1. Unit 1-1.2 The Entrepreneurial Process
Entrepreneurship
Unit The Entrepreneurial Process

2. History of Entrepreneurship
In the early years of the U.S economy, small businesses were the norm.
The Industrial Revolution brought about the growth of large companies. Ex. Steel, railroads, manufacturing

3. History of Entrepreneurship
Large companies were common
No international competition
Produced job security
1970’s
International Competition
low labor costs
Technology Revolution
Personal Computers
Volatile economic climate
High interest rates

4. History of Entrepreneurship
Known as the Decade of Entrepreneurship
Large companies were suffering
Smaller companies were able to adapt to changes
Outsourcing
New service jobs created to address needs
Government regulation
1990’s
No job security and fewer benefits
Move towards a more service-based economy
Influenced by internet and network technologies.

5. The Entrepreneurial Evolution
1960s
1990s
1970s
1980s
Large diversified companies
Volatile economic climate; beginning of technology revolution
No job security; move to service-based economy influenced by technology
More government regulation; smaller companies emerge

6. The Start-up Process 5 Components Entrepreneur Environment Opportunity
Startup resources
New venture organization

7. 1. The Entrepreneur Driving force Recognizes opportunity
Pulls together the resources
Brings the entire process together with life experience
Calculated risk taker
Passion

8. 2. The Environment
Variables that affect the venture but are not controlled by the entrepreneur.
4 categories affect a new venture’s ability to start and grow:
The nature of the environment, whether it’s uncertain, fast-changing stable, or highly competitive.
The availability of resources, such as skilled labor, start-up capital and sources of assistance.
Ways to realize value, such as favorable taxes, good markets and supportive governmental policies.
Incentives to create new businesses. Such as tax benefits and local, state and federal grants.

9. 3. The Opportunity
An opportunity is an idea that has commercial value only when customers are willing and able to buy it.
New businesses are founded on recognized opportunities in the environment.

10. 4. Start-up Resources
Being able to pull together the necessary people and capital.
Examples
Capital,
Skilled labor
Management expertise
Legal and financial advice
Facility
Equipment
Customers

11. 5. The New Venture Organization
The execution of the new business concept
New venture organization is the infrastructure of the business.
The foundation that supports all of the products, processes and services of the business.

12. Success and Failure
Business failure is a business that has stopped operating with a loss to creditors
A discontinuance is a business that is operating under a new name or the owner closed it and opened a new one. Not considered a failure.
About half of all new establishments survive 5 years or more, and about 1/3 survive 10 years or more.

13. Understanding the Numbers
In 2011 there were 28.2 million small businesses.
Small businesses make up:
99.7%of U.S. employer firms
63% of net new private-sector jobs
48.5% of private-sector employment
37% of high-tech employment
98% of firms exporting goods