Entrepreneurship Chapter Seven McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives LO1 Describe why people become entrepreneurs and what it takes, personally. LO2 Summarize how to assess opportunities to start a new company. LO3 Identify common causes of success and failure. LO4 Discuss common management challenges. LO5 Explain how to increase your chances of success, including good business planning. LO6 Describe how managers of large companies can foster entrepreneurship.

Entrepreneurship Entrepreneurship The pursuit of lucrative opportunities by enterprising individuals. creating new systems, resources, or processes to produce new goods or services and/or serve new markets

Some Myths About Entrepreneurship Entrepreneurs are born, not made. Anyone can start a business Entrepreneurs are gamblers Entrepreneurs want the whole show to themselves Entrepreneurs are their own bosses and completely independent. Entrepreneurs work longer and harder than managers in big companies.

Some Myths About Entrepreneurship Entrepreneurs experience a great deal of stress and pay a high price. Start a business and fail and you’ll never raise money again. Money is the most important start-up ingredient. Entrepreneurs should be young and energetic. Entrepreneurs are motivated solely by the quest for the almighty dollar. Entrepreneurs seek power and control over others.

Who is The Entrepreneur? Figure 7.1

What Business Should You Start? Franchising An entrepreneurial alliance between a franchisor (an innovator who has created at least one successful store and wants to grow) and a franchisee (a partner who manages a new store of the same type in a new location).

What Does it Take, Personally? Commitment and determination Leadership Opportunity obsession Tolerance of risk, ambiguity, and uncertainty Creativity, self-reliance, and ability to adapt Motivation to excel

Entrepreneurial Strategy Matrix Figure 7.2

Success and Failure Business incubators Protected environments for new, small businesses

Common Management Challenges You might not enjoy it Survival is difficult Growth creates new challenges It’s hard to delegate Misuse of funds Poor controls Mortality

Increasing Your Chances of Success Opportunity analysis A description of the good or service, an assessment of the opportunity, an assessment of the entrepreneur, specification of activities and resources needed to translate your idea into a viable business, and your source(s) of capital.

Planning Business plan A formal planning step that focuses on the entire venture and describes all the elements involved in starting it.

Outline of a Business Plan

Outline of a Business Plan