- 1. Chapter 6 Starting Your Own Business: TheEntrepreneurship
Alternative Learning Goals Define the termentrepreneurand
distinguish among entrepreneurs, small-business owners, and
managers. Identify four different types of entrepreneurs. Explain
why people choose to become entrepreneurs. Discuss conditions that
encourage opportunities for entrepreneurs. Identify personality
traits that typically characterize successful entrepreneurs.
Summarize the process of starting a new venture. Explain how
organizations promote intrapreneurship. 1 2 3 5 6 7 4
2. WHAT IS AN ENTREPRENEUR? Entrepreneur Person who seeks a
profitable opportunity and takes the necessary risks to set up and
operate a business. Differ from many small-business owners in their
strong desire to make their business grow. Differ from managers
through their overriding responsibility to sue the resources of the
organization to accomplish their goals. Willing to take risks. 3.
CATEGORIES OF ENTREPRENEURS 4. REASONS TO CHOOSE ENTRE-PRENEURSHIP
AS A CAREER PATH 5. Being Your Own Boss Example: Liz Lange, founder
and CEO ofLiz Lange Maternity . Borrowed $50,000 and opened an
office to sell her designs. Now has annual sales exceeding $10
million. Financial Success Two-thirds of all millionaires are
self-employed. Path to riches is uncertain due to high failure
rate. Job Security Downsizing by large companies has eliminated
more jobs than they created. Quality of Life Lifestyle Entrepreneur
Person who starts a business to reduce work hours and create a more
relaxed lifestyle. Many define quality of life by their ability to
fulfill social objectives. 6. THE ENVIRONMENT FOR ENTREPRENEURS 7.
Globalization Market products abroad and hire international talent.
Growing internationally. 8. Education One hundred U.S. colleges and
universities offer entrepreneurship majors, 73 offer an emphasis in
entrepreneurship, hundreds of others offer courses. Universities
are helping students launch businesses. Some programs teach
entrepreneurship to young people. Students who graduate from
entrepreneurship programs are three times as likely as others to be
self-employed and to help start new businesses. 9. Information
Technology Helps entrepreneurs work quickly and efficiently,
provide attentive customer service, increase sales, and project
professional images. Entrepreneurs also produce and market products
that apply new information technology. Internet also presents a
challenge because customers can check prices and buy online from
large or small companies anywhere in the world. Demographic and
Economic Trends New opportunities: Aging of U.S. population.
Emergence of Hispanics as nations largest ethnic group. Growth of
two-income families. 10. CHARACTERISTICS OF ENTREPRENEURS 11. 12.
STARTING A NEW VENTURE Selecting a Business Idea Two most important
considerations: Finding something you love to do and are good at.
Determining whether your idea can satisfy a need in the
marketplace. Buying an Existing Business Employees already in place
serve established customers and deal with familiar suppliers. Good
or service is known in the marketplace. Buying a Franchise Less
risky than starting a new firm, but requires careful andenergetic
preparation. 13. Creating a Business Plan Forty-seven percent of
the most recentInc . 500CEOs didnot create a formal written plan.
Still advisable because it helps an entrepreneur prepareenough
resources and stay focused on key objectives. AllBusiness .com
KaufmaneVenturing MoreBusiness .com 14. Finding Financing Seed
capital Initial funding needed to launch a new venture. Average
amount of seed money is $1.5 million, but median is $50,000.
Fifty-four percent of entrepreneurs started with $50,000 or less.
Debt financing Borrowed funds that entrepreneurs must repay. Equity
financing Funds invested in new ventures in exchange for part
ownership. May benefit entrepreneur with a good idea and skills but
little or no money. Venture capitalists Business firms or groups of
individuals that invest in new and growing firms in exchange for an
ownership share. Angel investors Wealthy individuals who invest
directly in a new venture in exchange for an equity stake. 15.
INTRAPRENEURSHIP IntrapreneurshipProcess of promoting innovation
within the structure of an existing organization. Example:3M
Researchers spend 15 percent of their time working on their own
ideas without approval from management. Askunkworksproject is
initiated by an employee who conceives an idea and then recruits
resources from within to turn it into a commercial product. Pacing
programsare company-initiated projects that focus on a few products
and technologies in which company sees potential for rapid
marketplace winners. Helps firms retain valuable employees.