1 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Chapter 2: Entrepreneurship Today

2 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Learning Objectives To realize there is no consensus concerning the definition of entrepreneur. Understand the decision to become an entrepreneur is influenced by an individual’s personality, the ethno- cultural environment, circumstances in society, and the interaction of these forces. To comprehend the many advantages and disadvantages of being an entrepreneur and, therefore, the decision to start a business must be weighted very carefully.

3 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ The Entrepreneurial Process The entrepreneurial process is common in the United States Each year, 1 of every 25 people is actively involved in trying to start a new business Many of these ventures start out as part-time businesses

4 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Entrepreneurial Activities New concept/new business Existing concept/new business Existing concept/existing business

5 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Factors of Entrepreneurship The individual Cultural factors Circumstances in society Combination of factors

6 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ The Individual Passion for the business Tenacity despite failure Confidence

7 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ The Individual (cont.) Self-determination Management of risk Seeing changes as opportunities

8 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ The Individual (cont.) Tolerance for ambiguity Initiative and need for achievement Detail orientated and perfectionism

9 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ The Individual (cont.) Perception of passing time Creativity Ability to see the big picture

10 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ The Individual (cont.) Motivating Factors To use personal skills and abilities To gain control over his/her life To build something for the family Because he/she liked the challenge To live how and where he/she chooses

11 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ The Individual (cont.) Self-Efficacy A person’s belief in his or her ability to perform a task Belief that success as an entrepreneur is possible

12 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Cultural Factors Some ethno-cultural groups have higher rates of entrepreneurship than do others Effect or culture and traits may be intertwined Cultural differences also affect the status of entrepreneurs

13 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Circumstances in Society Downsizing Immigrants Called “adaptive-response behavior”

14 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ The Entrepreneur and the Business Plan When writing a business plan, key information will include the entrepreneur’s: Education Work experience Entrepreneurial personality characteristics

15 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Advantages of Entrepreneurship Autonomy Challenge of a start-up Financial control

16 ENTREPRENEURSHIP, 4/e By Lambing and Kuehl PRENTICE HALL ©2007 by Pearson Education, Inc. Upper Saddle River, NJ Disadvantages of Entrepreneurship Personal sacrifices Burden of responsibility Little margin for error