1. The Foundations of Entrepreneurship
Edited by: Noémi Piricz
Based on: Thomas W. Zimmerer – Norman M. Scarborough: Essentials of Entrepreneurship and Small Business Management, Pearson Education International 2005, Chapter 1

2. Who is an Entrepreneur?
Let’s collect his/her most important characteristics!
Entrepreneur is one who creates a new business, taking certain risks and uncertainty,
for the purpose of achieving profit and growth,
by identifying opportunities and assembling the necessary resources

3. Personal Benefits of Entrepreneurship
1. Opportunity to create your own destiny – „being able to follow his/her own interests, desire and fun”
2. Opportunity to reap more profits (e.g. Bill Gates, M. Dell)
3. Opportunity to contribute to society – trust and respect

4. Drawbacks of Entrepreneurship
Uncertainty of income
Risk of losing your entire investment
Long hours and hard work
High level of stress
Complete responsibility
Discouragement and disillusionment

5. The Cultural Diversity of Entrepreneurship
Young entrepreneurs – comparing with other generations they are 3 times more likely to launch businesses
Women entrepreneurs - still certain discrimination in work market, - the rate of women entrepreneurs is growing dynamically

6. Part-time entrepreneurs - popular gateway to entrepreneurship, - lower risk
Family business: two or more members of the same family have the financial control of the company - deep roots in family values, long term plans, trust etc. - bitter disputes, business and private life mixed, problem of finding a good leader after retirement

7. The Power of „Small” Business
Small business: employs fewer than 100 people (US)
In the US small firms employ 51 % of the nation’s private sector workforce, even though they posses less than one-fourth of total business assets!
Small businesses produce 51% of the American private GDP.

8. Small companies create four times more innovation per research and development dollar than medium-sized firms

9. The 10 Deadly Mistakes of Entrepreneurship
1. Management mistakes – capacity, leadership ability, knowledge etc.
2. Lack of experience – professional, economic, organizational, dealing with human resources etc.
3. Poor financial control – undercapitalization (consequence: the firm runs out of capital before it is able to generate positive cash flow)

10. 4. Weak marketing efforts – mistake: if the entrepreneurs dream it, customers will automatically come; instead of providing them with value, quality, convenience, service and fun!
5. Failure to develop a strategic plan – „I don’t have time for it”
6. Uncontrolled growth – expansion should be financed by the profit they generate or by capital contributions from the owners

11. 7. Poor location – they often choose a vacant building
8. Improper inventory control – neglected in many cases, problems: too much or too few inventory, and even too much of the wrong type of inventory
9. Incorrect pricing – costs, aims, methods
10. Inability to make the „entrepreneurial transition” – after the start up, growth usually requires radical changes in several fields…

12. Key Definitions (of Chapter 1):
Entrepreneur
Part-time entrepreneurs
Family business
Small business
undercapitalization
cash flow