1. The Entrepreneurial Life
Part 1 Entrepreneurship: A World of Opportunity

2. Looking Ahead After studying this chapter, you should be able to:
Discuss the availability of entrepreneurial opportunities and give examples of successful businesses started by entrepreneurs.
Explain the nature of entrepreneurship and how it is related to small business.
Identify some motivators or rewards of entrepreneurial careers.
Describe the various types of entrepreneurs and entrepreneurial ventures.
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

3. Looking Ahead (cont’d.)
Identify five potential advantages of small entrepreneurial firms.
Discuss factors related to readiness for entrepreneurship and getting started in an entrepreneurial career.
Explain the concept of an entrepreneurial legacy and the challenges involved in crafting a worthy legacy.
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

4. Entrepreneurial Opportunities
Entrepreneurial Opportunity
A value-creating innovation with market potential
A desirable and timely innovation that creates value for interested buyers and end users
Success stories
SLR Contracting & Service Company
FlavorX
Auntie Anne’s
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

5. Who Are Entrepreneurs? Entrepreneurs are:
People who start and/or operate a business.
Individuals who discover market needs and launch new firms to meet those needs.
Risk takers who provide an impetus for change, innovation, and progress.
All active owner-managers (founders and/or managers of small businesses).
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

6. The Independent Entrepreneur
Source: John L. Hart FLP, and Creators Syndicate, Inc.
Exhibit 1.1
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

7. The Contributions of Small Business
Small Businesses:
Represent more than 99.7 percent of all employers.
Employ more than half of all private-sector employees.
Pay 44.5 percent of total U.S. private payrolls.
Generate 60 to 80 percent of net new jobs annually.
Produce 13 to 14 times more patents per employee than do large patenting firms.
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

8. What Is a Small Business?
Criteria for Defining Smallness in Business
Financing supplied by one person or small group
Localized business operations (except marketing)
Business’ size small relative to larger competitors
Fewer than 100 employees
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

9. Entrepreneurial Incentives
Exhibit 1.3
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

10. Why People Become Entrepreneurs
Reluctant Entrepreneur
A person who becomes an entrepreneur as a result of some severe hardship
Refugee
A person who becomes an entrepreneur to escape an undesirable situation
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

11. Varieties of Entrepreneurship
Founder (“Pure” Entrepreneur)
A person who brings a new firm into existence
Administrative Entrepreneur
An entrepreneur who oversees the operations of a ongoing business
Franchisee
An entrepreneur whose power is limited by the contractual relationship with a franchising organization
Entrepreneurial Team
Two or more people who work together as entrepreneurs
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

12. Small Businesses, Growth, and Profits
High-Potential Venture (Gazelle)
A small firm that has great prospects for growth
Attractive Small Firm
A small firm that provides substantial profits to its owner
Microbusiness
A small firm that provides minimal profits to its owner
Lifestyle Business
A microbusiness that permits the owner to follow a desired pattern of living
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

13. Artisan Entrepreneurs
A person with primarily technical skills and little business knowledge who starts a business
Characteristics
Technical training
Paternalistic approach
Reluctance to delegate
Narrow view of strategy
Personal sales effort
Short planning horizon
Simple record keeping
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

14. Opportunistic Entrepreneurs
A person with both sophisticated managerial skills and technical knowledge who starts a business
Characteristics
Broad-based education
Scientific approach to problems
Willing to delegate
Broad view of strategy
Diversified marketing approach
Longer planning horizon
Sophisticated accounting and financial control
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

15. Women Entrepreneurs More Women Entrepreneurs
Represent 38% of entrepreneurs in U.S.
Revenues at female-owned firms have grown 33% from 1976 to 2000.
Women are moving into nontraditional industries.
Problems Facing Female Entrepreneurs
Newness of entrepreneurial role
Lack of access to credit
Lack of networking connections
Discrimination
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

16. Competitive Advantages of Entrepreneurial Firms
Customer Focus
Firms lack bureaucracy.
Quality Performance
Quality is not limited to large firms.
Integrity and Responsibility
A solid reputation builds loyal customers.
Innovation
Small firms are the leading source of innovation.
Special Niche
Providing uniquely specialized services can be a powerful competitive advantage.
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

17. Age and Entrepreneurial Opportunity
Early Career Concerns
1. Getting an education
2. Gaining work experience
3. Acquiring financial resources
Late Career Concerns
1. Fulfilling family responsibilities
2. Attaining seniority in employment
3. Earning investment in a retirement program 25 35 45 20
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

18. Characteristics of Successful Entrepreneurs
Strong commitment to the business (tenacity)
Strong internal locus of control (self-reliant)
Moderate risk takers (financial, career, psychic risks)
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

19. Entrepreneurial Characteristics (Timmons and Spinelli)
Commitment and determination
Tenacious, decisive, and persistent in problem solving
Leadership
Self-starters and team builders who focus on honesty in their business relationships
Opportunity obsession
Aware of market and customer needs
Tolerance of risk, ambiguity, and uncertainty
Risk takers, risk minimizers, and uncertainty tolerators
Creativity, self-reliance, and adaptability
Open-minded, flexible, uncomfortable with the status quo, and quick learners
Motivation to excel
Goal oriented and aware of their weaknesses and strengths
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

20. Taking the Plunge Precipitating Event
An event, such as losing a job, that moves an individual to become an entrepreneur
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

21. Living the Entrepreneurial Life
Entrepreneurial Legacy
The tangible items and intangible qualities are passed on not only to heirs but also to the broader society.
Evaluating accomplishments
The disappointments in winning the wrong game
Crafting a Worthy Legacy
The nature of the entrepreneurial endeavor reflects personal goals and values.
Beginning with the End in Mind
Proper values and actions lead to a good exit.
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.

22. Key Terms entrepreneurial opportunity entrepreneur
reluctant entrepreneur
refugee
founder
franchisee
high-potential venture (gazelle)
attractive small firm
microbusiness
lifestyle business
entrepreneurial team
artisan entrepreneur
opportunistic entrepreneur
internal locus of control
external locus of control
precipitating event
entrepreneurial legacy
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.