Entrepreneurship & Small Business Management

Entrepreneurship: risk taking behavior that results in new opportunities
1. Classic entrepreneur: someone who's willing to pursue opportunities in situations others view as problem or threats
2. Serial entrepreneur: starts and run business and nonprofits over and over again, moving from interest & opportunity to the next
3. Entrepreneur skill: first mover advantage = comes form being able to exploit a niche or enter a market
4. May Kay Ash : Mary Kay cosmetics to help women everywhere to reach their full potential, invest with $5000. DAVID THOMAS- Founder of WENDY's -- world's famous burger cook
Characteristics of enterpreneurs
1. Found within organisations: INTRAPRENEURS- those with entreprenuerial characteristics as employees of larger firms
2. attitudes & personal interests
  1. Flexibility (corrective actions) Tolerance for ambiguity (risk takers)Self confidence (competent) Internal locus of control (destiny)High energy level (hardworking) High need for achievement (motivated)
3. Background, experiences & interests
  1. Family environment & childhood experiences
  2. work history
  3. windows career of opportunity age 22-45 risk taking allowed
  4. deeply embedded life interests : creative production (enjoy project initiation & working with unknown & find unconventional solutions& enterprise control (enjoy running things) = starts things and move things toward a goal. Independence & mastery sense.
4. Myths of entrepreneurs
  1. gamblers
  2. born not made--> talent is gained and enhanced by experience
  3. Money is the key to Entrepreneur success
Diversity & Entreprenuership
1. Necessity based entrepreneurship: occurs when other employment don't exist
2. 38% of all US businesses are women and they are starting new businesses twice the rate of the national average. In the private sector employment business 33% said they were not taken seriously by their prior employer while 29% said they experience glass ceiling issues. glass ceiling problem motivates women of color to persue entrepreneurship include not being recognised or valued by their employers and seeing other promoted ahead of them. Minortiy entreprenuership is one of the fastest growing sectors of our economy. Businesses created by minortiy entreprenuers now employ more than 4 million US workers and generat eover 500 billion in annual revenues. And the trend i upward. Those owned by African American has grown by 45%, by Asians 24% and small business owned by women 24%
Social Entrepreneurship (unique form of ethical entrepreneurship that takes risk seeks new ways to solve pressing social problems)
1. 1) Cleaning for a reason- NPO that builds networks of linkages with cleaning firms around the country that are willing to offer free home cleaning for cancer patient .2) 2 S.E tackled public health in Africa Sub realizing that developing nations are often bogged down in paperwork of public healt, they created software that make process quicker and more efficient while increasing the reliability of resulting databases. UN now helping them.
Entrepreneurship & Small Business
1. Small business
  1. has fewer than 500 employees, independently owned and operated and does not dominate the industry. 99% of American business meet this definition, 87% of them employ fewer than 20 persons. small business in the US employ 52% private workers & provide 51% private sector output and provide 7/10 new jobs in the economy . created 70% news jobs. they are life blood of the country and help enhance our quality of life and creating personal wealth. they will lead the way to prosperity, especially in today''s challenging economic environment
  2. Why they fail?
    1. insufficient financing
    2. lack of expertise
    3. lack of experience
    4. lack of strategy & strategic leadership
    5. poor financial control
    6. growing too fast
    7. lack of commitment
    8. ethical failure
  3. Development
    1. Business incubators: offer space, shared services and advise to help get small business started
    2. Small Business Development Centers founded with support from the US small business administration provide advise to new and existing small businesses
2. Why & how they get started/
  1. 1)want to be their own boss & control their future 2)going to work for a family owned business 3)seeking to fulfill a dream
  2. Franchise: when one business owner sells to another the right to operate the same business in another location
  3. Start Up: a new and temporary venture that is trying to discover a profitable business model for future success
  4. Lean Startups: use open source software, while staying small and striving to keep operations as simple as possible
3. FAMILY BUSINESS
  1. family business feud
  2. Succession problem
    1. succession plan
INTERNET ENTREPRENEURSHIP
1. ADVERTISING MODEL
2. SUBSCRIPTION MODEL
3. INTERMEDIARY MODEL
4. TRANSACTION MODEL
New venture creation of entrepreneurial firms
1. Life cycles
2. Writing Business Plan
  1. Business plan describes the direction for new business & financing needed to operate it
  2. sample outline
    1. Executive summary . Industry analysis. Company description. Products & services description. market description. marketing strategy. Milestones
3. forms of ownership
  1. Sole proprietorship
  2. Partnership
    1. general partnership: partners share management responsibilities
    2. limited partnership: consists of a general partner and one or more limited partners who do not participate in daily business management, they share in the profits but their losses are limited to the amount of their investment
    3. limited liability partnership: common among professionals, limits the liability of one partner for the negligence of another
  3. Corporation
    1. Pros: grants the organisation certain legal rights (e.g. to engage in contracts) & corporation becomes responsible for its own liabilities which seperates the owners from personal liability and gives the firm a life of its own that can extend beyond of its owners/
    2. Con: Rests largely with the cost of incorporating and the complexity of the documentation required to operate as an incorporated business
    3. LIMITED LIABILITY CORPORATION
      1. a hybrid business form combining the pros of the sole proprietorship, partnership and corporation. For liability purpose it functions like a corporation and protects the assets of owners against claims made against the company. For tax purposes, it functions as a partnership in the case of multiple owners and a sole proprietorship in the case of a single owner
4. FINANCING
  1. Debt financing
  2. Equity financing
  3. Venture capitalists
    1. Initial public offering
  4. Angel investor

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Entrepreneurship & Small Business Management

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