1. The Foundations of
The Foundations of
Entrepreneurship
Entrepreneurship
Prof Purshottam Patil
2. The World of the Entrepreneur
Every year in the U.S., entrepreneurs launch
850,000 new businesses.
Entrepreneurial spirit - the most significant
economic development in recent history.
GEM study: 11.3 percent of adult population
in the U.S. is actively involved in trying to
start a new business.
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 2
3. The World of the Entrepreneur
GEM study
Globally 9.4 percent of adults are actively
engaged in trying to start a business.
Men are twice as likely as women to start a
business (exactly the opposite trend in the U.S.,
however).
Nearly one-third of global entrepreneurs are
between the ages of 25 and 44.
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 3
4. 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.
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 4
5. Characteristics of Entrepreneurs
Desire for responsibility
Preference for moderate risk – risk
eliminators
Confidence in their ability to succeed
Desire for immediate feedback
High level of energy
Future orientation – serial entrepreneurs
Skilled at organizing
Value achievement over money
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 5
6. 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).
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 6
7. Benefits of Entrepreneurship
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
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 7
8. Drawbacks of Entrepreneurship
Uncertainty of income
Risk of losing your entire investment
Long hours and hard work
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 8
9. Small Business Owners' Work Week
Number of Hours Worked per Week
More than 60 hours Less than 30 hours
17% 11%
30 to 40 hours
24%
51 to 60 hours
20%
41 to 50 hours
28%
Source: Adapted from Dun & Bradstreet 21st Annual Small Business Survey Summary Report, 2002, p. 35.
10. Drawbacks of Entrepreneurship
Uncertainty of income
Risk of losing your entire investment
Long hours and hard work
Lower quality of life until the business gets
established
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 10
11. Entrepreneurs' Age at Business Formation
55 - 64 O ver 65 18 - 24
6.7% 1.0% 12.0%
45 - 54
17.4%
25 - 34
32.3%
35 - 44
30.6%
Source: 2004 Global Entrepreneurship Monitor.
12. Drawbacks of Entrepreneurship
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
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 12
13. Feeding the
Entrepreneurial Fire
Entrepreneurs as heroes
Entrepreneurial education
Demographic and economic factors
Shift to a service economy
Technological advancements
Independent lifestyle
E-commerce and the World Wide
Web
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 13
14. U.S. Retail E-Commerce Revenues
$250.0
$232.1
$199.3
$200.0
$169.5
Revenues (in Billions)
$142.5
$150.0
$117.7
$94.0
$100.0
$50.0
$-
2003 2004 2005 2006 2007 2008
Year
Source: eMarketer, 2005.
15. 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
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 15
16. The Cultural Diversity of
Entrepreneurship
Young entrepreneurs
Women entrepreneurs
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 16
17. Why Women Start Businesses
Frustrated with Other reasons
"glass ceiling" at 7%
big companies Gain control over
23% my schedule
46%
Saw a market
opportunity and
decided to pursue
it
24%
Source: Center for Women’s Business Research, 2004.
18. The Cultural Diversity of
Entrepreneurship
Young entrepreneurs
Women entrepreneurs
Minority-owned enterprises
Immigrant entrepreneurs
Part-time entrepreneurs
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 18
19. The Cultural Diversity of
Entrepreneurship
Home-based businesses
Family businesses
Copreneurs
Corporate castoffs
Corporate dropouts
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 19
20. Small Business by Industry
O the r
Fina nce 7.3%
8.0%
M a nufacturing Serv ice
5.8% 39.2%
Who les ale
7.4%
C o ns tructio n
11.8%
R eta il
20.5%
Source: U.S. Small Business Administration, 2005.
21. Small Businesses...
Employ 51 percent of the nation’s
private sector workforce.
Create more jobs than big businesses.
Are leaders in offering training and
advancement opportunities to
workers.
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 21
22. Small Businesses...
Produce 51 percent of the nation’s
private GDP.
Account for 47 percent of business
sales.
Create 13X more innovations per
employee than large companies.
Zipper, FM radio, laser, air
conditioning, escalator, light bulb,
personal computer, automatic
transmission, and many more!
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 22
23. Small Business Survival Rate
100%
100%
90%
% of Small Firms Surviving
81%
80%
70% 65%
60% 54%
50% 46%
40%
40% 36%
32% 29%
30% 27% 25%
20%
10%
0%
New 1 2 3 4 5 6 7 8 9 10
# of Years in Business
Source: NFIB Business Policy Guide, 2003, p. 16.
24. Ten Deadly Mistakes of
Entrepreneurship
1. Management mistakes
2. Lack of experience
3. Poor financial control
4. Weak marketing efforts
5. Failure to develop a strategic plan
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 24
25. Ten Deadly Mistakes of
Entrepreneurship
6. Uncontrolled growth
7. Poor location
8. Improper inventory control
9. Incorrect pricing
10. Inability to make the “entrepreneurial
transition”
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 25
26. 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.
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 26
27. Avoiding the Pitfalls of
Small Business Failure
Know your business in depth
Develop a solid business plan
Manage financial resources
Understand financial statements
Learn to manage people effectively
Keep in tune with yourself
Chapter 1: Entrepreneurship Copyright 2008 Prentice Hall Publishing 27
Hinweis der Redaktion
This "Deco" border was drawn on the Slide master using PowerPoint's Rectangle and Line tools. A smaller version was placed on the Notes Master by selecting all of the elements (using Select All from the Edit menu), deselecting the unwanted elements such as the Title (holding down the Shift key and clicking on the unwanted elements), and then using Paste as Picture from the Edit menu to place the border on the Notes Master. After pasting as a picture, we used the resize handles (with Shift to maintain the proportions) to reduce it to the size you see. Be sure to delete this word processing box before using this template for your own presentation.