Entrepreneurship & Small Businesses

Distinguish between entrepreneurial and small businesses Some characteristics of entrepreneurs

New ventures have small chances of success. How to improve the odds? D&B study: – –Technical competence – –Marketing competence – –Financial competence – –Management skills Make appropriate use of a strategic management process

Strategic Management in New & Small Businesses *** K.I.S.S. *** For new business, center around a business plan Many aids available (books, software, examples) For small business, use same SM process, but simplify

Capitalize on sources of innovation The unexpected An incongruity or discrepancy between what is and what ought to be A problem or need in an existing process Changes in the underlying industry or market structure Changes in demographics Changes in society's attitudes, beliefs, priorities New knowledge or technology that can be applied creatively

Some suggestions for generating new ideas Hobby or personal interest Why isn't there a... Shortcomings in existing products/services Extraordinary uses for ordinary things

Some environment factors that improve the chances of a new venture's success Rapidly changing industry Early, high-growth stages One big, dominant competitor Product is not vital to buyers' success

Use the Growth Vector Matrix in Considering Expansion

Three Traps to Avoid in a New Venture Don't try to be too clever Don't try to do many things Don't try to innovate for the future …it is hard enough to excel in meeting an established need, without also trying to create both the need and the solution …it is hard enough to excel in meeting an established need, without also trying to create both the need and the solution

Family-owned Businesses Power and transfer of power Watch financials Tied with family dynamics Family systems therapy

Recap Ways to Improve Odds Have more technical, marketing, financial, & management competence Use SM process, including business plan Use sources for ideas and innovation Manage product/market risks Avoid major traps

…and try to have more money than you think you need!