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Chapter 1: The Entrepreneurial Life

by: Jackline Kingori

Chapter 1: The Entrepreneurial Life MGT 241 - 1

Marketplace > Ball State University > Business, management > MGT 241 - 1 > Chapter 1 The Entrepreneurial Life
Jackline Kingori
The Entrepreneurial Experience
Robert D Mathews (P)

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The whole first chapter of notes is here! Extra explanation is included in red and different concepts are shown in full detail.
The Entrepreneurial Experience
Robert D Mathews (P)
The Entrepreneurial Experience, MGT 241, Entrepreneurship
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This 7 page Bundle was uploaded by Jackline Kingori on Tuesday September 15, 2015. The Bundle belongs to MGT 241 - 1 at Ball State University taught by Robert D Mathews (P) in Fall 2015. Since its upload, it has received 27 views. For similar materials see The Entrepreneurial Experience in Business, management at Ball State University.

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Date Created: 09/15/15
The Entrepreneurial Life Chapter 1 The Contributions of Small Business Small Business amp the Economy Represent 997 of all rms Employ over m of employees in the private sector Account for M of private payrolls Outperform larger companies in net job creation Generates M of net new iobsannually Hire 43 of hightech employees Represent 973 of all exporters Provide increased business ownership opportunities for minorities and selfemployed degreed individuals The Contributions of Small Business Small Business amp the Economy Provide increased business ownership opportunities for for minorities and selfemployed degreed individuals 1000 new startups per year average Only 15 000 companies employ more than m people m of all businesses are considered small More than m of all businesses employ 5 people or less Nearly M of all rms employ less than Q people The Contributions of Small Business Entrepreneurs amp Taxes Entrepreneurs pay more than m of all income taxes M of all corporate tax returns come from SCorporations closely held Within the highest tax bracket m of lers are current entrepreneurs Small Business Vs Entrepreneurship Small Business Microbusiness provides minimal pro ts to its owner extra income source seasonal business Lifestyle Business selfemployed 95 for this business Attractive Small Firm Provides substantial pro ts to its owner Has growth potential Small Business Vs Entrepreneurship Entrepreneur Sees opportunity when others see chaos contradiction and confusion Key Objectives 0 Innovation 0 Pro tability 0 Growth Understands concept of professionalization o mh Potential Venture Gazelle Excellent growth prospects typically M or more annually for 5 years What Is a Small Business Criteria for De ning Smallness in Business 1 Small in size relative to larger competitors for example fewer than 100 employees 2 Localized business operations except marketing 3 Financing supplied by one person or small group 4 Has the potential to become more than a oneperson show SBA Small Business Administration gt 500 Employees or less gt SME s Small 150 Medium 51500 employees Entrepreneurial Opportunities Entrepreneurial Opportunity 0 An economicaly attractive and timely opportunity that creates value for interested buyers or end users Bootstrapping 0 Doing more with less in terms of resources invested in a business and where possible controlling the resources without owning them Who Are Entrepreneurs Entrepreneurs are 0 A person who starts andor operates a business 0 Individuals who discover market needs and launch rms to meet those needs 0 Risk takers who provide an impetus for change innovation and progress 0 All active ownermanagers founders andor managers of small businesses How to Fail as an Entrepreneur 1 Overestimate what you can do 2 Lack an understanding of the market 3 Hire mediocre people Because of egg 4 Fail to be a team player which is usually the result of taking oneself too seriously 5 Be a domineering manager 6 Fail to share ownership in the business in an equitable way Varieties of Entrepreneurship Founder quotPurequot Entrepreneur A person who brings a new rm into existence quotSecond stagequot Entrepreneur An administrative entrepreneur who overseas the operations of a ongoing business Franchisee 0 An entrepreneur whose power is limited by the contractual relationship with a franchising organization easier to go in the market Already a business plan Entrepreneurial Team 0 Two or more people working together as entrepreneurs is becoming more common Better w a team instead by yourself Entrepreneurship as a Mindset Social Entrepreneurship ls entrepreneurial activity whose goal is to nd innovative solutions to society s most pressing needs problems and opportunities Corporate Entrepreneurship aka lntrapreneurship Community Entrepreneurship Personal Entrepreneurship Women amp Minority Entrepreneurs More Women amp Minority Entrepreneurs More women than men are starting new businesses 0 Many businesses are now majority femaleowned 0 Movement of women into nontraditional industries 0 Problems Facing Female amp Minority Entrepreneurs Possible dif culties related to gender and race 0 Lack of access to credit 0 Lack of networking connections Balancing work 8 family life The Importance of Mentors Mentors Are knowledgeable persons who can offer guidance from their experience in a given eld 0 Teach entrepreneurs what and how to do 0 Show them how to avoid mistakes 0 Provide entrepreneurs encouragement when needed 0 Provide networking and business contacts Your Motivations for Owning a Business Being an entrepreneur s extremely challenging Takes undying love and passion to keep going 0 Can run in a family 0 Can help make the world a better place 0 Can make meaning in your life Is Owning a Small Business a Good Fit for You Am I passionate about my product or service What is my tolerance for risk Am I effective in making decisions Am I willing to take on numerous responsibilities Will I be able to avoid burnout U39lbUUNH Why People Become Entrepreneurs Reluctant Entrepreneur A person who becomes an entrepreneur as a result of some severe hardship Refugee A person who becomes an entrepreneur to escape an undesirable situation Artisan Entrepreneurs Artisan Entrepreneur o A person with primarily technical skills and little business knowledge who starts a business Characteristics 0 Take a paternalistic approach 0Are reluctant to delegate Use few sources of capital 0Have a traditional marketingstrategy Focus on personal sales effort 0 Have a short planning horizon Opportunistic Entrepreneurs Opportunistic Entrepreneur A person with both sophisticate managerial skills and technical knowledge who starts a business Characteristics Class Broadbased education Scienti c approach to problems Willing to delegate Broad view of strategy Diversi ed marketing approach Longer planning horizon Sophisticated accounting and nancial control Millennial Entrepreneurs GenY Have no fear of technology Are idealistic and optimistic Are more collaborative Build elements of community in the business Start companies while studying entrepreneurship Fai fastI learn a lot and keep going ic Entrepreneur Pro le Loner socially isolated Hard worker Fast learner Wealthseeking risktaker Greedy and dishonest Disadvantages of Small Business Entre Sales uctuations Financial losses Risk of failure Competition Laws amp regulations Public risks Increased responsibilities Employee relations preneur Myths Entrepreneurs are doers not thinkers Entrepreneurs are born not made Entrepreneurs are always inventors Entrepreneurs are academic amp social mis ts Entrepreneurs must t the pro le All entrepreneurs need is money All entrepreneurs need is luck Opportunity 6 preparation Entrepreneurs are extreme risk takers Dark Side of Entrepreneurship Risk 0 Financial 0 Career 0 Family 6 Social Psychological Stress Loneliness o Immersion in Business People Problems Dark Side of Entrepreneurship Entrepreneurial Ego Control Distrust Overriding desire to achieve Unrealistic Optimism Entrepreneurial Competencies Key standard business functions marketing accounting management sales nance HR industryspeci c knowledge space expertise 0 Resource competencies Determination competencies Opportunity competencies Professionalization Professionalization extent to which a rm meets or exceeds standard industry business practices 0 Expert Exceeding standard practices everything is done in best way possible Specialized founders or owners are passionate about one or two key business functions expert remaining activities are standard industry practice Minimalized Good enough mantra typically poor record keeping and little to no innovation Building an Entrepreneurial Legacy Looking Back At An Entrepreneurial Life 0 Proper values and actions lead to a good exit 0 Evaluating accomplishments Winning the Wrong Game 0 The nature of the entrepreneurial endeavor re ects personal goals and values o Crafting a Worthy Entrepreneurial Legacy 0 The tangible items and intangible qualities passed on to both heirs and society Satisfaction and Ful llment o Achieving balance with what do I want to do Starting a Small Business First hurdle is inaction Second hurdle is 0 Knowledge Expertise Competencies Connections Third hurdle is resources Small business Development Center Incubators Campus Resources Finances


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