Introduction to Entrepreneurship Launching New Ventures Allen 5th Edition Chapter 2 Preparing for the Entrepreneurial Journey Business is fundamentally about people Step 1 to starting a new venture FINDING A MARKET NEED defined by customers who purchase and based on product service benefits Step 2 assembling the right team difficult for 1 person to possess all knowledge and skills needed to start and run business How big to grow a business is a personal decision More employees doesn t necessary mean more profits MYTHS ABOUT ENTREPRENEURSHIP 1 Entrepreneurs only start businesses to make money Truth start because of the need for independence and creativity It takes a lot of money to start a business 2 3 Entrepreneurship takes a great idea Truth starts with a great team and new opportunity 4 The bigger the risk the bigger the reward Truth goal is to reduce risk levels 5 Business plan is required for success 6 Entrepreneurship is for the young and reckless Truth entrepreneurs can be any age 7 Entrepreneurs cannot be taught born not made Truth entrepreneurship is a learning process Truth businesses can start without formal planning planning helps build and grow the venture entrepreneurs are as varies as the business they start Pathways to Entrepreneurship 1 Home Based Entrepreneur Technology allows people to do business anywhere many resources Most are hobby consulting and freelance businesses Good starting point in growing a business Reduced start up risks Internet Entrepreneur 2 Transact all business aspects over the internet Deals with digital products services that do not require brick and mortar physical distribution Allows to launch business at relatively low costs Ability to test waters ad receive feedback on ideas 3 Serial Entrepreneur Entrepreneur starts one business and continues to move to start other ventures 4 Portfolio Entrepreneur Entrepreneur owns minority majority stake in several ventures 5 Traditional Entrepreneur Starts brick and mortar business and build to a point where wealth is created and harvested Found in all industries 6 Non Profit Entrepreneur Focused on social responsibility education religion and other charitable goals Make a profit but money stays in the company and not distributed to owners 7 Corporate Venturer Start ventures inside existing organization Involves activities new to company High risks and uncertainty SKUNK WORKS ROUTE autonomous group given mandate to find and develop new products for the company that may be external to core competencies for entrepreneurial mindset to succeed inside a large corporation there must be 1 Senior management commitment 2 Champions 3 Corporate interoperability 4 Clearly defined stages and metrics 5 Superior teams 6 Spirit of entrepreneurship Preparing to Become an Entrepreneur 1 Find a mentor 2 Build a network 3 Learn about entrepreneurs 4 Analyze personality and preferences 5 6 Study and industry Improve acquire critical skills BUSINESS IS ABOUT RELATIONSHIPS Effective networking has 1 Consistent growth 2 Large size 3 Cultivation interaction and exchange 4 Legitimacy provided by credible network partners 5 Balance of resources NETWORKING exchange of info and resources among individuals groups and organizations who share common goals that are mutually beneficial and create value for all of its members Strong ties close friends family Weak ties acquaintances business contacts Barriers to becoming self employed 1 Lack of confidence 2 Financial needs 3 Startup logistics 4 Personal family issues 5 Time constraints 6 Lack of skills
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