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ENT3003 – MidtermInformation from text: Launching New Ventures Kathleen R. AllenDr. Dever’s Class 12:30 M WChapter 1 – Understanding Entrepreneurship p.9 (1Q) Job Creation- Entrepreneurial ventures create many jobs- The SBA (Small Business Administration) definition of small business – fewer than 500 employees (this includes high-growth technology ventures to “mom and pops” – big range)- represents 99.7% of all employers- 45% of private payroll - generates 60-80% of new jobs annually - in 2005 there were 25.8 million businesses in U.S. p. 12 (1Q) Business Failure- 2/3s of bus. Survive 2 year, and 44 % survive 4 years (prob. won’t be a Q seeing that he said Q9 would be only stat Q)- Bus. Survival contributed to; sufficient capital, employees, entrepreneur’s start up intentionp. 13 (1Q) History of Entrepreneurial Revolution - term Entrepreneur has existed 250 years- US founded on free enterprise – encouraging people to take risk to make the econ. stronger- in the 80’s – entrepreneurs became popular – average people suddenly became legends- examples: Marc Andressen – co –founder of Netscape Communications – brought info on the internet- and Howard Schultz – Starbucks – made drinking coffee an art – saw unsatisfied needs and satisfied them p.14 (1Q) - 70’s trends: Macroeconomic turmoil, international competition, technological revolution- Vietnam war brought inflation, which resulted in no borrowing or spending, which lead torecession- 80’s unemployment 10% and 1/5 of US companies faced foreign competition especially inautomobile and machine tool industries p.15 (3Qs)- 80’s - Decade of Entrepreneurship – called by dean of management science – Peter Drucker- press began to focus on business activities, even creating popular magazines – Inc. and Entrepreneur - big businesses – began to downsize and reverse trend of diversification to compete with small businesses - reorganization led to improved performance, increased profits, higher stock prices- also meant; many jobs would not longer exist, employees would receive fewer benefits only “secure” jobs were in civil services - end of the 80’s entrepreneurs took businesses international much sooner, especially high tech industries.- 90’s – Information Age – entrepreneurs would need the vision, resources and motivation to seek new opportunity and create jobs using Internet - internet allowed people to compete alongside established companies - competitiveness laid in the hands of information and new ideas - investors saw quicker returns in e-commerce p.17 (1Q) Women in Business- smaller size of businesses explained different motivations; how they define success and tend to redefine how business is done rather than impact econ. - 55% in service industry (tend to smaller size companies)p. 18 (1Q) Social Responsibility- company’s accountable to society and create proactive social programs (which reward employees for their involvement in community)- Mellody Hobson – Chicago-based investment firm – uses her Ariel Community Academy toteach children how to invest – “allows (her) to attract like-minded employees who have a sense of community”p.26 (4Qs)Myth 2: It take a lot of money to start a business- it does not, Lori Gallagher took her love of travel and jewelry to create a 2.8 million dollar co. She started with $1000 worth of sample pieces - more important than money are; the management team, market being addressed and resources (founding team, contacts, connections in value chain)Myth 3: It takes a great idea - book uses Disney World and Howard Schultz’s Starbucks as examples- it’s about having a great team, large market, execution plan that will make a co. successfulMyth 4: The bigger the risk, the bigger the reward- not true, entrepreneurs reduce risk by testing the market and writing a business plan- they will keep more equity if they can reduce the risk for investors p. 27 Myth 5 and 6: (conceptual Q) A business plan is required for success – Not required, investors like to see them to see know if the entrepreneur knows what he or she is doing- Pizza Hut and Crate and Barrel started with no business plan- More important is to spend time and resources testing the market for the feasibility of the business concept in terms of actual sales Entrepreneurship is for the young the reckless – False, entrepreneurship is for anyone whowants to experience the thrill of building something from scratch and make it a success- common thought is that you need to be young to have the energy, drive, resources and riskiness involved – not true- Ray Kroc – founded McDonald’s at 52Myth 7: Entrepreneurship cannot be taught- False, specific skills and behaviors can be taught, part of it is a discipline which can be taught- however the passion to achieve can not be taughtChapter 2 - Preparing For The Entrepreneurial Journey p. 29 (2Q’s) The Serial of Portfolio Entrepreneurship - Serial Entrepreneur – starts one business and then moves on to start another- Portfolio entrepreneur – owns more than one company at a time- Wayne Huizenga is an example of both he started and owned Waste Management Inc., blockbuster, and Auto Nation all at one time while working on the othersp. 31 (1Q) The Corporate Venture- activities that are new and started within an already existing co. They are risky, therefore they are managed separately- many large companies choose between: the skunk works, intrapreneurhsip and acquisition to simulate the entrepreneurial environment require for innovation (small startups within a bigger co)p. 36 (1Q) Effective network- exchange info and resources among individuals, groups and organizations whose common goals are to mutually benefit and create value for the members- consistent network growth- large network size- network cultivations, interaction and exchange- network balance in terms of resources- legitimacy provided by credible network partners p.40 (2Q) Improve or Acquire Critical Skills - entrepreneurs must be able to analyze a situation, extract important info. and ignore superfluous info., compare outcomes, extrapolate from experiences- must weigh options and use critical thinking - make decisions, b/c wise decisions provide opportunity for growth Critical Entrepreneurial Skills:(this comes from a table in the book – Dever said this would be an a and b, b and c, none of the above, all the above Q) - Analysis and


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FSU ENT 3003 - Midterm

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