1 / 27

Chapter 6: Fostering Entrepreneurship

MANAGING: A COMPETENCY BASED APPROACH 11 th Edition. Chapter 6: Fostering Entrepreneurship. Don Hellriegel. Susan E. Jackson. John W. Slocum, Jr. Prepared by Argie Butler Texas A&M University. Fostering Entrepreneurship. Learning Goals.

andren
Download Presentation

Chapter 6: Fostering Entrepreneurship

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. MANAGING: A COMPETENCY BASED APPROACH 11th Edition Chapter 6: Fostering Entrepreneurship Don Hellriegel Susan E. Jackson John W. Slocum, Jr. Prepared by Argie Butler Texas A&M University

  2. Fostering Entrepreneurship • Learning Goals 1. Explain the nature of entrepreneurship and the impact the environment has on it 2. Describe the competencies that contribute to entrepreneurs’ success 3. Outline the planning essentials for potential entrepreneurs 4. Describe the basic essentials of corporate entrepreneurship Chapter 6: PowerPoint 6.1

  3. Entrepreneurship: Its Meaningand Scope Common Components of Entrepreneurship What is Entrepreneurship? Somethingnew Somethingbetter • The creation of an innovative organization for the purpose of economic gain or growth under conditions of risk or uncertainty New deliverysystem ordistribution channel Entering an underserved or new market Chapter 6: PowerPoint 6.2

  4. How Does the Environment Affect Entrepreneurship? • Open and free markets • Deregulation • Political climate • Economic and technological conditions • Support system • Availability of capital and loans • Tax rates and policies • Support services: SBA, SBDCs, venture capital firms, chambers of commerce, etc. Chapter 6: PowerPoint 6.3

  5. How Does the Environment Affect Entrepreneurship? • Business incubation: a business support process that accelerates the successful development of start-up and fledging companies by providing entrepreneurs with an array of targeted resources and services • Common features in business incubators • Management and technical guidance • Networking • Rental space/flexible leases • Shared business services and equipment • Psychological and moral support • Assistance in obtaining financing Chapter 6: PowerPoint 6.4

  6. Is a Small Business an Entrepreneurial Firm? • Small business—one that is independently owned and operated and which is not dominant in its field of operation • SBA defines size by number of employees or dollars of sales, depending upon industry • Small business firm may be entrepreneurial, depending upon its initiatives Chapter 6: PowerPoint 6.5

  7. Are Family Businesses Entrepreneurial Firms? • Family business: one owned and managed mostly by people who are related by blood and/or marriage • May or may not be entrepreneurial • 30% of family businesses survive to the second generation, 12% to the third generation, and 3% to the fourth and beyond Chapter 6: PowerPoint 6.6

  8. Competencies of Successful Entrepreneurs Self management Communication Successful entrepreneurs • Need forachievement • Desire forindependence • Self confidence • Self sacrifice Planningand administration Teamwork Strategic action Multicultural Specialized Knowledge Varies by type of business launched Chapter 6: PowerPoint 6.7 (Figure 6.1)

  9. Importance of Self-Confidence and Optimism I think its’ important to see this clear path and not be discouraged when people throw stones at it, because they will. You will have to be willing to see the path, believe in it, and have the stamina and persistence to stick with it. You have to stand your ground and have confidence. Denise Divine Founder of Devine Foods Chapter 6: PowerPoint 6.8

  10. Strategic Action Competency: Interrelated Strategic Practices of Successful Entrepreneurs Delivering products and services that are perceived as high quality and that are seen by its customers or clientsas adding value Developing or improving products and services on a regular basis Generating new customers or clients that expand revenue Focusing marketing expenditures and developing customer-oriented employees Maintaining financial control of the firm Establishing a strong commitment to ethical practices Chapter 6: PowerPoint 6.9

  11. Planning and Administration Competency: Snapshot Do your homework prior to starting the business. Make sure the market truly needs your service or product. Finally, make sure you can differentiate your service or product from the competition in a way that is beneficial to the customer. Stay focused on your goals, but be flexible enough to modify your business plan to match what the market is truly asking for. As evidenced of why this is important: 75 percent of my firm’s revenue today is from services we didnot offer in my original business plan. Daniel Driesenga Founder and CEO Driesenga & Associates Chapter 6: PowerPoint 6.10

  12. Communication Competency • Successful entrepreneurs score higher than 82 percent of the population on their ability to express support and encouragement • Successful entrepreneurs succeed by helping other people—their employees, partners, investors, suppliers—become successful themselves Chapter 6: PowerPoint 6.11

  13. Planning Essentials for Entrepreneurs • Business Plan • Snapshot • Describes the basic idea that is the foundation for the start-up and outlines how that idea can be turned into reality “Someone once said: If you don’t know where you’re going, any road will take you there. You need to know exactly where you want to go, what route you’re going to take, when you will arrive and what you are to do upon arrival—no guesswork at all. You need to determine whether there is a demand for your service and, if so, what constitutes your market.” Don DoggettManagement Counselor Counselors to America’s Small Business Chapter 6: PowerPoint 6.12

  14. Business Plan: Essential Components I. Executive Summary • What, how, why, where, and when must be summarized II. Business Description Component • The name of the business • The potential and uniqueness of the new venture (continued) Chapter 6: PowerPoint 6.13 (Adapted from Table 6.1)

  15. Business Plan: Essential Components(cont’d) III. Marketing Component • Convince investors that sales projectionsand competition can be met • Identify target market, market position,market share, pricing strategy • Evaluate all competition and state why andhow you will be better than your competitors • Identify advertising plans with cost estimates Chapter 6: PowerPoint 6.14 (Adapted from Table 6.1)

  16. Business Plan: Essential Components(cont’d) IV. Location Component • Describe the advantages of your location (zoning, tax laws, wage rates); list the production needs in terms of facilities (plant, storage, office space) and equipment (machinery, furnishings, supplies) • Indicate proximity to your suppliers Chapter 6: PowerPoint 6.15 (Adapted from Table 6.1)

  17. Business Plan: Essential Components(cont’d) V. Management Component • Supply résumés of all key people in the management of your venture • Describe the legal structure of your venture (sole proprietorship, partnership, or corporation) • Give information on how and how much everyone is to be compensated Chapter 6: PowerPoint 6.16 (Adapted from Table 6.1)

  18. Business Plan: Essential Components(cont’d) VI. Financial Component • Describe the needed sources for your funds and the uses you intend for the money • Develop an estimated budget, cash flow statement, and profit and loss statement • Create stages of financing for purposes of allowing evaluation by investors at various points Chapter 6: PowerPoint 6.17 (Adapted from Table 6.1)

  19. Business Plan: Essential Components(cont’d) VII. Potential Critical-Risks Component • Any potentially unfavorable industry-wide trends, such as price cutting by competitors • Design or manufacturing costs in excess of estimates • Sales projections not achieved • Product development schedule not met • Provide some alternative courses of action Chapter 6: PowerPoint 6.18 (Adapted from Table 6.1)

  20. Business Plan: Essential Components(cont’d) VIII. Milestone Schedule Component • Develop a timetable or chart to demonstrate when each phase of the venture is to be completed IX. Appendix or Bibliography Chapter 6: PowerPoint 6.19 (Adapted from Table 6.1)

  21. How to Start the Business Buy Strategy Start-up strategy Other options Franchise strategy Chapter 6: PowerPoint 6.20

  22. Principle of Affordable Loss • The conscious determination of the amount of resources (money, time, and effort) entrepreneurs are willing to commit to an idea, which, in turn, influences the choice of strategies and methods needed to generate early revenues • Addresses tension between excessive analysis and quick action Chapter 6: PowerPoint 6.21

  23. Finding Funds Venture capitalist Business angel Entrepreneur,family,friends Private sectorfinancialinstitutions Businessincubators,government agencies (SBA) Chapter 6: PowerPoint 6.22

  24. Factors That Favor a Global Start-up ForeignFinancingis Better TargetCustomersRequire an InternationalPresence HumanResources AreDispersed AmongCountries GlobalStart-Up DomesticInertia Could Impede Later Efforts toInternationalize ForeignCompetition WillQuickly Enter theMarket DomesticMarket is TooSmall to SupportExpenses Chapter 6: PowerPoint 6.23 (Adapted from Figure 6.2)

  25. Recommendations to Ensure a Successful Family Business Clear Job ResponsibilitiesAnd Authority Relationships Explicit Hiring CriteriaFor Family Members Commitment toResolving Conflicts Quickly Plan for ManagementTransitions Use of OutsideAdvisors/Directors Chapter 6: PowerPoint 6.24 (Figure 6.3)

  26. Corporate Entrepreneurship • What is Corporate Entrepreneurship? • The development, promotion, and implementation of innovation initiatives in established firms for the purpose of generating growth and, thus, profits under risky or uncertain conditions • Essential for the survival of firms • Who Is a Corporate Entrepreneur? • Someone in an organization who champions turning new ideas into profitable realities Chapter 6: PowerPoint 6.25

  27. How is Corporate Entrepreneurship Fostered? Commitment from senior management Flexible organization design Autonomy of the venture team Incentivesand rewardsfor risk taking Appropriatelydesigned controlsystem Competent and talented people who exhibit entrepreneurialbehaviors and attitudes Chapter 6: PowerPoint 6.26

More Related