Principles of Entrepreneurship for Start-ups PDF 2018

Principles of Entrepreneurship for Start-ups 01 Introduction The Challenge of Entrepreneurship Prof. Dr.-Ing. Jost Jacoby Principles of Entrepreneurship/ JJ / Folie 1 © – Hochschule der Baye...

Principles of Entrepreneurship for Start-ups 01 Introduction The Challenge of Entrepreneurship Prof. Dr.-Ing. Jost Jacoby Principles of Entrepreneurship/ JJ / Folie 1 © – Hochschule der Bayerischen Wirtschaft Principles of Entrepreneurship for Start-ups Principles of Entrepreneurship / JJ / Folie 2 © – Hochschule der Bayerischen Wirtschaft  Background Reading Entrepreneurship Barringer Bruce R., Ireland, Duane 6th ediiton Pearson 2018 ISBN 978-1292255330 Entrepreneurship Grichnik, D.; Brettel, M.; Koropp, C.; Mauer, R. Schäffer-Poeschel Verlag 2017 ISBN 978-3791036595 Principles of Entrepreneurship / JJ / Folie 3 © – Hochschule der Bayerischen Wirtschaft  Background Reading ▪ Abrams, R.: Sucessful Business Plan, Secrets & Strategies, Planning Shop, 2010 ▪ Barringer, B.: Preparing Effective Business Plans, Pearson 2015 ▪ Berry, T.: Hurdle, the Book on Business Planning, Palo Alto Software, Inc, 2006 ▪ Evans, V.: (Financial Times Essential Guide to) Writing a Business Plan, FT Press, 2010 ▪ Finch, B.: How to write a Business Plan, Kogan Page, 2019 ▪ Pinson, L.: Anatomy of a Business Plan, Out of Your Mind & Into The Marketplace, 2013 ▪ Shelton, H. : The secrets to writing a successful business plan, Summit Valley, 2014 ▪ Bauerle, J: Accounting Quick Start Guide, ClydeBank, 2018 ▪ Piper, M.: Accounting made simple, Simple Subjects 2010 ▪ Piper, M.: Corporate finance made simple, Simple Subjects 2020 Principles of Entrepreneurship / JJ / Folie 4 © – Hochschule der Bayerischen Wirtschaft  Principles of Entrepreneurship for Startups Rules of the game: Methods: SWS Assignments Papers Classroom training 42 Presentations E-Learning/Self Learning 22 Business plan Exam Evaluation: Duration 90 minutes Assignments 50% Answer knowledge questions Exam 50% Understand and discuss business questions Principles of Entrepreneurship / JJ / Folie 5 © – Hochschule der Bayerischen Wirtschaft  Principles of Entrepreneurship for Startups Time Table Lecture Date Topic (Subject 1 14.10.2020 Introduction The Challenge of Entrepreneurhsip to Changes!) 2 17.10.2024 Business Opportunities 3 24.10.2024 Presentations Business Opportunities 4 31.10.2024 Business Models 07.11.2024 Seminar Week 5 14.11.2024 Presentations Business Models 6 21.11.2024 Business Planning (Introduction) 7 28.11.2024 Business Planning (Marketing, Sales, Revenue) 05.12.2024 Seminar Week 8 12.12.2024 Presentations Business Planning - Revenue 9 19.12.2024 Business Planning (OPEX) 26.12.2024 Christmas Break 02.01.2025 Christmas Break 10 09.01.2025 Presentations Business Plans 11 16.01.2025 Market Entry and Lager Stages 12 23.01.2025 Wrap Up, Reserve, Outlook on Exam Principles of Entrepreneurship / JJ / Folie 6 © – Hochschule der Bayerischen Wirtschaft  Today´s Topics 1. The callenge of entrepreneurship 2. What makes an entrepreneur? 3. Which fields will we talk about in this course? 4. German startup monitor 5. Assignment: Business opportunities Principles of Entrepreneurship/ JJ / Folie 7 © – Hochschule der Bayerischen Wirtschaft  Aspects of Entrepreneurship Entrepreneurship Entrepreneurship as Entrepreneurship as a field of science what an entrepreneur does Field for Entrepreneurship- Part of Management Entrepreneur Psychology and Process Sciences and Economics Sociology Identify Market Bussineswoman Innovator Opportunities Business Personality Functions Traits of Macro- Develop Business Strategy Entrepreneurs Founder economic Models Marketing Significance Social Finance Manager Inventor Interaction Build and lead Organisation Companies Leadership Society and Sales, Production, Political Sourcing Framework Controlling Principles of Entrepreneurship/ JJ / Folie 8 © – Hochschule der Bayerischen Wirtschaft  The Entrepreneur - Historically When a French dictionary for the first time documents the word „entrepreneur“ in print in 1723 the Englisch language still uses the term „Adventurer“. Cantillion (1734): Cantillion sees the entrepreneur as an individual who is driven by the pursuit of profit and equiped with the ability, to acquire goods cheaply and to sell them expensively. A key characteristic of the entrepreneuer is that he is taking risks. Say (1816): The role of the entrepreneur as described by Say is characterised by the organisation of the production process through a combination of the three production factors land, capital and labour. What´s also part of the story: Marx (1867): Decsribes the role of the „capitalist“ who is the owner of the means of production and who runs the production process with the aid of „workers“ who are forced to sell their labour to the owners. In his opinion this inevitably leads to exploitation and class rule which can only be overcome if the private ownership of means of production and the principle of maximising profits can be done away with. Every time the application of Marxism has been attempted it has failed and lead to the immiserisation of whole countries and regions. (vgl. Gablers Wirtschaftlexikon, und wikipedia) Principles of Entrepreneurship/ JJ / Folie 9 © – Hochschule der Bayerischen Wirtschaft  The Entrepreneur – 20th Century Knight (1921): For knight the entrepreneur is predominantly someone who bears true uncertainty. Different from a risk which is paired with a probability and an expectancy value uncertainty can not be mitigated. The willingess to take on this incalculable uncertainty is according to Knight what makes a true enrepreneur. Schumpeter (1934): Schumpeters vison of the entrepreneur is characterised by innovative behaviour and by the concept of the creative destruction of a market equilibrium. In this context he sees innovation as recombination of existing resources (in his own example: the combustion engine and the carriage). The never-ending adapion of the market equilibrium is the driving force of economic growth. Kirzner (1973): The function of the entrepreneur according to Kirzner is to utilize opportunities for arbitrage. If there are imperfect informations on a market they are used to generate business benefits and this generates a new market equlibrium. Kirzners and Schumpeters entrepreneur are therefore complementing each other to form an encompassing concept. Kirzner also points out, that many innovations are generated through incremental improvements (e. g. laptop computers). (vgl. Gablers Wirtschaftlexikon, wikipedia) Principles of Entrepreneurship/ JJ / Folie 10 © – Hochschule der Bayerischen Wirtschaft  An attempt to plot fhe field of research of entrepreneurship The scientific discipline entrepreneurship is in an early stage of ist developing an independet field of research. (Imre Lakatos devloped the concept that fields of research a more frutiful than isolated hypotheses.) Positive Heuristic Entrepreneurial Negative Heuristic Auxilliary Hypotheses fields of actiivity can be identified. To aquire, evaluate Model and test the and decide about Avoid therories relation of decsion informations includes that are not maker and The succes factors Core Hpotheses a subjective element. based on opportunity of one venture do individualism not necessarily aply Certain actions and decisions of the Teams and teamwork to other ventures entrepreneur are key to success. are a (possible) part Avoid theories Be aware of of the system. that have no Rationality principle: Intentional, plan- context factors social context based behaviour is applied. A successful outcome is Methodological rationalism: We look at Taking risks Avoid degenerative Use empirical desired, but we economic phenomena which are is a necessity problem transfer can also learn from subject to social and cultural influences (trying to defend a methods to failure. weak hypothesis generate inductive Oberservations need to be non- An economic form of knowledge through other anecdotical so conclusions can be coordination (plain: a hypotheses) There always is generalized. company) is needed an element of Draw innovation – Avoid changes to conclusons to leading beyond Entrepreneurhip does not only apply to start-ups. the core generate rules imitation. it also is an option for existing companies and hypotheses networks (vlg. Grichnik S. 8f) Principles of Entrepreneurship/ JJ / Folie 11 © – Hochschule der Bayerischen Wirtschaft  Entrepreneurship - Process Günter Faltin (2008), Professor of Entrepreneurship at Freie Universität Berlin, coined with his book „Brain vs. Capital" the term of „concept-creative founding“: Entrepreneurship according to this is a creative process, wthat does not invent anything, but arranges existing mehtods into innovations on the basis of conceptional business models. (gründerszene.de) Business Detection Phase Market Potential Business Idea Opportunity Feasibility Preparation of Development Phase Business Plan Analysis Establishment Implementation Phase Setting Up Growth Maturity (vlg. Pott S. 6) Principles of Entrepreneurship/ JJ / Folie 12 © – Hochschule der Bayerischen Wirtschaft  Entrepreneurship - Process (Jonikas, 2017) Principles of Entrepreneurship/ JJ / Folie 13 © – Hochschule der Bayerischen Wirtschaft  The Entrepreneur – Personality Traits Risk Taking Achievement Persuasiveness Motivation Control and Founder Team Organisation Personality Abilities Social Stability Competence Tenacity Initiative (vgl. Pott S. 34) Principles of Entrepreneurship/ JJ / Folie 14 © – Hochschule der Bayerischen Wirtschaft  Discussion – 5 Common Myths 1. Entrepreneurs are born not made 2. Entrepreneurs are Gamblers 3. Entrepreneurs are motivated primarily by money 4. Entrepreneurs should be young and energetic 5. Entrepreneurs love the spotlight (Barringer/Ireland, p. 41) Principles of Entrepreneurship/ JJ / Folie 15 © – Hochschule der Bayerischen Wirtschaft  Why passion is important Case Study Prim: How a lack of passion can kill a business (Barringer/Ireland, p. 37) Principles of Entrepreneurship/ JJ / Folie 16 © – Hochschule der Bayerischen Wirtschaft  Why passion is important (Barringer/Ireland, p. 37) Principles of Entrepreneurship/ JJ / Folie 17 © – Hochschule der Bayerischen Wirtschaft  Factors of an Entrepreneurial Eco-System Environmental Factors Public Services Infrastructure Entrepreneurship Factors Support Visibility Culture Entrepreneur Networks Innovations Market Training Financing Geography (vlg. Grichnik) Principles of Entrepreneurship/ JJ / Folie 18 © – Hochschule der Bayerischen Wirtschaft  Entrepreneurial Economy Baumol, William (2007) Our four Elemens of a... successful entrepreneurial economy are the following: 1. It must be relatively easy to form a business without expensive and time consuming bureaucratic red tape … > bancruptcy must not be too difficult … > reasonably well functioning financial system … > flexible labor markets 2. Government institutions must reward socially useful entrepreneurial activity. … Here the rule of law.. is especially important. 3. Government institutions must discourage activity that aims to divide up the economic pie rather than increase its size. Such.. activities include > criminal behavior.. as well as > „rent seeking behavior“ (politcal lobbying or.. frivolous lawsuits) 4. Finally in the successful entrepreneurial economy government institutions must ensure that the winning entrepreneurs … continue to have incentives to innovate and grow. > antitrust laws > openness to trade (nach Grichnik S.16) Principles of Entrepreneurship/ JJ / Folie 19 © – Hochschule der Bayerischen Wirtschaft  Rates of Early Stage Entrepreneurial Activity (Barringer/Ireland, p. 31) Principles of Entrepreneurship/ JJ / Folie 20 © – Hochschule der Bayerischen Wirtschaft  Startups in Germany (vgl. Deutscher Startup Monitor 2022) Principles of Entrepreneurship/ JJ / Folie 21 © – Hochschule der Bayerischen Wirtschaft  Age of the Startups (vlg. Deutscher Startup Monitor 2018) Principles of Entrepreneurship/ JJ / Folie 22 © – Hochschule der Bayerischen Wirtschaft  Development Phases (vgl. Deutscher Startup Monitor 2020 Principles of Entrepreneurship/ JJ / Folie 23 © – Hochschule der Bayerischen Wirtschaft  Industries (vgl. Deutscher Startup Monitor 2022) Principles of Entrepreneurship/ JJ / Folie 24 © – Hochschule der Bayerischen Wirtschaft  Business Models (vgl. Deutscher Startup Monitor 2022) Principles of Entrepreneurship/ JJ / Folie 25 © – Hochschule der Bayerischen Wirtschaft  Founders Subject (vgl. Deutscher Startup Monitor 2021) Principles of Entrepreneurship/ JJ / Folie 26 © – Hochschule der Bayerischen Wirtschaft  Team Size (vgl. Deutscher Startup Monitor 2022) Principles of Entrepreneurship/ JJ / Folie 27 © – Hochschule der Bayerischen Wirtschaft  Financing - Volume (vgl. Deutscher Startup Monitor 2022) Principles of Entrepreneurship/ JJ / Folie 28 © – Hochschule der Bayerischen Wirtschaft  Financing - Sources (vgl. Deutscher Startup Monitor 2022) Principles of Entrepreneurship/ JJ / Folie 29 © – Hochschule der Bayerischen Wirtschaft  Challenges (vgl. Deutscher Startup Monitor 2022) Principles of Entrepreneurship/ JJ / Folie 30 © – Hochschule der Bayerischen Wirtschaft  Intended Exits Size of Teams (vgl. Deutscher Startup Monitor 2021 and 2022) Principles of Entrepreneurship/ JJ / Folie 31 © – Hochschule der Bayerischen Wirtschaft  Serial Founders (vlg. Deutscher Startup Monitor 2018) Principles of Entrepreneurship/ JJ / Folie 32 © – Hochschule der Bayerischen Wirtschaft Roadmap – What´s coming? 1. What is Entrepreneurship 2. Disovering and Creating Business Opportunities 3. Developing Business Models 4. Business Planning 5. Legal Set Up, Partners and Investors 6. Market Entry and Positioning Resource Management and Growth Exit and Later Stage Principles of Entrepreneurship / JJ / Folie 33 © – Hochschule der Bayerischen Wirtschaft