CREATING A NEW BUSINESS Entrp 1. Lecture1. My back ground Research interest revolves around...

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Transcript of CREATING A NEW BUSINESS Entrp 1. Lecture1. My back ground Research interest revolves around...

Entrp 1. Lecture1

Creating a New BusinessEntrp 1. Lecture1My back groundResearch interest revolves around entrepreneurial activities surrounding sourcing and commercialization of radical innovations, especially in the IT and Hi-tech sectors.

Worked as a consultant with Frost & Sullivan and Access Markets International (AMI)-Partners. Clients include IBM, SAP, HP-Compaq, Intel, AMD, Cisco Systems and so forth.

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Some Lessons LearnedIt is necessary to continuously challenge your comfort zones with an idea, or concept.

Whatever you do will be insignificant, but it is very important that you do it. M.K. Gandhi

Imagination is more important than knowledge.Albert Einstein

Organizations need to run very fast to remain in their positions.

Define the term entrepreneur and distinguish among entrepreneurs, small-business owners, and managers.

Identify the different types of entrepreneurs.

Explain why people choose to become entrepreneurs.

Discuss factors that support and expand opportunities for entrepreneurs.Identify personality traits that typically characterize successful entrepreneurs.

Summarize the process of starting a new venture.

Explain how organizations promote intrapreneurship.Learning Goals12345674An entrepreneur is a 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 use the resources of the organization to accomplish their goals.Willing to take risks.What is Entrepreneurship?5Entrepreneurship is the practice of starting new organizations or revitalizing mature organizations, particularly new businesses generally in response to identified opportunities.

Entrepreneurship is often a difficult undertaking, as a vast majority of new businesses fail.

Entrepreneurial activities are substantially different depending on the type of organization that is being started. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating many job opportunities.What is Entrepreneurship?6Categories of EntrepreneursClassic EntrepreneursSerial EntrepreneursSocial Entrepreneurs

7Great Leaders

8Great Entrepreneurs

9Need For Sustained, Successful Innovation, and Subsequent Commercialization

Environment demands itCommercialization is keyApplies to every firmCEO as entrepreneurCommercialization is the means by which an innovation is seen by its users.

10Does the MBA Kill Innovation?

Yes.

For many years, business programs have produced master of business administration graduates with keen analytical skills, eager to be mid-level managers who were ready to sharpen their pencils to find the weaknesses that would ultimately kill ideas.

Most Entrepreneurs and Leaders are not MBAs. 11Characteristics of an Entrepreneur Courage Action Oriented Leadership Positive Attitude Optimistic Enthusiastic Passionate Confident Innovative Creative Opportunistic Visionary Architect and Builder High Need for Achievement Not Afraid of Failure Determined and Persistent Promoter Flexible and Adaptable Pioneer Agent of Change Tolerant of Risk Tolerant of Ambiguity Pragmatic Independent Not Willing to Work for Others Clever Resourceful

Note: One person may have all the skills, that is why it is important to find someone who can complement your skills, while sharing your values and vision. 12More than 11% of Americans run their own business.In an average month, Americans start approximately 465,000 new businesses.The past two decades have shown a heightened interest in entrepreneurial careers.People choose entrepreneurship for many reasonsDissatisfaction with traditional workTheir ideas fulfill customer needs

Entrepreneurship as a Career13Why People Become Entrepreneurs

14Being your Own BossSelf-management is the motivation that drives many entrepreneurs.Financial SuccessEntrepreneurs are wealth creators. Job SecurityOver the past ten years, large companies have eliminated more jobs than they have created.Quality of LifeStarting a business gives the founder some choice over when, where, and how to work.Why Entrepreneurship?15The Environment for Entrepreneurship

16GlobalizationThe rapid globalization of business has created many opportunities for entrepreneurs

17EducationOne hundred U.S. colleges and universities offer entrepreneurship majors.Universities are helping students launch businesses.Many programs teach entrepreneurship to young people.Information TechnologyTechnology has given entrepreneurs tools that help them compete.Entrepreneurs have used information technology to revolutionize industries.Demographic and Economic TrendsAging of U.S. population.Emergence of Hispanics as nations largest ethnic group.Growth of two-income families.

Education/IT/Demographic & Economic Trends18Characteristics of Entrepreneurs

19Entrepreneurial CharacteristicsVision - entrepreneurs begin with an overall idea for how to make their business idea a successHigh Energy Level - a willingness to work hardNeed to Achieve - entrepreneurs work hard because they want to excelSelf-Confidence - fearlessness in the face of difficult oddsTolerance for Failure - entrepreneurs are not easily discouragedCreativity - entrepreneurs devise innovative ways to overcome difficult problems and situationsTolerance for Ambiguity - entrepreneurs take in stride uncertainties.Internal Locus of Control - entrepreneurs believe they can control their own fate

20Entrepreneurial Quiz

21Starting A New VentureSelecting a Business IdeaFind something you love to do and are good at doingCan your idea satisfy a need in the marketplace?Entrepreneurs must be sure that the idea they choose has interest in the marketplaceBusiness Plan22Creating a Business Plan58% of the most recent Inc. CEOs did not create a formal written plan.But business plans do help entrepreneurs prepare enough resources and stay focused on key objectives.

23Finding FinancingDebt FinancingCredit CardsFamily and FriendsBank Loans (SBA backed)

Equity FinancingVenture CapitalistsAngel Investors

24Business Incubators is a key way government supports new venturesClean Energy Incubator (CEI)

Enterprise ZonesEncourage entrepreneurship in specific geographic areas

Government LegislationThe Immigration Act of 1990Government Support for New Ventures25IntrapreneurshipPromoting innovation within organizational structuresAn idea to promote creativityCompanies promote in a variety of ways26