> > > > Starting Your Own Business: The Entrepreneurship Alternative Chapter 6

Do these faces look familiar?

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 small- business 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. What is Entrepreneurship?

Categories of Entrepreneurs Classic Entrepreneurs Serial Entrepreneurs Social Entrepreneurs

Categories of Entrepreneurs (contd.) 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

Why People Become Entrepreneurs

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. Why Entrepreneurship?

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. Why Entrepreneurship?

The Environment for Entrepreneurship

Globalization 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. Education/IT/Demographic & Economic Trends

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. Education/IT/Demographic & Economic Trends

Characteristics of Entrepreneurs

Entrepreneurial Characteristics 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

Finding Financing 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.