The Environment of Entrepreneurship and Small Business ...

normaldeerΔιαχείριση

20 Νοε 2013 (πριν από 3 χρόνια και 9 μήνες)

70 εμφανίσεις

Appendix A

Managing Small
Business Start Ups

Entrepreneurship


Process of initiating a business venture



organizing necessary resources


assuming risks and rewards


With downsizing and frustration with
corporate lifestyles, many persons are
electing to become entrepreneurs.

Small Businesses


Generally fewer than 500 employees


Create jobs (1987
-
1992: small, fast
-
growing firms
added more high
-
paying jobs than large
companies eliminated)


Create new products and services


Provide opportunities for persons who may have
careers blocked in established corporations.
(Female entrepreneurs in 33% of new ventures in
1994 vs. 24% in 1975)

Small Businesses


About 97% of all businesses


Include about 90% of corporations


Contribute almost half the GDP


Provide majority of employment

Small Businesses


Typically viewed as having high failure
rates


40
-
50% within 3 years


60
-
80% within 5 years


However, 20% within 5 years may be
more accurate.


10% for female owned

Personality Characteristics of
Entrepreneurs


Independence


Internal Locus of Control (feel they
control their own destinies)


Need to achieve


High self
-
confidence


High tolerance for ambiguity


High energy level


Starting an Entrepreneurial
Firm

Develop a BUSINESS PLAN:


Product/Service?


Customers?


Which Legal Form to Use?


How to Finance?


Tactics to Establish?


How to Operate?


Product/Service


Most ideas come from one’s profession or
products/services used.


Customers


Wholesale vs. Retail


Geography


Demographics


Competition for those customers


Legal Form of the Business



Proprietorship

= unincorporated business
owned by an individual


Partnership

= unincorporated business
owned by two or more people


Corporation

= artificial entity existing apart
from its owners.

How to Finance?


Obtaining Financial Resources


Personal Equity


Debt financing


Equity financing from Others

»
including Partners, Stockholders, and Venture Capital
firms

»
they are investing in exchange for share of ownership in
the company


Managing Financial Resources


Budgeting is critical, including allowances for initial
losses


How to Establish?


Start
-
up


Buy
-
out


Franchise


Spin
-
off


Incubator participation

How to Operate?


Decisions to be made with respect to:


Production methods


Suppliers


Marketing techniques


Leadership styles


Human Resource policies, etc.

Stages of Growth


Key Issues


Existence

= Begins to produce product/service and get
customers.


Survival

= Has begun to generate sufficient cash flow.


Success

= Now profitable. May consider using
professional managers.


Takeoff

= Delegation critical to manage and finance
growth.


Resource maturity
= Can begin acting like a large mature
company, balancing stability and entrepreneurship with
planning and controls.

Getting Help


Accountants


Attorneys


A board of directors


Small Business Administration


Small Business Development Centers


SCORE (Service Corps of Retired Executives)


Trade Associations


Books


Internet

Intrapreneurship


Intrapreneur

= Someone who promotes
innovation within an existing
organization.


Requires:


Vision


Persistence


Ability to Build and Lead Teams

Advice for Intrapreneurs


Come to work each day willing to be
fired.


Do any job needed to make your project
work, regardless of your job description.


Remember that it is easier to ask for
forgiveness than for permission.

Facilitating Intrapreneurship


Flexible organizational design


Non
-
Bureaucratic controls


Autonomous Venture Teams


Selection, training, and mentoring for
intrapreneurship


Reward risk
-
taking


Tolerate failures