ENT3003 Midterm Information from text Launching New Ventures Kathleen R Allen Dr Dever s Class 12 30 M W 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 intention p 13 1Q History of Entrepreneurial Revolution term Entrepreneur has existed 250 years US founded on free enterprise encouraging ppl 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 to recession 80 s unemployment 10 and 1 5 of US companies faced foreign competition especially in automobile 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 to teach 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 successful Myth 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 who wants 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 52 Myth 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 taught Chapter 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 others p 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 start ups 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 critical thinking opportunity recognition resource gathering organizational and time management persuasion and negotiation written and oral communication leadership and people management and decision making p 41 3Q Study an Industry best way to discover opportunity is by studying and working in the industry group of cos in a similar activity value chain businesses involved in the production of a product or service best