Understanding Entrepreneurial Trends Section 1 Chapter 3 Recognizing Opportunity

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

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

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.

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.

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.

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.

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.

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.

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

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

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

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?

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.

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

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

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.

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

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?

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

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.

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

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.

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

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?

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?

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