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Objectives

Learn the role of entrepreneurs, benefits and drawbacks of owning a small business, and reasons for business failure. Understand the impact of diversity, cultural aspects, and global trends in entrepreneurship.

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Objectives

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  1. Objectives • At the end of the lecture students should be able to:- • Define the role of the entrepreneur in the U.S. economy. • Describe the entrepreneurial profile. • Describe the benefits of owning a small business. • Describe the potential drawbacks of owning a small business. • Explain the forces that are driving the growth in entrepreneurship. Fundamental of Entrepreneurship

  2. Discuss the role of diversity in small business and entrepreneurship. • Describe the contributions small businesses make to the U. S. economy. • Explain the reasons small businesses fail. • Put business failure into the proper perspective. • Explain how small business owners can avoid the major pitfalls of running a business. Fundamental of Entrepreneurship

  3. Topics covered • Introduction To Entrepreneurship • Characteristic Of Successful Entrepreneur • The Cultural Diversity Of Entrepreneurship • Eleven Deadly Mistakes of Entrepreneurship Fundamental of Entrepreneurship

  4. The World of the Entrepreneur • In the U.S., entrepreneurs start nearly 6 million businesses a year! • Global Entrepreneurship Monitor (GEM) • Approximately 10.5% of U.S. population is actively involved in trying to start a new business. • Approximately 12% of people in 37 GEM countries studied are involved in starting a new business. Fundamental of Entrepreneurship

  5. Fundamental of Entrepreneurship Source: 2002 Global Entrepreneurship Monitor.

  6. What is an Entrepreneur? One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them. Fundamental of Entrepreneurship

  7. Fundamental of Entrepreneurship

  8. Characteristics of Entrepreneurs • Desire to take initiative • Preference for moderate risk • Confidence in their ability to succeed • Self-reliance • Perseverance • Desire for immediate feedback Fundamental of Entrepreneurship

  9. Characteristics of Entrepreneurs • High level of energy • Competitiveness • Future orientation • Serial entrepreneurs • Skilled at organizing • Value achievement over money Fundamental of Entrepreneurship

  10. Entrepreneurship • One characteristic of entrepreneurs stands out: Diversity! • Anyone – regardless of age, race, gender, color, national origin, or any other characteristic – can become an entrepreneur (although not everyone should). Fundamental of Entrepreneurship

  11. Benefits of Small Business Ownership The opportunity to: • Create your own destiny • Make a difference • Reach your full potential • Reap impressive profits • Contribute to society and to be recognized for your efforts • Do what you enjoy and to have fun at it Fundamental of Entrepreneurship

  12. Drawbacks of Small Business Ownership • Uncertainty of income • Risk of losing your entire investment • Long hours and hard work Fundamental of Entrepreneurship

  13. Fundamental of Entrepreneurship

  14. Drawbacks of Small Business Ownership • Uncertainty of income • Risk of losing your entire investment • Long hours and hard work • Lower quality of life until the business gets established Fundamental of Entrepreneurship

  15. Fundamental of Entrepreneurship

  16. Drawbacks of Small Business Ownership • Uncertainty of income • Risk of losing your entire investment • Long hours and hard work • Lower quality of life until the business gets established • High levels of stress • Complete responsibility • Discouragement Fundamental of Entrepreneurship

  17. Feeding the Entrepreneurial Fire • Entrepreneurs as heroes • Entrepreneurial education • Demographic and economic factors • Shift to a service economy • Technological advancements • Independent lifestyles • E-Commerce and the World Wide Web Fundamental of Entrepreneurship

  18. Feeding the Entrepreneurial Fire • Entrepreneurs as heroes • Entrepreneurial education • Demographic and economic factors • Shift to a service economy • Technological advancements • Independent lifestyles • E-Commerce and the World Wide Web • International opportunities Fundamental of Entrepreneurship

  19. The Cultural Diversity of Entrepreneurship • Young entrepreneurs Fundamental of Entrepreneurship

  20. Fundamental of Entrepreneurship

  21. The Cultural Diversity of Entrepreneurship • Young entrepreneurs • Women entrepreneurs Fundamental of Entrepreneurship

  22. Fundamental of Entrepreneurship

  23. The Cultural Diversity of Entrepreneurship • Young entrepreneurs • Women entrepreneurs • Minority-owned enterprises • Immigrant entrepreneurs • Part-time entrepreneurs Fundamental of Entrepreneurship

  24. The Cultural Diversity of Entrepreneurship • Home-based business owners • Family business owners • Copreneurs • Corporate castoffs • Corporate dropouts Fundamental of Entrepreneurship

  25. Fundamental of Entrepreneurship

  26. Small Businesses... • Make up 98.5% of all the businesses in the U.S. • Employ 52% of the nation’s private sector workforce. • Pay 45 % of total private payroll. • Create more jobs than big businesses. • Are leaders in offering training and advancement opportunities to workers. Fundamental of Entrepreneurship

  27. Small Businesses... • Produce 51% of the nation’s private GDP. • Account for 47% of business sales. • Create 4X more innovations per R & D dollar spent than medium-sized firms and 24X as many as large companies. • Create two-thirds of all new inventions. • Produce 13X to 14X more patents per employees than large companies. Fundamental of Entrepreneurship

  28. Fundamental of Entrepreneurship

  29. Eleven Deadly Mistakes of Entrepreneurship • Management incompetence • Lack of experience • Forcing a flawed idea • Undercapitalization • Poor cash management • Failure to develop a strategic plan Fundamental of Entrepreneurship

  30. Eleven Deadly Mistakes of Entrepreneurship • Weak marketing effort • Uncontrolled growth • Poor location • Lack of inventory control • Inability to make the “entrepreneurial transition” Fundamental of Entrepreneurship

  31. Putting Failure Into Perspective • Entrepreneurs are not paralyzed by the prospect of failure. • Failure – a natural part of the creative process. • Successful entrepreneurs learn to fail intelligently. Fundamental of Entrepreneurship

  32. Avoiding the Pitfalls of Small Business Failure • Know your business in depth • Prepare a solid business plan • Manage financial resources • Understand financial statements Fundamental of Entrepreneurship

  33. Avoiding the Pitfalls of Small Business Failure • Learn to manage people effectively • Set your business apart from the competition • Keep in tune with yourself Fundamental of Entrepreneurship

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