Entrepreneurship: Starting and Growing a Business

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Entrepreneurship Starting and Growing a Business

• Chapter 5

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Question

• Can an entrepreneur be a small business owner?
• Are all small business owners entrepreneurs
• Explain

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• Entrepreneur
• person with vision, drive, and creativity
  willing to take the risk of starting a new
  business or of greatly changing the scope and
  direction of an existing firm

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Types of Entrepreneurs

• 1. Classic entrepreneurs
• people who start their own companies based on
  innovative ideas
• 2. Multipreneurs
• people who start a series of companies
• 3. Intrapreneurs
• people who apply vision and risk taking within a
  large organization

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Application of Intrapreneurship

• Intrapreneurship as a management strategy
• to encourage managers to invest more in, and take
  ownership of, their work
• by giving intrapreneurs 2 types of profit-share
• personal reward
• apply toward improving their departments

Source Entrepreneur, Jan. 2000, p. 116
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Characteristics ofSuccessful Entrepreneurs

• 1. Personality
• ambitious, independent, self-confident,
  risk-taking, visionary, creative, energetic,
  passionate, committed
• 2. Managerial Ability
• 3. Technical Knowledge

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• Small Business
• business that is independently owned by an
  individual or small group of investors, locally
  based, and nondominant in its industry

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Question

• Why does the manufacturing sector of the economy
  have relatively few small businesses?

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Advantages of Small Business

• 1. Greater flexibility
• 2. More efficient operation
• 3. Greater ability to serve specialized markets
• 4. More personal service

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Disadvantages of Small Business

• 1. High need for managerial skill
• 2. Difficulty fund-raising
• 3. Burdensome government regulations
• 4. Extreme personal commitment from owner

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Question

• What are some factors to consider when deciding
  whether to buy an existing business or start a
  new one?

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Question

• Why are small businesses generally more effective
  than large businesses in generating new ideas?

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Help for Small Businesses

• Small Business Administration Government agency
  that helps people start and manage small
  businesses
• 1. Financial Assistance
• Small Business Investment Companies
• 2. Management Advice
• Business Development Library
• Volunteer consulting groups

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Starting Your Own Business

• 1. Self-assessment
• 2. Choose to buy a small business or start from
  scratch
• 3. Find a business idea
• 4. Choose a business organization
• 5. Develop a Business Plan
• 6. Finance the business

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Contents of a Business Plan

• 1. Title Page Table of Contents
• 2. Executive Summary
• 3. Vision and Mission Statement
• 4. Company Overview
• 5. Detailed Plans for
• Products and/or Services, Marketing, Management,
  Operating, and Financing
• 6. Appendix of Supporting Documents

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Managing a Small Business Issues

• 1. Using outside consultants
• certified public accounting, outsourcing some
  business functions
• 2. Hiring and Retaining Employees
• Jim Day, Chief Executive of Noble Drilling,
  recognizes the importance of hiring people good
  for the job, rather than people similar to
  oneself (Source Fortune, Sept. 28, 1998, p.
  254.)
• 3. Operating Internationally
• increased sales and higher profits

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Question

• What is the relationship between economic factors
  and poor management skills, in terms of
  explaining the failure of a small business?

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Trends in Entrepreneurshipand Small Business

• Increase in home-based business
• More younger, female, and minority entrepreneurs
• More small businesses are started on the Internet
• The number of small businesses doing e-commerce
  increased from 150,000 in 1997 to 850,000 in 1999
  (Source International Data Corp./Entrepreneur,
  Jan. 2000, p. 46)

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Question

• Explain how small businesses can benefit from
  using the Internet?

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Summary

• Entrepreneurs and Small Business
• Entrepreneurs
• Types
• Characteristics
• Small Business
• Advantages/Disadvantages
• SBA
• Starting a business
• Business Plan
• Trends