Introduction to Entrepreneurship
• There is tremendous interest in entrepreneurship around
the world
• The Global Entrepreneurship Monitor (GEM), a joint
research effort by Babson College and the London Business
School, tracks entrepreneurship in 40 countries.
– The 2003 GEM Study showed that about 300 million, or 12.5
percent, or adults in the countries surveyed are involved in
forming new businesses.
– It also tracks whether people are becoming entrepreneurs
because they spotted an attractive opportunity or because they
can find no better choice of work. Overall, about 2/3rds of those
surveyed reported they were starting a business to pursue an
attractive opportunity.
• However, motivation alone is not enough; it must be
coupled with good information, a solid business idea, and
effective execution to maximize chances for success.
Entrepreneurship
• It is the process by which individuals pursue
opportunities and put useful ideas into practice.
• This can be accomplished by either an individual or a
group and typically requires creativity, drive, and a
willingness to take risks.
• Looking at the eBay example, Omidyar saw an
opportunity to create a marketplace where buyers and
sellers could find each other online, he risked his career
by quitting his job to work at eBay full time, and he
worked hard to build a profitable company that
delivers a creative and useful service to consumers.
Why become an Entrepreneur?
• The 3 main reasons that people become
entrepreneurs and start their own firms are:
– To be their own boss
– To pursue their own ideas
– To realize financial rewards
• The most common reason it to be one’s own
boss. This doesn’t mean these people are hard to
work with, but it means they have a long-time
ambition to own their own firm or are frustrated
with traditional jobs. (p.6)
Be your own boss!
• Many people also long for independence, a
desire that can be satisfied by being their own
boss.
– Those who become entrepreneurs for this reason
only, typically do not grow their firms beyond their
immediate control. In the eBay example, Omidyar
had to hire a manager– clearly his goal was not to
only be independent.
Pursue your own ideas!
• Some people are naturally alert, and when they recognize
ideas for new products or service, they have a desire to see
those ideas realized.
• Established firms often resist innovation so employees are
left with good ideas that go unfulfilled. They may choose to
leave this firm to start their own business and develop their
ideas.
• Some people, through hobby, leisure activity, or just
everyday life, recognize the need for a product or service
that is not available in the marketplace. If the idea is viable
enough to support a business, they commit tremendous
time and energy to convert the idea into a part-time or fulltime firm.
– We will later look at how entrepreneurs spot ideas and
determine wither they represent viable business opportunities
Financial rewards $$
• This motivation, however, is typically secondary
to the first two and often fails to live up to its
hype.
• The average entrepreneur does not make more
money than someone with a similar amount of
responsibility in a traditional job.
• Some entrepreneurs even feel that the financial
rewards associated with entrepreneurship can be
bittersweet if they are accompanied by losing
control of their firm. (p.7)
Characteristics of Successful
Entrepreneurs
• There are several characteristics common to
successful entrepreneurs:
1. Passion for the business: this is the number one
characteristic. This passion typically stems from
their belief that the business will positively
influence people’s lives. It even explains why
some hugely successful entrepreneurs (Bill
Gates, Steve Jobs) continue to work after they
are financially secure. They strongly believe that
the product or service they are selling makes a
difference in people’s lives and makes the world
a better place to live in.
Passion for the business
• This Passion is important because the process of
starting and building a new firm is demanding.
You must be fully committed.
• However, this doesn’t mean you wear rosecoloured glasses; it is important to be
enthusiastic about a business idea, but it is also
important to understand its potential flaws and
risks.
• An entrepreneur must remain flexible enough to
tweak the idea when it is necessary to do so.
#2 Product/Customer Focus
• This quality is exemplified by the following statement made
by Steve Jobs:
– “the computer is the most remarkable tool we’ve ever build…
but the most important thing is to get them in the hands of as
many people as possible”
• There is an understanding here of the two most important
elements in any business– products and customers.
• Its important to think about the management, marketing,
finance, etc., but none of these make a difference if the
firm doesn’t have good products with the capability to
satisfy customers.
• This focus stems from the fact that most successful
entrepreneurs are, at heart, craftspeople. They are
obsessed with making products that meet their customer’s
needs.
#3 Tenacity Despite Failure
• Because entrepreneurs are typically trying something new,
the failure rates associated with their efforts is naturally
high.
• The process of developing a new business is somewhat
similar to what a scientist experiences in a lab: developing a
new business idea may require a certain degree of
experimentation before success is attained.
• Setbacks and failures inevitably occur during this process,
but successful entrepreneurs have the ability to persevere
through these setbacks.
• A certain measure of fear is healthy when pursuing a new
idea. Acknowledging that unforeseen circumstances or a
competitor’s aggressive action could ruin a company’s plans
produces vigilance in entrepreneurs that may help them
succeed.
#4 Execution Intelligence
• The ability to fashion a solid business idea into a viable
business is a key characteristic of successful entrepreneurs.
• An ancient Chinese saying warns, “To open a business is
very easy; to keep it open is very difficult”.
• The ability to effectively execute a business idea means
developing a business model, putting together a new
venture team, raising money, establishing partnerships,
managing finances, leading and motivating employees, and
so on.
• It also demands the ability to translate thought, creativity,
and imagination into action and measurable results. The
founder of Amazon.com, Jeff Bezos, once said, “Ideas are
easy. It’s execution that’s hard”.
What went wrong?
The Singing Machine: How Success can Breed Failure
•
•
•
•
•
Many entrepreneurs learn the hard way to be leery of quick success. If a firm’s products catch on
quickly, the ability to execute properly becomes double important. Success is fun- but it if comes too
quickly, its easy to get caught up in the euphoria and start making careless decisions. That is exactly
what happened to the Singing Machine, a maker of karaoke machines.
The Singing Machine started out making karaoke machines for professional singers, a relatively small
market. The company’s products were made in China, so it had a fairly small staff and a modest
overhead. Then the company had some good luck- karaoke caught on. Soon it started selling its
machines through Circuit City and Best Buy, and it looked as though the sky was the limit. In fact,
Business Week named The Singing Machine the number one hot growth company for 2002.
All of this sounds good, right? Wait til you read what happened. Expecting continued growth, The
Singing Machine loaded up on karaoke machines for the 2002 Christmas season, getting as many
machines as possible on retailer’s shelves. But the big retailers were savvy and protected their own selfinterests, despite the popularity of karaoke machines. For example, one retailer demanded that The
Singing Machine place their machines on shelves on a consignment basis. It wouldn’t actually buy the
machines, it would only display and sell them, and if they sold, great! If not, the Singing Machine would
have to take them back. Another retailer demanded that The Singing Machine provide it a guaranteed
gross profit margin, essentially shielding itself from any risk.
As it turned out, the karaoke craze waned in late 2002. After the Christmas season was over, The
Singing Machine was in trouble. Rather than helping it liquidate its inventory, the retailers it contracted
with moved on to the next “hot” item and more than $30 million in karaoke machines ended up in the
Singing Machine’s warehouses. Reflecting on the agreements that his company entered into in its haste
to get sales during the 2002 Christmas season, Y.P. Chan, the company’s new CEO, said, “it’s a classic
business school case of growing pains… One needs to be disciplined enough to walk away from a
business deal which doesn’t make any sense.”
Quick success– every entrepreneur’s dream– can rapidly erode into failure if a business becomes overly
optimistic about its products or services and starts chasing deals that don’t make sense. Execution
intelligence is as important in the good times as it is in the tough times.
Common Traits and Characteristics of
Entrepreneurs
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Achievement motivated
Alert to opportunities
Creative
Decisive
Energetic
Has an internal locus of control
Is a moderate risk taker
Needs to achieve
Is a networker
Persuasive
Promoter
Resource assembler
Self-confident
Self-starter
Has a strong work ethic
Tenacious
Tolerant of ambiguity (lack of clarity, certainty)
visionary
Common Myths about Entrepreneurs
• There are many misconceptions about who entrepreneurs
are and what motivates them to launch firms to develop
their ideas.
• Some misconceptions are due to the media covering
atypical entrepreneurs, such as a couple of college students
who obtain venture capital to fund a small business that
they grow into a multimillion-dollar company.
– Venture capital is financial capital provided to early-stage, highpotential, high risk, growth startup companies. The venture
capital fund makes money by owning equity in the companies it
invests in, which usually have a novel technology or business
model in high technology industries, such as biotechnology, IT,
software, etc
Myth 1: Entrepreneurs are born, not
made
• This myth is based on the mistaken belief that some people are
genetically predisposed to be entrepreneurs.
• The consensus of many hundreds of studies on the psychological
and sociological makeup of entrepreneurs is that entrepreneurs are
not genetically different from other people. No one is “born” to be
an entrepreneur; everyone has the potential to become one.
• Whether someone does or doesn’t is a function of environment, life
experiences, and personal choices.
• However, there are personality traits and characteristics commonly
associated with entrepreneurs. These traits are developed over
time and evolve from an individual’s social context. For example,
studies show that people with parents who were self-employed are
more likely to become entrepreneurs. After witnessing a father’s or
mother’s independence in the workplace, a child is more likely to
find independence appealing.
• Similarly, people who personally know an entrepreneur are more
than twice as likely to be involved in starting a new firm than those
with no entrepreneur acquaintances or role models.
Myth 2: Entrepreneurs are gamblers
• A second myth about entrepreneurs is that they are
gamblers and take big risks. The truth is, entrepreneurs
are usually moderate risk takers, as are most people.
The idea that entrepreneurs are gamblers originates
from two sources:
– First, entrepreneurs typically have jobs that are less
structured, and so they face a more uncertain set of
possibilities than managers or employees. For example, an
entrepreneur who starts an e-business consulting service
has a less stable job than a phone company employee.
– Second, many entrepreneurs have a strong need to
achieve and often set challenging goals, a behavior that is
sometimes equated with risk taking.
Myth 3: Entrepreneurs are motivated
primarily by money
• It is naïve to think that entrepreneurs don’t seek
financial rewards. As discussed previously,
however, money is rarely the primary reason
entrepreneurs start new firms.
• Some entrepreneurs warn that the pursuit of
money can be distracting. Media mogul Ted
Turner said, “If you think money is a real big
deal… you’ll be too scared of losing it to get it”.
• Similarly, Debbie Fields, the founder of Mrs.
Fields Cookies, said that if you chase money,
you’ll never get it.
Myth 4: Entrepreneurs should be
young and energetic
• The average entrepreneur is 35 to 45 years old and has 10 or more
years of experience in a large firm.
• While it is important to be energetic, investors often cite the
strength of the entrepreneur as their most important criterion in
the decision to fund new ventures. In fact, a sentiment that venture
capitalists often express is that they would rather fund a strong
entrepreneur with a mediocre business idea than fund a strong
business idea and a mediocre entrepreneur.
• What makes an entrepreneur “strong” in the eyes of an investor is
experience in the area of the proposed business, skills and abilities
that will help the business, a solid reputation, a track record of
success, and passion about the business idea. The first four of these
five qualities favor older rather than younger entrepreneurs. In
addition, many people turn to entrepreneurship in lieu of
retirement.
Myth 5: Entrepreneurs love the
spotlight
• While some entrepreneurs are flamboyant, the vast
majority of entrepreneurs do not attract public
attention.
• How many entrepreneurs can you name? Most of us
could come up with Bill Gates of Microsoft, Steve Jobs
of Apple, and Michael Dell of Dell, Inc. Whether or not
they sought attention, they are often in the news.
• However, few of us could name the founders of
Google, Nokia, or GAP even though we frequently use
these firm’s products and services. These
entrepreneurs, like most, have either avoided attention
or been passed over by the popular press. They defy
the myth that entrepreneurs, more so than other
groups in our society, love the spotlight.
Opportunity vs. Idea
•
•
•
An opportunity gap is a gap between what is currently on the market and the
possibility for a new or significantly improved product, service, or business that
results from emerging trends.
Essentially, entrepreneurs recognize an opportunity and turn it into a successful
business.
An opportunity is a favorable set of circumstances that creates a need for a new
product, service, or business. Most entrepreneurial firms are started in one of two
ways:
– 1) Firms that are externally stimulated: an entrepreneur decides to launch a firm, searches for
and recognizes an opportunity, and then starts a business, as Jeff Bezos did with Amazon.com.
– 2) Firms that are internally stimulated: an entrepreneur recognizes a problem or an
opportunity gap and creates a business to fill it.
•
•
Regardless of which of these two ways an entrepreneur starts a new business,
opportunities are tough to spot. It is difficult to identify a product, service, or
business opportunity that isn’t merely a different version of something already
available.
Opportunity recognition is part art, part science. An entrepreneur must rely on
instinct, which makes it an art, and on purposeful action and analytical techniques,
which makes it a science.
Opportunity
• An opportunity has four essential qualities: it is (1)
attractive, (2) durable, (3) timely, and (4) anchored in a
product, service, or business that creates or adds value
for its buyer or end user.
• For an entrepreneur to capitalize on an opportunity, its
window of opportunity must be open. This is a
metaphor describing the time period in which a firm
can realistically enter a new market. Once the market
for a new product is established, its window of
opportunity opens. As the market grows, firms enter
and try to establish a profitable position. At some
point, the market matures, and the window of
opportunity closes. Example: Search Engines
Idea
• It is important to understand that there is a difference
between an opportunity and an idea.
• An idea is a thought, impression, or notion. It may or may
not meet the criteria of an opportunity.
• This is a critical point because many businesses fail not
because the entrepreneurs that started them didn’t work
hard, but rather because there was no real opportunity to
begin with. Before getting excited about a business idea, it
is crucial to understand whether the idea fills a need and
meets the criteria for an opportunity.
• When it doesn’t, it can lead to a disappointing outcome as
shown in “What Went Wrong”.
What Went Wrong?
Online Postage: An Idea Instead of an Opportunity
•
•
•
•
•
•
If a seemingly attractive new product or service idea turns out to be more trouble than good for its customers, its almost
sure to fail. The story of two Internet companies trying to sell stamps online provides a vivid example of the importance of
one of the four qualities of an attractive opportunity; namely, the opportunity must be anchored in a product or service that
adds value for its buyer or end users.
Until recently, buying stamps was a chore for small businesses and for people who work from their homes. Because of the
cost, most small firms don’t have postal meters, which are devices that store prepaid postage. So the only choice for most of
these businesspeople had been to stand in line at the post office.
Then, the Internet came along, and two start-ups, E-Stamps and Stamps.com, offered a solution to the problem. The
companies, with the U.S. Postal Service’s blessing, rolled out services that allowed customers to purchase stamps over the
internet and print them out from their PCs. The media was captivated. “Now there’s a new way to go postal,” exclaimed ABC
News. Investors were equally enthralled. Collectively, the two companies raised more than half a billion dollars from
investors and through initial public offerings.
But regrettable, both E-Stamps and Stamps.com fell flat. One of the most important reasons for their failure is that their
service didn’t deliver sufficient “value” to attract the interest of enough paying customers. In fact, for many businesses, the
service turned out to be more trouble than benefit. Here’s why.
First, although the idea of avoiding trips to the post office sounded good, there was no price break for buying postage
online. In fact, in most cases, it cost more to buy postage online because of the service fee charged by the online providers.
Both E-Stamps and Stamps.com lobbied the Postal Service to allow them to offer their customers stamps at a discount. Their
argument was that online postage relieves congestion at post offices and makes the mail easier to sort. But the Postal
Service didn’t agree. Second, downloading postage turned out to be a hassle, largely because of security provisions required
by the Postal Service. A downloaded stamp doesn’t look like an actual stamp. Instead it is a tamper-proof bar code that is
affixed to a letter in place of a regular stamp. To download stamps, a customer had to jump through several hoops, making
the process somewhat awkward. Finally, other complications made the service cumbersome, at least initially. For example, in
some instances, businesses had to buy special hardware to attach to the computer that stored the downloaded postage.
As this story shows, the services offered by E-Stamps and Stamps.com failed one of the key tests of an opportunity: the idea
wasn’t anchored in a product or service that created enough value for it’s buyers to represent a legitimate opportunity.
Ways to Identify an opportunity
• Observing Trends: the first approach to identifying opportunities is to
observe trends and study how these trends create opportunities for
entrepreneurs to pursue.
• Economic factors, social factors, technological advances, and political
action and regulatory changes are the most important trends to follow.
• There are two ways entrepreneurs can get a handle on these trends.
• First, they can carefully study and observe them. Some entrepreneurs are
better at this than others, depending on their personal characteristics and
levels of motivation.
• Entrepreneurs who have industry experience, who have well-established
social network, who are creative and who are, in general, alert are more
likely to sport trends and interpret them correctly.
• The second way entrepreneurs understand emerging trends is to purchase
customized forecast and market analyses from independent research
firms. These tools allow for a fuller understanding of how specific trends
create opportunities.
Trends
• Economic Forces: State of the economy, level of disposable
income, consumer spending patterns
• Social Forces: social and cultural trends, demographic
changes, what people think is “in”
• Technological Advances: new technologies, emerging
technologies, new uses of old technologies
• Political and Regulatory Changes: new changes in the
political arena, new laws and regulations.
• If any of these trends fill a business, product, or service
opportunity gap (the difference between what is available
and what is possible), then it can lead to new business,
product, and service ideas.
Solving a problem
• Sometimes identifying opportunities simply
involves noticing a problem and finding a way
to solve it.
• For example, Norton antivirus software- this
company took advantage of a problem that
resulted when new technology was
introduced.
– To be continued…
Identifying Opportunities by Solving
Problems
• Look for problems. People complain about it
being hard to sleep through the night, get rid
of clutter in their homes, find an affordable
vacation, trace their family origins, get rid of
garden weeds, and so on.
• Someone may simply notice a problem that
others are having and think that the solution
might represent an opportunity.
Personal Characteristics
•
•
Some personal characteristics tend to make some people better at recognizing opportunities
than others.
Opportunity recognition refers to the process of perceiving the possibility of a profitable
new business or a new product or service.
– Prior experience: while working in industry you may spot a particular niche that is
underserved. You may also build a network of social contacts who provide insights that
lead to opportunities.
– Cognitive Factors: some people believe that entrepreneurs have a “sixth sense” called
entrepreneurial alertness, which is formally defined as the ability to notice things
without engaging in deliberate search. Some research indicates that alertness goes
beyond noticing things and involves a more purposeful effort. It is largely a learned skill,
and people who have more knowledge of an area tend to be more alert to opportunities
in that area than others.
– Social Networks: a large network of social and professional contacts will result in
exposure to more opportunities and ideas than people without these networks.
– Creativity: this is the process of generating a novel or useful idea. It involves preparation
(through background, experience, and knowledge), incubation (mulling over ideas),
insight (the flash of recognition when the solution to a problem is seen or an idea is
born), evaluation (when the idea is subjected to scrutiny and analyzed for viability), and
elaboration (when the creative idea is put into a final form, the details are worked out,
and the idea is transformed into something of value).
Advantages and Disadvantages
• Whether to be self-employed or work for someone else: that’s a choice
that only you can make, and one with no right or wrong answer.
• There are a host of factors, personal and professional, in a decision about
whether to go solo. Factors to consider include:
– Situational: Do you have many family responsibilities? Do you have support from
friends and family?
– Talent: Do you have the skills to make it on your own?
– Psychological: Do you have the temperament and the discipline necessary?
– Financial: Do you have the money you need to get started? Or have enough saved
to keep you afloat until your venture runs smoothly?
– Benefits: Are employee benefits available through your spouse’s employment? Can
you afford the high bills of health coverage or can you take the risk of being
without it?
– Legal: Do you understand and can you handle your increased liability as an
independent professional?
– Ownership: Do you understand the differences as to who owns your work -- the
copyright or patent or recipe -- if you create your creation as an employee? As a
self-employed? As a work-for-hire?
– The Unknown: How prepared are you for an emergency such as getting hurt while
working? A long bout with the flu? A shortage of clients? Computer crashes? Car
breakdowns? A no-show babysitter?
•
•
•
•
•
Whether you're running your own business or working as an independent
contractor, you'll soon realize that working for yourself isn't just another job, it's a
way of life.
Are you someone who likes a nine-to-five routine and collecting a regular
paycheck? When you're self-employed, you must be willing to make sacrifices for
the sake of the job. You're going to work long hours, which means that you won't
have as much time as you used to for family or leisure activities. And if the cash
flow becomes a trickle, you're going to be the last one to get paid.
Can you get along well with all types of people? Being self-employed is all about
managing relationships--with your clients or customers, your suppliers, perhaps
with your employees, certainly with your family, and probably with your banker,
lawyer, and accountant, too. If you're the type who wants to be alone to do the
few things that you're good at, then you should do that--for someone else.
Are you a disciplined self-starter? Being self-employed means that you're your
own boss. There may be days when you'll have to make yourself sit at your desk
instead of going for a long lunch, or (especially if you work out of your home) place
those business calls instead of reading the newspaper.
Finally, do you enjoy wearing many hats? Depending on your line of work, you may
be involved in handling marketing and sales duties, financial planning and
accounting responsibilities, administrative and personnel management chores--or
all of the above.
DISADVANTAGES OF SELF-EMPLOYMENT
•
•
All the important disadvantages of self-employment can be summed as one big
piece of bad news: nobody is taking care of you.
You alone are responsible for yourself – and often for a lot of others too.
– If you need to raise additional money to get started, you may need a cosigner or
collateral (such as your home) for a loan.
– You'll need a cash backup so you can pay your bills while you're waiting for
business to come in or waiting to be paid for completed work.
– must pay employee and employer portions of Canada Pension Plan contribution see CPP contribution rates
– more record-keeping required
– often work longer hours with no extra pay
– cost of purchasing and maintaining own equipment
– risk of loss
– liable if contract obligations not fulfilled, thus liability insurance may be needed
– no employee benefits- you'll have to provide your own health insurance
– after first year-end, usually must make income tax installment payments
– must register to collect GST, except for small suppliers
– cash management and planning required to ensure funds available for tax
remittances
– may require services of bookkeeper or accountant for the record-keeping and
government reporting
ADVANTAGES OF SELF-EMPLOYMENT
• The same thing that makes self-employment
scary is what makes it attractive and
adventurous. Nobody will take care of you,
but instead of dwelling on that as bad news,
embrace it as good news: it means you will be
in charge. You will be responsible for yourself
– and often for others too. No big daddy will
tell you what to do, how to do it, and when to
do it. Nor can they fire you. You’ll have more
control of your time and your life.
Advantages
•
•
•
•
•
•
•
•
•
•
•
•
no employment insurance premiums, unless voluntarily paid
more expenses are tax-deductible - for example, expense of travelling to and from
clients' places of business is tax-deductible
more freedom to choose own working hours
can work for more than one client
opportunity for increased profits: the possibility of more money for the same work
If you're working for yourself, chances are you'll be doing work that you enjoy.
You'll get to pick who you'll work for or with, and in most cases you'll work with
your customers or clients directly--no go-betweens muddying the waters. As a
result, you may have days when it hardly feels as if you're working at all.
Being your own boss means that you'll be in control of all of the decisions affecting
your working life.
You'll decide on your business plan, your quality assurance procedures, your
pricing and marketing strategies--everything.
You'll have job security; you can't be fired for doing things your way.
As you perform a variety of tasks related to your work, you'll learn new skills and
broaden your abilities.
You'll even have the flexibility to decide your own hours of operation, working
conditions, and business location. If you're working out of your home, your startup costs may be reduced.
Entrepreneurs Compared With Small
Business Owners
• Entrepreneurial ventures are not necessarily the
same as small businesses, although lots of
entrepreneurial ventures start out as small
businesses. Some of the big differences between
entrepreneurial ventures and small businesses
are that the person who starts them thinks
differently and have very different goals. Because
entrepreneurs think differently and have different
goals than people who start small businesses,
they make different decisions.
• First, entrepreneurs generally do something new, and different. This is
often called innovation today. Example of innovation in the food industry
might be a new way to serve prepared meals, process and package food,
or provide catering services in remote locations. Examples in other
industries might be developing a new welding process, using computers in
ways no one has thought of before, and so on. People who start small
businesses often copy what other people have done or are doing. Another
restaurant, a small welding shop, or a business that repairs computers and
trains people how to sue them, might be examples of small businesses.
• Second, entrepreneurs want to do something that is highly valued,
something that will draw people to the business. CD players are a very
different way of playing music. The sound quality is better than with
cassette tapes, and very much better than records or LPs. This is called
“creating value”, people value high quality sound, so they buy CDs and CD
players. Today, with MP3 and WAV computer files, people who own
personal computers can get whatever music they like from the Internet,
put it on their own CDs and play what they like. With MP3 music files, they
can also put many more songs on one CD that was possible a few years
ago.
• Third, entrepreneurs want to start businesses that grow, and grow and
grow. Entrepreneurs are not satisfied to start a small business, make it
profitable, then run the business for the rest of their working lives.
Because of this they make long term plans, sometimes called a “strategy”.
Entrepreneurs want to have the very best, biggest, most widely spread
business possible. People who start small businesses may only want to
make enough money so they can care for their families, have a
comfortable life and retire to leave the business to their children; these
are often called life-style businesses.
• So, entrepreneurs want to innovate (do something new), create value, and
will grow and grow and grow. Small business owners generally have
different goals and ambitions. Because of this, entrepreneurs make
different, longer term plans (strategies), deal with people differently than
small business owners, often by making them more responsible for what
they do and giving them more power (called empowering employees),
provide more training, and help pay for more education for the people
who work for them, and very often give, or sell, a share in the business to
their employees.
Review
Entrepreneurs:
• Innovate (do something new)
• Create value (do something people want)
• Want to grow and grow
• Make long term, strategic plans
• Empower employees
• Train and help educate them; and
• Often give employee part ownership of the business
People who start small businesses/small business owners:
• Want to make a living (sometimes called lifestyle
businesses)
• Do not want to be “the biggest fish in the pond”
• Will often employ people in their families; and
• Want to retire and leave the business to their children
Assignment #2
• Based on our class notes and the presentation
from Chef Bromley, discuss the advantages and
disadvantages of owning your own business.
• Along with the details provided in class, include
your own personal opinion on whether you feel
the advantages outweigh the disadvantages or
vice versa.
• Answers should be at least 1 page, typed, and
double spaced. (20%)