1. Understanding Entrepreneurial Trends Section 1
Chapter 3 Recognizing Opportunity

2. Current Entrepreneurial Trends
Internet Businesses
Online Business: A business that conducts business by means of the internet.
Small businesses that have used the internet have grown 46% faster than those that do not.
Service Businesses
Dominate the American economy
Services: Tangible things that businesses do for us that enhance our lives.
Insurance, Sports and Entertainment, Tourism, Accounting, Banking

3. Current Entrepreneurial Trends
Home Based Businesses
Over 40 Million businesses being conducted from home
Tradespeople, Graphic Artists, Sales Reps, Web Designers
Socially Responsible Nonprofit Businesses
Started to better society
Often nonprofits
Community theater, feeding the hungry, educational

4. Current Entrepreneurial Trends
Focus on Technology
Can create a strong competitive advantage
Increases productivity
Can be a company’s product
Strategic Alliances
Strategic Alliance: Forming a partnership with another company.
3M and Tape dispenser companies.

5. Current Entrepreneurial Trends
Outsourcing
Contracting with other companies for services.
Allows a business to focus on what it does best.
Decreases overhead
Allow companies to start new projects more quickly
Direct capital into money making activities.
Most common is business processing such as accounting, human resources, and payroll.

6. Current Entrepreneurial Trends
Corporate Ventures
Corporate Venture: A new venture started inside a large corporation.
Starting a small company as a spinoff to act more like entrepreneurs.
Parent company supplies the resources to get the corporate venture off the ground.
The corporate venture can be more flexible.
Eventually can become its own company.

7. Learning to Recognize Opportunity
Creativity and Innovation
Innovation: Finding new ways to do things.
You can LEARN how to be creative
Connection: Bringing two things together that are not usually connected.
Discovery
Invention
Application: Going beyond the original invention to other uses.

8. Idea Vs. Opportunity You generate ideas by thinking creatively.
Opportunities are ideas that have commercial potential.
Entrepreneurs are alert to unmet consumer needs, and unique unfilled market niches.
Niche: A small specialized market.

9. Finding Opportunities by Understanding Industries
Industry: A grouping of businesses with a common purpose.
Changes in industries create profitable niches for new businesses to fill.
New products or services create complementary types of businesses.

10. Thinking Creatively About Opportunity
Practice Brainstorming
Brainstorming: Thinking freely to create new ideas.
Look at ordinary items in new ways
Find creative solutions to new problems
Connect unrelated items

11. Improve Your Creativity
Believe in Yourself
Use nonlogical thinking
Free your mind
View problems as challenges
Entertain all ideas
Relax
Have a playful attitude
Look at failure as a learning experience
Model creative behavior
Develop listening skills

12. Creative Sources of Ideas
Observe the World around you
Observe people at the mall or in office buildings, or out to lunch
Be An Avid Reader
Watch for Demographic Changes
Demographics: Personal characteristics that describe a population.
Diversity

13. Creative Sources of Ideas - Consider Your Own Experiences
Interests
Top 5 interests
One product or service you use with your interests
One problem associated with each product or service
Hobbies
Work
Any gaps in your company’s network of suppliers?
Are they in need of any services that aren’t being provided?
Has technology created new opportunities?

14. Creative Sources of Ideas - Consult Outside Sources
Trade Magazines: A periodical published for specific types of businesses or industries.
Contains articles on new products, services or business concepts
Specialty Magazines: A Periodical that targets people with special interests in sports, camping, fashion, and a variety of other areas.
Trade Show and Exhibitions
Trade Show: Vendors and manufacturers introduce new items and promote established products and services.
Good source of spinoff ideas.

15. Creative Sources of Ideas - Consult Outside Sources
Newspapers
Business sections that report on trends and innovations.
The Internet
Small Business Administration
Government Agencies
U.S. Patent Office
Official Gazette: Lists each patent granted and lists all patents available for license or sale.

16. Starting Vs. Buying a Business Section 2
Chapter 3 Recognizing Opportunity

17. Generate 3-5 possible opportunities.
Include rationale including trends and topics from 3-1.
*Be aware that you will be using ONE of these throughout the semester by developing a business plan.

18. Personal Values and Goals
Values: Define who you are, shape your attitudes and your choices, and help you identify your priorities.
Choose Ten Values that matter most to you from this slide.
Adventure Balance Courage
Commitment Compassion Creativity
Competition Fairness Fun
Generosity Hard Work Health
Honesty Independence Integrity
Kindness Knowledge Learning
Power Recognition Security
Relationships Responsibility Solitude
Spirituality Tolerance Loyalty

19. Entering the Family Business
Rewards and Challenges of a Family Business
Only 1/3 of them survive the second generation
Trust and togetherness
Need to establish clears lines of communication
Questions to Ask Yourself
Do I have the ability to work for a member of my family?
Do we share the same goals for the business?
Do we share the same general personal goals?
Can we maintain a positive family relationship?
Can I leave the business problems at work when I go home each night?

20. Buying an Existing Business
Less risky than starting a new business
Customer Base
Goodwill: The favor and loyalty a business acquires by its good reputation.
Established procedures
Substantial Inventory
Trade Credit
Former owner may offer expertise

21. Buying A Franchise
Franchise: A legal agreement to begin a new business in the name of a recognized company.
Franchisee: The buyer of a franchise who is given the right to its product, process, or service. The buyer receives the way of operating a business and a product with name recognition.
Franchisor: The seller of a franchise who is giving the buyer its planning and management expertise.

22. Buying a Franchise Benefit of national advertising
You may be trained in methods of operation
Franchisor can limit how you run the business.
Investigate Market Saturation
Best locations may have already been sold

23. Evaluating a Business Opportunity
Investigate the company and industry carefully
Hire an accountant to verify the value of the business’s inventory, accounts receivable, and assets.
Hire an attorney to advise you and to investigate the business for any legal liabilities.

24. Where to Find a Business
Newspaper
Network
Business Broker: Someone whose job is to bring buyers and sellers together.

25. Questions to Ask Before You Buy a Business
Is the business interesting to me and others?
Why is the owner selling?
What is the business’s potential for growth?

26. Starting Your Own Business Questions to Ask
Do I have the motivation to start from nothing?
Does the business align with my personality, abilities, values, and goals?
Do I have sufficient knowledge of basic operations to undertake the business?
Do I have the necessary managerial ability?
Do I have the right partners to help me with the business?
Do I have enough financial resources to start from scratch?
Am I willing to accept the risk?

27. Starting Your Own Business What You Must Do
Determine that your venture is feasible by testing your concept in the market.
Decide whether you want a traditional business with a physical location or an online business or a combination of both.
Prepare a business plan.
Secure professional advisors
Purchase equipment
Hire employees
Initiate relationships with suppliers
Set up distribution channels
Create awareness for the business