1. Management: Principles10
Management: Principles
and Practices
Griffin
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2. The Nature of Entrepreneurship
The process of planning, organizing, operating, and assuming the risk of a business.
Entrepreneur
Someone who engages in entrepreneurship.
Small Business
A business that is privately owned by one individual or a small group of individuals; it has sales and assets that are not large enough to influence its environment.
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3. The Role of Entrepreneurship in Society
Research Findings:
Most new businesses fail, those that survive often do so because the entrepreneur works for little income.
More than 98% of U.S. businesses have fewer than 100 employees.
Most U.S. workers work for small businesses.
The majority of small businesses are owner operated.
Small business is a strong presence in both mature and emerging economies
Small businesses have a strong effect on job creation, innovation, and are important to big businesses.
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4. Entrepreneurship’s Role in Society
Small Businesses’ Role in Job Creation
Create many of the new jobs in the U.S.
Dominate sectors that have added the most jobs.
Represent 92% of all U.S. exporters.
Innovation
Major innovations are as likely to come from small businesses as from large firms.
Much of what is created in the high-technology sectors comes from start-up companies.
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5. Entrepreneurship’s Role in Society (cont’d)
Importance to Large Businesses
Most products made by large manufacturers are sold to customers by small businesses.
Small businesses as suppliers provide large firms with essential services, supplies, and raw materials.
Large businesses outsource many routine business operations such as packaging, delivery, and distribution to small businesses.
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6. Strategy for Entrepreneurial Organizations
Emphasizing distinctive competencies
Gaining first mover advantage
Choosing an industry in which to compete
Basic Strategic Challenges
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7. Writing a Business Plan
is a document that summarizes the business strategy and structure. It should include:
business goals and objectives.
strategies used to achieve these goals and objectives.
a plan of how the entrepreneur will implement these strategies.
Entrepreneurship and International Management
Expansion and growth potential in foreign markets.
Entering a foreign country’s market can be an important catalyst for success.
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8. Entrepreneurial Organization Structure
Starting the New Business
Buying an Existing Business
Business has a proven ability to draw customers and make a profit (the business is a going concern).
Networks (e.g., customers and suppliers) are established.
Negative: New owners inherit any existing problems.
Starting from Scratch
Avoids problems associated with previous owners.
Freedom to choose suppliers, equipment, location, and workers.
Negative: More business risk and uncertainty.
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9. Getting into the Game Identifying a Genuine Business Opportunity
Where are they?
Who are my customers?
At what price will they buy my product?
In what quantities will they buy?
How will my product differ from those of my competitors?
Who are my competitors?
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10. Financing the New Business
Venture Capital Companies
Small-Business Investment Companies
SBA Financial Programs
Sources of New Business Financing
Personal Resources
Strategic Alliances
Lenders
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11. Seeking New Business Advice
Advisory Boards
Management Consultants
Small Business Administration
Networking with Others
Sources of Management Advice
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12. Franchising The Franchising Agreement
Governs the operation of a franchise business by the entrepreneur (the franchisee) under a license by a parent company (the franchiser).
The entrepreneur pays the parent company for use of trademarks, products, formulas, and business plans.
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13. The Performance of Entrepreneurial Organizations
The emergence of E-commerce
Crossovers to small business by former large-business employees
Trends in New Business Start-Ups
Increased entrepreneurial opportunities for minorities and women
Better survival rates for small businesses
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14. Success in Entrepreneurial Organizations
Reasons for Success
Hard work, drive, and dedication by the entrepreneur.
Careful analysis of market conditions provides insights about business conditions
Managerial competence through training and experience contributes to success.
Luck sometimes plays a role.
Reasons for Failure
Managerial incompetence/ inexperience of the entrepreneur.
Neglect in not devoting sufficient time and effort to the business.
Weak control systems that do not warn of impending problems.
Insufficient capital to sustain the business until it starts to turn a profit.
© 2010 South-Western, Cengage Learning, Inc. All rights reserved.

15. Key Terms entrepreneurship entrepreneur small business
established market
niche
first-mover advantage
business plan
venture capital company
franchisee
franchisor
franchising agreement
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