Entrepreneurship

Starting Your Own Business: The

Entrepreneurship Alternative

AN OVERVIEW
 An entrepreneur
is a person who seeks a profitable
opportunity and takes the necessary
risks to set up and operate a business.
 An entrepreneur
Are individuals who recognize opportunities
where others see chaos or confusion.

Whatever the passion - because they all fit in

some way- they are the heroes of today's
marketplace.
 An entrepreneur
Richard Cantillon (1697-1734)

The entrepreneur is a specialist in taking on risk

He “insures” workers by buying their products (or

labor services) for resale before consumers have
indicated how much they are willing to pay.
Why should you be
interested?

Many young people have succeeded:

◦ Michael Dell - Dell Computers
◦ Frank Carney - Pizza Hut
◦ Paul Orfalea - Kinko’s
◦ Fred DeLuca - Subway.
◦ Kristy Taylor - SkinCareRx.com
◦ Mark Zuckerberg - Facebook
Opportunity to reap large profits
Why NOT to be an
Entrepreneur

Uncertainty of income
Risk of losing entire invested capital
Lower quality of life until business gets
established
High levels of stress
Complete responsibility
 What is Entrepreneurship?
Scott Shane (Case Western) – “Entrepreneurship is an
activity that involves the discovery, evaluation and
exploitation of opportunities to introduce new goods and
services, ways of organizing, markets, processes, and new
materials through organizing efforts that previously had not
existed.”
Howard Stevenson (Harvard) – “.. The pursuit of
opportunity without regard to resources currently
controlled.”
W. Gibb Dyer, Jr. (BYU) – “The founding of new businesses
is the essence of entrepreneurial activity.”
 What is Entrepreneurship?
Entrepreneurship is a dynamic process of vision, change,
and creation. It requires an application of energy and
passion toward the creation and implementation of new
ideas and creative solution.

Essential ingredients include the willingness to take

calculated risk - in terms of time, equity or career, the
ability to formulate an effective venture team; the creative
skill to marshall needed resources; the fundamental skill of
building a solid business plan; and, finally, the vision to
recognize opportunity where others see chaos,
contradiction and confusion.
 Avoiding Folklore: The Myths of
Entrepreneurship.
1.. Entrepreneurs are doers not thinkers.
2.. Entrepreneurs are born not made.
3.. Entrepreneurs are always investors.
4.. Entrepreneurs are academic and social misfits.
5.. Entrepreneurs must fit the profile.
6.All entrepreneurs need is money.
7.All entrepreneurs need is luck.
8.Most entrepreneurial initiatives fail.
9.Entrepreneur are extreme rist takers -.... the gamblers.
 en eu r s hi p
Entrepr
as a C ar e e r
• People choose entrepreneurship for many reasons
– Dissatisfaction with traditional work

– Their ideas fulfill customer needs

 l e B e co m e
Why Peop
re pr e n eu rs
En t
 Why
n eur ship ?
Entrepre
Being your Own Boss
◦ Self-management is the motivation that drives many
entrepreneurs.
Financial Success
◦ Entrepreneurs are wealth creators.
Job Security
◦ Over the past ten years, large companies have eliminated
more jobs than they have created.
Quality of Life
◦ Starting a business gives the founder some choice over when,
where, and how to work.

15
 ris ti c s of
Characte
p re n e u r s
Entre

16
 re n eu r ia l
Entrep
c t eris ti c s
Chara
• Vision - entrepreneurs begin with an overall idea for how to make their
business idea a success
• High Energy Level - a willingness to work hard
• Need to Achieve - entrepreneurs work hard because they want to excel
• Self-Confidence - fearlessness in the face of difficult odds
• Tolerance for Failure - entrepreneurs are not easily discouraged
• Creativity - entrepreneurs devise innovative ways to overcome difficult
problems and situations
• Tolerance for Ambiguity - entrepreneurs take in stride uncertainties.
• Internal Locus of Control - entrepreneurs believe they can control their
own fate
17
 Who are entrepreneurs?

Common traits Common traits

◦ Original thinkers ◦ Self employed parents
◦ Risk takers ◦ Firstborns
◦ Take responsibility for ◦ Between 30-50 years old
own actions ◦ Well educated – 80%
◦ Feel competent and have college degree and
capable 1/3 have a graduate level
◦ Set high goals and enjoy degree
working toward them
 Successful and Unsuccessful
Entrepreneurs
Successful Unsuccessful
◦ Creative and Innovative ◦ Poor Managers
◦ Position themselves in ◦ Low work ethic
shifting or new markets ◦ Inefficient
◦ Create new products ◦ Failure to plan and
◦ Create new processes prepare
◦ Create new delivery ◦ Poor money managers
 Characteristics of Entrepreneurs
Key Personal
Attributes

Strong Managerial Successful

Competencies Entrepreneurs

Good Technical Skills

 Key Personal Attributes
Entrepreneurs are Made, Not Born!
◦ Many of these key attributes are developed early in life,
with the family environment playing an important role
◦ Entrepreneurs tend to have had self employed parents
who tend to support and encourage independence,
achievement, and responsibility
◦ Firstborns tend to have more entrepreneurial attributes
because they receive more attention, have to forge their
own way, thus creating higher self-confidence
 Key Personal Attributes
(cont.)
Entrepreneurial Careers
◦ The idea that entrepreneurial success leads to more
entrepreneurial activity may explain why many entrepreneurs
start multiple companies over the course of their career
◦ Corridor Principle- Using one business to start or acquire others
and then repeating the process
◦ Serial Entrepreneurs- A person who founds and operates multiple
companies during one career
 Key Personal Attributes
(cont.)
Need for Achievement
◦ A person’s desire either for excellence or to succeed in
competitive situations
◦ High achievers take responsibility for attaining their
goals, set moderately difficult goals, and want
immediate feedback on their performance
◦ Success is measured in terms of what those efforts have
accomplished
◦ McClelland’s research
 Key Personal Attributes
(cont.)
Desire for Independence
◦ Entrepreneurs often seek independence from
others
◦ As a result, they generally aren’t motivated to
perform well in large, bureaucratic organizations
◦ Entrepreneurs have internal drive, are confident
in their own abilities, and possess a great deal of
self-respect
 Key Personal Attributes
(cont.)
Self-Confidence
◦ Because of the high risks involved in running an
entrepreneurial organization, having an
“upbeat” and self-confident attitude is essential
◦ A successful track record leads to improved self-
confidence and self-esteem
◦ Self-confidence enables that person to be
optimistic in representing the firm to employees
and customers alike
 Key Personal Attributes
(cont.)
Self-Sacrifice
◦Essential
◦Nothing worth having is free
◦Success has a high price, and
entrepreneurs have to be willing to
sacrifice certain things
 Technical Proficiency
Many entrepreneurs demonstrate strong
technical skills, typically bringing some related
experience to their business ventures
For example, successful car dealers usually have
lots of technical knowledge about selling and
servicing automobiles before opening their
dealerships
Especially important in the computer industry
NOT ALWAYS NECESSARY
Questions To Keep In Mind
What are my motivations for owning a business?

Should I start or buy a business?

What and where is the market for what I want to sell?

How much will all this cost me?

Should my company be domestic or global?

 Entrepreneurship: Growth Pressures
Business Dimension Entrepreneurial Formal Organization
Organization
Strategic orientation Seeks opportunity Controls resources
Commitment to Revolutionary Evolutionary
opportunity Short duration Long duration
Commitment to Lack of stable needs and Systematic planning
resources resource bases systems
(capital, people, and
equipment)

Control of resources Lack of commitment to Power, status, financial

permanent ventures rewards for maintaining
status quo
Management Structure Flat Clearly defined authority
Many informal networks and responsibility
Compensation policy Unlimited; based on Short-term driven;
team’s accomplishments limited by investors
One More Time
What is an entrepreneur?
Characteristics of an entrepreneur
Planning to be an entrepreneur
Growth pressures, managing a family business, and corporate
intrapreneurship