Entrepreneurship

Chapter 5June 12, 2012

Learning Objectives

LO1 Describe why people become entrepreneurs and what it takes, personally

LO2 Summarize how to assess opportunities to start a new company

LO3 Identify common causes of success and failureLO4 Discuss common management challengesLO5 Explain how to increase your chances of success, including

good business planningLO6 Describe how managers of large companies can foster

intrapreneurship and an entrepreneurial orientation

3-2

And others……..

• where's your picture?

So you want to be an entrepreneur?

• Small Business Administration Entrepreneur Readiness

• General assistance• Offered by Google

What is entrepreneurship?

• The pursuit of lucrative opportunities by enterprising individuals (your text)

• Activity of creating new businesses by freewheeling mavericks who operate in a world far removed from corporate life

• Major source of economic growth and job creation

Source of economic development

• 565,000 new businesses per month (2010)• No new companies = negative annual

employment growth• Micro-firms– 20% of all new jobs each year

Demographics and entrepreneurs

• Greatest increase in Latino start-ups• Decline in African-American start-ups• Slight increase in start-ups by men• Slight decrease in start-ups by women

Who is an entrepreneur?

• Made, not born– “Transitioned entrepreneurs”

• “Serial entrepreneurs”• “Social entrepreneurs”• “Lifestyle entrepreneurs”

Who is an entrepreneur?

• Similar problems– Funding– People– know-how (expertise)

• A rose is a rose………– Chaos = opportunity– “reality distortion field”

• Fortune 500 should listen

Entrepreneur's “DNA”

At the heart and soul …..

• A way of viewing the world• Ability to act based on those views• Locus of control• An opportunistic outlook• A willingness to take risks (and to fail)

Who is The Entrepreneur?

5-12

So what business should you start?

• An idea– But have to be able to implement it

• The opportunity– Lemons? Then make lemonade

• Franchises– Careful– Franchisor– Franchisee

• The next frontiers– To infinity and beyond!!!

SpaceX Dragon

• Interesting video

Opportunity Analysis

5-16

How to pay for it?

Business Plan

Planning

• Business plan– A formal planning step that focuses on the entire venture

and describes all the elements involved in starting it.

5-18

Outline of a Business Plan

5-19

Outline of a Business Plan

5-20

And then what????

• 50% fail in the first 5 years (SBA)– Lack of experience– Insufficient capital (money)– Poor location– Poor inventory management– Over-investment in fixed assets– Poor credit arrangements– Personal use of business funds– Unexpected growth

Corporate entrepreneurship

• Entrepreneurial orientation– Independent action– Innovativeness– Risk taking– Proactiveness– Competitive aggressiveness

5-22

Corporate entrepreneurship

• Intrapreneurship• Two approaches– Bootlegging– Skunkworks

• High risk/high reward (personally and at corporate level)

So why not you?

• seriously, why not you?