A Framework for Entrepreneurship Dr. Stan Abraham MHR 423 Spring 2010

Entrepreneurship Defined  “The pursuit of opportunity without regard to resources currently controlled” (Stevenson et al)  “The creation of an innovative economic organization for gain or growth under conditions of risk and uncertainty” (Dollinger)

Obstacles to Entrepreneurship  Lack of money  Losing one’s security  Being talked out of good ideas  No supportive network  Inability to carry out an innovative idea  Mired in gimmicks—unable to develop a good business concept  Lack of confidence  Inability to recognize an opportunity  No passion

A Framework for Entrepreneurship NEW VENTURE CREATION Individual Characteristics Environmental Resources and Enablers Organizational Strategies and Programs Environmental Constraints – Barriers to Entry

Selecting a Business What makes for a good choice?  An opportunity to work with an entrepreneur developing a business plan for his company  Try to avoid restaurants—very difficult to start one without experience or having been a chef  Discuss other ideas with me at any time

The Three Questions 1. Is there a demand for the product? –Where is the evidence? 2. Can the product (company) compete in the marketplace? –Is it better or different from what exists, or is it unique? And will people want it? 3. Can the company make money? –Will the enterprise be profitable and be able to sustain its margins over time?

1. Evidence of Demand  There are already people who are discerning and care about what they buy (eat) –If there’s a “hot” area, then riding the wave of that excitement is evidence of demand  Do a survey of your target market  Look for trends, such as a rise in personal disposable income  Create the demand (much more difficult)

2. Evidence that It Can Compete  Patent protection  Uniqueness  Creating a niche  Coming in at a lower cost (hence price)  Differentiate (according to customer needs)  Go where your competition isn’t  Location, location, location

3. Evidence of Profitability  Competitors are making profits  Your costs are very low  Take a survey –If people say they are willing to pay far more for your product than you were planning to price it at  Differentiated –Allows you to price at a premium

By Next Week... You will have to move fast!  Find a business idea or company on which to do your business plan –Get it approved by me (via )  Download and read the handouts for the course on my website  Get to know your group (forming, norming, storming) before “performing”

Any Questions?