PowerPoint Presentation

 Section 1.2
 Pages 12-15
1.2 The Entrepreneurial Process

What you’ll learn

 The process of
entrepreneurship
 The components of a new
venture organization
 How businesses succeed
1.2 The Entrepreneurial Process

Why it’s important

 Understanding the
entrepreneurial process will
help you build a more
effective business that creates
value.
1.2 The Entrepreneurial Process

Why it’s important

 Learning the facts about
business success and failure
will help you make wiser
business decisions.
1.2 The Entrepreneurial Process

Key Terms
environment
enterprise zones
opportunity
start-up resources
new venture
1.2 The Entrepreneurial Process
Key Terms (Cont.)
business failure
discontinuance
1.2 The Entrepreneurial Process

I. ENTREPRENEURIAL
START-UP
The entrepreneurial start-up
process includes five key
components.
A. The entrepreneur
1.2 The Entrepreneurial Process

B. The environment
C. The opportunity
D. Start-up resources
E. The new venture
organization
1.2 The Entrepreneurial Process

II. THE ENTREPRENEUR

A. The entrepreneur pulls
together the different
components involved in
creating a new business.
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B. The entrepreneur brings to

the business all the behaviors
and experience from his or
her life to that point.
1.2 The Entrepreneurial Process

III. THE ENVIRONMENT

A. The business environment
refers to the variables
affecting it that are not
controlled by the
entrepreneur.
1.2 The Entrepreneurial Process

B. There are four general

categories of environmental
variables affecting a new
venture.
1. The nature of the
environment (uncertain,
fast-changing, stable,
highly competitive etc.)
1.2 The Entrepreneurial Process

2. The availability of resources

3. Ways to realize value
(favorable taxes, good
markets, supportive
government policies)
4. Incentives to create new
businesses, such as
enterprise zones
1.2 The Entrepreneurial Process

Enterprise zones - Specially

designated area of a community
that provide tax benefits to new
businesses locating there and
grants for new product
development.
1.2 The Entrepreneurial Process

Springboard
Analyze the current
business environment.
1.2 The Entrepreneurial Process

IV. THE OPPORTUNITY

A. An opportunity is an idea that
has commercial value.
B. New businesses are founded
on recognized opportunities
in the environment.
1.2 The Entrepreneurial Process

V. START-UP RESOURCES
A. The start-up resources an
entrepreneur needs to start a
business include the
following.
1. Capital
1.2 The Entrepreneurial Process

2. Skilled labor
3. Management expertise
4. Legal and financial advice
5. A facility
6. Equipment
7. Customers
1.2 The Entrepreneurial Process

B. The most important start-up

resource is customers.
1.2 The Entrepreneurial Process

VI. THE NEW VENTURE

ORGANIZATION
A. The new venture
organization is the shell
that surrounds all the
parts of a new business.
1.2 The Entrepreneurial Process

B. The parts of a new business

include the following.
1. Products
2. Processes
3. Services
1.2 The Entrepreneurial Process

C. Entrepreneurs are able to

create value for a business
through new venture
organization.
1.2 The Entrepreneurial Process

VII. HOW BUSINESSES

SUCCEED
A. The myth that most new
businesses fail is not true.
1.2 The Entrepreneurial Process

B. A recent study done by Dun

& Bradstreet found that
more businesses succeed than
fail.
1.2 The Entrepreneurial Process

C. The problem with most

reports on business failure is
that they don’t define failure
properly.
1.2 The Entrepreneurial Process

VIII. WHAT IS BUSINESS

FAILURE?
A. A business failure is a
business that files Chapter 7
bankruptcy or loses money
for creditors and their
investors.
1.2 The Entrepreneurial Process

B. Businesses that disappear

from public lists are not
always failures.
C. Some businesses that
disappear from public lists
are discontinuances.
1.2 The Entrepreneurial Process

D. A discontinuance is a
businesses that is either
operating under a new name
or has been purposely
discontinued to start a new
one.
1.2 The Entrepreneurial Process
Discussion Starter
Name a business in the
community that is
considered a
discontinuance--not a
failure.
1.2 The Entrepreneurial Process

E. Discontinuances are not

failures because they are
planned and cause no harm
to creditors.
1.2 The Entrepreneurial Process

F. Failure is also sometimes

mistakenly reported when an
owner changes the legal
status of a business.
1.2 The Entrepreneurial Process

IX. HOW CAN

ENTREPRENEURS
SUCCEED?
A. The chances of a new
business succeeding are
good with effective
planning.
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B. The number–one cause of

business failure is poor
management.
1.2 The Entrepreneurial Process

C. Entrepreneurs can improve

their chances of success.
1. Learn how to build a new
business
2. Assemble a team that has
the expertise they need
1.2 The Entrepreneurial Process

End of Section 1.2