Starting and Growing Your Business

Part 2
Starting and
Growing Your
Business
Copyright 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Chapter 6
Starting Your Own
Business: The
Entrepreneurship
Alternative
Chapter Objectives
1. Define the term entrepreneur and distinguish among
entrepreneurs, small-business owners, and managers.
2. Identify three different types of entrepreneurs.
3. Explain why people choose to become entrepreneurs.
4. Discuss conditions that encourage opportunities for
entrepreneurs.
5. Describe the role of entrepreneurs in the economy.
6. Identify personality traits that typically characterize
successful entrepreneurs.
7. Summarize the process of starting a new venture.
8. Explain how organizations promote intrapreneurship.
Chapter Overview
People are increasingly choosing the path of
entrepreneurship
To become an entrepreneur, learn as much
as possible by:
Completing academic programs
Gaining practical experience working
Reading newspaper and magazine articles
and biographies of successful
entrepreneurs
What Is An Entrepreneur?
A person who seeks a profitable opportunity
and takes the necessary risks to set up and
operate a business.
Websites
Entrepreneurial Leadership
Entrepreneur
EntreWorld
Categories of Entrepreneurs
Classic entrepreneursperson who
identifies a business opportunity and
allocates available resources to tap that
market.
Intrapreneurentrepreneurially oriented
person who develops innovations within the
context of a large organization.
Change Agentmanager who tries to
revitalize an established firm to keep it
competitive.
Why People Become Entrepreneurs
U.S. Adults Currently Engaged in Starting a

Business
Reasons to Choose Entrepreneurship

as a Career Path
Desire to Be Your Own Boss
Self-management is the motivation of many
entrepreneurs
Financial Success
Entrepreneurs:
Are wealth creators
Believe they wont get rich working for
others
Path to riches can be long and uncertain
Reasons to Choose Entrepreneurship

as a Career Path
Job Security
Many workers lack job security
Growing percentage of Americans create
their own by starting their own firms
Quality of Life
Gives the founder some choice over when,
where, and how to work
Many work extraordinarily long hours . . .
often at the whim of their customers
Factors Supporting and Expanding Opportunities

for Entrepreneurs
The Environment for Entrepreneurs

Globalization
Creates many opportunities for
entrepreneurs
Allows products to be sold overseas
Provides international talent pool

Education
Tremendous growth in educational
opportunity for would-be entrepreneurs via:
College Classes
Business schools helping students start
businesses
Other organizations like the Center for
Entrepreneurial Leadership

Information Technology
Provided a big boost for entrepreneurs
Helps entrepreneurs work quickly and
efficiently, provide attentive customer
service, increase sales, and project a
professional image
Has created demand for new products
Internet is also a challenge for
entrepreneurs
Customers can go online, quickly get
needed information, and buy from
anywhere in the world

Demographic and Economic Trends
Demographic trends create opportunities
for new goods and services

Entrepreneurship around the World
Growth of entrepreneurship is a worldwide
phenomenon
Level of entrepreneurship varies
considerably even among industrialized
nations
Levels of Entrepreneurial Activity in 10 Countries
Influence of Entrepreneurs on
the Economy
American entrepreneurs have given the world
goods and services that have changed the
way people live, work, and play
Products include:
Ball-point pens
Netscape Navigator software
Fiberglass skis
Velcro fasteners
FedEx delivery service
MacDonald's
the Economy
Influence of Entrepreneurs on the Economy
the Economy
Innovation
Entrepreneurs:
Create new products
Build new industries
Bring new life to old industries
Since WWII, behind:
2/3rds of Inventions
95% of major innovations
the Economy
Job Generation
Vital source of new jobs
Typically hire small numbers of employees
per firm . . . spread over many companies
See potential employees where
established firms overlook them
Gazelles
the Economy
Diversity
Entrepreneurship offers excellent
economic opportunities for women and
minorities
Characteristics of Entrepreneurs
Vision
Have an overall idea for how to make a
business inspiration a success
High Energy Level
Willingly work hard to realize their visions
Need to Achieve
Need to work hard because they want to
excel
Self-Confidence and Optimism
Believe in ability to succeed, and they instill
their optimism in others
Tolerance for Failure
Entrepreneurs view setbacks and failures
as learning experiences
Not easily discouraged or disappointed
when things dont go as planned
Creativity
Entrepreneurs typically conceive new ideas
for goods and services
Devise innovative ways to overcome difficult
problems and situations
Tolerance for Ambiguity
Take the uncertainties associated with
launching a venture in stride
Internal Locus of Control
Believe that they control their own fates
Take personal responsibility for the
success or failure of their actions rather
than believing in luck or fate
Think You Might Be a Good Entrepreneur?
Starting a New Venture

Selecting a Business Idea
Finding something you love to do and are
good at doing
Determining whether your idea can satisfy
a need in the market
Success also depends on your offering
being appealing to the marketplace

Buying an Existing Business
Some prefer not to assume the risks of
starting a new firm
Buying a Franchise
Another less risky
way to begin a business

Creating a Business Plan
Online Resources for Preparing a Business
Plan

Finding Financing
Seed Capitalinitial funding needed to
launch a new venture.
Debt Financingborrowed funds that
entrepreneurs must repay.

Finding Financing
Equity Financingfunds invested in new
ventures in exchange for part ownership.
Venture Capitalistsbusiness firm or
group of individuals who invest in new and
growing firms.

Finding Financing
Angel Investorswealthy individuals who
invest directly in a new venture in
exchange for an equity stake.
Intrapreneurship
Intrapreneurshipprocess of promoting
innovations within the structure of an existing
organization.
Helps retain employees who might
otherwise leave to start their own
businesses
Intrapreneurship practiced in:
3M (e.g. skunkworks)
Thermo Electron
Xerox
Intuit

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Part 2

Why People Become Entrepreneurs

U.S. Adults Currently Engaged in Starting a

Reasons to Choose Entrepreneurship

Reasons to Choose Entrepreneurship

Factors Supporting and Expanding Opportunities

The Environment for Entrepreneurs

The Environment for Entrepreneurs

The Environment for Entrepreneurs

The Environment for Entrepreneurs

The Environment for Entrepreneurs

Levels of Entrepreneurial Activity in 10 Countries

Think You Might Be a Good Entrepreneur?

Starting a New Venture

Starting a New Venture

Starting a New Venture

Starting a New Venture

Starting a New Venture

Starting a New Venture

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