New Ventures

1
New Ventures

• Entrepreneurship
• occurs when an enterprising individual pursues a
  lucrative opportunity
• entrepreneurs generate new ideas and turn them
  into business ventures
• A small business
• has fewer than 100 employees
• is independently owned and operated
• is not dominant in its field
• is not characterized by many innovative practices

2
New Ventures (cont.)

• Sources of new venture creation
• independent entrepreneurship - individual
  establishes a new organization without the
  benefit of corporate support
• spin-offs - corporate managers become
  entrepreneurs by splitting from the parent firm
  and creating a new business
• intrapreneurs - corporate entrepreneurs who
  create a new venture working in big organizations

3
Entrepreneurs Three Questions

• Are my goals well defined?
• Do I have the right strategy?
• Can I execute the strategy?

4
Clarifying Goals

• What kind of enterprise?
• Profit or lifestyle goals?
• Sustainability
• Target size
• What risks and sacrifices?
• Level of capital investment
• Time personal investment
• Can I accept risks and sacrifices?

5
Setting Strategy

• Is the strategy well defined?
• Does it provide clear direction?
• Can the strategy generate sufficient
  profit/growth?
• What is the competitive edge?
• Is the strategy sustainable?
• Market a function of major change?
• Consider exit strategies?
• Growth too conservative or aggressive?

6
The Entrepreneurial Strategy Matrix
7
Executing the Strategy

• Resources
• Venture capital investment
• Staffing
• Organizational Capabilities
• Organizational structure
• Organizational culture
• Founder roles
• Changing role with firm growth to more management
  functions

8
Entrepreneurial Hazards

• Survival is difficult
• Mortality of founder
• Succession plan unclear
• Inadequate delegation
• Misuse of funds
• wrong uses or inadequate control
• Poor planning controls
• failure to anticipate problems