1. The Entrepreneurial Process
Chapter 1
Section 2

2. The History of Entrepreneurship
Entrepreneurship became a popular topic in the 1980’s
Small businesses were the norm
Basic needs were supplied
Industrial Revolution brought about the growth of large companies in steel, railroads, and manufacturing.
1960’s
no international competition
Job security, workers spent entire life with one company

3. The History of Entrepreneurship
High inflation, produced high prices and higher-than-normal interest rates
Competition from countries with lower labor costs.
Introduction of the microprocessor and the personal computer brought the world into the Information Age
Whole categories of products become obsolete

4. The History of Entrepreneurship
Known as the “Decade of Entrepreneurship”
Large companies were suffering
New smaller companies were responding to the market change
Outsourcing Increased, more Service companies emerged
Mid 1990’s Internet
Changed the way businesses operated
New entrepreneurial ventures
Do business anywhere & reach customers in cost effective and efficient ways anywhere in the world

5. The Entrepreneurial Start-Up Process
Includes Five key components
Entrepreneur
Driving force
Recognizes opportunity
Pulls together the resources to exploit the opportunity
Creates a company to execute the opportunity in the marketplace
Adds all life experiences and expertise
Sees the venture through from idea to market

6. The Entrepreneurial Start-Up Process
The Environment
Includes variables that affect the venture but are not controlled by entrepreneur
Four variables affect a new venture’s ability to start and grow
Nature of the environment
Availability of resources
Ways to realize value
Incentives to create a new business (enterprise zones)

7. The Entrepreneurial Start-Up Process
The Opportunity
An idea that has commercial potential
Idea + market = opportunity

8. The Entrepreneurial Start-Up Process
Start-up Resources
Skilled labor
Management expertise
Capital
Legal & financial advice
Facility
Equipment
Customers
New Venture Organization
Supports all the products, processes, and services
Allows for the creation of value to benefit the owners, the employees, the customers, and the economy

9. New Business Success and Failure
Small Business Admin. Report that 66% of small businesses survive the first two years.
Drops to 40% by six years
One-third of businesses that close do so successfully; due to selling, closing for retirement, or merging with another company
A business failure – has stopped operating with a loss to creditors
Discontinuance – was purposely discontinued by an owner who wanted to start a new one; the business may also be operating under a new name
Not failures

10. How Entrepreneurs Can Succeed
Effective Planning & Management
Recognizing a need in the Market
Testing that opportunity in the marketplace
Assembling a team with the necessary expertise to execute the business concept