11- 1

Section 1: The Challenge of Entrepreneurship

The Foundations
of Entrepreneurship

Copyright © 2016 Pearson Education Ltd 1-2

❖ Define the role of the entrepreneur in business around the
world.
❖ Describe the entrepreneurial profile.
❖ Describe the benefits of entrepreneurship.
❖ Describe the drawbacks of entrepreneurship.
❖ Explain the cultural diversity of entrepreneurship.
❖ Describe the important role that small businesses play in
our economy.
❖ Put failure into the proper perspective.
❖ Explain how an entrepreneur can avoid becoming another
failure statistic.

Copyright © 2016 Pearson Education Ltd 1-3

❖ Entrepreneurship is a key driver of economic growth for
Egypt and around the world.
❖ Egyptian society’s perception of entrepreneurship is
particularly high and continues to grow.
❖ More than 73 percent of Egyptians think entrepreneurship is
a good career choice.
❖ Over the past decade, Egypt has witnessed an entrepreneurial
revolution, with a growing number of support organizations,
emerging policy focus, and numerous government and donor
support programs.

Copyright © 2016 Pearson Education Ltd 1-5

 Entrepreneurship in Egypt

❖ The Global Entrepreneurship Monitor (GEM) report states

that more than 42 percent of early-stage entrepreneurs are
"necessity entrepreneurs," meaning they started a new
venture due to a lack of other employment opportunities.

❖ One of the report’s important findings is that only one out

of every four entrepreneurs in Egypt is a woman, which is
significantly lower than the global average. Young adults
between the ages of 25-34 are also the group most likely to
undertake an entrepreneurial venture.

1-6 Ch. 1: The Foundations of Entrepreneurship

Copyright © 2016 Pearson Education Ltd 1-7
❖Entrepreneur:
❖ One who creates a new business in the face of
risk and uncertainty for the purpose of
achieving profit and growth by identifying
opportunities and assembling the necessary
resources to capitalize on them.
❖ Although many people come up with great
business ideas, most of them never act on their
ideas. Entrepreneurs do!

Copyright © 2016 Pearson Education Ltd 1-8

1. Desire for responsibility
2. Preference for moderate levels of risk
(Calculated risk takers not wild risk takers):
risk eliminators
3. Self-reliance
4. Confidence in their ability to succeed
5. Determination

Copyright © 2016 Pearson Education Ltd 1-9

6. Desire for immediate feedback (Sales, profit,
likes on Facebook, and number of followers on
Instagram or Twitter)
7. High level of energy
8. Future orientation
9. Skilled at organizing
10. Value of achievement over money

Copyright © 2016 Pearson Education Ltd 1 - 10

▪ Opportunity entrepreneurs:
People who start businesses because they spot an
opportunity in the marketplace.

▪ Necessity entrepreneurs:
People who start businesses because they cannot
find work any other way.

Copyright © 2016 Pearson Education Ltd 1 - 11

▪ Serial entrepreneurs: People who repeatedly start
businesses and grow them to a sustainable size before
striking out again.
➢ The majority of serial entrepreneurs are Leapfroggers,
people who start a company, manage its growth until
they get bored, and then sell it to start another.

➢ A few are Jugglers (or parallel entrepreneurs), people

who start and manage several companies at once.

Copyright © 2016 Pearson Education Ltd 1 - 12

▪ Social entrepreneurs: entrepreneurs who
use their skills not only to create profitable
businesses, but also to achieve social and
environmental goals for the common good of the
society as a whole.

Copyright © 2016 Pearson Education Ltd 1 - 13

❖ Other characteristics that entrepreneurs tend to exhibit:
▪ A high degree of commitment
▪ Tolerance for ambiguity
▪ Creativity
▪ Flexibility
▪ Resourcefulness
▪ A willingness to work hard
▪ Tenacity

Copyright © 2016 Pearson Education Ltd 1 - 14

❖ One characteristic of entrepreneurs stands
out: diversity!
❖ Anyone – regardless of age, race, gender,
color, national origin, or any other
characteristic – can become an entrepreneur
(although not everyone should).
❖ Entrepreneurship is NOT a genetic trait; it
is a skill that most people can learn.

Copyright © 2016 Pearson Education Ltd 1 - 15

▪ The opportunity to:
❖ Create your own destiny (being my own boss).
❖ Make a difference.
❖ Reach your full potential.
❖ Reap impressive profits.
❖ Contribute to society and to be recognized for
your efforts.
❖ Do what you enjoy and to have fun at it.

Copyright © 2016 Pearson Education Ltd 1 - 16

❖ Uncertainty of income
❖ Risk of losing your entire investment
❖ Long hours and hard work
❖ Lower quality of life until the business gets
established
❖ High levels of stress
❖ Complete responsibility
❖ Discouragement

Copyright © 2016 Pearson Education Ltd 1 - 17

Copyright © 2016 Pearson Education Ltd 1 - 18
❖ Young entrepreneurs
❖ Women entrepreneurs
❖ Immigrant entrepreneurs
❖ Part-time entrepreneurs
❖ Home-based businesses

Copyright © 2016 Pearson Education Ltd 1 - 19

 (continued)

❖ Family businesses (includes 2 or more

members of a family who have financial control
of the company)
❖ Copreneurs (entrepreneurial couples who work
together as co-owners of their businesses)
❖ Corporate castoffs
❖ Corporate dropouts
❖ Retiring baby boomers

Copyright © 2016 Pearson Education Ltd 1 - 20

Ch. 1: The Foundations of Entrepreneurship 1 - 21
1. Management mistakes
2. Lack of experience
3. Poor financial control
4. Weak marketing efforts
5. Failure to develop a strategic plan
6. Poor location
7. Incorrect pricing

Ch. 1: The Foundations of Entrepreneurship 1 - 22

❖ Entrepreneurs are not paralyzed by the
prospect of failure.
❖ Failure: a natural part of the creative process.
❖ Successful entrepreneurs learn to fail
intelligently.

Copyright © 2016 Pearson Education Ltd 1 - 23

❖ Know your business in depth
❖ Build a viable business model – and test it
❖ Develop a solid business plan
❖ Understand financial statements
❖ Manage financial resources
❖ Learn to manage people effectively
❖ Set your business apart from the competition
❖ Maintain a positive attitude

Copyright © 2016 Pearson Education Ltd 1 - 24

Entrepreneurs:
❖ Are an important part of the free enterprise
system
❖ Are a diverse and talented group of people
❖ Represent a cross-section of society as a whole
❖ Are able to enhance the profitability of their
businesses through acquiring additional
knowledge and experience

Copyright © 2016 Pearson Education Ltd 1 - 25

Copyright © 2016 Pearson Education Ltd 1 - 26
Thank You ☺

Copyright © 2016 Pearson Education Ltd 1 - 27