1. Recognizing Opportunity Back to Table of Contents

2. Recognizing Opportunity 2 Chapter 3 Recognizing Opportunity Understanding Entrepreneurial Trends Starting Versus Buying a Business 3.1 3.2

3. Recognizing Opportunity 3 Identify the importance of personal values and goals in choosing an entrepreneurial pursuit. Describe the challenges and rewards of entering a family business. List the benefits and drawbacks of buying a business. Describe how you can evaluate a business opportunity. Compare the advantages and disadvantages of starting your own business. Section 3.1 Understanding Entrepreneurial Trends 3.1

4. Recognizing Opportunity 4 The ability to recognize new opportunities and to think creatively is essential for success in today’s market. Section 3.1 Understanding Entrepreneurial Trends 3.1

5. Recognizing Opportunity 5 online business services outsourcing strategic alliance corporate venture innovation Section 3.1 Understanding Entrepreneurial Trends 3.1 niche brainstorm demographics trade magazine specialty magazine trade show

6. Recognizing Opportunity 6 Current Entrepreneurial Trends One way to identify business opportunities is to study current trends that provide opportunities for entrepreneurs. Section 3.1 Understanding Entrepreneurial Trends

7. Current Entrepreneurial Trends Section 3.1 Understanding Entrepreneurial Trends 7 Internet businesses service businesses home-based businesses socially-responsible non-profit businesses corporate ventures strategic alliances technology outsourcing

8. Recognizing Opportunity 8 Internet Businesses The Internet has transformed the way business is conducted. An online business can reach customers around the world. online business a company that conducts business by means of the Internet Section 3.1 Understanding Entrepreneurial Trends

9. Recognizing Opportunity 9 Service Businesses Service businesses dominate the American economy. Business services account for the largest part of U.S. economic growth. Types include tourism, banking, accounting, and many more. services intangible things that businesses do for consumers that enhance their lives Section 3.1 Understanding Entrepreneurial Trends

10. Recognizing Opportunity 10 Home-Based Businesses The number of businesses that start in the home has been growing tremendously over the past 20 years. In the late 1990’s, about 41 million businesses were being conducted from home. A result from the high technology available to self- employed people. Examples include- consultants, sales reps, writers, graphic artists, and Web Page designers.

11. Recognizing Opportunity 11 Socially Responsible Nonprofit Businesses Some people start businesses to better society. They have a mission that is focused on doing good. The business is usually nonprofit, which means the owner must keep the profits in the business. Examples- feed the hungry, community theatre organization, or an educational focused business.

12. Recognizing Opportunity 12 Focus on Technology An increased amount of focus is on technology in the business world today. Entrepreneurs who know how to use technology will continue to improve their business and stay ahead of their competition.

13. Recognizing Opportunity 13 Outsourcing Outsourcing is hiring people and other companies to handle tasks that a business can not do or chooses not to do itself. Example- North Penn School District. What types of work might be outsourced? outsourcing contracting with other companies for services Section 3.1 Understanding Entrepreneurial Trends

14. Outsourcing Section 3.1 Understanding Entrepreneurial Trends 14 Benefits of Outsourcing more efficient saves time saves money lowers regulatory burden speeds up projects attracts investors

15. Recognizing Opportunity 15 Strategic Alliances A strategic alliance is a partnership among companies. If one company has a product or service that will help out another company, an alliance is formed. strategic alliance a partnership formed with another company for the purpose of supplying a product or service Section 3.1 Understanding Entrepreneurial Trends

16. Recognizing Opportunity 16 Corporate Ventures A corporate venture is formed within a company. The parent company supplies resources to help the new venture out. corporate venture a new venture started inside a larger company Section 3.1 Understanding Entrepreneurial Trends

17. Recognizing Opportunity 17 Learning to Recognize Opportunity Entrepreneurial thinking is about generating ideas and recognizing opportunities. Section 3.1 Understanding Entrepreneurial Trends

18. Recognizing Opportunity 18 Creativity and Innovation Creativity is the activity that results in innovation. Innovation- a new way of doing things Section 3.1 Understanding Entrepreneurial Trends

19. Recognizing Opportunity 19 Idea Versus Opportunity You generate ideas by thinking creatively. Opportunities are ideas that have commercial potential. Section 3.1 Understanding Entrepreneurial Trends

20. Recognizing Opportunity 20 Idea Versus Opportunity You can find a good business opportunity by recognizing an unfilled market niche. Section 3.1 Understanding Entrepreneurial Trends niche a small specialized market

21. Recognizing Opportunity 21 Finding Opportunities by Understanding Industries If you understand an industry, you can identify opportunities within that industry. Section 3.1 Understanding Entrepreneurial Trends

22. Thinking Creatively About Opportunity Section 3.1 Understanding Entrepreneurial Trends 22 Practice brainstorming. (Think Freely) Find creative solutions to common problems. (Use a screwdriver as a pry bar.) Look at ordinary items in new ways. ( Find a new use for an item) Connect unrelated items. (Come up with a new product from unrelated ones.)

23. Recognizing Opportunity 23 Thinking Creatively About Opportunity 1.During brainstorming, ideas are not judged as good or bad. 2.Look at ordinary items. 3.Find creative solutions. 4.Connect unrelated items. See your notes. brainstorming to think freely in order to generate ideas Section 3.1 Understanding Entrepreneurial Trends

24. Recognizing Opportunity 24 Challenges to Creativity Entrepreneurs can stimulate and encourage creativity in many ways. The most difficult challenges to creativity are the challenges you bring upon yourself. Time pressures, the influences of uncooperative people, lack of confidence, and rigid thinking. Section 3.1 Understanding Entrepreneurial Trends

25. Recognizing Opportunity 25 Creative Sources of Ideas To identify creative ideas: Section 3.1 Understanding Entrepreneurial Trends 1.Observe the world around you. 2.Watch for demographic changes. 3.Be an avid reader. 4.Consider your interests, hobbies, and work experiences. 5.Consult outside sources of information.

26. Recognizing Opportunity 26 Watch for Demographic Changes It is important for entrepreneurs to understand demographics and demographic trends. Section 3.1 Understanding Entrepreneurial Trends Demographics- Personal characteristics that describe a population by age, gender, income, ethnic background, education, and occupation, among others

27. Sources of Information 27 Sources of Information trade magazines specialty magazines trade shows exhibitions newspapers the Internet government agencies Section 3.1 Understanding Entrepreneurial Trends

28. Recognizing Opportunity 28 Consult Outside Sources A trade magazine offers current, industry-specific news. trade magazine a periodical published for a specific type of business or industry Section 3.1 Understanding Entrepreneurial Trends

29. Recognizing Opportunity 29 Consult Outside Sources A specialty magazine offers information about specific topics. specialty magazine a periodical published for people with special interests, such as sports, camping, or fashion Section 3.1 Understanding Entrepreneurial Trends You can use specialty magazines to identify the interests and needs of potential consumers.

30. Recognizing Opportunity 30 Consult Outside Sources At a trade show, you can learn about new goods and services in a field. trade show a gathering or exhibition where vendors and manufacturers introduce new items and promote established products and services Section 3.1 Understanding Entrepreneurial Trends

31. Recognizing Opportunity 31 1. Discuss current trends that provide opportunity for entrepreneurs. Section 3.1 Understanding Entrepreneurial Trends 3.1 Current trends that provide opportunity for entrepreneurs include Internet businesses, service businesses, home- based businesses, socially responsible nonprofit businesses, corporate ventures, strategic alliances, and an increased emphasis on technology and outsourcing.

32. Recognizing Opportunity 32 2. Explain ways to recognize opportunity. Section 3.1 Understanding Entrepreneurial Trends 3.1 Most good business opportunities result from the entrepreneur’s ability to recognize unmet consumer needs and unique and unfilled market niches. One way to identify opportunities is to understand industries and examine and analyze industry trends.

33. Recognizing Opportunity 33 3. Explain how to think creatively about opportunity. Section 3.1 Understanding Entrepreneurial Trends 3.1 There are several ways to think creatively about opportunity, including practicing brainstorming, looking at ordinary items in new ways, finding creative solutions to common problems, and connecting unrelated items.

34. Recognizing Opportunity 34 4. Discuss ways to overcome challenges to creativity. Section 3.1 Understanding Entrepreneurial Trends 3.1 To overcome challenges to creativity, believe in yourself, use nonlogical thinking, don’t think of everything in practical terms, view problems as challenges that offer the opportunity to innovate, entertain all ideas, relax, have a playful attitude, look at failure as a learning experience that will lead to success, model creative behavior, and develop listening skills.

35. Recognizing Opportunity 35 5. Explain ways to find creative business ideas. Section 3.1 Understanding Entrepreneurial Trends 3.1 You can generate creative business ideas by watching people; watching for demographic changes; reading; considering his or her own experiences; and consulting outside sources such as trade magazines, trade shows, newspapers, the Internet, and government agencies.

36. Recognizing Opportunity 36 Identify the importance of personal values and goals in choosing an entrepreneurial pursuit. Describe the challenges and rewards of entering a family business. List the benefits and drawbacks of buying a business. Describe how you can evaluate a business opportunity. Compare the advantages and disadvantages of starting your own business. Section 3.2 Starting Versus Buying a Business 3.2

37. Recognizing Opportunity 37 Whether you start a business from scratch or buy an existing business and make it better, owning a business that is compatible with your personal values and goals is critical. Section 3.2 Starting Versus Buying a Business 3.2

38. Recognizing Opportunity 38 values goodwill franchise Section 3.2 Starting Versus Buying a Business 3.2 franchisee franchisor business broker

39. Recognizing Opportunity 39 Personal Values and Goals Personal values and goals should be used as a guide when choosing entrepreneurial pursuits. values the beliefs and principles by which you choose to live that define who you are, shape your attitudes and choices, and help you identify your priorities Section 3.2 Starting Versus Buying a Business

40. Recognizing Opportunity 40 Advantages and Disadvantages of working for a Family Business Trust and togetherness are shared. Team environment, get more accomplished. Disadvantages Owners can never get away from the business. Can’t view the business objectively. Sometimes parents cant let their kids make business decisions.

41. Recognizing Opportunity 41 Buying an Existing Business In many ways, buying an existing business is less risky than starting one from scratch Section 3.2 Starting Versus Buying a Business

42. Recognizing Opportunity 42 Advantages of buying an existing Business Employees are already working and trained. The equipment is already in place. Customers are established. Procedures are in place. Inventory procedures are set up.

43. Recognizing Opportunity 43 Drawbacks of buying a business Unforeseen debt. Employees may not be the best in the workforce. Is the industry in decline? Is there potential for growth?

44. Recognizing Opportunity 44 Buying an Existing Business When you buy an existing business, you often gain the goodwill of loyal customers. Section 3.2 Starting Versus Buying a Business goodwill - The favor and loyalty a business acquires by its good reputation

45. Recognizing Opportunity 45 Buying a Franchise When you buy a franchise, you buy the right to set up a new business patterned on an existing model. Section 3.2 Starting Versus Buying a Business franchise a legal agreement to begin a new business in the name of a recognized company

46. Recognizing Opportunity 46 Buying a Franchise The franchisee is the buyer of a franchise. The franchisor is the seller of a franchise. franchisee the buyer of a franchise who is given the right to the franchisor’s product, process, or service Section 3.2 Starting Versus Buying a Business franchisor the seller of a franchise who is giving the buyer planning and management expertise

47. Recognizing Opportunity 47 Evaluating a Business Opportunity To evaluate a business opportunity: Section 3.2 Starting Versus Buying a Business Investigate the company. Investigate the industry. Talk to customers, employees, and suppliers. Hire an accountant to advise you. Hire an attorney to advise you.

48. Where to Find a Business 48 Finding Business Opportunities newspapers business publications networking business brokers Section 3.2 Starting Versus Buying a Business

49. Recognizing Opportunity 49 Where to Find a Business You can find a business broker in the telephone book or online. business broker someone whose job it is to bring buyers and sellers of businesses together for a fee Section 3.2 Starting Versus Buying a Business

50. Recognizing Opportunity 50 Starting Your Own Business When you start your own business from scratch, you can do things your own way. You can build the company with fresh ideas and enthusiasm. Section 3.2 Starting Versus Buying a Business

51. Recognizing Opportunity 51 1. Identify the importance of personal values and goals in choosing an entrepreneurial pursuit. Section 3.2 Starting Versus Buying a Business 3.2 Personal values and goals should be used as a guide when choosing entrepreneurial pursuits because they define who you are, shape your attitudes and your choices, and help you identify your priorities.

52. Recognizing Opportunity 52 2. Describe the challenges and rewards of entering a family business. Section 3.2 Starting Versus Buying a Business 3.2 The greatest reward of a family business is the trust and togetherness that family members often share. One of the greatest challenges of a family business is that its owners can never get away from the business.

53. Recognizing Opportunity 53 3. List the benefits and drawbacks of buying a business. Section 3.2 Starting Versus Buying a Business 3.2 The benefits include established procedures, inventory, trade credit, employees, equipment, and customers. The drawbacks include the possibility that the business may be losing money or have a poor reputation, dated inventory, substandard equipment or facilities, and unskilled employees.