneurial Start--up up
ProcessProcess
� Five key components
� All work together to create the new business
� The entrepreneur� The entrepreneur
� The environment
� The opportunity
� Start-up resources
� The new venture organization
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The EntrepreneurThe Entrepreneur
� The driving force behind the start-up process.
� Recognizes the opportunity.
� Pulls together the resources.
� Creates the company.
� Is the calculated risk taker.
� Has the passion and persistence to see the venture through.
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The EnvironmentThe Environment
� Four categories of environmental variables affect a new venture’s ability to start and grow� The nature of the environment (uncertain, fast-� The nature of the environment (uncertain, fast-
changing, unstable, or competitive)
� Availability of resources (labor, capital)
� Ways to realize value (taxes, good markets)
� Incentives to create new businesses (Enterprise Zones provide tax benefits or grants to start)
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The OpportunityThe Opportunity
� An idea that has commercial value
� Customers must be willing and ready to buy
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StartStart--up Resourcesup Resources
� Capital
� Skilled labor
� Management expertise� Management expertise
� Legal and financial advice
� Facility
� Equipment
� Customers
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The New Venture OrganizationThe New Venture Organization
� The infrastructure of the business
� The foundation that supports all of the products, processes and services of the business
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New Business Success and New Business Success and
FailureFailure
� 50/50 chance of surviving five years or more.
� The Small Business Administration (SBA) reports that 66 percent of small businesses survive the first two years.
� Drops to about 40 percent by six years.
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Facts About Business FailureFacts About Business Failure
� A business that has stopped operating with a loss to creditors.
� Loses money for creditors (the people how lent it money and investors).
� Discontinuance – a business that is operating under a new name – closed or changed with no harm to creditors.
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How Entrepreneurs Can SucceedHow Entrepreneurs Can Succeed
� Effective planning and management
� Recognize opportunity in the marketplace, assemble a team with the necessary expertise to execute the business concept.
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Entrepreneurs tend to . . .Entrepreneurs tend to . . .
� be passionate about achieving their goals � have a spirit of adventure (in fact, the word "adventure" is derived from
the Latin word meaning "to venture") � have a strong need to achieve and seek personal accomplishment � be self-confident and self-reliant � be goal-oriented � be goal-oriented � be innovative, creative, and versatile � be persistent � be hardworking and energetic � have a positive attitude � be willing to take initiative � have a strong sense of commitment
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