THE ENTREPRENEUR Chapter 2

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

More misconceptions….. Variation A: the entrepreneur slaved 20 years to make a dream come true. Variation A: the entrepreneur slaved 20 years to make a dream come true. OR OR

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

PROFILE OF THE ENTREPRENEUR PROFILE OF THE ENTREPRENEUR PSYCHOLOGICAL PORTRAIT PSYCHOLOGICAL PORTRAIT CHARACTERISTICS OF LEISURE SERVICE ENTREPRENEUR CHARACTERISTICS OF LEISURE SERVICE ENTREPRENEUR THE SPIRIT OF ENTREPRENEURSHIP THE SPIRIT OF ENTREPRENEURSHIP

Psychological Portrait Self confident and persistent in the pursuit of their objectives Self confident and persistent in the pursuit of their objectives Are motivated to create something unique on their own Are motivated to create something unique on their own Dislike someone else having authority over them Dislike someone else having authority over them Are impatient and drive themselves and everyone them Are impatient and drive themselves and everyone them

More….. Are comfortable in stress situations and are challenged rather than discouraged by setbacks Are comfortable in stress situations and are challenged rather than discouraged by setbacks Are willing to make personal and family sacrifices in order to succeed Are willing to make personal and family sacrifices in order to succeed Are sensitive to good ideas Are sensitive to good ideas

And more… View money as a resource and as a way of keeping score, but not as a motivating source. View money as a resource and as a way of keeping score, but not as a motivating source. Are mentally tough and recognize their own limitations Are mentally tough and recognize their own limitations Are more concerned with people’s accomplishments than their feelings Are more concerned with people’s accomplishments than their feelings

And more…. Prefer individual sports over team Prefer individual sports over team Are competitive, but compete against self-imposed standards Are competitive, but compete against self-imposed standards Can comprehend complex situations and can work on multiple tasks Can comprehend complex situations and can work on multiple tasks Are realistic, calculated risk takers Are realistic, calculated risk takers

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

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

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

SYSTEMATIC ENTREPRENEURSHIP AND SOURCES FOR INNOVATION Source 1: The Unexpected Success or Failure Source 1: The Unexpected Success or Failure Source 2: Incongruities Source 2: Incongruities Source 3: The Process Need Source 3: The Process Need Source 4: Industry & Market Structures Source 4: Industry & Market Structures Source 5: Demographics Source 5: Demographics Source 6: Changes In Perception Source 6: Changes In Perception Source 7: New Knowledge Source 7: New Knowledge Source 8: The Bright Idea Source 8: The Bright Idea

The Unexpected Success of Failure The Unexpected Success of Failure They can point to new opportunities They can point to new opportunities This method is often neglected, because it may not be seen, even by insiders. For example, a sporting goods store in Texas sold a small line of ski equipment and sales increased over a couple of years, because air fares were cheap so people could get to ski resorts in Colorado, Wyoming, etc. This method is often neglected, because it may not be seen, even by insiders. For example, a sporting goods store in Texas sold a small line of ski equipment and sales increased over a couple of years, because air fares were cheap so people could get to ski resorts in Colorado, Wyoming, etc.

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

The Process Need The Process Need This is a task-focused innovation that perfects a process that already exists by replacing a weak link or by redesigning an existing process around new knowledge. This is a task-focused innovation that perfects a process that already exists by replacing a weak link or by redesigning an existing process around new knowledge. Example: Movie theaters and self serve soft drink stations. Example: Movie theaters and self serve soft drink stations.

Industry and Market Structures This source of innovation requires that managers of a company ask themselves: “What is our business?” The idea is to search for a flaw in the basic nature of the industry. This source of innovation requires that managers of a company ask themselves: “What is our business?” The idea is to search for a flaw in the basic nature of the industry. For example: Wal-mart Corp. For example: Wal-mart Corp.

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

Changes In Perception Changes In Perception When changes in people’s perception take place, facts do not change, but meanings do. When changes in people’s perception take place, facts do not change, but meanings do. For example: fitness used to be perceived as weight lifting, distance running, etc. Now it is more of a lifestyle and social interaction perception. For example: fitness used to be perceived as weight lifting, distance running, etc. Now it is more of a lifestyle and social interaction perception.

New Knowledge Innovations based on new knowledge are the “superstars” of entrepreneurs. Innovations based on new knowledge are the “superstars” of entrepreneurs. For example: DVD players, digital cameras, CD players, global positioning for boats and cars, etc. For example: DVD players, digital cameras, CD players, global positioning for boats and cars, etc.

The Bright Ideas The Bright Ideas This innovation is the riskiest and the least successful method. This innovation is the riskiest and the least successful method. They are typically unorganized and out of synch with the market demand or the demographics They are typically unorganized and out of synch with the market demand or the demographics

CHALLENGES AS AN ENTREPRENEUR W/IN AN ORGANIZATION Resistance to change by the organization Resistance to change by the organization Resentment of the individual Resentment of the individual Red tape that makes it difficult to operate quickly Red tape that makes it difficult to operate quickly Discouragement of creative ideas Discouragement of creative ideas Little tolerance for risk Little tolerance for risk Lack of incentives for innovations Lack of incentives for innovations Over-emphasis on accountability Over-emphasis on accountability

HOW TO OVERCOME THE BARRIERS 1. Serve 3 types of needs: the customer, organization, & the entrapreneur. 2. Allow time to develop the idea 3. Develop a business plan 4. Find allies and sponsors 5. Avoid premature publicity 6. Get small decisions 7. Recognize your own weaknesses

ENTREPRENEURIAL MANAGEMENT 1. Your business should be built around honesty and integrity 2. Stick to what you know, but learn more. 3. Find a bank or other financial institution you can rely on, and one that can rely on you. 4. Treat your employees well by caring for people in the totality of their lives, not just at work.

Cont… 5. Give employees the license to be themselves and the opportunity to be entrepreneurs. 6. Earn the trust of your customers by treating them fairly and with appreciation. Your employees will follow this lead if they feel appreciated.

A little more… 7. Strive for excellence! Being the best is better than being the biggest. 8. Always put part of your earnings back into the business. 9. Plan ahead 10. Watch your business like a hawk, KNOW YOUR FINANCES.