Entrepreneurship Small Business Start Ups

ENTREPRENEURSHIP &
SMALL BUSINESS START

UPS
LEARNING OUTCOMES
 Define the term entrepreneur and distinguish among

entrepreneurs, small-business owners, and managers.
 Identify personality traits that typically characterize

successful entrepreneurs.
 Analyze the process of starting a new venture
 Describe the five stages of growth for an entrepreneurial

company
WHAT IS ENTREPRENEURSHIP
 It is the process of initialing a business

venture , organizing the necessary
resources, and assuming the associated
risk and rewards.
WHAT IS AN ENTREPRENEUR?
 Entrepreneur Person who seeks a profitable opportunity
and takes the necessary risks to set up and operate a
business.
(Richard L Daft)
 Entrepreneurs are simply those who understand that there
is little difference between obstacle and opportunity and
are able to turn both to their advantage.
(Victor
Kiam)
WHAT IS A SMALL BUSINESS?

 Independently owned and managed business that does not
dominate its market.
ENTREPRENEURSHIP
• Differ from many small-business owners in their

strong desire to make their business grow.
• Differ from managers through their overriding
responsibility to sue the resources of the
organization to accomplish their goals.
• Willing to take risks.
FIVE TYPES OF SMALL BUSINESS
OWNERS
 Idealist-like to working on something that is new,

creative or personally meaningful
 Optimizers-Get personal satisfaction from being
business owners
 Hard Workers- like putting in the long hours and
dedication to build a larger, more profitable business.
 Jugglers- high energy people who enjoy handling every
detail of their own businesses
 Sustainers- enjoy chance to balance work and personal
life
IMPACT OF ENTREPRENEURIAL
COMPANIES
Job Creation
Innovation
Importance to
Big Businesses
 Internal Locus of Control
Belief by individuals that their future is within their
control and that external forces have little influence.
 High Energy Level

High level of passion also help entrepreneurs overcome
inevitable obstacles and traumas
 Need to Achieve
People are motivated to excel and pick situations in
which success is likely.
 Self Confidence
People who start and run a business must act decisively.
 Awareness of Passing Time
Entrepreneurs tend to be impatient: they feel sense of
urgency. They want to progress things as if there is no
tomorrow.
 Tolerance for Ambiguity

Psychological characteristic that allows a person to be
untroubled by disorder and uncertainty.
AN ENTREPRENEURIAL START UP
Starting with an idea

• Two most important considerations:
Finding something you love to do and are good
at.
Determining whether your idea can satisfy a need
in the marketplace.
Guidelines for selecting an idea that is a
good entrepreneurial opportunity:
1) List your interests and abilities.
2) List the types of businesses that match your interests and
abilities.
3) Identify future needs for products that no one yet offers.
4) Evaluate existing goods and services and ways you can improve
them.
5) Choose a business that offers profit potential.
6) Conduct marketing research to determine potential profitability.
7) Learn as much as you can about the appropriate industry
REASONS FOR STARTING A BUSINESS
 Joined family business
 To control own future
 To be my own boss
 To fulfill a dream
 Downsized or Layoff
SOURCES OF NEW BUSINESS IDEAS
 In depth understanding of the industry of profession

 Market niche spotted
 Brainstorming
 Copying someone else
 Hobby
Writing a business plan
It is a document specifying the business details prepared
by an entrepreneur prior to opening a new business.
Business plan must comprise of the following
1) Demonstrate a clear, compelling vision that creates an air of excitement

2) Provide a clear and realistic financial projection
3) Profile potential customers and the target market
4) Include detailed information about the industry and competitors
5) Provide evidence of an effective entrepreneurial management team
6) Pay attention to good formatting and clear writing
7) Keep the plan short
8) Highlight critical risks that may threaten the business success
9) Spell out the sources and uses of start up funds and operating funds
Choosing a legal structure
 Sole Proprietorship
 Partnership
 Corporations
Arranging Finance
The financing decision often involves two options
Debt Financing
Borrowing money that has to be repaid at a later date to
start a business is referred to as debt financing.
Equity Financing
Funds that are invested in exchange for ownership of
the company
FIVE STAGES OF SMALL BUSINESS
GROWTH
 Stage 1- Start Up
Main problems are producing the product or services and
obtaining customers
 Stage II- Survival
Business demonstrates that it is a workable business entity

 Stage III-Success
The company is solidly based and profitable. Systems and

procedures are in place to allow the owner to slow down if desired
 Stage IV-Take Off
Here the key problem is how to grow rapidly and finance that growth.
The owner
 Stage V-Resource Maturity
The company’s substantial financial gains may come at the cost of
loosing its advantages of small size, including flexibility and the
entrepreneurial spirit.

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ENTREPRENEURSHIP &

SMALL BUSINESS START

 Define the term entrepreneur and distinguish among

 Identify personality traits that typically characterize

 Analyze the process of starting a new venture

 Describe the five stages of growth for an entrepreneurial

 It is the process of initialing a business

WHAT IS A SMALL BUSINESS?

• Differ from many small-business owners in their

 Idealist-like to working on something that is new,

 High Energy Level

 Tolerance for Ambiguity

Starting with an idea

SOURCES OF NEW BUSINESS IDEAS

 In depth understanding of the industry of profession

1) Demonstrate a clear, compelling vision that creates an air of excitement

Business demonstrates that it is a workable business entity

The company is solidly based and profitable. Systems and

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