WHAT IS ENTREPRENEURSHIP?
• Strategic thinking and risk-taking behaviour that results in the creation of new
opportunities for individuals and/or organizations.
• Risk-taking individuals who take actions to pursue opportunities and situations
others may fail to recognize or may view as problems or threats.
Entrepreneurs are …
• Founders of businesses that become large-scale enterprises.
• People who:
Buy a local franchise outlet
Open a small retail shop
Operate a self-employed service business
• People who introduce a new product or operational change in an existing
CHARACTERISTICS OF ENTREPRENEURS:
• Internal locus of control: entrepreneurs believe that they control their own
destiny; they are self-directing and like autonomy.
• High energy level: entrepreneurs are persistent, hard working, and willing to exert
extraordinary efforts to succeed.
• High need for achievement: entrepreneurs are motivated to act individually to
accomplish challenging goals; they thrive on performance feedback.
• Tolerance for ambiguity: entrepreneurs are risk takers; they tolerate situations
with high degrees of uncertainty.
• Self-confidence: entrepreneurs feel competent, believe in themselves, and are
willing to make decisions.
• Action-oriented: entrepreneurs try to act ahead of problems; they want to get
things done quickly and do not want to waste valuable time.
• Desire for independence: entrepreneurs want to be independent; they are highly
self-reliant and want to be their own boss rather than to work for others.
• Parents were entrepreneurs or self-employed.
• Families encouraged responsibility, initiative, and independence.
• Have tried more than one business venture.
• Have relevant personal or career experience.
• Become entrepreneurs between 22 and 45 years of age.
• Have strong interests in creative production and enterprise control.
• Seek independence and sense of mastery.
Reasons for women and member of visible minorities becoming entrepreneurs:
• Out of necessity (necessity-based entrepreneurship)
• Gain economic independence.
• Provide a pathway to career success that may be blocked otherwise.
Common myths about entrepreneurs:
• Entrepreneurs are born, not made.
• Entrepreneurs are gamblers.
• Money is the key to entrepreneurial success.
• You have to be young to be an entrepreneur.
• You must have a degree in business to be an entrepreneur. WHAT IS SPECIAL ABOUT SMALL BUSINESSES?
Small businesses …ones with 100 or fewer employees, independently owned and
• 48 percent of the private labour force works in small businesses.
• Are established by:
• Starting a new business.
• Buying an existing business.
• Buying and running a franchise.
• The Internet offers numerous entrepreneurial opportunities.
• Nearly 85% of small businesses are conducting business over the internet.
Family businesses …owned and financially controlled by family members.
• In US, family businesses account for 78% of new job creation
• 60 % of the nation’s employment.
• Can provide an ideal business situation.
• Problems unique to family businesses:
• Family business feud when members of the controlling family get into
disagreements about work responsibilities, business strategy, operating approaches,
finances, or other matters.
Succession problem transferring leadership from one generation to
The succession plan should include:
Procedures for choosing or designating the firm’s new leadership.
Legal aspects of any ownership transfer.
Any financial and estate plans relating to the transfer.
Small businesses have a high failure rate––60 to 80 percent of new businesses fail
in their first five years of operation. Reasons for new business failure include poor
cash flow, uncontrolled growth, etc.
Reasons for small business failures:
• Lack of experience
• Lack of expertise
• Lack of strategy and strategic leadership
• Poor financial control – not keeping track of numbers
• Growing too fast