Transcript > > > > > > > > Chapter 6 The Entrepreneurship

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Chapter 6
Starting Your Own Business:
The Entrepreneurship
Alternative
• An entrepreneur is a person who seeks a profitable
opportunity and takes the necessary risks to set up and
operate a business.
• Differs from small business owners: Often smallbusiness owners also posses entrepreneurial qualities but
entrepreneurs differ from small-business owners in their
strong desire to make their business grow and expand.
• Differs from managers: Managers are employees who
direct the efforts of others to achieve an organization’s
goals.
• Classic Entrepreneurs
• Serial Entrepreneurs
• Social Entrepreneurs
Classic entrepreneurs – identify a business opportunity and
allocate available resources to tap that market.
Serial entrepreneurs – start one business, run it, and then
start and run additional businesses in succession.
Social entrepreneurs – recognize a societal problem and
use business principles to develop innovative solutions.
Social Business
• Being your Own Boss
– Self-management (i.e. to have control over when, where,
and how to work) is the motivation that drives many
entrepreneurs.
• Financial Success
– Entrepreneurs are wealth creators.
– They believe it is not possible to become rich by working
for others and research actually confirms that.
– Although, this is a primary motive for entrepreneurs, the
path to riches can be long and uncertain.
• Job Security
– Over the past ten years, large companies have eliminated
more jobs than they have created to improve efficiency.
– Although the demand for skilled employees remains high,
however, there is no job security.
• Quality of Life
– Starting a business gives the founder some choice over when,
where, and how to work.
– A lifestyle entrepreneur is a person who starts a business to
reduce work hours and create a more relaxed life.
– A common misconception about entrepreneurship is that it is
an easy route for someone tired of working and with a little
extra cash to invest.
The rapid globalization of business has created many
opportunities for entrepreneurs
Education
• Now most colleges and universities around the globe offer
entrepreneurship courses as well as majors.
• Universities are helping students launch businesses.
• Apart from educational institutes many other organizations have
started teaching entrepreneurship to young people.
• Research furthermore shows that students who major in
entrepreneurship or take such courses are three times as likely to
be self-employed and three times more likely to help start new
companies.
• It was also found that entrepreneurship education raises both
attitudes and overall entrepreneurial intentions.
Information Technology
• Technology has given entrepreneurs tools that help them compete.
• The explosion in IT has provided one of the biggest boosts for
entrepreneurs in terms of work pace and efficiency, customer service,
sales, etc .
• Entrepreneurs have used information technology to revolutionize
industries.
• The internet and web have also created opportunities for entrepreneurs.
Demographic and Economic Trends
• Changing demographic factors such as age, cultural, social and religious
groups create different kinds of opportunities for entrepreneurs to market
new goods and services.
• Vision - entrepreneurs begin with an overall idea for how to make their
business idea a success
• High Energy Level - a willingness to work hard
• Need to Achieve - entrepreneurs work hard because they want to excel
• Self-Confidence - fearlessness in the face of difficult odds
• Tolerance for Failure - entrepreneurs are not easily discouraged
• Creativity - entrepreneurs devise innovative ways to overcome difficult
problems and situations
• Tolerance for Ambiguity - entrepreneurs take in stride uncertainties.
• Internal Locus of Control - entrepreneurs believe they can control their
own fate
• Debt Financing – borrow money that must be repaid
– Credit Cards
– Family and Friends
– Bank Loans
• Equity Financing – exchange a share of ownership for
money supplied by investors.