Entrepreneurship
Starting Your Own Business: The
Entrepreneurship Alternative
AN OVERVIEW
An entrepreneur
is a person who seeks a profitable
opportunity and takes the necessary
risks to set up and operate a business.
An entrepreneur
Are individuals who recognize opportunities
where others see chaos or confusion.
Whatever the passion - because they all fit in
some way- they are the heroes of today's
marketplace.
An entrepreneur
Richard Cantillon (1697-1734)
The entrepreneur is a specialist in taking on risk
He “insures” workers by buying their products (or
labor services) for resale before consumers have
indicated how much they are willing to pay.
Why should you be interested?
Many young people have succeeded:
◦Michael Dell - Dell Computers
◦Frank Carney - Pizza Hut
◦Paul Orfalea - Kinko’s
◦Fred DeLuca - Subway.
◦Kristy Taylor - SkinCareRx.com
◦Mark Zuckerberg - Facebook
Opportunity to reap large profits
Why NOT to be an Entrepreneur
Uncertainty of income
Risk of losing entire invested capital
Lower quality of life until business gets
established
High levels of stress
Complete responsibility
What is Entrepreneurship?
Scott Shane (Case Western) – “Entrepreneurship is an
activity that involves the discovery, evaluation and
exploitation of opportunities to introduce new goods and
services, ways of organizing, markets, processes, and new
materials through organizing efforts that previously had not
existed.”
Howard Stevenson (Harvard) – “.. The pursuit of
opportunity without regard to resources currently
controlled.”
W. Gibb Dyer, Jr. (BYU) – “The founding of new businesses is
the essence of entrepreneurial activity.”
What is Entrepreneurship?
Entrepreneurship is a dynamic process of vision, change,
and creation. It requires an application of energy and
passion toward the creation and implementation of new
ideas and creative solution.
Essential ingredients include the willingness to take
calculated risk - in terms of time, equity or career, the
ability to formulate an effective venture team; the creative
skill to marshall needed resources; the fundamental skill of
building a solid business plan; and, finally, the vision to
recognize opportunity where others see chaos,
contradiction and confusion.
Avoiding Folklore: The Myths of
Entrepreneurship.
1.. Entrepreneurs are doers not thinkers.
2.. Entrepreneurs are born not made.
3.. Entrepreneurs are always investors.
4.. Entrepreneurs are academic and social misfits.
5.. Entrepreneurs must fit the profile.
6.All entrepreneurs need is money.
7.All entrepreneurs need is luck.
8.Most entrepreneurial initiatives fail.
9.Entrepreneur are extreme rist takers -.... the gamblers.
• People choose entrepreneurship for many reasons
– Dissatisfaction with traditional work
– Their ideas fulfill customer needs
Being your Own Boss
◦ Self-management is the motivation that drives many
entrepreneurs.
Financial Success
◦ Entrepreneurs are wealth creators.
Job Security
◦ Over the past ten years, large companies have eliminated more
jobs than they have created.
Quality of Life
◦ Starting a business gives the founder some choice over when,
where, and how to work.
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• Vision - entrepreneurs begin with an overall
idea for how to make their business idea a
success
• High Energy Level - a willingness to work
hard
• Need to Achieve - entrepreneurs work hard
because they want to excel
• Self-Confidence - fearlessness in the face17of
difficult odds
Who are entrepreneurs?
Common traits
◦ Original thinkers
◦ Risk takers
◦ Take responsibility for
own actions
◦ Feel competent and
capable
◦ Set high goals and enjoy
working toward them
Common traits
◦ Self employed parents
◦ Firstborns
◦ Between 30-50 years old
◦ Well educated – 80% have
college degree and 1/3
have a graduate level
degree
Successful and Unsuccessful
Entrepreneurs
Successful
◦ Creative and Innovative
◦ Position themselves in
shifting or new markets
◦ Create new products
◦ Create new processes
◦ Create new delivery
Unsuccessful
◦ Poor Managers
◦ Low work ethic
◦ Inefficient
◦ Failure to plan and
prepare
◦ Poor money managers
Characteristics of Entrepreneurs
Key Personal
Attributes
Strong Managerial
Competencies
Good Technical Skills
Successful
Entrepreneurs
Key Personal Attributes
Entrepreneurs are Made, Not Born!
◦ Many of these key attributes are developed early in life,
with the family environment playing an important role
◦ Entrepreneurs tend to have had self employed parents
who tend to support and encourage independence,
achievement, and responsibility
◦ Firstborns tend to have more entrepreneurial attributes
because they receive more attention, have to forge their
own way, thus creating higher self-confidence
Key Personal Attributes (cont.)
Entrepreneurial Careers
◦ The idea that entrepreneurial success leads to more
entrepreneurial activity may explain why many entrepreneurs
start multiple companies over the course of their career
◦ Corridor Principle- Using one business to start or acquire others
and then repeating the process
◦ Serial Entrepreneurs- A person who founds and operates multiple
companies during one career
Key Personal Attributes (cont.)
Need for Achievement
◦ A person’s desire either for excellence or to succeed in
competitive situations
◦ High achievers take responsibility for attaining their
goals, set moderately difficult goals, and want
immediate feedback on their performance
◦ Success is measured in terms of what those efforts have
accomplished
◦ McClelland’s research
Key Personal Attributes (cont.)
Desire for Independence
◦Entrepreneurs often seek independence from
others
◦As a result, they generally aren’t motivated to
perform well in large, bureaucratic organizations
◦Entrepreneurs have internal drive, are confident
in their own abilities, and possess a great deal of
self-respect
Key Personal Attributes (cont.)
Self-Confidence
◦Because of the high risks involved in running an
entrepreneurial organization, having an “upbeat”
and self-confident attitude is essential
◦A successful track record leads to improved selfconfidence and self-esteem
◦Self-confidence enables that person to be
optimistic in representing the firm to employees
and customers alike
Key Personal Attributes (cont.)
Self-Sacrifice
◦Essential
◦Nothing worth having is free
◦Success has a high price, and
entrepreneurs have to be willing to
sacrifice certain things
Technical Proficiency
Many entrepreneurs demonstrate strong technical
skills, typically bringing some related experience
to their business ventures
For example, successful car dealers usually have
lots of technical knowledge about selling and
servicing automobiles before opening their
dealerships
Especially important in the computer industry
NOT ALWAYS NECESSARY
Questions To Keep In Mind
What are my motivations for owning a business?
Should I start or buy a business?
What and where is the market for what I want to sell?
How much will all this cost me?
Should my company be domestic or global?
Entrepreneurship: Growth Pressures
Business Dimension
Entrepreneurial
Organization
Formal Organization
Strategic orientation
Seeks opportunity
Controls resources
Commitment to
opportunity
Revolutionary
Short duration
Evolutionary
Long duration
Commitment to
resources
Lack of stable needs and Systematic planning
resource bases
systems
(capital, people, and equipment)
Control of resources
Lack of commitment to
permanent ventures
Power, status, financial
rewards for maintaining
status quo
Management Structure
Flat
Many informal networks
Clearly defined authority
and responsibility
Compensation policy
Unlimited; based on
Short-term driven;
team’s accomplishments limited by investors
One More Time
What is an entrepreneur?
Characteristics of an entrepreneur
Planning to be an entrepreneur
Growth pressures, managing a family business, and corporate
intrapreneurship