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Chap.7-Entrepreneurship.pptxEntrepreneurship
Chapter Seven
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Quote
“A man is known by the company he organizes.”
Ambrose Bierce
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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.
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Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education
Entrepreneurship (1 of 3)
The pursuit of lucrative opportunities by enterprising individuals.
Discovering, evaluating, and capitalizing on opportunities to create new and future goods and services.
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Entrepreneurship (2 of 3)
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Small business
A business having fewer than 100 employees, independently owned and operated, not dominant in its field, and not characterized by innovative practices.
Entrepreneurial venture
A new business having growth and high profitability as primary objectives.
Some Myths About Entrepreneurship (1 of 2)
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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 (2 of 2)
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Entrepreneurs experience a great deal of stress and pay a high price.
If an entrepreneur is talented, success will happen in a year or two.
Entrepreneurs are lone wolves and cannot work with others.
Unless you attained 600+ on your SATs or GMATs, you’ll never be a successful entrepreneur.
Entrepreneurship (3 of 3)
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Entrepreneur
Individuals who establish a new organization without corporate sponsorship.
Intrapreneurs
New-venture creators working inside big companies.
Exhibit 7.2 Mega-Entrepreneurs Who Started in Their 20s
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Exhibit 7.3 Who is The Entrepreneur?
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The Idea
A great product, a viable market, and good timing are essential ingredients in any recipe for success.
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Opportunities Entrepreneurs Should Consider
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Technological discoveries
Demographic changes
Lifestyle and taste changes
Economic dislocations
Calamities
Government initiatives and rule changes
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).
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Question (1 of 2)
Which Internet model charges fees to advertise
on a site?
Transaction fee model
Subscription model
Advertising support model
Affiliate model
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The correct answer is c – advertising support model. See next slide
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The Internet (1 of 2)
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Transaction fee model
Charging fees for goods and services.
Subscription model
Charging fees for site visits.
Advertising support model
Charging fees to advertise on a site.
The Internet (2 of 2)
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Intermediary model
Charging fees to bring buyers and sellers together.
Affiliate model
Charging fees to direct site visitors to other companies’ sites.
Social Entrepreneurship
Leveraging resources to address social problems.
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Exhibit 7.4 Examples of Social Enterprises
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Social Enterprise Empowering Latina Entrepreneurs
Nely Galan founded Adelante, a movement “designed to empower Latinas in the U.S. economically through inspiration, motivation, training, and resources on entrepreneurship.”
Galan feels that by helping Latinas become more financially successful, she will have a positive impact on their communities and families.
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Social Enterprise Questions Empowering Latina Entrepreneurs
What factors are motivating Galan to help Latinas become successful entrepreneurs?
Why do you think Coca-Cola, a consumer products company, is collaborating with Galan to empower women entrepreneurs?
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What Does it Take, Personally?
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Commitment and determination
Leadership
Opportunity obsession
Tolerance of risk, ambiguity, and uncertainty
Creativity, self-reliance, and ability to adapt
Motivation to excel
Exhibit 7.5 Entrepreneurial Strategy Matrix
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Success and Failure (1 of 2)
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Anticipate risk.
Consider the role of the economic environment.
Utilize business incubators.
Realize there are common management challenges.
Going public with an initial public offering (IPO).
Question (2 of 2)
A _____________ is a protected environment for small businesses.
Business incubator
Small business office
SBA
Service incubator
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The correct answer is a – business incubator. See next slide.
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Success and Failure (2 of 2)
Business incubators
Protected environments for new, small businesses.
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Common Management Challenges
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You might not enjoy it.
Survival is difficult.
Growth creates new challenges.
It’s hard to delegate.
Misuse of funds.
Poor controls.
Mortality and succession.
Initial public offering (IPO)
Sale to the public, for the first time, of federally registered and underwritten shares of stock in the company.
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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.
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Exhibit 7.6 Opportunity Analysis
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Planning
Business plan
A formal planning step that focuses on the entire venture and describes all the elements involved in starting it.
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Outline of a Business Plan (1 of 2)
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EXECUTIVE SUMMARY
THE INDUSTRY AND THE COMPANY AND ITS PRODUCT(S) OR SERVICE(S)
MARKET RESEARCH AND ANALYSIS
THE ECONOMICS OF THE BUSINESS
MARKETING PLAN
DESIGN AND DEVELOPMENT PLANS
Outline of a Business Plan (2 of 2)
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MANUFACTURING AND OPERATIONS PLAN
MANAGEMENT TEAM
OVERALL SCHEDULE
CRITICAL RISKS, PROBLEMS AND ASSUMPTIONS
THE FINANCIAL PLAN
PROPOSED COMPANY OFFERING
APPENDIXES
Five Key Factors
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The people
The opportunity
The competition
The context
Risk and reward
Nonfinancial Resources
Legitimacy
People’s judgment of a company’s acceptance, appropriateness, and desirability, generally stemming from company goals and methods that are consistent with societal values.
Social capital
A competitive advantage in the form of relationships with other people and the image other people have of you.
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Building Support for your Idea
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Clear the investment with your immediate boss.
Make cheerleaders who will support your idea.
Horse trading for support, time, money, and other resources.
Get the blessing of relevant higher-level officials.
Building Intrapreneurship
Skunkworks
A project team designated to produce a new, innovative product.
Bootlegging
Informal work on projects, other than those officially assigned, of employees’ own choosing and initiative.
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Characteristics of Entrepreneurial Orientation
Entrepreneurial orientation
The tendency of an organization to identify and capitalize successfully on opportunities to launch new ventures by entering new or established markets with new or existing goods or services.
Allow independent action.
Innovativeness.
Risk taking.
Proactiveness.
Competitive aggressiveness.
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Management in Action - Onward The People and Passion of Popchips
Despite his own track record as a successful entrepreneur, Keith Belling never tried to start Popchips alone. He built a network of relationships to launch the company.
Recently, the venture capital firm that provided an initial 25 million dollars of start-up funding sold their stake in the company for 670 million.
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Management in Action - Questions The People and Passion of Popchips
What actions described in this case increase Popchips’ chances of long-term success?
Why do you think the innovation of popped snacks came from an entrepreneur like Keith Belling instead of from a big snack company?
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