1. Chapter 5 Entrepreneurship
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2. Learning Objectives
Explain the role of entrepreneurs and how external factors impact their ventures.
Describe the personal attributes that contribute to entrepreneurs’ success.
Outline the planning essentials for potential entrepreneurs.
State the role of intrapreneurs and how organizations can foster intrapreneurship.
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3. Entrepreneurs and External Factors
Entrepreneurs create something for the purpose of gain while accepting the risk and uncertainty associated with their ventures.
Entrepreneurs typically incorporate at least one of the following:
Something new
Something better
An underserved or new market
New delivery system or distribution channel
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4. Entrepreneurs and External Factors (cont.)
Business incubators are organizations designed to accelerate the growth and success of entrepreneurial companies through an array of business support resources and services.
Common features found in business incubators include:
An existing building is used to accommodate tenants
Tenants are offered below-market rent and flexible lease arrangements
Incubator provides shared services
Incubator fosters psychological or moral support
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5. Entrepreneurs and External Factors (cont.)
Small business owners refer to anyone who owns a major equity stake in a company with fewer than 500 employees.
A family business is one owned and managed mostly by people who are related by blood and/or marriage.
Each of these may or may not be considered an entrepreneur
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6. Common Attributes of Successful Entrepreneurs (adapted from Figure 5
Technical Proficiency
Attributes
Varies by Type
of Business Started
Successful
Entrepreneurs
Personal
Attributes
Need for Achievement
Desire for Independence
Self-Confidence
Self-Sacrifice
Managerial
Competencies Attributes
Strategic Action
Planning and Administration
Teamwork
Communication
Self-Management
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7. Planning Essentials for Entrepreneurs
A business plan describes the basic idea that is the foundation for the start-up and outlines how that idea can be turned into reality.
One challenge is to avoid exaggeration in development of the business plan
Deciding how to start the business.
Buy Strategy
Start-Up Strategy
Franchise Strategy
Other Strategic Options
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8. Planning Essentials for Entrepreneurs (cont.)
Assessing Affordable Loss
Principle of affordable loss – the conscious determination of the amount of resources entrepreneurs are willing to commit to an idea, which, in turn, influences the choice of strategies and methods needed to generate early revenues
Finding Funds
Common sources include:
The entrepreneur and other members of team, family, and friends.
Financial institutions
Venture capital firms
Business angels
Business incubators
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9. Factors That Favor a Global Start-Up (adapted from Figure 5.2)
Foreign
Financing
is Better
Human
Resources Are
Dispersed Among
Countries
Target
Customers
Require an International
Presence
Global
Start-Up
Foreign
Competition Will
Quickly Enter the
Market
Domestic
Inertia Could Impede
Later Efforts to
Internationalize
Domestic
Market is Too
Small to Support
Expenses
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10. Recommendation to Ensure a Successful Family (adapted from Figure 5.3)
Clear Job Responsibilities
And Authority Relationships
Explicit Hiring Criteria
For Family Members
Commitment to
Resolving Conflicts
Quickly
Use of Outside
Advisors/Directors
Plan for Management
Transitions
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11. Corporate Intrapreneurship
Corporate intrapreneurship refers to the fostering of entrepreneurial behavior within established companies to product growth and profits.
An intrapreneur is someone in an organization who champions turning new ideas in profitable realities.
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12. Fostering Intrapreneurship
Organizations that foster intrapreneurship have the following characteristics.
Commitment from senior management
Flexible organizational design
Autonomy of the venture team
Competent and talented people
Incentives and rewards for risk taking
An appropriately designed control system
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13. Fostering Intrapreneurship
Skunkworks are islands of intrapreneurial activity within larger organizations.
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