Examine current trends that provide opportunities for entrepreneurs.

2. Section Objectives • Examine current trends that provide opportunities for entrepreneurs. • Identify ways to recognize opportunity. • Explain how to think creatively about opportunity. • Determine ways to find creative business ideas.

3. The Main Idea The ability to recognize new opportunities and to think creatively is essential for success in today’s global market.

4. Content Vocabulary online business services sustainability social entrepreneurs outsourcing strategic alliance corporate venture innovation niche brainstorm demographics trade magazine specialty magazine trade show

5. Current Entrepreneurial Trends One way to identify business opportunities is to study current trends that provide opportunities for entrepreneurs.

6. Current Entrepreneurial Trends Internet businesses social entrepreneurship service businesses focus on technology home-based businesses outsourcing and strategic alliances green businesses corporate ventures 6

7. Internet Businesses online business a company that conducts business by means of the Internet The Internet has transformed the way business is conducted. An online business can reach customers around the world.

8. Service Businesses services intangible things that businesses do for consumers that enhance their lives Service businesses dominate the American economy. Business services account for the largest part of U.S. economic growth.

9. Outsourcing outsourcing contracting with other companies for services Outsourcing is hiring people and other companies to handle tasks that a business can not do or chooses not to do itself.

10. Outsourcing Benefits of Outsourcing more efficient lowers regulatory burden saves time speeds up projects saves money attracts investors 10

11. Strategic Alliances strategic alliance a partnership formed with another company for the purpose of supplying a product or service A strategic alliance is a partnership among companies.

12. Corporate Ventures corporate venture a new venture started inside a larger company A corporate venture is formed within a company.

13. Learning to Recognize Opportunity Entrepreneurial thinking is about generating ideas and recognizing opportunities.

14. Creativity and Innovation innovation a new way of doing things Creativity is the activity that results in innovation.

15. Idea Versus Opportunity You generate ideas by thinking creatively. Opportunities are ideas that have commercial potential. Section 3.1 Understanding Entrepreneurial Trends

16. Idea Versus Opportunity niche a small specialized market You can find a good business opportunity by recognizing an unfilled market niche.

17. Finding Opportunities by Understanding Industries If you understand an industry, you can identify opportunities within that industry.

18. Thinking Creatively About Opportunity Practice brainstorming. Look at ordinary items in new ways. Find creative solutions to common problems. Connect unrelated items. 18

19. Thinking Creatively About Opportunity brainstorming to think freely in order to generate ideas During brainstorming, ideas are not judged as good or bad.

20. Challenges to Creativity Entrepreneurs can stimulate and encourage creativity in many ways. The most difficult challenges to creativity are the challenges you bring upon yourself.

21. Creative Sources of Ideas To identify creative ideas: • Observe the world around you. • Watch for demographic changes. • Be an avid reader. • Consider your own experiences – interests, hobbies, and work experiences. • Consult outside sources of information.

22. Watch for Demographic Changes demographics personal characteristics that describe a population by age, gender, income, ethnic background, education, and occupation, among others It is important for entrepreneurs to understand demographics and demographic trends.

23. Sources of Information trade magazines specialty magazines government agencies Sources ofInformation trade shows the Internet exhibitions newspapers 23

24. Consult Outside Sources trade magazine a periodical published for a specific type of business or industry A trade magazine offers current, industry-specific news.

25. Consult Outside Sources specialty magazine a periodical published for people with special interests, such as sports, camping, or fashion A specialty magazine offers information about specific topics. You can use specialty magazines to identify the interests and needs of potential consumers.

26. Consult Outside Sources trade show a gathering or exhibition where vendors and manufacturers introduce new items and promote established products and services At a trade show, you can learn about new goods and services in a field.

27. After You Read 1. Discuss current trends that provide opportunity for entrepreneurs. Current trends that provide opportunity for entrepreneurs include Internet businesses, service businesses, home-based businesses, socially responsible nonprofit businesses, corporate ventures, strategic alliances, and an increased emphasis on technology and outsourcing.

28. After You Read 2. Explain ways to recognize opportunity. Most good business opportunities result from the entrepreneur’s ability to recognize unmet consumer needs and unique and unfilled market niches. One way to identify opportunities is to understand industries and examine and analyze industry trends.

29. After You Read 3. Explain how to think creatively about opportunity. There are several ways to think creatively about opportunity, including practicing brainstorming, looking at ordinary items in new ways, finding creative solutions to common problems, and connecting unrelated items.

30. After You Read 4. Discuss ways to overcome challenges to creativity. To overcome challenges to creativity, believe in yourself, use nonlogical thinking, don’t think of everything in practical terms, view problems as challenges that offer the opportunity to innovate, entertain all ideas, relax, have a playful attitude, look at failure as a learning experience that will lead to success, model creative behavior, and develop listening skills.

31. After You Read 5. Explain ways to find creative business ideas. You can generate creative business ideas by watching people; watching for demographic changes; reading; considering his or her own experiences; and consulting outside sources such as trade magazines, trade shows, newspapers, the Internet, and government agencies.

32. Section Objectives • Identify the importance of personal values and goals in choosing an entrepreneurial pursuit. • Describe the challenges and rewards of entering a family business. • List the benefits and drawbacks of buying a business. • Describe how you can evaluate a business opportunity. • Compare the advantages and disadvantages of starting your own business.

33. The Main Idea Whether you start a business or buy an existing one, make sure it is compatible with your personal values and goals.

34. Content Vocabulary values goodwill franchise franchisee franchisor business broker

35. Personal Values and Goals values the beliefs and principles by which you choose to live that define who you are, shape your attitudes and choices, and help you identify your priorities Personal values and goals should be used as a guide when choosing entrepreneurial pursuits.

36. Entering the Family Business The greatest advantage of a family business is the trust and togetherness that family members often share. Families that work well together have great potential for success in a family business.

37. Buying an Existing Business In many ways, buying an existing business is less risky than starting one from scratch.

38. Buying an Existing Business goodwill the favor and loyalty a business acquires by its good reputation When you buy an existing business, you often gain the goodwill of loyal customers.

39. Buying a Franchise franchise a legal agreement to begin a new business in the name of a recognized company When you buy a franchise, you buy the right to set up a new business patterned on an existing model.

40. Buying a Franchise franchisee the buyer of a franchise who is given the right to the franchisor’s product, process, or service franchisor the seller of a franchise who is giving the buyer planning and management expertise The franchisee is the buyer of a franchise. The franchisor is the seller of a franchise.

41. Evaluating a Business Opportunity To evaluate a business opportunity: • Investigate the company. • Investigate the industry. • Talk to customers, employees, and suppliers. • Hire an accountant to advise you. • Hire an attorney to advise you.

42. Where to Find a Business businesspublications newspapers FindingBusinessOpportunities businessbrokers networking 42

43. Where to Find a Business business broker someone whose job it is to bring buyers and sellers of businesses together for a fee You can find a business broker in the telephone book or online.

44. Starting Your Own Business When you start your own business from scratch, you can do things your own way. You can build the company with fresh ideas and enthusiasm.

45. After You Read 1. Identify the importance of personal values and goals in choosing an entrepreneurial pursuit. Personal values and goals should be used as a guide when choosing entrepreneurial pursuits because they define who you are, shape your attitudes and your choices, and help you identify your priorities.

46. After You Read 2. Describe the challenges and rewards of entering a family business. The greatest reward of a family business is the trust and togetherness that family members often share. One of the greatest challenges of a family business is that its owners can never get away from the business.

47. After You Read 3. List the benefits and drawbacks of buying a business. The benefits include established procedures, inventory, trade credit, employees, equipment, and customers. The drawbacks include the possibility that the business may be losing money or have a poor reputation, dated inventory, substandard equipment or facilities, and/or unskilled employees.

48. After You Read 4. Describe how you can evaluate a business opportunity. To evaluate a business opportunity, investigate the company and the industry very carefully; verify the value of the businesses inventory, accounts receivable, and assets; and hire an accountant and an attorney to advise you.

49. After You Read 5. Compare the advantages and disadvantages of starting your own business. The advantages include being able to do things your own way and being able to build the company with fresh ideas and enthusiasm. The disadvantages include extensive planning and resource gathering.

50. End of Chapter 3 Recognizing Opportunity