Introduction This is the era of the entrepreneur! Through the
world, growing numbers of people are realizing their dreams of
owning and operating their own business. Entrepreneurship is
thriving. The past two decades have seen record numbers of
entrepreneurs launching new businesses and each year. American
entrepreneurs alone start 3 to 4.3 million businesses each year and
84 percent are doing that for the first time. A study by the Global
Entrepreneurship Monitor (GEM) found 11.3 percent of the adult
population in the United States is working to start a business.
North America, South America and Latin America lead the world in
entrepreneurial activity.
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Who is an ENTREPRENEUR? An entrepreneur is one who creates a
new business in the face of risk and uncertainty for achieving
profit and growth opportunities and assembles the necessary
resources to capitalize on those opportunities. Scarborough
(2005)
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Traits of an ENTREPRENEUR Desire for responsibility Preference
for moderate risk (risk eliminators) Confidence in their ability to
succeed Desire for immediate feedback High level of energy Future
orientation (serial entrepreneurs) Skill in organization Value of
achievement over money
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Traits of an ENTREPRENEUR Other characteristics of
entrepreneurs include: High degree of commitment Willingness to
accept risk, work hard and take action Flexibility
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YOU BE THE CONSULTANT SUMMARY A Pigskin Revolution Ed Sabol, a
once unhappy coat salesman, had a passion for filming his sons high
school football games and other activities. Word of Eds filming
abilities soon got around and he found himself working a number of
local high school games. This led to Eds successful bid ($3,000) to
film the 1962 NFL championship game.
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Then Commissioner Pete Rozelle was so impressed with the work
that he agreed to Eds proposal to create a new entity known as NFL
Films that would both preserve the history of the game and promote
it to the nations sports fans. NFL Films creative approach to the
game has resulted in 82 Emmy Awards to date. Ed retired in 1987,
turning the reins over to his son Steve who has taken the company
to new heights thanks in part to his empowering leadership style
and product innovation. The company now has a 200,000 square foot
state-of-the-art facility.
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Questions Q1. Identify the entrepreneurial traits that Ed Sabol
and his son Steve exhibit? Q2. How would you characterize the
Sabols philosophy, beliefs, and values to a small business as it
grows? Q3. What factors have led to NFL Films success?
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The Benefits of Entrepreneurship The primary benefits
entrepreneurs enjoy include the opportunity to: Create their own
destiny Make a difference Reach their full potential Generate
impressive profits Contribute to society and be recognized for
their efforts Do what they enjoy and have fun at it!
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The Potential Drawbacks of Entrepreneurship With these
potential rewards, Entrepreneurship also presents risk and
uncertainty. Entrepreneurs may experience: Uncertainty of income
The entrepreneur is the last one to be paid. Risk of losing their
entire investment Long hours and hard work Lower quality of life
until the business gets established High levels of stress Complete
responsibility Discouragement
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Behind the Boom: Whats Feeding the Entrepreneurial Fire? The
rapid increase in entrepreneurs has been a result of: Considering
entrepreneurs as heroes Entrepreneurial education Demographic and
economic factors Shift to a service economy Technological
advancements Independent lifestyles Commerce and the Internet
Additional international opportunities
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Discussion What is your perception of entrepreneurs in our
community and in our society? Why do you believe entrepreneurs have
that reputation?
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Never Too Young Erica Gluck had a desire to earn her own money
at the age of seven. She convinced a local pasta shop to allow her
to sell their products off site on weekends. Erica never looked
back as she went on to start her own pasta company, expand its
product lines, hire her parents and give a portion of her profits
back to the community.
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Never Too Young Adam Witty, a college student, observed his
father repeatedly giving up (season) tickets to Orlando Magic games
that often went unused because of last minute business commitments.
That sparked the idea for a Web-based company that allows buyers to
securely purchase tickets to events that normally would not be
available. Adam started the company from his dorm room, was able to
utilize the facilities of his school and expanded his product lines
to include a wide variety of sporting events.
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Never Too Young The University of Maryland created a forum that
allows about 100 student entrepreneurs to live and work together.
That environment has inspired about twenty of those students to
start their own business.
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Questions Q1. In addition to the normal obstacles of starting a
business, what other barriers do young entrepreneurs face? Q2. What
advantages do young entrepreneurs have when launching a business?
Q3. What advice would you offer a fellow college student about to
start a business? Q4. Work with a team of your classmates to
develop ideas about what your college or university could do to
create a culture of entrepreneurship on your campus or in your
community.
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Discussion If you were to begin a business immediately after
your academic career concluded, what challenges would you face?
Would you consider that an ideal time in your life to launch your
first venture? If not, at what point in your life might be a better
time and why? What experiences might you find beneficial before you
started your own business.
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The Cultural Diversity in Entrepreneurship Entrepreneurs are
found in virtually every walk of life including: Young
Entrepreneurs Women Entrepreneurs Minority Enterprises Immigrant
Entrepreneurs Part-time Entrepreneurs Home-Based Businesses Family
Businesses Copreneurs Corporate Castoffs Corporate Dropouts
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Promoting Innovation Innovation - the act or process of
introducing new ideas, devices, or methods
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Promoting Innovation All Innovation begins with creative ideas.
Innovation is the implatation of creative inspiration. Creativity
is the function of three components: Expertise, creative thinking
skills and motivation
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Promoting Innovation Innovation is fostered by information
gathered from new connections; from insights gained by journeys
into other disciplines or places; from active, collegial networks
and fluid open boundaries. Innovation arises from organizing
circles of exchange, where information is not just accumulated or
stored, but created. Knowledge is generated a new from connections
that were not there before. Wheatley (1994).
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Promoting Innovation Innovation requires a fresh way of looking
at things, an understanding of people, and an entrepreneurial
willingness to take risks and to work hard. An idea doesntbecome an
innovation until it is widely adopted and incorporated into peoples
daily lives. Most people resist change, so a key part of innovating
is convincing other people that your idea is a good one by
enlisting their help, and, in doing so, by helping them see the
usefulness of the idea.
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Elements of Innovation 1. Challenge: What we are trying to
change or accomplish-the pull 2. Customer focus: Creating value for
your customers the Push 3. Creativity: Generating and sharing the
idea(s)- the brain 4. Communication: The flow of information and
ideas the life blood
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Elements of Innovation 5. Collaboration: People coming together
to work together on the idea(s) - the heart. 6. Completion:
Implementing the new idea-the muscle. 7. Contemplation; Learning
and sharing lessons lead to higher competency-the ladder
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Elements of Innovation 8. Culture: The playing field of
innovation includes: Leadership (sees the possibilities and
positions the team for action-the role model) People (diverse
groups of radically empowered people innovate the source of
innovation) Basic values (trust and respect define and distinguish
an innovative organization-the backbone). Innovation values
(certain values stoke the fires that make theimpossible
possible-the Spark). 9. Context: Innovation is shaped by
interactions with the world
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CREATIVITY AND INNOVATION IN AN ENTREPRENEURIAL ORGANIZATION
The winning performance of the entrepreneur and the organization
focuses on. Competing on quality not prices: Domination of a market
niche; Competing in an area of strength Having tight financial, and
operating controls: Frequent product or service innovation
(particularly important in manufacturing
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Six Criteria for Assessing New Business Opportunities
Entrepreneurs often begin with innovative ideas, but succeeding in
a new business also requires objective assessment procedures. If
your gut tells you a product, service or existing business is a
risk you want to take, use objective measurements to better
determine its likelihood of success. The bottom line is
profitability.
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Financials Assess the company's financial performance or
potential financial performance. Evaluate historical sales
revenues, profit margins of products and services, recent sales
trends and cash flow. Examining cash flow lets you determine when
you will get your money in and how much credit you might need to
obtain. For example, your business might have excellent sales, but
if the customers dont pay for 60 days, you might have to delay your
salary, operate using your savings while you wait for your bills to
be paid, or take out a loan to buy materials. If you are launching
a new business, look for trade association data that shows
financial trends for similar companies and expected trends for the
coming year.
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Sales A thorough sales assessment will give you insight into
how sales have taken place and where you might improve them. Spot
trends by analyzing where products are selling and to what types of
customers. Certain geographic territories with low sales may not be
underperforming, but are simply underserved, offering opportunities
to grow the business.
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Market Data Researching the marketplace will help determine if
it is being underserved or possibly saturated. Detailed demographic
data can show that even if the marketplace contains significant
competition, you have an opportunity to successfully introduce a
new business or improve the performance of an existing one.
Demographics such as gender, age, race and marital status will help
you better understand who your potential customers are. Analyzing
the price points of your competitors will also give you insight
into why people might be buying a particular product or service.
Look at market trends, such as sales during the last three years,
and look for advances in technology that might affect the
marketplace.
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Assets and Liabilities Look at the assets of an existing
business to determine how it depends on them. The business might
depend on a recipe, trademark, copyright or patent for its unique
selling proposition. A companys location, specific manufacturing
process, grandfathered agreements or no-compete agreements with a
supplier might be giving the business an edge, without which it
would struggle to compete. A franchise might be thriving because of
a restricted territory it owns or specific benefit it has been
receiving from the owners status as a minority. Check the assets of
any business you plan to purchase to determine what would happen if
you lose them. Look for liabilities, such as debts, lawsuits and
expiring contracts and assets.
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Relationships Key factors in a small businesss success often
include personnel, endorsements and relationships. Key personnel,
such as a well-known chef, IT whiz or top sales performer can make
or break a business. Having a professional sports league or a
celebrity endorse a business might be key to driving its sales.
Having official sponsor, supplier or partner status of a trade
association or other organization can also boost sales.
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Opportunity Costs Look at what entering a new business will
cost you, in terms of lost revenue, personal time or sales
connected to other business or opportunities you have. For example,
using your cash to buy a business reduces your ability to pay down
debt, lower interest payments, improve or upgrade current
facilities, increase advertising and make other investments with
that cash. You will need to devote your personal time to the new
business. Accurately assess the number of hours you will need to
spend on a new business venture and calculate the revenue your time
would generate spent on another opportunity.