Entrepreneurship: Creating Opportunity Mr Kuhn

The Entrepreneurial Start-Up Process The Entrepreneurial Start-Up Process consists of five components: The Entrepreneur The Environment The Opportunity Resources New Venture Organization

The Entrepreneur The entrepreneur is the driving force of the start up process for he or she recognises an opportunity Responsible for pulling together all resources for project and creating a company The entrepreneur is a calculated risk taker Requires persistence, passion and patience (The Marshmallow Theory)

The Environment Not all variables are controlled by the entrepreneur, in general four categories of environmental variables affect a new ventures ability to start and grow: The nature of the environment. Is it uncertain, fast changing, stable or highly competitive? The availability of resources, such as skill labour, start up capital, and sources of assistance Ways to realize value, such as favorable taxes, good markets, and supportive governmental policies Incentives to create new businesses. Enterprise Zones are specifically designated areas of a community that provide tax benefits to new businesses locating there

Start-Up Resources When ready to execute a concept or opportunity for a new business, and entrepreneur must pull together: Capital Skilled Labour Management Legal and financial advice A facility Equipment Customers

The New Venture Organization The execution of the new business concept The infrastructure of the business The foundation that supports all products, processes, and services of the new business Creates benefits for entrepreneur, customers, employees, and economy

The Opportunity An opportunity in business is best describes as an idea with commercial value An idea only has value if customers are ready and willing to buy your product An Idea + A Market = Opportunity

Learning to Recognize Opportunity Creativity is the activity that results in innovation (Finding new ways of doing things) The general process of creativity is as follows: Connection (Bringing things that are not usually connected together) Davinci using observations of tree branches to engineer canals that lead to the sea Discovery Davinci discovers he needs a way to let boats move under a bridge in new canal system Invention Davinci creates hydraulic system that controls water levels and lets boat pass under bridge Application (Going beyond original uses to other uses in other areas) Davinci’s idea was later used to power water mills

Idea versus Opportunity Ideas and opportunities are two different concepts in business Opportunities have commercial potential and can be turned into a business Most good business opportunities result from an entrepreneur’s alertness to unmet customer needs and unfilled market niches (Small Specialized Market)

Finding Opportunities by Understanding Industries An industry is a grouping of businesses with a common purpose In every industry the market is continuously changing which leads to new niches to be filled The new development of new product and services in industry creates the need for complementary types of business If you understand an industry, you understand how to respond and take advantage of its changes. You can also understand problems that customers experience

Recognizing Trends Observe the World Around You Watch people in your community and inquire what people want and what they need Eg. Mary Naylor learned people in business buildings wanted same concierge service as hotels. She created a company that offered such services and is now worth millions Watch Demographic Changes An increase in diversity in North America has lead to a surge in ethnic products including foods, hair-care products, cosmetics, and others Current Trends What is popular in your community now? Example: Health and Fitness

Keys to Success Go out and try! Take a risk! Make a plan! (It will change) Failure is key to young entrepreneurs Be honest and reliable If you aim to help people, money will come. Don’t focus on the money Do what you enjoy! You know what you enjoy. Knowledge is power. If you are excited, you will be committed