1. Introduction to Entrepreneurship
New Venture Development
Walter Good
Asper School of Business
University of Manitoba

2. What is Entrepreneurship?
Researchers have been very inconsistent in their definitions of ‘entrepreneurship’. Definitions have emphasized a broad range of activities including:
The creation of organizations
The carrying out of new combinations
The exploration of opportunities
The bearing of uncertainty
The bringing together of factors of production
And others

3. Some Examples Richard Cantillon (circa 1730)
“Self-employment of any sort. Entrepreneurs buy at certain prices in the present and sell at uncertain prices in the future. The entrepreneur is a bearer of uncertainty.”

4. Jean Baptiste Say (1816)
“The entrepreneur is the agent ‘who unites all means of production and who finds in the value of the products…the reestablishment of the entire capital he employs, and the value of the wages, the interest, and the rent which he pays, as well as profits belonging to himself.’”

5. Joseph Schumpter (1934)
“The entrepreneur is the innovator who implements change within markets through the carrying out of new combinations. As such, the entrepreneur moves the market away from equilibrium”

6. Penrose (1963)
“Entrepreneurial activity involves identifying opportunities within the economic system. Managerial capacities are different from entrepreneurial capacities.”

7. Kirzner (1979)
“The entrepreneur recognizes and acts upon market opportunities. The entrepreneur is essentially an arbitrageur.”

8. Gartner (1988)
“The creation of new organizations”

9. Timmons (1994)
“Entrepreneurship is creating something of value from practically nothing”

10. Bygraves (1997)
“An entrepreneur is someone who perceives an opportunity and creates an organization to pursue it”

11. There is no single accepted definition of entrepreneurship.
Small business?
Micro business?
Corporate entrepreneurship or intrapreneurship?
High-growth firms?
Family businesses?
Franchises?

12. Entrepreneurship & Economic Thought
Joseph Schumpeter (1930s) Israel Kirzner (1970s) S S D D
“CREATIVE DESTRUCTION”
Entrepreneurship moves market
away from equilibrium
“ENTREPRENEURIAL DISCOVERY”
Entrepreneurship moves market
toward equilibrium.
New combinations: new goods,
methods of production, new markets,
sources of supply, organizations.
Entrepreneur alert to opportunities
that already exist and are waiting to
be noticed.

13. Entrepreneurs Can Play a Number of Roles in the Economy
1. Create new product and/or service businesses.
2. Bring creative and innovative methods to developing or producing new products or services.
3. Provide employment opportunities and create new jobs as a result of growing their businesses consistently and rapidly.
4. Help contribute to regional and national economic growth.
5. Encourage greater industrial efficiency/productivity to enhance our international competitiveness.

14. Some Facts About Entrepreneurship
1998 adult working population was 130 million, 17.3% or 21+ million were self-employed
Since WWII small entrepreneurial firms have been responsible for ½ of all innovation and 95% of all radical innovation.

15. Entrepreneurship Drives Job & Wealth Creation.
Since 1980, large companies have lost more than 5M jobs, but 34M new jobs have been created.
At any point in time, 8.5% of the adult population is starting a new business.
In 1950s 50,000 businesses were incorporated per year. 770,000 businesses were incorporated in 1998.
Small businesses are the backbone of the North American Economy.
They create 2 of every 3 new jobs and produce 39% of the GNP.

16. Firms with fewer than 20 employees currently create almost 95% of net new jobs.
Increasingly women are questioning traditional corporate jobs to seek their careers in entrepreneurship.
People in their 50’s or 60’s are planning second careers as entrepreneurs rather than retiring.
The vast majority or nearly 3 million millionaires accumulated their wealth through entrepreneurial ventures.

17. The Components of Successful Entrepreneurial Ventures
Business Plan
The Entrepreneur
Opportunity
Resources
Organization
Strategy

18. Outline of the Entrepreneurial Process
Decide to go into business for yourself
Assess your potential
Find an appropriate product or service idea
Buy a business
Start a new business
Acquire a franchise
Conduct a feasibility study
Technical feasibility
Market acceptability
Financial viability
Organize your business structure and legal requirements
Protect your idea
Arrange the necessary financing
Develop a comprehensive business plan

19. Myths About Entrepreneurship
Myth 1 Entrepreneurs are born, not made.
Myth 2 Anyone can start a business. It’s just a matter of luck and guts.
Myth 3 Entrepreneurs are gamblers.
Myth 4 Entrepreneurs want to run the whole show themselves.
Myth 5 Entrepreneurs are their own bosses and completely independent.
Myth 6 Entrepreneurs work longer and harder than corporate managers.
Myth 7 Entrepreneurs face greater stress and more pressures, and thus pay a higher personal price in their jobs than do other managers.
Continued

20. Myths About Entrepreneurship
(Continued)
Myth 8 Starting a business is risky and often ends in failure
Myth 9 Money is the most important ingredient of success
Myth 10 New business start-ups are for the young and energetic
Myth 11 Entrepreneurs are motivated solely by their quest for the almighty dollar
Myth 12 Entrepreneurs seek power and control over other people so that they can feel “in charge”

21. STAGE TWO Assess Your Potential for an Entrepreneurial Career
Realistically assess your potential for an
Entrepreneurial Career
Understand the
personal attributes
important for
success in a
business of your
own
demands the
entrepreneurial
role will make on
you and your
family
Evaluate
your managerial
skills
Conduct a
personal financial
assessment
Develop a
personal
balance sheet
budget
Assess your strengths and weaknesses
that will affect your ability to achieve
your entrepreneurial goals

22. Attitudes and Behaviours Valuable for Turning a Business Dream into Reality
Commitment, Determination, and Perseverance
A Success Orientation
Opportunity and Goal Orientation
Action Orientation and Personal Responsibility
Persistent Problem Solving and a Need to Achieve
A Reality Orientation
The Ability to Seek and Use Feedback
Self-Reliance
Continued

23. S
Attitudes and Behaviours Valuable for Turning a Business Dream into Reality
(Continued)
Self-Confidence
A tolerance of Ambiguity and Uncertainty
Moderate Risk-Taking and Risk Sharing
The Ability to Respond Positively to Failure
A Need for Status and Power
Integrity and Reliability
A Team Builder

24. Business Skills Needed by Successful Entrepreneurs
1. Managing Money
2. Managing People
3. Directing Business Operations
4. Directing Sales and Marketing Operations
5. Setting Up a Business