Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 1-1

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 1-2 Chapter 1

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  In the U.S., entrepreneurs start more than 6.5 million businesses a year!  Global Entrepreneurship Monitor (GEM)  Approximately 13% of the U.S. population aged is actively involved in entrepreneurial activity  The global average is also 13% 1-3

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 1-4

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 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 1-5

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 1-6 Why Entrepreneurs Start Businesses

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Characteristics of Entrepreneurs:  Desire and willingness to take initiative  Preference for moderate risk  Confidence in their ability to succeed  Self-reliance  Perseverance  Desire for immediate feedback 1-7

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  More Characteristics of Entrepreneurs:  High level of energy  Competitiveness  Future orientation  Serial entrepreneurs  Skilled at organizing  Value of achievement over money 1-8

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Other Characteristics of Entrepreneurs:  High degree of commitment  Tolerance for ambiguity  Flexibility  Tenacity 1-9

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Conclusion?  Diversity seems to be a central characteristic of entrepreneurs  Anyone – regardless of age, race, gender, color, national origin, or any other characteristic – can become an entrepreneur (although not everyone should)  Entrepreneurship is a skill that is learned 1-10

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Creativity vs. Innovation  Creativity – the ability to develop new ideas and to discover new ways of looking at problems and opportunities  Innovation – the ability to apply creative solutions to problems and opportunities to enhance or to enrich people’s lives 1-11

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Monitor Trends and Exploit Them Early On  Independa  Travel – and Be Inspired  Eileen Fisher  Take A Different Approach To An Existing Market  I Do Now I Don’t  Put a New Twist on an Old Idea  Vitaband 1-12

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Look for Creative Ways to Use Existing Resources  Dig This  Realize That Others Have the Same Problem That You Do  MileWise  Take Time to Play  Flash Pals  Notice What Is Missing  Viking Range Corporation 1-13

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  The opportunity to:  Gain control over your own destiny  Make a difference  Social entrepreneurs  Reach your full potential  Reap impressive profits  Contribute to society and be recognized for your efforts  Do what you enjoy doing 1-14

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Uncertainty of income  Risk of losing your entire invested capital  Long hours and hard work  Lower quality of life until the business gets established  High levels of stress  Complete responsibility  Discouragement 1-15

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Entrepreneurs as heroes  Entrepreneurial education  Demographic and economic factors  Shift to a service economy  Technological advancements  Outsourcing  Independent lifestyles  E-Commerce, the Internet, and mobile computing  International opportunities 1-16

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Young entrepreneurs 1-17

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall New Entrepreneurs by Age Group

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Young entrepreneurs  Women entrepreneurs 1-19

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall Entrepreneurial Activity Index by Gender

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Young entrepreneurs  Women entrepreneurs  Minority enterprises 1-21

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall Percentage of New Entrepreneurs by Minority Group

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Young entrepreneurs  Women entrepreneurs  Minority enterprises  Immigrant entrepreneurs  Part-time entrepreneurs  Home-based business owners 1-23

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall Rules for a Successful Home-Based Business Rule 1. Do your homework. Rule 2. Find out what your zoning restrictions are. Rule 3. Create distinct zones for your family and business dealings. Rule 4. Focus your home-based business idea. Rule 5. Discuss your business rules with your family. Rule 6. Select an appropriate business name. Rule 7. Buy the right equipment. Rule 8. Dress appropriately. Rule 9. Learn to deal with distractions. Rule 10. Realize that your phone can be your best friend—or your worst enemy.

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall Rules for a Successful Home-Based Business Rule 11. Be firm with friends and neighbors. Rule 12. Maximize your productivity. Rule 13. Create no-work time zones. Rule 14. Take advantage of tax breaks. Rule 15. Make sure you have adequate insurance coverage. Rule 16. Understand the special circumstances under which you can hire outside employees. Rule 17. Be prepared if your business requires clients to come to your home. Rule 18. Get a post office box. Rule 19. Network. Rule 20. Be proud of your home-based business.

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Young entrepreneurs  Women entrepreneurs  Minority enterprises  Immigrant entrepreneurs  Part-time entrepreneurs  Home-based business owners  Family business owners  Family-owned business 1-26

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Copreneurs  Corporate castoffs  Corporate “dropouts”  Retired baby boomers 1-27

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall Entrepreneurial Activity by Age Group

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Small business: one that employs fewer than 100 people  Small businesses:  Comprise 99.7% of the 27.2 million businesses in the U.S.  Employ 49.2% of the nation’s private sector workforce  Pay 43% of the nation’s total private payroll  Create more jobs than big businesses 1-29

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall Small Businesses by Industry

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Small businesses:  Are leaders in offering training and advancement opportunities to workers  Provide 67% of workers with their first jobs  Produce 46% of the nation’s private GDP  Account for 47% of business sales  Play a key role in innovation:  Produce 16.5 times more patents per employee than large companies 1-31

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  About 52% of new companies fail within 5 years  Entrepreneurs are not paralyzed by the prospect of failure  Failure is a natural part of the creative process  Successful entrepreneurs learn to fail intelligently 1-32

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall Small Business Survival Rate

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Know your business in depth  Prepare a business plan  Manage financial resources  Understand financial statements  Learn to manage people effectively  Set your business apart from the competition  Maintain a positive attitude 1-34

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 1-35