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ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

CHAPTER 2

Inside the Entrepreneurial Mind:

From Ideas to Reality

CHAPTER 2 Inside the Entrepreneurial Mind: From Ideas to Reality Copyright © 2011 Pearson Education, Inc.
CHAPTER 2 Inside the Entrepreneurial Mind: From Ideas to Reality Copyright © 2011 Pearson Education, Inc.
CHAPTER 2 Inside the Entrepreneurial Mind: From Ideas to Reality Copyright © 2011 Pearson Education, Inc.

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

Creativity and Innovation

  • Creativity – the ability to develop new ideas and to discover new ways of looking at problems and opportunities; thinking new things

  • Innovation – the ability to apply creative solutions to problems or opportunities to enhance or to enrich people’s lives; doing new things.

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ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

Entrepreneurship

  • Entrepreneurship – the result of a disciplined, systematic process of applying creativity and innovation to the needs and opportunities in the marketplace.

  • Entrepreneurs connect their creative ideas with the purposeful action and structure of a business.

Ch. 2: Inside the Entrepreneurial Mind

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Failure: Part of the Creative Process!

  • For every 3,000 new product ideas:

    • Four make it to the development stage.

    • Two are actually launched.

    • One becomes a success in the market.

  • On average, new products account for 40% of companies’ sales!!

  • Creativity is an important source of building a competitive advantage.

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Can We Learn to Be Creative? Yes! By overcoming paradigms and by suspending conventional thinking long
    Can We Learn to Be Creative?
    Yes!
    By overcoming paradigms and by suspending
    conventional thinking long enough to
    consider new and different alternatives!
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    Ch. 2: Inside the Entrepreneurial Mind
    Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
    How Creative Are You?
    Hundred
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    Ch. 2: Inside the Entrepreneurial Mind
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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    How Creative Are You?

    Fortune 500

    Scattered

     

    Grace Period

    Showers

    Triumph of the Spirit

    Rhodes Scholar

    I Understand

    Spring Break

    Media Bias

    Two for One Stock Split

    Blue in the Face

    High Intensity

    Spreadsheet

    Objection

    Web Links

    Rolls Royce

    Tomb of

    Overruled

    Tutankhamen

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    Right-Brained, Creative Thinkers

    • Always ask: “Is there a better way?”

    • Challenge custom, routine, and tradition.

    • Are reflective.

    • Are prolific thinkers.

    • Play mental games.

    Right-Brained, Creative Thinkers  Always ask: “Is there a better way?”  Challenge custom, routine, and

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Right-Brained, Creative Thinkers

    • Realize that there may be more than one “right” answer.

    • Know that mistakes are pit stops on the way to success.

    • Recognize that problems are springboards for new ideas.

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    Right-Brained, Creative Thinkers  Realize that there may be more than one “right” answer.  Know

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    Right-Brained, Creative Thinkers

    • Understand that failure is a natural part of the creative process.

    • Relate seemingly unrelated ideas to a problem.

    • Have “helicopter skills.”

    Right-Brained, Creative Thinkers  Understand that failure is a natural part of the creative process. 

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Left-Brained or Right-Brained?

    Entrepreneurship requires both left-and right-brained thinking.

    • Right-brained thinking draws on divergent reasoning, the ability to create a multitude of original, diverse ideas.

    • Left-brained thinking counts on convergent reasoning, the ability to evaluate multiple ideas and to choose the best solution to a problem.

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     Left-brained thinking counts on convergent reasoning, the ability to evaluate multiple ideas and to choose

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    Barriers to Creativity

    • Searching for the one “right” answer

    • Focusing on “being logical”

    • Blindly following the rules

    • Constantly being practical

    • Viewing play as frivolous

    Barriers to Creativity  Searching for the one “right” answer  Focusing on “being logical” 

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Barriers to Creativity

    • Becoming overly specialized

    • Avoiding ambiguity

    • Fearing looking foolish

    • Fearing mistakes and failure

    • Believing that “I’m not creative”

    Barriers to Creativity  Becoming overly specialized  Avoiding ambiguity  Fearing looking foolish  Fearing

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    Questions to Spur the Imagination

    • Is there a new way to do it?

    • Can you borrow or adapt it?

    • Can you give it a new twist?

    Questions to Spur the Imagination  Is there a new way to do it?  Can
    • Do you merely need more of the same?

    • Do you need less of the same?

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Questions to Spur the Imagination

    (continued)

    • Is there a substitute?

    • Can you rearrange the parts?

    • What if you do just the opposite?

    • Can you combine ideas?

    • Can you put it to other uses?

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    Questions to Spur the Imagination (continued)  Is there a substitute?  Can you rearrange the

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    Questions to Spur the Imagination

    (continued)

    • What else could you make from this?

    • Are there other markets for it?

    • Can you reverse it?

    • Can you eliminate it?

    • Can you put it to another use?

    Questions to Spur the Imagination (continued)  What else could you make from this?  Are
    • What idea seems impossible, but if executed, would revolutionize your business?

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Tips for Enhancing Organizational Creativity

    • Include creativity as a core company value

    • Embrace diversity

    • Expect creativity

    • Expect and tolerate failure

    Tips for Enhancing Organizational Creativity  Include creativity as a core company value  Embrace diversity
    • Create an organizational structure that nourishes creativity

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    Tips for Enhancing Organizational Creativity

    (continued)

    • Encourage curiosity

    • Create a change of scenery periodically

    • View problems as opportunities

    • Provide creativity training

    • Provide support

    Tips for Enhancing Organizational Creativity (continued)  Encourage curiosity  Create a change of scenery periodically
    • Develop a procedure for capturing ideas

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Tips for Enhancing Organizational Creativity

    • Talk and interact with customers

    • Look for uses for your company’s products or services in other markets

    • Reward creativity

    • Model creative behavior

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    Tips for Enhancing Organizational Creativity  Talk and interact with customers  Look for uses for

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    Tips for Enhancing Individual Creativity

    • Allow yourself to be creative

    • Give your mind fresh input every day

    • Observe the products and services of other companies, especially those in completely different markets

    • Recognize the creative power of mistakes

    • Notice what is missing

    Tips for Enhancing Individual Creativity  Allow yourself to be creative  Give your mind fresh

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Tips for Enhancing Individual Creativity

    • Keep a journal to record your thoughts and ideas

    • Listen to other people

    • Listen to customers

    • Talk to a child

    Tips for Enhancing Individual Creativity  Keep a journal to record your thoughts and ideas 
    • Do something ordinary in an unusual way

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    Tips for Enhancing Individual Creativity

    • Keep a toy box in your office

    • Do not throw away seeming “bad” ideas

    • Read books on stimulating creativity or take a class on creativity

    • Take some time off

    • Be persistent

    Tips for Enhancing Individual Creativity  Keep a toy box in your office  Do not

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    The Creative Process

    Preparation

    • Investigation

    Investigation

    Transformation

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Incubation

    • Illumination

    Illumination

    Verification

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Implementation

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    The Creative Process

    Preparation

    • Investigation

    Investigation

    Transformation

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Incubation

    • Illumination

    Illumination

    Verification

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Implementation

    Ch. 2: Inside the Entrepreneurial Mind

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Preparation

    Get your mind ready for creative thinking.

    • Adopt the attitude of a lifelong student.

    • Read … a lot … and not just in your field of expertise.

    • Clip articles of interest to you and save them.

    • Take time to discuss your ideas with other people.

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    Preparation

    Get your mind ready for creative thinking.

    • Join professional or trade associations and attend their meetings.

    • Study other countries and their cultures.

    • Travel to new places.

    • Develop your listening skills.

    • Eliminate creative distractions.

    Ch. 2: Inside the Entrepreneurial Mind

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    The Creative Process

    Preparation

    • Investigation

    Investigation

    Transformation

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Incubation

    • Illumination

    Illumination

    Verification

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Implementation

    Ch. 2: Inside the Entrepreneurial Mind

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    The Creative Process

    Preparation

    • Investigation

    Investigation

    Transformation

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Incubation

    • Illumination

    Illumination

    Verification

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Implementation

    Ch. 2: Inside the Entrepreneurial Mind

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Transformation

    • Involves viewing both the similarities and the differences among the information collected.

    • Two types of thinking are required:

      • Convergent – the ability to see the similarities and the connections among various and often diverse data and events.

      • Divergent – the ability to see the differences among various data and events.

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    Transformation

    • How can you transform information into purposeful ideas?

      • Grasp the “big picture” by looking for patterns that emerge.

      • Rearrange the elements of the situation.

      • Use synectics, taking two seeming nonsensical ideas and combining them.

      • Remember that several approaches can be successful. If one fails, jump to another.

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    The Creative Process

    Preparation

    Preparation Investigation Transformation

    Investigation

    Investigation

    Transformation

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Incubation

    Incubation Illumination Verification

    Illumination

    Illumination

    Verification

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Implementation

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    Incubation

    Allow your subconscious to reflect on the information collected.

    • Walk away from the situation.

    • Take the time to daydream.

    • Relax – and play – regularly.

    • Dream about the problem or opportunity.

    • Work on the problem in a different environment.

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    The Creative Process

    Preparation

    • Investigation

    Investigation

    Transformation

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Incubation

    • Illumination

    Illumination

    Verification

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Implementation

    Ch. 2: Inside the Entrepreneurial Mind

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    The Creative Process

    Preparation

    • Investigation

    Investigation

    Transformation

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Incubation

    • Illumination

    Illumination

    Verification

    Preparation Investigation Transformation Incubation Illumination Verification
    Preparation Investigation Transformation Incubation Illumination Verification

    Implementation

    Ch. 2: Inside the Entrepreneurial Mind

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Verification

    • Validate the idea as accurate and useful.

      • Is it really a better solution?

      • Will it work?

      • Is there a need for it?

      • If so, what is the best application of this idea in the marketplace?

      • Does this product or service fit into our core competencies?

      • How much will it cost to produce or to provide?

      • Can we sell it at a reasonable price that will produce a profit?

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    The Creative Process

    Preparation

    Preparation Investigation Transformation

    Investigation

    Investigation

    Transformation

    Preparation Investigation Transformation Incubation Illumination Verification Implementation
    Preparation Investigation Transformation Incubation Illumination Verification Implementation

    Incubation

    Incubation Illumination Verification

    Illumination

    Illumination

    Verification

    Preparation Investigation Transformation Incubation Illumination Verification Implementation
    Preparation Investigation Transformation Incubation Illumination Verification Implementation
    Preparation Investigation Transformation Incubation Illumination Verification Implementation

    Implementation

    Ch. 2: Inside the Entrepreneurial Mind

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Techniques for Improving the Creative Process

    Brainstorming:

    The goal is to create a large quantity of novel and imaginative ideas.

    Ch. 2: Inside the Entrepreneurial Mind

    Techniques for Improving the Creative Process Brainstorming: The goal is to create a large quantity of

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    Brainstorming Guidelines

    • Keep the group small – “Two pizza rule.”

    • Make the group as diverse as possible.

    • Emphasize that company rank is irrelevant.

    • Have a well-defined problem, but don’t reveal it ahead of time.

    • Limit the session to 40 to 60 minutes.

    • Take a field trip.

    • Appoint a recorder.

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    Brainstorming Guidelines  Keep the group small – “Two pizza rule.”  Make the group as

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Brainstorming Guidelines

    • Use a seating pattern that encourages interaction.

    • Throw logic out the window.

    • Encourage all ideas from the team.

    • Shoot for quantity of ideas over quality of ideas.

    Brainstorming Guidelines  Use a seating pattern that encourages interaction.  Throw logic out the window.
    • Forbid criticism.

    • Encourage idea “hitch-hiking.”

    • Dare to imagine the unreasonable.

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    Techniques for Improving the Creative Process

    • Brainstorming

      • The goal is to create a large quantity of novel and imaginative ideas.

    • Mind-mapping

      • A graphical technique that encourages thinking on both sides of the brain, visually displays relationships among ideas, and improves the ability to see a problem from many sides.

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Techniques for Improving the Creative Process

    • Force Field Analysis

      • A useful technique for evaluating the forces that support and oppose a proposed change.

      • Three columns:

        • Center: Problem to be addressed

        • Left: Driving forces

        • Right: Restraining forces

  • Score each force (-1 to +4) and add them.

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    Sample Force Field Analysis FIGURE 2.2
    Sample Force Field Analysis
    FIGURE 2.2

    Ch. 2: Inside the Entrepreneurial Mind

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Techniques for Improving the Creative Process

    • TRIZ

      • A systematic approach designed to solve any technical problem.

      • Relies on 40 principles and left-brained thinking to solve problems.

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    Ch. 2: Inside the Entrepreneurial Mind Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

    Ch. 2: Inside the Entrepreneurial Mind

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Techniques for Improving the Creative Process

    • TRIZ

      • A systematic approach designed to solve any technical problem.

      • Relies on 40 principles and left-brained thinking to solve problems.

  • Rapid Prototyping

    • Transforming an idea into an actual model that will point out flaws and lead to design improvements.

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    Protecting Your Ideas

    • Patent – a grant from the Patent and Trademark Office to the inventor of product, giving the exclusive right to make, use, or sell the invention for 20 years from the date of filing the patent application.

    Protecting Your Ideas  Patent – a grant from the Patent and Trademark Office to the

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    FIGURE 2.4 Patent Applications and Patents Issued Copyright © 2011 Pearson Education, Inc. Publishing as Prentice

    FIGURE 2.4

    Patent Applications and Patents Issued

    Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

    The Six Steps to a Patent

    6. File the patent application 5. Complete the patent application 4. Study search results 3. Search
    6. File the patent application
    5. Complete the patent application
    4. Study search results
    3. Search existing patents
    2. Document the device
    1. Establish the invention’s novelty

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Protecting Your Ideas

    • Trademark – any distinctive word, symbol, design, name, logo, slogan, or trade dress a company uses to identify the origin of a product or to distinguish it from other goods on the market.

    • Servicemark – the same as a trademark except that it identifies the source of a service rather than a product.

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    FIGURE 2.6 Trademark Applications and Trademarks and Renewals Issued Ch. 2: Inside the Entrepreneurial Mind Copyright

    FIGURE 2.6

    Trademark Applications and Trademarks and Renewals Issued

    Ch. 2: Inside the Entrepreneurial Mind

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

     

    Protecting Your Ideas

     
    • Copyright – an exclusive right that protects the creators of original works of authorship such as literary, dramatic, musical, and artistic works.

    • Copyrighted material is denoted by the symbol ©.

     Copyrighted material is denoted by the symbol ©.

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    Protecting Your Ideas

     

    Type of

    What It

    Time

       

    Protection

    Covers

    Required

    Cost

    Copyright

    Works of

       

    original

    About 2 weeks

    About $35

    authorship

    Trademark

    Logos, names,

    6 – 12 months

    $900 - $1,500

    phrases

    Design patent

    Look of an original product

    Up to 2 years

    $5,000 - $20,000

    Utility patent

    How an original product works

    – 5 years

    • 2 $5,000 - $20,000

    Business

    A business

    – 5 years

    • 2 $5,000 - $20,000

    method patent

    process

     

    Source: Anne Field, How to Knock Out Knock Offs,Business Week, March 14, 2005.

     

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    ESSENTIALS OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT 6E

    Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality

    Conclusion

    • The creative process is a tenant of the entrepreneurial experience.

    • Success, and even survival itself, requires entrepreneurs to tap their creativity.

    • The seven steps of the creative process transform an idea into a business reality.

    • Creativity results in value, and value provides a competitive advantage.

    • Entrepreneurs protect their creative ideas with patents, trademarks, servicemarks, and copyrights to sustain a competitive edge.

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    Ch. 2: Inside the Entrepreneurial Mind

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