Entrepreneurship Chapter Seven Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

7-2 Learning Objectives LO1 Describe why people become entrepreneurs and what it takes, personally. LO2 Summarize how to assess opportunities to start a new company. LO3 Identify common causes of success and failure. LO4 Discuss common management challenges. LO5 Explain how to increase your chances of success, including good business planning. LO6 Describe how managers of large companies can foster entrepreneurship.

7-3 Entrepreneurship  Entrepreneurship  The pursuit of lucrative opportunities by enterprising individuals.  Discovering, evaluating, and capitalizing on opportunities to create new and future goods and services.

7-4 Entrepreneurship  Entrepreneurial venture  A new business having growth and high profitability as primary objectives.

7-5 Entrepreneurship  Entrepreneur  Individuals who establish a new organization without the benefit of corporate sponsorship.  Intrapreneurs  New-venture creators working inside big companies.

7-6 The Idea  A great product, a viable market, and good timing are essential ingredients in any recipe for success.

7-7 What Business Should You Start?  Franchising  An entrepreneurial alliance between a franchisor (an innovator who has created at least one successful store and wants to grow) and a franchisee (a partner who manages a new store of the same type in a new location).

7-8 Examples of Social Entrepreneurship Companies Table 7.3

7-9 Success and Failure  Anticipate risk  Consider the role of the economic environment  Utilize business incubators  Realize there are common management challenges  Going public with an initial public offering (IPO)

7-10 Biggest Start-Up Mistake

7-11 Planning  Business plan  A formal planning step that focuses on the entire venture and describes all the elements involved in starting it.

7-12 Nonfinancial Resources  Legitimacy  People’s judgment of a company’s acceptance, appropriateness, and desirability, generally stemming from company goals and methods that are consistent with societal values.

7-13 Nonfinancial Resources  Social capital  A competitive advantage in the form of relationships with other people and the image other people have of you.

7-14 Building Intrapreneurship  Skunkworks  A project team designated to produce a new, innovative product.

7-15 Building Intrapreneurship  Bootlegging  Informal work on projects, other than those officially assigned, of employees’ own choosing and initiative.