Small Business Management 12e - Longenecker, Moore, & Petty

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Nov 20, 2013 (3 years and 6 months ago)

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PowerPoint Presentation by Charlie Cook

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Western College Publishing.


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The Winning
Hand of
Entrepreneurship

1

Entrepreneurship

and Small Business

12e

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-
Western College Publishing. All rights reserved.

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2

Looking Ahead

After studying this chapter, you should be able to:

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

2.
Explain the entrepreneurial challenges presented by
e
-
commerce and global changes.

3.
Explain the nature of entrepreneurship and how it is
related to small business.

4.
Identify three motivators or rewards of entrepreneurial
careers.

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Western College Publishing. All rights reserved.

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3

Looking Ahead (cont’d)

5.
Describe the various types of entrepreneurs and
entrepreneurial ventures.

6.
Identify ways to gain a potential competitive edge for
small entrepreneurial firms.

7.
Discuss factors related to readiness for
entrepreneurship and getting started in an
entrepreneurial career.

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4

Entrepreneurial Opportunities


Entrepreneurial Opportunity


A value creating innovation with market potential


A desirable and timely innovation that creates
value for interested buyers and end users.


Success stories


Marketplace Holdings


Auntie Anne’s


RotoZip® Tool Corporation

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5

Who Are Entrepreneurs?


Entrepreneurs are:


Persons 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).

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Entrepreneurial Challenges


E
-
Commerce


An outgrowth and part of the Information Age that
is producing the new economy.


Globalization


The trend toward a global

economy creates new

competition and opportunities.

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What Is a Small Business?


Criteria for Defining Smallness in Business


Financing supplied by one person or small group


Localized business operations (except marketing)


Business’ size small relative to larger competitors


Fewer than 100 employees

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Profit

Freedom from the limits


of standardized pay for

standardized work

Independence

Freedom from supervision

and rules of bureaucratic

organizations

Escape from an

oppressive culture

Personal Fulfillment

Freedom to achieve a

satisfying way of life

Escape from routine

and unchallenging work

Rewards of Entrepreneurship

Fig. 1.2

Entrepreneurial Incentives

Make

Money

Be Your

Own Boss

Enjoy a
Satisfying Life

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Entrepreneurial Refugees


Foreign refugee


Corporate refugee


Parental refugee


Feminist refugee


Housewife refugee


Society refugee


Educational refugee

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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 Businesses, Growth, 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.

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Characteristics of

Artisan Entrepreneurs


Technical training


Paternalistic approach


Reluctance to delegate


Narrow view of strategy


Personal sales effort


Short planning horizon


Simple record keeping

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Characteristics of

Opportunistic Entrepreneurs


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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14

Women Entrepreneurs


More Women Entrepreneurs


Women own 38% of all U.S. businesses.


Employment at female
-
owned firms has grown
108% since 1992.


Women are moving into nontraditional industries.


Problems Facing Female Entrepreneurs


Newness of entrepreneurial role


Lack of access to credit


Lack of personal networking

connections in the established

business community

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Competitive Advantages of

Entrepreneurial Firms


Customer Focus


Lack of bureaucracy


Quality Performance


Quality is not limited

to large firms


Integrity and
Responsibility


A solid reputation
builds loyal customers


Innovation


Small firms are the
leading source of
innovation.


Low
-
Cost Production


Sound management
can lead to lower
operating costs.

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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

Fig 1.3

Age Concerns in Starting a Business

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Characteristics of

Successful Entrepreneurs


Strong commitment to the business

(tenacity)


Strong internal locus of control

(self
-
reliant)


Moderate risk takers

(financial, career, psychic risks)


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Opportunity

Level of Risk

Starting a business

High risk

Buying a business

Medium risk

Opening a franchised business

Medium risk

Entering a family business

Variable risk

Types of Entrepreneurial

Career Opportunities

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19

Taking the Plunge


Precipitating Event


An event, such as losing

a job, that moves an

individual to become

an entrepreneur.