1. Entrepreneurs: The Powerful Economic Force CHAPTER 1 BENTR2101 FUNDAMENTAL OF ENTREPRENUERSHIP

2. BENTR2101Fundamental of Entrepreneurship2 Objectives At the end of the lecture students should be able to:- –Define the role of the entrepreneur in the U.S. economy. –Describe the entrepreneurial profile. –Describe the benefits of owning a small business. –Describe the potential drawbacks of owning a small business. –Explain the forces that are driving the growth in entrepreneurship.

3. BENTR2101Fundamental of Entrepreneurship3 –Discuss the role of diversity in small business and entrepreneurship. –Describe the contributions small businesses make to the U. S. economy. –Explain the reasons small businesses fail. –Put business failure into the proper perspective. –Explain how small business owners can avoid the major pitfalls of running a business.

4. BENTR2101Fundamental of Entrepreneurship4 Topics covered Introduction To Entrepreneurship Characteristic Of Successful Entrepreneur The Cultural Diversity Of Entrepreneurship Eleven Deadly Mistakes of Entrepreneurship

5. BENTR2101Fundamental of Entrepreneurship5 The World of the Entrepreneur In the U.S., entrepreneurs start nearly 6 million businesses a year! Global Entrepreneurship Monitor (GEM) –Approximately 10.5% of U.S. population is actively involved in trying to start a new business. –Approximately 12% of people in 37 GEM countries studied are involved in starting a new business.

6. BENTR2101Fundamental of Entrepreneurship6 Source: 2002 Global Entrepreneurship Monitor.

7. BENTR2101Fundamental of Entrepreneurship7 What is an Entrepreneur? One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them.

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9. BENTR2101Fundamental of Entrepreneurship9 Characteristics of Entrepreneurs Desire to take initiative Preference for moderate risk Confidence in their ability to succeed Self-reliance Perseverance Desire for immediate feedback

10. BENTR2101Fundamental of Entrepreneurship10 Characteristics of Entrepreneurs High level of energy Competitiveness Future orientation –Serial entrepreneurs Skilled at organizing Value achievement over money

11. BENTR2101Fundamental of Entrepreneurship11 Entrepreneurship One characteristic of entrepreneurs stands out: Diversity! Anyone – regardless of age, race, gender, color, national origin, or any other characteristic – can become an entrepreneur (although not everyone should).

12. BENTR2101Fundamental of Entrepreneurship12 Benefits of Small Business Ownership The opportunity to: Create your own destiny Make a difference Reach your full potential Reap impressive profits Contribute to society and to be recognized for your efforts Do what you enjoy and to have fun at it

13. BENTR2101Fundamental of Entrepreneurship13 Drawbacks of Small Business Ownership Uncertainty of income Risk of losing your entire investment Long hours and hard work

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15. BENTR2101Fundamental of Entrepreneurship15 Drawbacks of Small Business Ownership Uncertainty of income Risk of losing your entire investment Long hours and hard work Lower quality of life until the business gets established Lower quality of life until the business gets established

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17. BENTR2101Fundamental of Entrepreneurship17 Drawbacks of Small Business Ownership Uncertainty of income Risk of losing your entire investment Long hours and hard work Lower quality of life until the business gets established High levels of stress High levels of stress Complete responsibility Complete responsibility Discouragement Discouragement

18. BENTR2101Fundamental of Entrepreneurship18 Feeding the Entrepreneurial Fire Entrepreneurs as heroes Entrepreneurial education Demographic and economic factors Shift to a service economy Technological advancements Independent lifestyles E-Commerce and the World Wide Web

19. BENTR2101Fundamental of Entrepreneurship19 Feeding the Entrepreneurial Fire Entrepreneurs as heroes Entrepreneurial education Demographic and economic factors Shift to a service economy Technological advancements Independent lifestyles E-Commerce and the World Wide Web International opportunities International opportunities

20. BENTR2101Fundamental of Entrepreneurship20 The Cultural Diversity of Entrepreneurship Young entrepreneurs

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22. BENTR2101Fundamental of Entrepreneurship22 The Cultural Diversity of Entrepreneurship Young entrepreneurs Women entrepreneurs

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24. BENTR2101Fundamental of Entrepreneurship24 The Cultural Diversity of Entrepreneurship Young entrepreneurs Women entrepreneurs Minority-owned enterprises Immigrant entrepreneurs Part-time entrepreneurs

25. BENTR2101Fundamental of Entrepreneurship25 The Cultural Diversity of Entrepreneurship Home-based business owners Family business owners Copreneurs Corporate castoffs Corporate dropouts

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27. BENTR2101Fundamental of Entrepreneurship27 Small Businesses... Make up 98.5% of all the businesses in the U.S. Employ 52% of the nation’s private sector workforce. Pay 45 % of total private payroll. Create more jobs than big businesses. Are leaders in offering training and advancement opportunities to workers.

28. BENTR2101Fundamental of Entrepreneurship28 Produce 51% of the nation’s private GDP. Account for 47% of business sales. Create 4X more innovations per R & D dollar spent than medium-sized firms and 24X as many as large companies. –Create two-thirds of all new inventions. –Produce 13X to 14X more patents per employees than large companies. Small Businesses...

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30. BENTR2101Fundamental of Entrepreneurship30 Eleven Deadly Mistakes of Entrepreneurship 1.Management incompetence 2.Lack of experience 3.Forcing a flawed idea 4.Undercapitalization 5.Poor cash management 6.Failure to develop a strategic plan

31. BENTR2101Fundamental of Entrepreneurship31 Eleven Deadly Mistakes of Entrepreneurship 7.Weak marketing effort 8.Uncontrolled growth 9.Poor location 10.Lack of inventory control 11.Inability to make the “entrepreneurial transition”

32. BENTR2101Fundamental of Entrepreneurship32 Putting Failure Into Perspective Entrepreneurs are not paralyzed by the prospect of failure. Failure – a natural part of the creative process. Successful entrepreneurs learn to fail intelligently.

33. BENTR2101Fundamental of Entrepreneurship33 Avoiding the Pitfalls of Small Business Failure Know your business in depth Prepare a solid business plan Manage financial resources Understand financial statements

34. BENTR2101Fundamental of Entrepreneurship34 Avoiding the Pitfalls of Small Business Failure Learn to manage people effectively Set your business apart from the competition Keep in tune with yourself