Chapter 1

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Nov 20, 2013 (3 years and 4 months ago)

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PowerPoint Presentation by Charlie Cook

The University of West Alabama

Longenecker


Moore


Petty


Palich

© 2008 Cengage Learning.

All rights reserved.

Entrepreneurship: A World of Opportunity

CHAPTER 1

The
Entrepreneurial
Life

Part 1

© 2008 Cengage Learning. All rights reserved.

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Looking

AHEAD

1.
Discuss the availability of entrepreneurial opportunities and give
examples of successful businesses started by entrepreneurs.

2.
Explain the nature of entrepreneurship and how it is related to
small business.

3.
Identify some motivators or rewards of entrepreneurial careers.

4.
Describe the various types of entrepreneurs and entrepreneurial
ventures.

5.
Identify five potential advantages of small entrepreneurial firms.

6.
Discuss factors related to readiness for entrepreneurship and
getting started in an entrepreneurial career.

7.
Explain the concept of an entrepreneurial legacy and the
challenges involved in crafting a worthy legacy.

After you have read this chapter, you should be able to:

© 2008 Cengage Learning. All rights reserved.

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Entrepreneurial Opportunities


Entrepreneurial Opportunity


An economically attractive and timely opportunity that
creates value for interested buyers or end users.


Success Stories


Latemodel Restoration Supply (Waco, Texas)


http://www.latemodelrestoration.com


Spanx (Atlanta, Georgia)


http://www.spanx.com


MP4 Solutions (San Antonio, Texas)


http://www.airstripob.com

© 2008 Cengage Learning. All rights reserved.

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Who Are Entrepreneurs?


Entrepreneurs are:


A person who starts and/or operates a business.


Individuals who discover market needs and
launch new firms to meet those needs.


Risk takers who provide an impetus

for change, innovation, and

progress.


All active owner
-
managers

(founders and/or managers

of small businesses).

© 2008 Cengage Learning. All rights reserved.

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The Contributions of Small Business


Small Businesses:


Produce 14 times as many patents per employee
than do large companies, and are twice as likely to
turn them into market successes.


Account for half of the private gross domestic product.


Create more than 60% of net new jobs annually.


Pay 44.3% of private payrolls.

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What Is a Small Business?


Criteria for Defining Smallness in Business

1.
Financing supplied by one person or small group

2.
Localized business operations (except marketing)

3.
Business’ size small relative to larger competitors

4.
Fewer than 100 employees

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Entrepreneurial Incentives

1
-
2

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Why People Become Entrepreneurs


Reluctant Entrepreneur


A person who becomes an entrepreneur as a result
of some severe hardship.


Refugee


A person who becomes an entrepreneur to

escape an undesirable situation.

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The Many Varieties of Entrepreneurship


Founder (“Pure” Entrepreneur)


A person who brings a new firm into existence.


Administrative Entrepreneur


An entrepreneur who overseas the operations of a
ongoing business.


Franchisee


An entrepreneur whose power is limited by the
contractual relationship with a franchising
organization.


Entrepreneurial Team


Two or more people who work together as
entrepreneurs.

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Small Business Growth Potential and Profits


High
-
Potential Venture (Gazelle)


A small firm that has great prospects for growth.


Attractive Small Firm


A small firm that provides

substantial profits to its owner.


Microbusiness


A small firm that provides

minimal profits to its owner.


Lifestyle Business


A microbusiness that permits the owner to follow a
desired pattern of living.

© 2008 Cengage Learning. All rights reserved.

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Artisan Entrepreneurs


Artisan Entrepreneur


A person with primarily technical skills and little
business knowledge who starts a business.


Characteristics:


Technical training


Paternalistic approach


Reluctance to delegate


Few sources of capital


Narrow view of strategy


Personal sales effort


Short planning horizon

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Opportunistic Entrepreneurs


Opportunistic Entrepreneur


A person with both sophisticated managerial skills
and technical knowledge who starts a business.


Characteristics:


Broad
-
based education


Scientific approach to problems


Willing to delegate


Broad view of strategy


Diversified marketing approach


Longer planning horizon


Sophisticated accounting

and financial control

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Women Entrepreneurs


More Women Entrepreneurs


The number of women
-
owned firms grew nearly twice
as fast as that of all firms from 1997 to 2006.


Females owned 30% of all businesses as of 2006.


Women are moving into nontraditional industries.


Problems Facing Female Entrepreneurs


Newness of entrepreneurial role


Lack of access to credit


Lack of networking

connections


Discrimination

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The Winning Hand of Entrepreneurship

Customer

Focus

Quality

Performance

Competitive
Advantages of
Entrepreneurial
Firms

Innovation

Integrity and
Responsibility

Special

Niche

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Age

Early Career Concerns

1. Getting an education

2. Gaining work experience

3. Acquiring financial

resources

Late Career Concerns

1. Fulfilling family


responsibilities

2. Attaining seniority


in employment

3. Earning investment in


a retirement program

25

35

45

20

Getting Started


Age and Entrepreneurial Opportunity

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Getting Started (cont’d)

Characteristics of
Successful
Entrepreneurs

Strong Commitment

to the Business

(Tenacity)

Moderate Risk Takers

(Financial, Career,
Psychic Risks)

Strong Internal

Locus of Control

(Self
-
Reliance)

© 2008 Cengage Learning. All rights reserved.

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Entrepreneurial Characteristics

(Timmons and Spinelli)

Commitment and
Determination

Leadership

Motivation to
Excel

Creativity, Self
-
Reliance, and
Adaptability

Opportunity
Obsession

Tolerance of Risk,
Ambiguity, and
Uncertainty

Attitudes and
Behaviors of
Entrepreneurs

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Getting Started (cont’d)


Taking the Plunge


Precipitating event


An event, such as losing a job,

that moves an individual to

become an entrepreneur.


Finding “Go
-
To” Persons


Mentors for advice and counsel


Growing and Managing the Business

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Living the Entrepreneurial Life


Entrepreneurial Legacy


The tangible items and intangible qualities passed on
not only to heirs but also to the broader society.


Evaluating accomplishments


Disappointments in winning the wrong game


Crafting a Worthy Legacy


The nature of the entrepreneurial endeavor reflects
personal goals and values.


Beginning with the End in Mind


Proper values and actions lead to a good exit.

© 2008 Cengage Learning. All rights reserved.

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Key

TERMS


entrepreneurial
opportunity


entrepreneur


reluctant entrepreneur


refugee


founder


franchisee


high
-
potential venture
(gazelle)


attractive small firm


microbusiness


lifestyle business


artisan entrepreneur


opportunistic entrepreneur


entrepreneurial team


internal locus of control


external locus of control


precipitating event


entrepreneurial legacy