Entrepreneurship: Successfully Launching New Ventures PDF

Entrepreneurship: Successfully Launching New Ventures Sixth Edition, Global Edition Chapter 1 Introduction to Entrepreneurship Copyright © 2019 Pearso...

Entrepreneurship: Successfully Launching New Ventures Sixth Edition, Global Edition Chapter 1 Introduction to Entrepreneurship Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Learning Objectives (1 of 2) 1.1 Describe entrepreneurship, entrepreneur, and the characteristics of entrepreneurial firms. 1.2 Discuss three main reasons people decide to become entrepreneurs. 1.3 Identify four main characteristics of successful entrepreneurs. 1.4 Explain five common myths regarding entrepreneurship. 1.5 Describe three types of start-up firms. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Learning Objectives (2 of 2) 1.7 Discuss the positive effects of entrepreneurship and entrepreneurial firms on economies and societies. 1.8 Explain the entrepreneurial process. 1.9 Learn how understanding entrepreneurship and the entrepreneurial process can facilitate career success. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. What Is Entrepreneurship? Academic Definition (Stevenson and Jarillo) – Entrepreneurship is the process by which individuals pursue opportunities without regard to resources they currently control. Alternative View – Entrepreneurship is the art of turning an idea into a business. Explanation of What Entrepreneurs Do – Entrepreneurs assemble and then integrate all the resources needed – the money, the people, the business model, the strategy – to transform an invention or an idea into a viable business. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Entrepreneur Definition An entrepreneur is an ambitious individual who uses his or her passion, vision, determination, creativity and discipline in order to take risks to build a business based on innovative solutions and creativity. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Why Become an Entrepreneur? The three primary reasons that people become entrepreneurs and start their own firms. – Desire to be their own boss – Desire to pursue their own ideas – Financial rewards Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Characteristics of Successful Entrepreneurs (1 of 3) Figure 1.1 Four Primary Characteristics of Successful Entrepreneurs Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Characteristics of Successful Entrepreneurs (2 of 3) Passion for the Business – The number one characteristic shared by successful entrepreneurs is a passion for the business. – This passion typically stems from the entrepreneur’s belief that the business will positively influence people’s lives. Product/Customer Focus – A second defining characteristic of successful entrepreneurs is a product/customer focus. – An entrepreneur’s keen focus on products and customers typically stems from the fact that most entrepreneurs are, at heart, craftspeople. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Characteristics of Successful Entrepreneurs (3 of 3) Tenacity Despite Failure – Because entrepreneurs are typically trying something new, the failure rate is naturally high. – A defining characteristic for successful entrepreneurs is their ability to persevere through setbacks and failures. Execution Intelligence – The ability to fashion a solid business idea into a viable business is a key characteristic of successful entrepreneurs. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Common Myths About Entrepreneurs (1 of 7) 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 studies is that no one is “born” to be an entrepreneur; everyone has the potential to become one. – Whether someone does or doesn’t become an entrepreneur is a function of their environment, life experiences, and personal choices. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Common Myths About Entrepreneurs (2 of 7) Although no one is “born” to be an entrepreneur, there are common traits and characteristics of successful entrepreneurs A moderate risk taker Optimistic Persuasive Networker Promoter Achievement motivated Resource assembler/leverager Alert to opportunities Creative Self-confident Self-starter Decisive Tolerant of ambiguity Energetic Visionary A strong work ethic Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Common Myths About Entrepreneurs (3 of 7) Myth 2: Entrepreneurs Are Gamblers – Most entrepreneurs are moderate risk takers. – The idea that entrepreneurs are gamblers originates from two sources:  Entrepreneurs typically have jobs that are less structured, and so they face a more uncertain set of possibilities than people in traditional jobs.  Many entrepreneurs have a strong need to achieve and set challenging goals, a behavior that is often equated with risk taking. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Common Myths About Entrepreneurs (4 of 7) Myth 3: Entrepreneurs Are Motivated Primarily by Money – While it is naïve to think that entrepreneurs don’t seek financial rewards, money is rarely the reason entrepreneurs start new firms. – In fact, some entrepreneurs warn that the pursuit of money can be distracting. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Common Myths About Entrepreneurs (5 of 7) Myth 4: Entrepreneurs Should Be Young and Energetic – Entrepreneurial activity is fairly evenly spread out over age ranges. – While it is important to be energetic, investors often cite the strength of the entrepreneur as their most important criterion in making investment decisions.  What makes an entrepreneur “strong” in the eyes of an investor is experience, maturity, a solid reputation, and a track record of success.  These criteria favor older rather than younger entrepreneurs. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Figure 1.2 Types of Start-Up Firms Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Economic Impact of Entrepreneurial Firms Innovation – Is the process of creating something new, which is central to the entrepreneurial process. – Small innovative firms are 16 times more productive than larger innovative firms in terms of patents per employee. Job Creation – Small businesses create a substantial number of net new jobs in the United States. – Firms with 500 or fewer employees created two million of the roughly three million private sector jobs in 2014. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Entrepreneurial Firms’ Impact on Society and Larger Firms Impact on Society – The innovations of entrepreneurial firms have a dramatic impact on society. – Think of all the new products and services that make our lives easier, enhance our productivity at work, improve our health, and entertain us. Impact on Larger Firms – Many entrepreneurial firms have built their entire business models around producing products and services that help larger firms become more efficient and effective. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. The Entrepreneurial Process The Entrepreneurial Process Consists of Four Steps Step 1: Deciding to become an entrepreneur. Step 2: Developing successful business ideas. Step 3: Moving from an idea to an entrepreneurial firm. Step 4: Managing and growing the entrepreneurial firm. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Steps in the Entrepreneurial Process (1 of 2) Step 1 Step 2 Developing Successful Business Ideas Copyright © 2019 Pearson Education, Ltd. All Rights Reserved. Steps in the Entrepreneurial Process (2 of 2) Step 3 Step 4 Copyright © 2019 Pearson Education, Ltd. All Rights Reserved.