PowerPoint Presentation Section 1.2 Pages 12-15

1.2 The Entrepreneurial Process What you’ll learn The process of entrepreneurship The components of a new venture organization How businesses succeed

1.2 The Entrepreneurial Process Why it’s important Understanding the entrepreneurial process will help you build a more effective business that creates value.

1.2 The Entrepreneurial Process Why it’s important Learning the facts about business success and failure will help you make wiser business decisions.

1.2 The Entrepreneurial Process Key Terms environment enterprise zones opportunity start-up resources new venture

1.2 The Entrepreneurial Process Key Terms (Cont.) business failure discontinuance

1.2 The Entrepreneurial Process I. ENTREPRENEURIAL START-UP The entrepreneurial start-up process includes five key components. A. The entrepreneur

1.2 The Entrepreneurial Process B. The environment C. The opportunity D. Start-up resources E. The new venture organization

1.2 The Entrepreneurial Process II. THE ENTREPRENEUR A. The entrepreneur pulls together the different components involved in creating a new business.

1.2 The Entrepreneurial Process B. The entrepreneur brings to the business all the behaviors and experience from his or her life to that point.

1.2 The Entrepreneurial Process III. THE ENVIRONMENT A. The business environment refers to the variables affecting it that are not controlled by the entrepreneur.

1.2 The Entrepreneurial Process B. There are four general categories of environmental variables affecting a new venture. 1. The nature of the environment (uncertain, fast-changing, stable, highly competitive etc.)

1.2 The Entrepreneurial Process 2. The availability of resources 3. Ways to realize value (favorable taxes, good markets, supportive government policies) 4. Incentives to create new businesses, such as enterprise zones

1.2 The Entrepreneurial Process Enterprise zones - Specially designated area of a community that provide tax benefits to new businesses locating there and grants for new product development.

1.2 The Entrepreneurial Process Springboard Analyze the current business environment. ? Answers will vary. Make sure students understand that entrepreneurs have no control over these variables.

1.2 The Entrepreneurial Process IV. THE OPPORTUNITY A. An opportunity is an idea that has commercial value. B. New businesses are founded on recognized opportunities in the environment.

1.2 The Entrepreneurial Process V. START-UP RESOURCES A. The start-up resources an entrepreneur needs to start a business include the following. 1. Capital

1.2 The Entrepreneurial Process 2. Skilled labor 3. Management expertise 4. Legal and financial advice 5. A facility 6. Equipment 7. Customers

1.2 The Entrepreneurial Process B. The most important start-up resource is customers.

1.2 The Entrepreneurial Process VI. THE NEW VENTURE ORGANIZATION A. The new venture organization is the shell that surrounds all the parts of a new business.

1.2 The Entrepreneurial Process B. The parts of a new business include the following. 1. Products 2. Processes 3. Services

1.2 The Entrepreneurial Process C. Entrepreneurs are able to create value for a business through new venture organization.

1.2 The Entrepreneurial Process VII. HOW BUSINESSES SUCCEED A. The myth that most new businesses fail is not true.

1.2 The Entrepreneurial Process B. A recent study done by Dun & Bradstreet found that more businesses succeed than fail.

1.2 The Entrepreneurial Process C. The problem with most reports on business failure is that they don’t define failure properly.

1.2 The Entrepreneurial Process VIII. WHAT IS BUSINESS FAILURE? A. A business failure is a business that files Chapter 7 bankruptcy or loses money for creditors and their investors.

1.2 The Entrepreneurial Process B. Businesses that disappear from public lists are not always failures. C. Some businesses that disappear from public lists are discontinuances.

1.2 The Entrepreneurial Process D. A discontinuance is a businesses that is either operating under a new name or has been purposely discontinued to start a new one.

1.2 The Entrepreneurial Process Discussion Starter Name a business in the community that is considered a discontinuance--not a failure. ? Answers will vary, but may include businesses that change names, ownership, or locations. Make sure students understand the difference.

1.2 The Entrepreneurial Process E. Discontinuances are not failures because they are planned and cause no harm to creditors.

1.2 The Entrepreneurial Process F. Failure is also sometimes mistakenly reported when an owner changes the legal status of a business.

1.2 The Entrepreneurial Process IX. HOW CAN ENTREPRENEURS SUCCEED? A. The chances of a new business succeeding are good with effective planning.

1.2 The Entrepreneurial Process B. The number–one cause of business failure is poor management.

1.2 The Entrepreneurial Process C. Entrepreneurs can improve their chances of success. 1. Learn how to build a new business 2. Assemble a team that has the expertise they need

1.2 The Entrepreneurial Process End of Section 1.2