THE ENTREPRENEURTHE ENTREPRENEUR

Chapter 2Chapter 2

MISCONCEPTIONSMISCONCEPTIONS

Several times a year we see Several times a year we see newspapers or t.v. shows newspapers or t.v. shows highlights of an individual who highlights of an individual who has become a successful has become a successful entrepreneur. The most entrepreneur. The most noteworthy often tell about a noteworthy often tell about a high school or college dropout high school or college dropout who turned a bright idea into a who turned a bright idea into a million dollar business.million dollar business.

More misconceptions…..More misconceptions…..

Variation A: the entrepreneur Variation A: the entrepreneur slaved 20 years to make a slaved 20 years to make a dream come true.dream come true.

OROR

Variation B: how the Variation B: how the entrepreneur gambled entrepreneur gambled everything his or her family everything his or her family owned on a long shot that came owned on a long shot that came through.through.

PROFILE OF THE PROFILE OF THE ENTREPRENEUR ENTREPRENEUR

PSYCHOLOGICAL PORTRAITPSYCHOLOGICAL PORTRAIT

CHARACTERISTICS OF CHARACTERISTICS OF LEISURE SERVICE LEISURE SERVICE ENTREPRENEURENTREPRENEUR

THE SPIRIT OF THE SPIRIT OF ENTREPRENEURSHIPENTREPRENEURSHIP

Psychological PortraitPsychological Portrait

Self confident and persistent in Self confident and persistent in the pursuit of their objectivesthe pursuit of their objectives

Are motivated to create Are motivated to create something unique on their ownsomething unique on their own

Dislike someone else having Dislike someone else having authority over themauthority over them

Are impatient and drive Are impatient and drive themselves and everyone themthemselves and everyone them

More…..More…..

Are comfortable in stress Are comfortable in stress situations and are challenged situations and are challenged rather than discouraged by rather than discouraged by setbackssetbacks

Are willing to make personal and Are willing to make personal and family sacrifices in order to family sacrifices in order to succeedsucceed

Are sensitive to good ideasAre sensitive to good ideas

And more…And more…

View money as a resource and View money as a resource and as a way of keeping score, but as a way of keeping score, but not as a motivating source.not as a motivating source.

Are mentally tough and Are mentally tough and recognize their own limitationsrecognize their own limitations

Are more concerned with Are more concerned with people’s accomplishments than people’s accomplishments than their feelingstheir feelings

And more….And more….

Prefer individual sports over Prefer individual sports over teamteam

Are competitive, but compete Are competitive, but compete against self-imposed standardsagainst self-imposed standards

Can comprehend complex Can comprehend complex situations and can work on situations and can work on multiple tasksmultiple tasks

Are realistic, calculated risk Are realistic, calculated risk takerstakers

Characteristics of Leisure Characteristics of Leisure Service EntrepreneursService Entrepreneurs

In a study of sport and leisure In a study of sport and leisure service entrepreneurs, found service entrepreneurs, found that no particular economic that no particular economic planning preceded their planning preceded their success. Entrepreneurs of sport success. Entrepreneurs of sport and leisure businesses tended and leisure businesses tended to de-emphasize growth to de-emphasize growth potential in favor of remaining a potential in favor of remaining a small, viable operation.small, viable operation.

Cont….Cont….

Commitment to the QUALITY of Commitment to the QUALITY of the product or service was the the product or service was the “key to success” that the sport “key to success” that the sport and leisure entrepreneurs most and leisure entrepreneurs most often emphasized. In addition, often emphasized. In addition, the study suggests that personal the study suggests that personal financial rewards were a lower financial rewards were a lower priority than the intrinsic rewards priority than the intrinsic rewards of operating a business.of operating a business.

The Spirit of EntrepreneurshipThe Spirit of Entrepreneurship

What is the “bottom line” that all What is the “bottom line” that all entrepreneurs must possess? entrepreneurs must possess? Many authorities believe that the Many authorities believe that the energy and spirit is the key energy and spirit is the key factor. A lot of people have factor. A lot of people have grand ideas, only few have the grand ideas, only few have the drive to make the dream come drive to make the dream come true.true.

SYSTEMATIC SYSTEMATIC ENTREPRENEURSHIP AND ENTREPRENEURSHIP AND SOURCES FOR INNOVATIONSOURCES FOR INNOVATION Source 1: The Unexpected Success Source 1: The Unexpected Success

or Failureor Failure Source 2: IncongruitiesSource 2: Incongruities Source 3: The Process NeedSource 3: The Process Need Source 4: Industry & Market Source 4: Industry & Market

StructuresStructures Source 5: DemographicsSource 5: Demographics Source 6: Changes In PerceptionSource 6: Changes In Perception Source 7: New KnowledgeSource 7: New Knowledge Source 8: The Bright IdeaSource 8: The Bright Idea

The Unexpected The Unexpected Success of Failure Success of Failure

They can point to new opportunitiesThey can point to new opportunities This method is often neglected, This method is often neglected,

because it may not be seen, even by because it may not be seen, even by insiders. For example, a sporting insiders. For example, a sporting goods store in Texas sold a small goods store in Texas sold a small line of ski equipment and sales line of ski equipment and sales increased over a couple of years, increased over a couple of years, because air fares were cheap so because air fares were cheap so people could get to ski resorts in people could get to ski resorts in Colorado, Wyoming, etc.Colorado, Wyoming, etc.

IncongruitiesIncongruities

An incongruity is a discrepancy between an An incongruity is a discrepancy between an existing situation and what should logically existing situation and what should logically be happening. For example, a public be happening. For example, a public recreation agency has a large youth recreation agency has a large youth football program with over 65 teams, but no football program with over 65 teams, but no soccer program, because surveys soccer program, because surveys suggested that soccer was not a popular suggested that soccer was not a popular fall sport for youth. However, football is an fall sport for youth. However, football is an expensive sport and soccer is not. The expensive sport and soccer is not. The agency was losing money on football so agency was losing money on football so met the incongruity by offering a soccer met the incongruity by offering a soccer program that more than covered costs and program that more than covered costs and actually made a profit.actually made a profit.

The Process NeedThe Process Need

This is a task-focused This is a task-focused innovation that perfects a innovation that perfects a process that already exists by process that already exists by replacing a weak link or by replacing a weak link or by redesigning an existing process redesigning an existing process around new knowledge. around new knowledge.

Example: Movie theaters and Example: Movie theaters and self serve soft drink stations.self serve soft drink stations.

Industry and Market Industry and Market StructuresStructures

This source of innovation This source of innovation requires that managers of a requires that managers of a company ask themselves: company ask themselves: “What is our business?” The “What is our business?” The idea is to search for a flaw in the idea is to search for a flaw in the basic nature of the industry.basic nature of the industry.

For example: Wal-mart Corp.For example: Wal-mart Corp.

The DemographicsThe Demographics

Demographic changes are the Demographic changes are the clearest and have the most clearest and have the most predictable consequences. These predictable consequences. These shifts have long lead times and shifts have long lead times and measured by many organizations measured by many organizations from whom data is readily available. from whom data is readily available. Often times, this data is not available Often times, this data is not available to all and it becomes a question of to all and it becomes a question of which entrepreneur can interpret and which entrepreneur can interpret and exploit the data and shifts in the exploit the data and shifts in the demographics, ie., women in demographics, ie., women in business.business.

Changes In PerceptionChanges In Perception

When changes in people’s When changes in people’s perception take place, facts do perception take place, facts do not change, but meanings do.not change, but meanings do.

For example: fitness used to be For example: fitness used to be perceived as weight lifting, perceived as weight lifting, distance running, etc. Now it is distance running, etc. Now it is more of a lifestyle and social more of a lifestyle and social interaction perception.interaction perception.

New KnowledgeNew Knowledge

Innovations based on new Innovations based on new knowledge are the “superstars” knowledge are the “superstars” of entrepreneurs.of entrepreneurs.

For example: DVD players, For example: DVD players, digital cameras, CD players, digital cameras, CD players, global positioning for boats and global positioning for boats and cars, etc.cars, etc.

The Bright IdeasThe Bright Ideas

This innovation is the riskiest This innovation is the riskiest and the least successful and the least successful method.method.

They are typically unorganized They are typically unorganized and out of synch with the market and out of synch with the market demand or the demographicsdemand or the demographics

CHALLENGES AS AN CHALLENGES AS AN ENTREPRENEUR W/IN AN ENTREPRENEUR W/IN AN ORGANIZATIONORGANIZATION Resistance to change by the Resistance to change by the

organizationorganization Resentment of the individualResentment of the individual Red tape that makes it difficult to Red tape that makes it difficult to

operate quicklyoperate quickly Discouragement of creative ideasDiscouragement of creative ideas Little tolerance for riskLittle tolerance for risk Lack of incentives for innovationsLack of incentives for innovations Over-emphasis on accountabilityOver-emphasis on accountability

HOW TO OVERCOME HOW TO OVERCOME THE BARRIERS THE BARRIERS

1.1. Serve 3 types of needs: the Serve 3 types of needs: the customer, organization, & the customer, organization, & the entrapreneur.entrapreneur.

2.2. Allow time to develop the ideaAllow time to develop the idea

3.3. Develop a business planDevelop a business plan

4.4. Find allies and sponsorsFind allies and sponsors

5.5. Avoid premature publicityAvoid premature publicity

6.6. Get small decisionsGet small decisions

7.7. Recognize your own weaknessesRecognize your own weaknesses

ENTREPRENEURIAL ENTREPRENEURIAL MANAGEMENT MANAGEMENT

1.1. Your business should be built Your business should be built around honesty and integrityaround honesty and integrity

2.2. Stick to what you know, but learn Stick to what you know, but learn more.more.

3.3. Find a bank or other financial Find a bank or other financial institution you can rely on, and one institution you can rely on, and one that can rely on you.that can rely on you.

4.4. Treat your employees well by Treat your employees well by caring for people in the totality of caring for people in the totality of their lives, not just at work.their lives, not just at work.

Cont…Cont…

5. Give employees the license to 5. Give employees the license to be themselves and the be themselves and the opportunity to be entrepreneurs.opportunity to be entrepreneurs.

6. Earn the trust of your 6. Earn the trust of your customers by treating them fairly customers by treating them fairly and with appreciation. Your and with appreciation. Your employees will follow this lead if employees will follow this lead if they feel appreciated.they feel appreciated.

A little more…A little more…

7. Strive for excellence! Being the 7. Strive for excellence! Being the best is better than being the best is better than being the biggest.biggest.

8. Always put part of your 8. Always put part of your earnings back into the business.earnings back into the business.

9. Plan ahead9. Plan ahead10. Watch your business like a 10. Watch your business like a

hawk, KNOW YOUR hawk, KNOW YOUR FINANCES.FINANCES.