The Entrepreneurial Life

Part 1 Entrepreneurship: A World of Opportunity

PowerPoint Presentation by Charlie Cook The University of West Alabama
Copyright 2006 Thomson Business & Professional Publishing. All rights reserved.

Entrepreneurial Opportunities
Entrepreneurial Opportunity
A value-creating innovation with market potential A desirable and timely innovation that creates value for interested buyers and end users

Success stories
Auntie Annes Souto Brothers Turf Mgt. Inc Mobile Flower Shop Exotic Yarns Co. Gourmet Tomatoes LLC

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Who Are Entrepreneurs?

Entrepreneurs are:
People who start and/or operate a business. Individuals who discover market needs and launch new firms to meet those needs. Risk takers who provide an impetus for change, innovation, and progress. All active owner-managers (founders and/or managers of small businesses).

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The Independent Entrepreneur

Source: John L. Hart FLP, and Creators Syndicate, Inc.

Exhibit 1.1
16

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The Contributions of Small Business

Small Businesses:
Represent more than 99.7 percent of all employers. Employ more than half of all private-sector employees. Pay 44.5 percent of total U.S. private payrolls.

Generate 60 to 80 percent of net new jobs annually.

Produce 13 to 14 times more patents per employee than do large patenting firms.

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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

4 Routes To Entrepreneurship -Buy a Business --Start a New Business _ Franchised Business _ Entering a Family Business

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Entrepreneurial Incentives

Main Drawback is business failure

Exhibit 1.3
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Why People Become Entrepreneurs

Reluctant Entrepreneur
A person who becomes an entrepreneur as a result of some severe hardship

Refugee
A person who becomes an entrepreneur to escape an undesirable situation

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Artisan Entrepreneurs
Artisan Entrepreneur
A person with primarily technical skills and little business knowledge who starts a business

Characteristics
Technical training Paternalistic approach Reluctance to delegate Narrow view of strategy Personal sales effort Short planning horizon Simple record keeping
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Opportunistic Entrepreneurs
Opportunistic Entrepreneur
A person with both sophisticated managerial skills and technical knowledge who starts a business

Characteristics
Broad-based education 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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Women Entrepreneurs
More Women Entrepreneurs
Represent 38% of entrepreneurs in U.S. Revenues at female-owned firms have grown 33% from 1976 to 2000. Women are moving into nontraditional industries.

Problems Facing Female Entrepreneurs

Newness of entrepreneurial role Lack of access to credit Lack of networking connections Discrimination
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Competitive Advantages of Entrepreneurial Firms

Customer Focus
Firms lack bureaucracy.

Innovation
Small firms are the leading source of innovation.

Quality Performance
Quality is not limited to large firms.

Special Niche
Providing uniquely specialized services can be a powerful competitive advantage.

Integrity and Responsibility

A solid reputation builds loyal customers.

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Age and Entrepreneurial Opportunity

Early Career Concerns

Late Career Concerns

1. Getting an education
2. Gaining work experience 3. Acquiring financial resources

1. Fulfilling family responsibilities

2. Attaining seniority in employment 3. Earning investment in a retirement program 25 Age 35 45

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Taking the Plunge

Precipitating Event
An event, such as losing a job, that moves an individual to become an entrepreneur

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Living the Entrepreneurial Life

Entrepreneurial Legacy
The tangible items and intangible qualities are passed on not only to heirs but also to the broader society.
Evaluating accomplishments The disappointments in winning the wrong game

Crafting a Worthy Legacy

The nature of the entrepreneurial endeavor reflects personal goals and values.

Beginning with the End in Mind

Proper values and actions lead to a good exit.

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