Chapter 6 – Entrepreneurship and Small Business
THE NATURE OF ENTREPRENEURSHIP
Entrepreneurship: Strategic thinking and risk-taking behavior that results in the creation of new
opportunities for individuals and/or organizations.
Who are the entrepreneurs?
o Risk-taking individuals who take actions to pursue opportunities and situations others may
fail to recognize or may view as problems or threats.
o Starts new ventures that bring life to new product and service ideas
o Founders of businesses that become large-scale enterprises.
Characteristics of entrepreneurs:
o People who: Buy a local franchise outlet, open a small retail shop, operate a self-employed
o People who introduce a new product or operational change in an existing organization
o High energy level, high need for achievement, self-confidence, passion, control
ENTREPRENEURSHIP AND SMALL BUSINESSES
Ones with 100 or fewer employees and independently owned and operated.
50 percent of the private labour force works in small businesses.
Are established by:
o Starting a new business.
o Buying an existing business.
o Buying and running a franchise.
Why They Fail…
o Lack of experience , lack of expertise, lack of strategy and strategic leadership, poor
financial control, growing too fast, insufficient commitment, ethical failure
Entrepreneurship and the Internet
The Internet offers numerous entrepreneurial opportunities.
o Online buying and selling
o Dot-com businesses
Businesses are limited only by personal creativity.
Business-to-Business (B2B) ventures are possible.
International Business Entrepreneurship
Provides strategic opportunities for small businesses.
Creates exporting and importing opportunities.
Supported through appropriate governmental and non-governmental organizations.
Family businesses …
Owned and financially controlled by family members.
Largest percentage of businesses worldwide.
www.notesolution.com Can provide an ideal business situation.
Problems unique to family businesses: family business feud and succession problems
NEW VENTURE CREATION
The entrepreneur has to ask themselves if their idea is good, if it is a good strategy, if a market
niche can be identified, if there is a new market that has not been discovered and if there is a first-
mover advantage by exploiting a niche or entering a market before competitors
Life Cycle of Entrepreneurial Firms
Writing the Business Plan
describes the direction of the new business and the financing needed to operate it
what to include in a business plan: