Download - Chapter 6:Fostering Entrepreneurship
Chapter 6: PowerPoint 6.18 (Adapted from Table 6.1)
Fostering Ent
repr
eneu
rshi
p
Chapter 6: Fostering Entrepreneurship
MANAGING: A COMPETENCY BASED APPROACH
11th Edition
Prepared by
Argie ButlerTexas A&M University
Don Hellriegel
John W. Slocum, Jr.
Susan E. Jackson
Chapter 6: PowerPoint 6.1
Fostering Ent
repr
eneu
rshi
p
Learning Goals
1. Explain the nature of entrepreneurship and the impact the environment has on it
2. Describe the competencies that contribute to entrepreneurs’ success
3. Outline the planning essentials for potential entrepreneurs
4. Describe the basic essentials of corporate entrepreneurship
Chapter 6: PowerPoint 6.2
Fostering Ent
repr
eneu
rshi
p
What is Entrepreneurship?
Common Components of Entrepreneurship
Entrepreneurship: Its Meaningand Scope
The creation of an innovative
organization for the purpose of economic gain
or growth under
conditions of risk or
uncertainty
Somethingnew
Somethingbetter
New deliverysystem or
distribution channel
Entering an underserved or
new market
Chapter 6: PowerPoint 6.3
Fostering Ent
repr
eneu
rshi
pHow Does the Environment Affect
Entrepreneurship?
Open and free markets Deregulation Political climate Economic and technological conditions Support system
Availability of capital and loans Tax rates and policies Support services: SBA, SBDCs, venture capital
firms, chambers of commerce, etc.
Chapter 6: PowerPoint 6.4
Fostering Ent
repr
eneu
rshi
p
How Does the Environment Affect Entrepreneurship?
Business incubation: a business support process that accelerates the successful development of start-up and fledging companies by providing entrepreneurs with an array of targeted resources and services
Common features in business incubators Management and technical guidance Networking Rental space/flexible leases Shared business services and equipment Psychological and moral supportAssistance in obtaining financing
Chapter 6: PowerPoint 6.5
Fostering Ent
repr
eneu
rshi
p
Small business—one that is independently owned and operated and which is not dominant in its field of operation
Small business firm may be entrepreneurial, depending upon its initiatives
SBA defines size by number of employees or dollars of sales, depending upon industry
Chapter 6: PowerPoint 6.6
Fostering Ent
repr
eneu
rshi
p
Family business: one owned and managed mostly by people who are related by blood and/or marriage
May or may not be entrepreneurial
30% of family businesses survive to the second generation, 12% to the third generation, and 3% to the fourth and beyond
Are Family Businesses Entrepreneurial Firms?
Chapter 6: PowerPoint 6.7 (Figure 6.1)
Fostering Ent
repr
eneu
rshi
p
Self management
Need forachievement
Desire forindependence
Self confidenceSelf sacrifice
Successfulentrepreneurs
Planningand
administration
Multicultural
TeamworkStrategicaction
Communication
Specialized Knowledge
Varies by type ofbusiness launched
Chapter 6: PowerPoint 6.8
Fostering Ent
repr
eneu
rshi
p Importance of Self-Confidence
and Optimism
I think its’ important to see this clear path and not be discouraged when people throw stones at it, because they will. You will have to be willing to see the path, believe in it, and have the stamina and persistence to stick with it. You have to stand your ground and have confidence.
Denise DivineFounder of Devine Foods
Chapter 6: PowerPoint 6.9
Fostering Ent
repr
eneu
rshi
p
Delivering products and services that are perceived as high quality and that are seen
by its customers or clientsas adding value
Developing or improving products and services on a
regular basis
Generating new customers or clients that expand
revenue
Focusing marketing expenditures and
developing customer-oriented employees
Maintaining financial control of the firm
Establishing a strong commitment to ethical
practices
Chapter 6: PowerPoint 6.10
Fostering Ent
repr
eneu
rshi
p
Planning and AdministrationCompetency: Snapshot
Do your homework prior to starting the business.Make sure the market truly needs your service or product.
Finally, make sure you can differentiate your service or product from the competition in a way that is beneficial to the customer. Stay focused on your goals, but be flexible enough to modify your business plan to match what the market is truly asking for. As evidenced of why this is important: 75 percent
of my firm’s revenue today is from services we didnot offer in my original business plan.
Daniel DriesengaFounder and CEO
Driesenga & Associates
Chapter 6: PowerPoint 6.11
Fostering Ent
repr
eneu
rshi
p Communication
Competency
Successful entrepreneurs score higher than 82 percent of the population on their ability to express support and encouragement
Successful entrepreneurs succeed by helping other people—their employees, partners, investors, suppliers—become successful themselves
Chapter 6: PowerPoint 6.12
Fostering Ent
repr
eneu
rshi
p
Planning Essentials for Entrepreneurs
Describes the basic idea that is the foundation for the start-up and outlines how that idea can be turned into reality
“Someone once said: If you don’t know where you’re going, any road will take you there. You need to know exactly where you want to go, what route you’re going to take, when you will arrive and what you are to do upon arrival—no guesswork at all. You need to determine whether there is a demand for your service and, if so, what constitutes your market.”
Don DoggettManagement Counselor
Counselors to America’s Small Business
Business Plan Snapshot
Chapter 6: PowerPoint 6.13 (Adapted from Table 6.1)
Fostering Ent
repr
eneu
rshi
p Business Plan: Essential
Components
(continued)
I. Executive Summary What, how, why, where, and when must be
summarized
II. Business Description Component The name of the business The potential and uniqueness of the new venture
Chapter 6: PowerPoint 6.14 (Adapted from Table 6.1)
Fostering Ent
repr
eneu
rshi
p Business Plan: Essential
Components (cont’d)
III. Marketing Component Convince investors that sales projections
and competition can be met Identify target market, market position,
market share, pricing strategy Evaluate all competition and state why and
how you will be better than your competitors Identify advertising plans with cost estimates
Chapter 6: PowerPoint 6.15 (Adapted from Table 6.1)
Fostering Ent
repr
eneu
rshi
p Business Plan: Essential
Components (cont’d)
IV. Location Component Describe the advantages of your location
(zoning, tax laws, wage rates); list the production needs in terms of facilities (plant, storage, office space) and equipment (machinery, furnishings, supplies)
Indicate proximity to your suppliers
Chapter 6: PowerPoint 6.16 (Adapted from Table 6.1)
Fostering Ent
repr
eneu
rshi
p Business Plan: Essential
Components (cont’d)
V. Management Component Supply résumés of all key people in the
management of your venture Describe the legal structure of your venture (sole
proprietorship, partnership, or corporation) Give information on how and how much everyone
is to be compensated
Chapter 6: PowerPoint 6.17 (Adapted from Table 6.1)
Fostering Ent
repr
eneu
rshi
p
Business Plan: EssentialComponents (cont’d)
VI. Financial Component Describe the needed sources for your
funds and the uses you intend for the money
Develop an estimated budget, cash flow statement, and profit and loss statement
Create stages of financing for purposes of allowing evaluation by investors at various points
Chapter 6: PowerPoint 6.18 (Adapted from Table 6.1)
Fostering Ent
repr
eneu
rshi
p Business Plan: Essential
Components (cont’d)
VII. Potential Critical-Risks Component Any potentially unfavorable industry-wide
trends, such as price cutting by competitors Design or manufacturing costs in excess of
estimates Sales projections not achieved Product development schedule not met Provide some alternative courses of action
Chapter 6: PowerPoint 6.19 (Adapted from Table 6.1)
Fostering Ent
repr
eneu
rshi
p Business Plan: Essential
Components (cont’d)
VIII. Milestone Schedule Component Develop a timetable or chart to
demonstrate when each phase of the venture is to be completed
IX. Appendix or Bibliography
Chapter 6: PowerPoint 6.20
Fostering Ent
repr
eneu
rshi
p
Other options
Franchise strategy
Buy Strategy Start-up strategy
How to Start the Business
Chapter 6: PowerPoint 6.21
Fostering Ent
repr
eneu
rshi
pPrinciple of Affordable Loss
The conscious determination of the amount of resources (money, time, and effort) entrepreneurs are willing to commit to an idea, which, in turn, influences the choice of strategies and methods needed to generate early revenues
Addresses tension between excessive analysis and quick action
Chapter 6: PowerPoint 6.22
Fostering Ent
repr
eneu
rshi
pFinding Funds
Entrepreneur,family,friends
Venture capitalist Business angel
Businessincubators,government
agencies (SBA)
Private sectorfinancial
institutions
Chapter 6: PowerPoint 6.23 (Adapted from Figure 6.2)
Fostering Ent
repr
eneu
rshi
p
Factors That Favor a Global Start-up
GlobalStart-Up
ForeignFinancingis Better
HumanResources Are
Dispersed AmongCountries
TargetCustomersRequire an
InternationalPresence
ForeignCompetition WillQuickly Enter the
Market
DomesticMarket is Too
Small to SupportExpenses
DomesticInertia Could Impede Later
Efforts toInternationalize
Chapter 6: PowerPoint 6.24 (Figure 6.3)
Fostering Ent
repr
eneu
rshi
pRecommendations to Ensure a
Successful Family Business
Commitment toResolving Conflicts
Quickly
Clear Job ResponsibilitiesAnd Authority Relationships
Explicit Hiring CriteriaFor Family Members
Plan for ManagementTransitions
Use of OutsideAdvisors/Directors
Chapter 6: PowerPoint 6.25
Fostering Ent
repr
eneu
rshi
p
Corporate Entrepreneurship
What is Corporate Entrepreneurship?
The development, promotion, and implementation of innovation initiatives in established firms for the purpose of generating growth and, thus, profits under risky or uncertain conditions
Essential for the survival of firms
Who Is a Corporate Entrepreneur?
Someone in an organization who champions turning new ideas into profitable realities
Chapter 6: PowerPoint 6.26
Fostering Ent
repr
eneu
rshi
pHow is Corporate Entrepreneurship
Fostered?
Incentivesand rewards
for risk taking
Commitment from senior management
Flexible organization design
Autonomy of the venture team
Appropriatelydesigned control
system
Competent and talented people who
exhibit entrepreneurialbehaviors and attitudes