Starting Your Own Business: The Entrepreneurship Alternative

Chapter

6

LO 6.1 Define the term entrepreneur and distinguish among entrepreneurs, small-business owners, and managers.

LO 6.2 Identify the different types of entrepreneurs.

LO 6.3 Explain why people choose to become entrepreneurs.

LO 6.4 Discuss factors that support and expand opportunities for entrepreneurs.

Learning Objectives

LO 6.5 Identify personality traits that typically characterize successful entrepreneurs.

LO 6.6 Summarize the process of starting a new venture.

LO 6.7 Explain how organizations promote intrapreneurship.

Entrepreneur: A person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business

Differ from many small-business owners in their strong desire to make their business grow

Differ from managers through their overriding responsibility to use the resources of the organization to accomplish their goals

Willing to take risks

What is Entrepreneurship?

Categories of Entrepreneurs

Classic entrepreneurs

Serial entrepreneurs

Social entrepreneurs

What kind of entrepreneur starts many businesses in succession?

a. Classic entrepreneurb. Social entrepreneurc. Serial entrepreneurd. Intrapreneur 

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What kind of entrepreneur starts many businesses in succession?

a. Classic entrepreneurb. Social entrepreneurc. Serial entrepreneurd. Intrapreneur

Answer: C

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In an average month, Canadians start approximately 23,000 new businesses.

Recent decades have shown a heightened interest in entrepreneurial careers.

People choose entrepreneurship for many reasons Dissatisfaction with traditional work Their ideas fulfill customer needs Freedom to make own decisions

Reasons to Choose Entrepreneurship as a Career Path

Why People Become Entrepreneurs

Being Your Own Boss Self-management is the motivation that drives

many entrepreneurs. Financial Success

Entrepreneurs are wealth creators and idea generators.

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.

Reasons to Choose Entrepreneurship as a Career Path

What is the overriding responsibility of an entrepreneur? a.To manage peopleb.To make as much money as possiblec. To use the company resources to accomplish goalsd. To be ethical and socially responsible 

 

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What is the overriding responsibility of an entrepreneur?

a.To manage peopleb.To make as much money as possiblec. To use the company resources to accomplish goalsd. To be ethical and socially responsible

Answer: C

 

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The Environment for Entrepreneurship

The rapid globalization of business has created many opportunities for entrepreneurs.

Most of the fastest-growing small Canadian companies have international sales (most to the United States).

Entrepreneurship is growing worldwide; levels vary by country.

Globalization

Education Students at many colleges and universities can

take a major in entrepreneurship. Dozens of other colleges and universities offer an emphasis in entrepreneurship and hundreds more offer one or two courses in how to start a business.

Many schools offer internships with start-ups.

Information Technology Technology has given entrepreneurs tools that

help them compete. Entrepreneurs have used information technology

to revolutionize industries.

Education/Information Technology

Demographics on Entrepreneurships and Small Business

Two groups are most likely to start their own businesses Immigrants to North America People between the ages of 55 and 64 (have access to

retirement savings/home equity; want to keep working after retirement)

Flexible, adaptable entrepreneurs will have most success

Demographic and Economic Trends

Characteristics of Entrepreneurs

Vision: an overall idea for how to make business ideas successful

High energy level: a willingness to work hard Need to achieve: want to excel and achieve difficult

goals Self-confidence: fearlessness in the face of difficult

odds Tolerance for failure: not easily discouraged Creativity: devise innovative ways to overcome difficult

problems and situations; have new ideas for good and services

Tolerance for ambiguity: take business uncertainties in stride

Internal locus of control: belief in control of own fates

Characteristics of Entrepreneurs

Guidelines for Selecting a Business Idea

Selecting a Business Idea Find something you love to do and are good at

doing Find an idea that can satisfy a need in the

marketplace Entrepreneurs must be sure that the idea

they choose has interest in the marketplace.

Business Plan

Starting a New Venture

Advantages: Established customers Deal with familiar suppliers Good/service known in marketplace Necessary permits and licenses are

already secured Financing may be easier

Seller financing

Buying an Existing Business

In the past, many entrepreneurs launched businesses without a formal business plan.

Business plans help contemporary entrepreneurs prepare enough resources and stay focused on key objectives.

Creating a Business Plan

Seed capital: The initial funding needed to launch a new vendor

Debt Financing Credit cards Family and friends Bank loans Finance companies

Equity Financing Venture Capitalists Angel Investors

Finding Financing

Business incubators are a key way government supports new ventures

Enterprise zones Encourage entrepreneurship in specific

geographic areas set aside for economic renewal

Urban reserves Economic zone within a municipality set

aside as First Nation reserve land for Aboriginal commercial ventures

Government Support for New Ventures

Which of the following is the least likely source of financing for new ventures?

a. Venture capitalistsb. Debt capitalc. Equity capitald. Angel investors

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Which of the following is the least likely source of financing for new ventures?

a. Venture capitalistsb. Debt capitalc. Equity capitald. Angel investors

Answer: A

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The process of promoting innovation within the structure of an existing organization

An idea to promote creativity Companies promote in a

variety of ways Skunkworks Pacing Programs

Intrapreneurship

Bootlegging is a 3M effort to promote intrapreneurship by allowing:a. employees to borrow time from other projects to develop new products.b. employees to take a sabbatical to work on new products.c. employees to take frequent vacations to inspire new product ideas.d. employees to copy competitors’ product ideas and claim credit.  

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Bootlegging is a 3M Corp. effort to promote intrapreneurship by allowing:a. employees to borrow time from other projects to develop new products.b. employees to take a sabbatical to work on new products.c. employees to take frequent vacations to inspire new product ideas.d. employees to copy competitors’ product ideas and claim credit.  Answer: A

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