Master of International Tourism and Hospitality Management -
Ish
Topic3-Contemporaryentrepreneurshippractices.pptx
Entrepreneurship
Topic 3
Contemporary entrepreneurship practices
Module Objectives
describe the importance of small enterprises
identify and describe small enterprise characteristics
explain the challenge of new enterprise start-ups and growth
analyse critical factors involved in new venture success and failure
know why comprehensive planning is required in a new venture.
2
Small business entrepreurship
Contribution:
Wealth creation
employment creation
development of new industries
identification and development of new markets
export orientation
introduction and application of innovation
independence and self-fulfilment
response to local market niches
seed bed for entrepreneurial behaviour
4
Market Niche
Market place for mass-produced
goods is saturated
Consumers ask for more specialised and tailor-made products with high quality.
- Piore and Sabel (1985) -
5
Independence:
independence an important reason
happier even with less income
Personal satisfaction
Capital:
“dormant” capital
from personal savings
family contributions
6
Are small business owners entrepreneurs?
Are entrepreneurs small business owners?
Market Niche
Interde-pendence
Personal savings
Small business enterprises vs entrepreneurship?
Small business enterprises vs entrepreneurship
“All new ventures are not entrepreneurial in nature. Entrepreneurial firms may begin at any size level, but their key focus is growth over time. Some new small firms may grow, but many will remain small businesses for their organisational lifetimes.”
Carland, J.W., Hoy, F., Boulton, W.R. & Carland, J.C. (1984), p. 357
8
Carland, J.W., Hoy, F., Boulton, W.R. & Carland, J.C. (1984), p. 358
9
Small business enterprises vs entrepreneurship
Small business venture:
- Independently owned
- Not dominant in his field
- Does not engage in marketing or innovative processes
Small business owner:
- Principal purpose: personal goals
- Primary source of income
- Extension of personality, bound with family
Entrepreneurial venture:
- Principal goal: profitability and growth
- Innovative practices
Entrepreneur:
- Individual
- Principal goal: profitability and growth
- Innovative behaviour
- Strategic management practices
Challenges and growth of start-ups
Challenges
Small scale of operations
Day-to-day involvement
Generally, one or two owners
Wide range of roles
Business heavily dependent on owner
Challenges
Small scale of operations
Day-to-day involvement
Generally, one or two owners
Wide range of roles
Business heavily dependent on owner
Challenges / Objectives
Independence
Welfare
Wealth
Tax reduction
Raising capital
Skilled staff
Regulatory/legal barriers
Cash-flow
Success and failure
Why do new ventures fail? (1)
Lack of business management skills
Managerial inexperience
Poor management performance
Lack of human and capital resources
Lead to failure:
Generate (satisfied) customers
Control purchasing costs
Managing financial assets
Why do new ventures fail? (2)
Bird (1989):
P = A ∞ M
(P = Perfomance, A = Abilities, M = Motivations)
What is missing?
What‘s missing?
Engagement with the environment
Forming relationships with outsiders
Government regulations
Inflation
Unstable financial markets
Personal factors (e.g. technical skills)
What can we do to help success?
What can we do to help success?
Failure
Regulations
Lack of capital
Success
Networks
Training
Planning
What can we do to help success?
Planning:
Less than half of small enterprise owners had a formal plan prior to going into business
What can we do to help success?
Training:
Formal education vs entrepreneurship
adapt structures, policies, etc
adjust intentionally networks, niche
What can we do to help success?
Networks:
Successful entrepreneurs are involved voluntary in many networks
increase in knowledge and ideas requires active cooperation
crucial for survival and growth
Module Summary
how small enterprises contribute to the economy
the small business characteristics
small business owners vs entrepreneurs
analysed the critical factors for new venture success and failure
how to prevent failure through comprehensive planning
