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Management 11e John Schermerhorn

Management 11e John Schermerhorn. Chapter 6 Entrepreneurship and New Ventures. Planning Ahead – Chapter 6 Study Questions. What is entrepreneurship? What is special about small business entrepreneurship? How do entrepreneurs start and finance new ventures?.

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Management 11e John Schermerhorn

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  1. Management11e John Schermerhorn Chapter 6 Entrepreneurship and New Ventures

  2. Planning Ahead – Chapter 6 Study Questions • What is entrepreneurship? • What is special about small business entrepreneurship? • How do entrepreneurs start and finance new ventures?

  3. Study Question 1: What is entrepreneurship? • Entrepreneurship • Risk-taking behavior that results in new opportunities • Serial entrepreneur • Starts and runs business and nonprofits over and over again • First-mover advantage • First to exploit a niche or enter a market • Entrepreneurs • Display entrepreneurial behavior as employees of larger firms

  4. Study Question 1: What is entrepreneurship? • Characteristics of entrepreneurs

  5. Study Question 1: What is entrepreneurship? • Diversity and Entrepreneurship • Women and minority entrepreneurs are growing in numbers • Necessity-based entrepreneurship • People start a business because no other employment opportunities exist • Social entrepreneurship • Unique form of ethical entrepreneurship that seeks new ways to solve pressing social problems • Social entrepreneurs • Take risks to find new ways to solve pressing social problems such as poverty, literacy, illness,homelessness

  6. Study Question 2: What is special about small business entrepreneurship? Small business have fewer than 500 employees

  7. Study Question 2: What is special about small business entrepreneurship? • Starting a small business • Startup • New and temporary venture that is trying to establish a profitable business model • Franchise • One business owner sells to another the right to operate the same business in another location • Lean startups • Use free software and web services while staying small and keeping operations simple

  8. Study Question 2: What is special about small business entrepreneurship? • Options for starting a small business

  9. Study Question 2: What is special about small business entrepreneurship? • Types of internet business models

  10. Study Question 2: What is special about small business entrepreneurship? • Family owned businesses • Largest percentage of businesses worldwide • Feuds result when family members disagree over how the business is run • Possible succession problems • Who will run the business when the current head leaves? • Succession plan outlines leadership transition and financial matters

  11. Study Question 2: What is special about small business entrepreneurship? • Why small businesses fail • SBA reports as many as 60 – 80% fail

  12. Study Question 2: What is special about small business entrepreneurship? • Small business development • Business incubator • Offers space, shared services and advice to get small businesses started • Small Business Development Centers • Founded with U.S. Small Business Administration to provide advice to new and existing small businesses

  13. Study Question 3: How do entrepreneurs start and finance new ventures? • Life cycles of entrepreneurial firms

  14. Study Question 3: How do entrepreneurs start and finance new ventures? • Business plan • Describes goals, operating plans and financing for a new business • Banks want to see a well-developed business plan before loaning money • Forms of ownership • Sole Proprietorship • An individual or married couple pursuing business for a profit

  15. Study Question 3: How do entrepreneurs start and finance new ventures? • Forms of ownership • Partnership • Two or more people agree to contribute resources to start and operate a business together

  16. Study Question 3: How do entrepreneurs start and finance new ventures? • Forms of ownership • Corporation • A legal entity that exists separately from its owners • Limited Liability Company (LLC) • A combination of sole proprietorship, partnership, and corporation • Protects owners against personal loss other than what is invested in the company • Treated as a proprietorship or partnership for tax purposes

  17. Study Question 3: How do entrepreneurs start and finance new ventures? • Financing • Debt Financing • involves borrowing money from another person, a bank, or a financial institution • Equity Financing • involves exchanging ownership shares for outside investment monies • Venture Capitalists • Involves making large investments in new ventures in return for an equity stake in the business • Financing • Angel Investor • A wealthy individual willing to invest in return for equity in a new venture • Initial Public Offering (IPO) • An initial selling of shares of stock to the public at large

  18. Chapter 6 Case • Sprinkles: Leading a sweet trend

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