1 21 14 Chapter 2 Most Entrepreneurs work a few years like most individuals won t so that they can live the rest of their lives like most individuals can t Sustainability An idealized state of human fulfillment satisfaction health prosperity that exists from generation to generation It involves meeting the needs of the present generation w o compromising the ability to meet the needs of future generations Financial sustainability The ability of private firms to generate the profits and cash flow needed to sustain their business operations Triple bottom line Businesses consider a broader bottom line that takes into account profits people and the planet Enlightened self interest A business philosophy where the business does well financially by helping others and the environment Sustainable businesses main concerns Their own viability and profitability Managing operations to reduce negative environmental impact Recycling Conserving the use of nonrenewable material energy Internal Profit maximization External Legal and regulatory Potential to lower energy material costs Improve reputation sales Founder s values Barriers to Sustainable Business Practices Lack of understanding of what sustainability is and means to an enterprise Flaws in execution Too ambitious agenda Selfish business motives Lack of sincere interest Greenwashing When a product of service is sold as green or environmentally friendly using deceptive claims A Systems Approach Systems are made up of components that work together for the overall objective of the whole A system is more than a sum of its parts Closed System Organization that isolates itself from its external environment Does not take in new information is therefore likely to atrophy and vanish Open System Receives information uses it to interact dynamically with its environment In order to most effectively create a sustainable business a business entire system of operations must be mapped analyzed and understood Social Responsibility Business Stakeholder engagement formal process of relationship management Stakeholders include owners investors employees consumers all affected by the actions of the corporation Carrying capacity population of a species that the environment can sustain indefinitely Supply Demand when a product is in high demand low supply you increase its price Tragedy of the Commons describes a situation where individuals acting in own self interest overexploit a shared resource resulting in its depletion and ultimately negatively impacting the individual actors Overexploitation taking of a natural renewable resource at a greater rate than it can replenish and sustain itself Ecological Threshold tipping point where the stresses on an ecosystem exceed the capacity to absorb them Public Policy The decisions made and actions taken by government in regard to a particular issue or set of issues Market Failures instances in which the private market fails to allocate scarce resources in the most economically efficient manner U S is 2nd largest emitter of GHG emissions in the world China s 1st Two goals of sustainability reporting Documentation assessment of an organization s environmental economic social impact Communication of a company Radical Transparency A high degree of transparency that reveals the good bad and ugly of a business Intrapreneurship Entrepreneurship from within Sustainability Entrepreneurship builds on the basics of entrepreneurship and extends it to additionally addressing ecological and social concerns 1 23 14 Success isn t permanent and failure isn t fatal Mike Ditka SEVEN MYTHS OF ENTREPRENEURSHIP Entrepreneurs start businesses solely to make money Independence create something new It takes a lot of money to start a business Can start on 1000 or less it s not the amount of capital an entrepreneur possesses rather how many human resources they can harness It takes a great idea to start a business Not the great idea but the great team that with great execution in a growing market A business plan is required for success While formal business plans are good to have more important than business plan spending time and resources testing the market for the feasibility of a business concept in terms of actual sales The bigger the risk the bigger the reward Goal of most entrepreneurs to minimize risk Entrepreneurship is for the young and reckless Men and women between ages 45 64 are 34 of all entrepreneurial activity in U S while ages 25 44 are responsible for 50 and other 14 is over 65 years old Entrepreneurship cannot be taught It can Research has failed to identify a stereotypical entrepreneur The Home Based Entrepreneur Over 50 of all U S businesses are home based Sometimes required by lack of resources sometimes lifestyle choice Most often businesses are started in homes in order to reduce overhead and start up risk Serial Portfolio Entrepreneur start up multiple business and sell or keep them Traditional Entrepreneur brick and mortar not solely on Internet Non Profit Entrepreneur educational religious goals Corporate Venturer large organizations are finding it necessary to provide an opportunity for entrepreneurial activity in order to compete Skunk Works autonomous group given a mandate to find and develop new products operate outside traditional lines of authority of company but have access to its resources Challenges Finding right business opportunity Finding right people to help grow business Needing to work often long hours without pay No previous experience to rely on Raising capital and other resources Uncertainty as to when the venture will succeed high risk Dealing with sense of isolation and disillusionment Facing failure at some point Opportunities Creating wealth Becoming independent taking charge of career Working in environment you create Doing something you re passionate about Making a difference Creating new jobs Supporting the community Find a mentor Build a network Learn about entrepreneurs