14th edition

1. Chapter 6
Starting Y Own Business: The
our
Entrepreneurship Alternative

2. Learning Goals
1 Define the term entrepreneur and 5 Identify personality traits that
distinguish among entrepreneurs, small- typically characterize successful
business owners, and managers. entrepreneurs.
2 Identify the different types of 6 Summarize the process of starting a
entrepreneurs. new venture.
3 Explain why people choose to become 7 Explain how organizations promote
entrepreneurs. intrapreneurship.
4 Discuss factors that support and expand
opportunities for entrepreneurs.

3. W is Entrepreneurship?
hat
s An entrepreneur is a person who seeks a
profitable opportunity and takes the necessary
risks to set up and operate a business.
s Differ from many small-business owners in their
strong desire to make their business grow.
s Differ from managers through their overriding
responsibility to use the resources of the
organization to accomplish their goals.
s Willing to take risks.

4. Categories of Entrepreneurs
s Classic Entrepreneurs
s Serial Entrepreneurs
s Social Entrepreneurs

5. Entrepreneurship as a Career
s More than 11% of Americans run their own
businesses.
s In an average month, Americans start
approximately 465,000 new businesses.
s The past two decades have shown a heightened
interest in entrepreneurial careers.
s People choose entrepreneurship for many
reasons:
s Dissatisfaction with traditional work
s Their ideas fulfill customer needs

6. W People Become Entrepreneurs
hy

7. W Entrepreneurship?
hy
s Being Your Own Boss
s Self-management is the motivation that drives
many entrepreneurs.
s Financial Success
s Entrepreneurs are wealth creators.
s Job Security
s Over the past ten years, large companies have
eliminated more jobs than they have created.
s Quality of Life
s Starting a business gives the founder some choice
over when, where, and how to work.

8. The Environment for Entrepreneurship

9. Globalization
s The rapid globalization of business has created many
opportunities for entrepreneurs.

10. Education / IT / Demographic and
Economic Trends
s Education
s 100 U.S. colleges and universities offer entrepreneurship majors.
s Universities are helping students launch businesses.
s Many programs teach entrepreneurship to young people.
s Information Technology
s Technology has given entrepreneurs tools that help them
compete.
s Entrepreneurs have used information technology to revolutionize
industries.
s Demographic and Economic Trends
s Aging of U.S. population.
s Emergence of Hispanics as nation’s largest ethnic group.
s Growth of two-income families.

11. Characteristics of Entrepreneurs

12. Entrepreneurial Characteristics
s Vision - entrepreneurs begin with an overall idea for how to
make their business ideas successful
s High Energy Level - a willingness to work hard
s Need to Achieve - entrepreneurs work hard because they
want to excel
s Self-Confidence - fearlessness in the face of difficult odds
s Tolerance for Failure - entrepreneurs are not easily
discouraged
s Creativity - entrepreneurs devise innovative ways to overcome
difficult problems and situations
s Tolerance for Ambiguity - entrepreneurs take in stride
uncertainties
s Internal Locus of Control - entrepreneurs believe they can
control their own fates

13. Entrepreneurial Quiz

14. Starting a New Venture
s Selecting a Business Idea
s Find something you love to do and are good at
doing
s Can your idea satisfy a need in the marketplace?
s Entrepreneurs must be sure that the idea
they choose has interest in the marketplace.
s Business Plan

15. Buying an Existing Business
s Advantages:
s Established customers
s Deal with familiar suppliers
s Good/service known in marketplace
s Necessary permits and licenses are
already secured
s Financing may be easier
s Seller financing

16. Creating a Business Plan
s 58% of the most recent Inc. CEOs did not create a
formal written plan.
s But business plans do help entrepreneurs prepare
enough resources and stay focused on key
objectives.

17. Finding Financing
s Debt Financing
s Credit Cards
s Family and Friends
s Bank Loans (SBA backed)
s Equity Financing
s Venture Capitalists
s Angel Investors

18. Government Support for New Ventures
s Business Incubators are a key way
government supports new ventures
s Clean Energy Incubator (CEI)
s Enterprise Zones
s Encourage entrepreneurship in
specific geographic areas
s Government Legislation
s Immigration Act of 1990

19. Intrapreneurship
s Promoting innovation within
organizational structures
s An idea to promote creativity
s Companies promote in a variety
of ways
s Skunkworks
s Pacing Programs