Chapter 1:The Foundations of Entrepreneurship

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Entrepreneurship andEffective Small Business Management 11/e by Scarborough and Cornwall

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Entrepreneurs: The Driving Force Behind Small Business

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In the U.S., entrepreneurs start more than 6.5 millionbusinesses a year!

Global Entrepreneurship Monitor (GEM)

Approximately 13% of the U.S. population aged 18-64 is actively involved in entrepreneurial activity

The global average is also 13%

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Entrepreneur: One who creates a new businessin the face of risk and uncertainty for the purposeof achieving profit and growth by identifyingopportunities and assembling the necessaryresources to capitalize on them

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Why Entrepreneurs Start Businesses

Characteristics of Entrepreneurs:

Desire and willingness to take initiative

Preference for moderate risk

Confidence in their ability to succeed

Self-reliance

Perseverance

Desire for immediate feedback

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More Characteristics of Entrepreneurs:

High level of energy

Competitiveness

Future orientation

Serial entrepreneurs

Skilled at organizing

Value of achievement over money

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Other Characteristics of Entrepreneurs:

High degree of commitment

Tolerance for ambiguity

Flexibility

Tenacity

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Conclusion?

Diversity seems to be a central characteristic ofentrepreneurs

Anyone – regardless of age, race, gender, color,national origin, or any other characteristic – canbecome an entrepreneur (although not everyoneshould)

Entrepreneurship is a skill that is learned

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Creativity vs. Innovation

Creativity – the ability to develop newideas and to discover new ways oflooking at problems and opportunities

Innovation – the ability to apply creativesolutions to problems and opportunitiesto enhance or to enrich people’s lives

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How to Spot Entrepreneurial Opportunities

Monitor Trends and Exploit Them Early On

Independa

Travel – and Be Inspired

Eileen Fisher

Take A Different Approach To An ExistingMarket

I Do Now I Don’t

Put a New Twist on an Old Idea

Vitaband

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Look for Creative Ways to Use ExistingResources

Dig This

Realize That Others Have the SameProblem That You Do

MileWise

Take Time to Play

Flash Pals

Notice What Is Missing

Viking Range Corporation

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The opportunity to:

Gain control over your own destiny

Make a difference

Social entrepreneurs

Reach your full potential

Reap impressive profits

Contribute to society and be recognized for yourefforts

Do what you enjoy doing

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Uncertainty of income

Risk of losing your entire invested capital

Long hours and hard work

Lower quality of life until the business getsestablished

High levels of stress

Complete responsibility

Discouragement

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The Potential Drawbacks of Entrepreneurship

Entrepreneurs as heroes

Entrepreneurial education

Demographic and economic factors

Shift to a service economy

Technological advancements

Outsourcing

Independent lifestyles

E-Commerce, the Internet, and mobile computing

International opportunities

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Why the Boom: The Fuel Feeding the Entrepreneurial Fire

Young entrepreneurs

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The Cultural Diversity of Entrepreneurship

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New Entrepreneurs by Age Group

Young entrepreneurs

Women entrepreneurs

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Entrepreneurial Activity Index by Gender

Young entrepreneurs

Women entrepreneurs

Minority enterprises

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Percentage of New Entrepreneurs by Minority Group

Young entrepreneurs

Women entrepreneurs

Minority enterprises

Immigrant entrepreneurs

Part-time entrepreneurs

Home-based business owners

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Rules for a Successful Home-Based Business

Rule 1. Do your homework.

Rule 2. Find out what your zoning restrictions are.

Rule 3. Create distinct zones for your family and business dealings.

Rule 4. Focus your home-based business idea.

Rule 5. Discuss your business rules with your family.

Rule 6. Select an appropriate business name.

Rule 7. Buy the right equipment.

Rule 8. Dress appropriately.

Rule 9. Learn to deal with distractions.

Rule 10. Realize that your phone can be your best friend—or yourworst enemy.

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Rules for a Successful Home-Based Business

Rule 11. Be firm with friends and neighbors.

Rule 12. Maximize your productivity.

Rule 13. Create no-work time zones.

Rule 14. Take advantage of tax breaks.

Rule 15. Make sure you have adequate insurance coverage.

Rule 16. Understand the special circumstances under which you canhire outside employees.

Rule 17. Be prepared if your business requires clients to come to yourhome.

Rule 18. Get a post office box.

Rule 19. Network.

Rule 20. Be proud of your home-based business.

Young entrepreneurs

Women entrepreneurs

Minority enterprises

Immigrant entrepreneurs

Part-time entrepreneurs

Home-based business owners

Family business owners

Family-owned business

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Copreneurs

Corporate castoffs

Corporate “dropouts”

Retired baby boomers

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Entrepreneurial Activity by Age Group

1996-2012

Small business: one that employs fewer than 100people

Small businesses:

Comprise 99.7% of the 27.2 million businessesin the U.S.

Employ 49.2% of the nation’s private sectorworkforce

Pay 43% of the nation’s total private payroll

Create more jobs than big businesses

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Small Businesses by Industry

Small businesses:

Are leaders in offering training and advancementopportunities to workers

Provide 67% of workers with their first jobs

Produce 46% of the nation’s private GDP

Account for 47% of business sales

Play a key role in innovation:

Produce 16.5 times more patents peremployee than large companies

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About 52% of new companies fail within 5 years

Entrepreneurs are not paralyzed by the prospect offailure

Failure is a natural part of the creative process

Successful entrepreneurs learn to fail intelligently

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Small Business Survival Rate

Know your business in depth

Prepare a business plan

Manage financial resources

Understand financial statements

Learn to manage people effectively

Set your business apart from the competition

Maintain a positive attitude

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