Professional Documents
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Management: Canadian Edition
Management: Canadian Edition
to Accompany Chapter 6 of
Management
Canadian Edition
Schermerhorn Wright
What is entrepreneurship?
Management - Chapter 6 3
Entrepreneurship
Entrepreneurs are …
– Founders of businesses that become large-scale
enterprises.
– People who:
• Buy a local franchise outlet
• Open a small retail shop
• Operate a self-employed service business
– People who introduce a new product or
operational change in an existing organization.
Management - Chapter 6 4
Cat e g or i es o f
r ep r e n eu rs
E nt
• Classic Entrepreneurs
• Serial Entrepreneurs
• Social Entrepreneurs
Entrepreneurship
Management - Chapter 6 6
Entrepreneurship
Management - Chapter 6 7
l e B e co m e
Why Peop
re pr e n eu rs
En t
Why
n eur ship ?
Entrepre
• Being your Own Boss
– Self-management is the motivation that drives many
entrepreneurs.
• Financial Success
– Entrepreneurs are wealth creators.
• Job Security
– Over the past ten years, large companies have
eliminated more jobs than they have created.
• Quality of Life
– Starting a business gives the founder some choice
over when, where, and how to work.
Entrepreneurship?
Typical characteristics of entrepreneurs:
– Internal locus of control
– High energy level
– High need for achievement
– Tolerance for ambiguity
– Self-confidence
– Passion and action-orientation
– Self-reliance and desire for independence
– Flexibility
Management - Chapter 6 10
Figure 6.1 Personal traits and
characteristics of entrepreneurs.
Management - Chapter 6 11
ris ti c s of
Characte
p re n e u r s
Entre
re n eu r ia l
Entrep
c t eris ti c s
Chara
• Vision - entrepreneurs begin with an overall idea for how to make their
business idea a success
• High Energy Level - a willingness to work hard
• Need to Achieve - entrepreneurs work hard because they want to excel
• Self-Confidence - fearlessness in the face of difficult odds
• Tolerance for Failure - entrepreneurs are not easily discouraged
• Creativity - entrepreneurs devise innovative ways to overcome difficult
problems and situations
• Tolerance for Ambiguity - entrepreneurs take in stride uncertainties.
• Internal Locus of Control - entrepreneurs believe they can control their
own fate
Entrepreneurship
Management - Chapter 6 14
Study Question 2: What is special about
small businesses?
Small businesses …
– Ones with 100 or fewer employees.
– Independently owned and operated.
– 50 percent of the private labour force works in small
businesses.
– Are established by:
• Starting a new business.
• Buying an existing business.
• Buying and running a franchise.
Management - Chapter 6 15
Study Question 2: What is special about
small businesses?
Entrepreneurship and the Internet …
– The Internet offers numerous entrepreneurial
opportunities.
• Online buying and selling
• Dot-com businesses
– Businesses are limited only by personal
creativity.
– Business-to-Business (B2B) ventures are
possible.
Management - Chapter 6 16
Study Question 2: What is special about
small businesses?
Management - Chapter 6 18
Study Question 2: What is special about
small businesses?
Reasons for small business failures:
– Lack of experience
– Lack of expertise
– Lack of strategy and strategic leadership
– Poor financial control
– Growing too fast
– Insufficient commitment
– Ethical failure
Management - Chapter 6 19
Figure 6.2 Eight reasons why many small
businesses fail.
Management - Chapter 6 20
Study Question 3: How does one start
a new venture?
Important issues in new venture creation:
– Does the entrepreneur have good ideas and the courage to give them
a chance?
– Is the entrepreneur prepared to meet and master the test of strategy
and competitive advantage?
– Can the entrepreneur identify a market niche that is being missed by
other established firms?
– Can the entrepreneur identify a new market that has not yet been
discovered by existing firms?
– Can the entrepreneur generate first-mover advantage by exploiting a
niche or entering a market before competitors?
Management - Chapter 6 21
Study Question 3: How does one start
a new venture?
Questions that keep a new venture focused on its customers
…
– Who is your customer?
– How will you reach key customer market segments?
– What determines customer choices to buy or not buy your
product/service?
– Why is your product/service a compelling choice for the customer?
– How will you price your product/service for the customer?
– How much does it cost to make and deliver your product/service?
– How much does it cost to attract a customer?
– How much does it cost to support and retain a customer?
Management - Chapter 6 22
Study Question 3: How does one start
a new venture?
Management - Chapter 6 24
Study Question 3: How does one start
a new venture?
Basic items that should be included in a business plan:
– Executive summary
– Industry analysis
– Company description
– Product and services description
– Market description
– Marketing strategy
– Operations description
– Staffing description
– Financial projection
– Capital needs
– Milestones
Management - Chapter 6 25
Study Question 3: How does one start
a new venture?
Management - Chapter 6 26
Study Question 3: How does one start
a new venture?
Management - Chapter 6 28
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