Entrepreneurial Ventures,

Business Ownership &

Management
ENTREPRENEURSHIP DEVELOPMENT
STUDIES II
EDS 121
 What is an Entrepreneurial
Venture
O Entrepreneurial venture – This refers to an
organization whose primary goals are
profitability and growth, characterized by
innovative strategic practices
O A small business firm on the other hand refers
to an organization that is independently owned
and operated however not dominant in the
field and not engaged in innovative practices
 CONTD.
– Therefore the main difference
between a small business firm
and an entrepreneurial venture is
not in the types of goods or
services, but the fundamental
views on growth and innovation
Why ENTREPRENEURIAL
VENTURES Today?

Economic changes

Globalization

Increased competition

Advancing Technology

New market niches

4
 Innovation
O Innovation is defined as the process of
creating and implementing new idea/ ideas.
O Innovation is primarily classified into
three :
1) Process Innovation
2) Technical Innovation
3) Administrative Innovation
 Process Innovation
O Process innovation is realized through
conception of new ways of producing,
selling, and distributing existing
products.

O Some examples are business

transactions on the internet
Product/Technical Innovation
O Product/Technical innovation refers to
the creation of a new good or service.
O Some examples:
- Ladies wigs
- Cellular telephones
Administrative Innovation
O Administrative innovation refers to the
creation of a new organization design which
better facilitate the production and distribution
of services or products.
O An example is:
- Virtual or online Teams: any task-focused
group that meets w/out all members being in
the same room or even working at the same
time.
Venture startups Opportunities
O Emergence of E-Commerce
The Internet provides fundamentally
new ways of doing business
O Crossovers from Big Business
More businesses are being started by
people who have opted to leave big
corporations and put their experience
to work for themselves
 Contd.
O Global Opportunities
Many entrepreneurs are also
finding new opportunities in
foreign markets
 Business Ownership
Forms of Legal Ownership
– Sole proprietorship
– Partnership
– Corporation
• Choice of Ownership Form
– Based on the entrepreneur’s needs/desires for
control, ownership participation, financing
sources, and appropriateness of the chosen form
for the industry in which the firm will compete

© 2009 Pearson Education, Inc.

 Noncorporate Business
Ownership
O Sole Proprietorship O General Partnership
O business owned and O business with two or
usually operated by more owners who
one person who is share in both the
responsible for all of operation of the firm
its debts and the financial
responsibility for its
debts
 Sole Proprietorship
O Advantages O Disadvantages

└ Freedom └ Unlimited liability

└ Limited resources
└ Simple to form
└ Limited
└ Low start-up fundraising
costs capability
└ Tax benefits └ Lack of continuity
 Partnerships
O Advantages O Disadvantages
O More talent and └ Unlimited liability
money for general
O More fundraising partners
capability
└ Disagreements
O Relatively easy to
form among partners
O Limited liability for └ Lack of continuity
limited partners
O Tax benefits
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 The Corporate Entity
O Corporation
O business that is legally considered an
entity separate from its owners and is
liable for its own debts; owners’
liability extends to the limits of their
investments

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 Corporations
O Advantages O Disadvantages

O Limited liability └ Can be taken over

against the will of
O Continuity
its management
O Stronger └ Double taxation of
fundraising profits
capability └ Complicated and
expensive to form

3-16
Start a New Business
Tactics
Ways to Become a Business Owner
O Advantage – develop and design own way
O Disadvantage – long time to get off ground and to
make profitable

Buy an Existing Business

O Advantage – shorter time and existing track record
O Disadvantage – need to pay for goodwill

17
 Tactics
Ways to Become a Business Owner
Buy a Franchise = an agreement to sell
a product or service of another
O Advantage – management help is
provided by owner
O Disadvantage – lack of control

Participate in a Business Incubator =

shared office space, management,
support services, management advice 18
 Managing a Growing Venture

O Planning
O Defining goals and deciding on the tasks and use of
resources needed to attain them
O As organization grows, formal planning usually is not
instituted until around the success stage
O Business plan must be living document

O Planning concern – small businesses need to be Web-

savvy
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 Contd.

O Organizing
O 1st two stages typically very informal
O At 3rd stage, success, functional managers are hired
O Rules and regulations, procedural manuals
O Latter stages, delegation

20
 Contd.
O Leading
O Early stages – leader’s vision
O By success stage, must learn to motivate
employees or bring in managers who can
O Need for active communication

O Leadership is important because many small

firms have a hard time hiring qualified
employees

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 Contd.
O Controlling
O Controlling helps to direct affairs and enforce
alignments to goals and objectives
O Financial control – important in each stage
O Initial stages – exercised by simple accounting records
and by personal supervision
O By 3rd stage, operational budgets are in place;
structured control systems

O Control Techniques become more sophisticated as

the firm matures
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 ATTRIBUTES REQUIRED FOR
Entrepreneurial SUCCESS

O Resourcefulness
O Concern for good, personal customer relations
O Strong desire to be their own bosses
O Deal with uncertainty and risk

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