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Entrepreneurs
PowerPoint Presentation by
Ian Anderson, Algonquin College
Chapter 1
Copyright © 2010 by Nelson Education Ltd.
Looking Ahead
After studying this chapter, you should be able to:
1. Discuss the availability of entrepreneurial opportunities and give
examples of successful businesses started by entrepreneurs.
2.
Explain the nature of entrepreneurship and how it is related to small
business.
3.
Define and identify the importance of small business.
4.
Identify rewards and drawbacks of entrepreneurial careers.
5.
Describe the various types of entrepreneurs and entrepreneurial ventures.
6.
Discuss several factors related to readiness for entrepreneurship and
getting started in an entrepreneurial career.
7.
Describe some characteristics of successful entrepreneurs.
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Entrepreneurial Opportunity
• An economically attractive and timely opportunity
that creates value.
• A true opportunity exists only for the entrepreneur
who has the interest, resources, and capabilities
required to succeed.
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Entrepreneurial Opportunity
• In the Trenches: Gumdrops
Vancouver’s first wet weather boutique
proved that customers saw value in the
concept and that a business idea was
present, not just an opportunity.
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Entrepreneurship and Small Business
• Despite similarities, entrepreneur and small
business manager are not synonymous
– Entrepreneurs might be the founders of
business firms, or they might be ownermanagers of existing firms
– Small business managers receive specified
compensation and do not assume ownership
risks
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What Is a Small Business?
• Criteria for Defining Smallness in Business
–Financing supplied by one person or small group
–Localized business operations (except marketing)
–Business’ size small relative to larger
competitors
–Fewer than 100 employees
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Why is Small Business Important?
• In 2007, 1,030,000 small businesses were registered in
Canada
– 97% of these businesses have fewer than 50 employees
– 80% of all business entities have less than 5 employees
• There are 2.5 million self-employed Canadians
• 56% of Canadians work for small and medium-sized
businesses
• New jobs created by small businesses are growing at rate
of 2.3 percent per year, with almost 80 percent of the
growth being generated by the newly self-employed.
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Entrepreneurial Incentives
Exhibit 1-1
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Drawbacks of Entrepreneurship
• Hard work
– Finding new customers and markets
– Frustrations with financing, government, tax,
technology, and employment issues
• Long hours
– 20% work more than 60 hours per week
• Emotional loneliness
• Strong possibility of failure
• Disruptions to personal life
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Causes of Business Failures
• Lack of managerial and financial abilities
• Fail to adapt to competitive environment
• A broad based study found the following:
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32% inadequate research and development
23% lacked competitive advantage
14% uncontrolled costs
13% poorly developed marketing strategies
10% poor market timing
8% succumbed to competitor activities
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Varieties of Entrepreneurship
• Founder (“Pure” Entrepreneur)
 An entrepreneur who brings a new firm into existence.
• General Manager (“Second Stage” Entrepreneur)
 An entrepreneur who directs the continuing operations
of established firms.
• Franchisee
 An entrepreneur whose power is limited by the
contractual relationship with a franchising
organization.
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High-Potential Ventures versus Small
Firms and MicroBusinesses
• High-Potential Venture (Gazelle)
A small firm that has great prospects for growth.
• Attractive Small Firm
A small firm that provides
substantial profits to its owner.
• MicroBusiness (Lifestyle)
A small firm that provides
minimal profits to its owner.
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Characteristics of
Artisan Entrepreneurs
• A person with primarily technical skills and little
business knowledge.
– Paternalistic approach
– Reluctance to delegate
– Narrow view of strategy
– Personal sales effort
– Short planning horizon
– Simple record keeping
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Characteristics of
Opportunistic Entrepreneurs
• A person with both business skills and technical
knowledge.
– Scientific approach to problems
– Willing to delegate
– Broad view of strategy
– Diversified marketing approach
– Longer planning horizon
– Sophisticated accounting
and financial control
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Entrepreneurial Teams
Two or more people who work together as
entrepreneurs.
Helpful to:
 Secure a broad range of managerial talents
 Enhance profits
Useful in:
 High technology businesses
 Attractive small firms
 High potential ventures
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Four Routes to Entrepreneurship
Entering a family
business
Opening a
franchised business
Starting a new
business
Buying an existing
business
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Age Concerns in Starting a Business
Exhibit 1-2
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Entrepreneurial Refugee
• Refugee – a person who becomes an
entrepreneur to escape an undesirable
situation
• Foreign refugee
– Becomes an entrepreneur in
a new country
• Corporate refugee
– Leaves big business to go
into business for themselves
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Taking The Plunge
• Precipitating Event
An event, such as losing
a job, that moves an
individual to become
an entrepreneur.
 Job termination
 Job dissatisfaction
 Unexpected opportunity
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Successful Entrepreneurs
• Strong commitment / passion
• Willingness to take risks
 Moderate risk-takers
• Self-Confidence
 have an internal locus of control
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Internal vs. External Locus of Control
Internal Locus of Control:
 Entrepreneurs tend to hold themselves accountable
for their own successes or failures.
External Locus of Control:
 Non-entrepreneurs tend to believe that external
circumstances, luck or fate impact upon their
worlds.
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Entrepreneurial Characteristics
•
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•
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Commitment and determination
Leadership
Opportunity obsession
Tolerance of risk, ambiguity and
uncertainty
• Creativity, self-reliance and adaptability
• Motivation to excel
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