Transcript Slide 1

The Nature of Entrepreneurship
Who are these people?
Who are these people?
Who are these people?
Introduction
 This is the era of the entrepreneur! Through the world,
growing numbers of people are realizing their dreams of
owning and operating their own business.
Entrepreneurship is thriving. The past two decades have
seen record numbers of entrepreneurs launching new
businesses and each year. American entrepreneurs alone
start 3 to 4.3 million businesses each year and 84 percent
are doing that for the first time.
 A study by the Global Entrepreneurship Monitor (GEM)
found 11.3 percent of the adult population in the United
States is working to start a business. North America, South
America and Latin America lead the world in
entrepreneurial activity.
Who is an ENTREPRENEUR?
 An entrepreneur is one who creates a
new business in the face of risk and
uncertainty for achieving profit and
growth opportunities and assembles
the necessary resources to capitalize on
those opportunities. Scarborough
(2005)
Traits of an ENTREPRENEUR
 Desire for responsibility
 Preference for moderate risk (risk eliminators)
 Confidence in their ability to succeed
 Desire for immediate feedback
 High level of energy
 Future orientation (serial entrepreneurs)
 Skill in organization
 Value of achievement over money
Traits of an ENTREPRENEUR
Other characteristics of entrepreneurs include:
 High degree of commitment
 Willingness to accept risk, work hard and take action
 Flexibility
YOU BE THE CONSULTANT
SUMMARY – A Pigskin Revolution
 Ed
Sabol, a once unhappy coat
salesman, had a passion for filming his
son’s high school football games and
other activities. Word of Ed’s filming
abilities soon got around and he found
himself working a number of local
high school games. This led to Ed’s
successful bid ($3,000) to film the 1962
NFL championship game.
 Then Commissioner Pete Rozelle was so impressed
with the work that he agreed to Ed’s proposal to create
a new entity known as NFL Films that would both
preserve the history of the game and promote it to the
nation’s sports fans. NFL Films’ creative approach to
the game has resulted in 82 Emmy Awards to date. Ed
retired in 1987, turning the reins over to his son Steve
who has taken the company to new heights thanks in
part to his empowering leadership style and product
innovation. The company now has a 200,000 square
foot state-of-the-art facility.
Questions
 Q1. Identify the entrepreneurial traits that Ed Sabol
and his son Steve exhibit?
 Q2. How would you characterize the Sabol’s
philosophy, beliefs, and values to a small business
 as it grows?
 Q3. What factors have led to NFL Films’ success?
The Benefits of Entrepreneurship
The primary benefits entrepreneurs enjoy include the
opportunity to:
 Create their own destiny
 Make a difference
 Reach their full potential
 Generate impressive profits
 Contribute to society and be recognized for their
efforts
 Do what they enjoy and have fun at it!
The Potential Drawbacks of
Entrepreneurship
With these potential rewards, Entrepreneurship also presents
risk and uncertainty. Entrepreneurs may experience:
 Uncertainty of income –”The entrepreneur is the last one to
be paid.”
 Risk of losing their entire investment
 Long hours and hard work
 Lower quality of life until the business gets established
 High levels of stress
 Complete responsibility
 Discouragement
Behind the Boom: What’s Feeding
the Entrepreneurial Fire?
The rapid increase in entrepreneurs has been a result of:
 Considering entrepreneurs as heroes
 Entrepreneurial education
 Demographic and economic factors
 Shift to a service economy
 Technological advancements
 Independent lifestyles
 Commerce and the Internet
 Additional international opportunities
Discussion
 What is your perception of entrepreneurs in our
community and in our society?
 Why do you believe entrepreneurs have that
reputation?
Never Too Young
 Erica Gluck had a desire to earn her own money at the
age of seven. She convinced a local pasta shop to allow
her to sell their products off site on weekends. Erica
never looked back as she went on to start her own
pasta company, expand its product lines, hire her
parents and give a portion of her profits back to the
community.
Never Too Young
 Adam Witty, a college student, observed his father
repeatedly giving up (season) tickets to Orlando
Magic games that often went unused because of last
minute business commitments. That sparked the idea
for a Web-based company that allows buyers to
securely purchase tickets to events that normally
would not be available. Adam started the company
from his dorm room, was able to utilize the facilities of
his school and expanded his product lines to include a
wide variety of sporting events.
Never Too Young
 The University of Maryland created a forum that
allows about 100 student entrepreneurs to live and
work together. That environment has inspired about
twenty of those students to start their own business.
Questions
 Q1. In addition to the normal obstacles of starting a
business, what other barriers do young entrepreneurs
face?
 Q2. What advantages do young entrepreneurs have
when launching a business?
 Q3. What advice would you offer a fellow college
student about to start a business?
 Q4. Work with a team of your classmates to develop
ideas about what your college or university could do to
create a culture of entrepreneurship on your campus or
in your community.
Discussion
 If you were to begin a business immediately after your
academic career concluded, what challenges would
you face?
 Would you consider that an ideal time in your life to
launch your first venture? If not, at what point in your
life might be a better time and why?
 What experiences might you find beneficial before you
started your own business.
The Cultural Diversity in
Entrepreneurship
 Entrepreneurs are found in










virtually every walk of life
including:
• Young Entrepreneurs
• Women Entrepreneurs
• Minority Enterprises
• Immigrant Entrepreneurs
• Part-time Entrepreneurs
• Home-Based Businesses
• Family Businesses
• Copreneurs
• Corporate Castoffs
• Corporate Dropouts
Promoting Innovation
Innovation - the
act or process of
introducing
new ideas,
devices, or
methods
Promoting Innovation
 All Innovation begins with creative ideas.
 Innovation is the implatation of creative inspiration.
 Creativity is the function of three components:
Expertise, creative thinking skills and motivation
Promoting Innovation
 Innovation is fostered by information gathered from
new connections; from insights gained by journeys
into other disciplines or places; from active, collegial
networks and fluid open boundaries.
 Innovation arises from organizing circles of exchange,
where information is not just accumulated or stored,
but created.
 Knowledge is generated a new from connections that
were not there before. Wheatley (1994).
Promoting Innovation
 Innovation requires a fresh way of looking at things,
an understanding of people, and an entrepreneurial
willingness to take risks and to work hard.
 An idea doesn’tbecome an innovation until it is
widely adopted and incorporated into people’s daily
lives. Most people resist change, so a key part of
innovating is convincing other people that your idea
is a good one – by enlisting their help, and, in doing
so, by helping them see the usefulness of the idea.
Elements of Innovation
 1. Challenge: What we are trying to change or
accomplish-the “pull”
 2. Customer focus: Creating value for your customers –
the “Push”
 3. Creativity: Generating and sharing the idea(s)- the
“brain”
 4. Communication: The flow of information and ideas
–the “life blood”
Elements of Innovation
 5. Collaboration: People coming together to work




together on the idea(s) - the
“heart.”
6. Completion: Implementing the new idea-the
“muscle”.
7. Contemplation; Learning and sharing lessons lead
to higher competency-the
“ladder”
Elements of Innovation
 8. Culture: The playing field of innovation includes:
 Leadership (sees the possibilities and positions the




team for action-the role model)
People (diverse groups of radically empowered people
innovate –the source of innovation)
Basic values (trust and respect define and distinguish
an innovative organization-the backbone).
Innovation values (certain values stoke the fires that
make the“impossible” possible-the Spark).
9. Context: Innovation is shaped by interactions with
the world
CREATIVITY AND INNOVATION IN AN
ENTREPRENEURIAL ORGANIZATION
 The “winning performance” of the entrepreneur and





the organization focuses on.
Competing on quality not prices:
Domination of a market niche;
Competing in an area of strength
Having tight financial, and operating controls:
Frequent product or service innovation (particularly
important in manufacturing
Six Criteria for Assessing New
Business Opportunities
 Entrepreneurs often begin with innovative ideas, but
succeeding in a new business also requires objective
assessment procedures. If your gut tells you a product,
service or existing business is a risk you want to take,
use objective measurements to better determine its
likelihood of success. The bottom line is profitability.
Financials
 Assess the company's financial performance or potential
financial performance. Evaluate historical sales revenues,
profit margins of products and services, recent sales trends
and cash flow. Examining cash flow lets you determine when
you will get your money in and how much credit you might
need to obtain. For example, your business might have
excellent sales, but if the customers don’t pay for 60 days, you
might have to delay your salary, operate using your savings
while you wait for your bills to be paid, or take out a loan to
buy materials. If you are launching a new business, look for
trade association data that shows financial trends for similar
companies and expected trends for the coming year.
Sales
 A thorough sales assessment will give you
insight into how sales have taken place and
where you might improve them. Spot trends
by analyzing where products are selling and
to what types of customers. Certain
geographic territories with low sales may
not be underperforming, but are simply
underserved, offering opportunities to grow
the business.
Market Data
 Researching the marketplace will help determine if it is being
underserved or possibly saturated. Detailed demographic
data can show that even if the marketplace contains
significant competition, you have an opportunity to
successfully introduce a new business or improve the
performance of an existing one. Demographics such as
gender, age, race and marital status will help you better
understand who your potential customers are. Analyzing the
price points of your competitors will also give you insight into
why people might be buying a particular product or service.
Look at market trends, such as sales during the last three
years, and look for advances in technology that might affect
the marketplace.
Assets and Liabilities
 Look at the assets of an existing business to determine how it
depends on them. The business might depend on a recipe,
trademark, copyright or patent for its unique selling
proposition. A company’s location, specific manufacturing
process, grandfathered agreements or no-compete
agreements with a supplier might be giving the business an
edge, without which it would struggle to compete. A
franchise might be thriving because of a restricted territory it
owns or specific benefit it has been receiving from the
owner’s status as a minority. Check the assets of any business
you plan to purchase to determine what would happen if you
lose them. Look for liabilities, such as debts, lawsuits and
expiring contracts and assets.
Relationships
 Key factors in a small business’s success often include
personnel, endorsements and relationships. Key
personnel, such as a well-known chef, IT whiz or top
sales performer can make or break a business. Having
a professional sports league or a celebrity endorse a
business might be key to driving its sales. Having
official sponsor, supplier or partner status of a trade
association or other organization can also boost sales.
Opportunity Costs
 Look at what entering a new business will cost you, in
terms of lost revenue, personal time or sales connected
to other business or opportunities you have. For
example, using your cash to buy a business reduces your
ability to pay down debt, lower interest payments,
improve or upgrade current facilities, increase
advertising and make other investments with that cash.
You will need to devote your personal time to the new
business. Accurately assess the number of hours you will
need to spend on a new business venture and calculate
the revenue your time would generate spent on another
opportunity.