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BA 346

BA 346. Working as an Entrepreneur Week 1. Course Overview & Administrative Details. Course Structure Syllabus Adds Student Contact Info. Make sure I have your PREFERRED email address. Go to this link and put in your preferred email address http://bit.ly/fggwey.

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BA 346

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  1. BA 346 Working as an Entrepreneur Week 1

  2. Course Overview& Administrative Details • Course Structure • Syllabus • Adds • Student Contact Info

  3. Make sure I have your PREFERRED email address • Go to this link and put in your preferred email address • http://bit.ly/fggwey

  4. What is Entrepreneurship? According to Merriam-Webster's Online Dictionary… en·tre·pre·neur Pronunciation: \äⁿn-trə-p(r)ə-nər, -n(y)u̇r\ Function: noun Etymology: French, from Old French, from entreprendre to undertake Date: 1852 : one who organizes, manages, and assumes the risks of a business or enterprise • Is an entrepreneur just someone who runs a business? • Entrepreneur: someone who takes on the risk of a business activity to receive the rewards from that activity. • Entrepreneurship is the set of activities crucial to being an entrepreneur

  5. Why Entrepreneurship? • Every year, more than one million businesses are started in the United States. • What is the purpose of a business? • Business vs Non-Profit • Business vs Cool Idea • What motivates people to become entrepreneurs?

  6. Risk & Return • Return is the reward, as a percentage of the investment • Risk is uncertainty • Risk and return always balance • Risk tolerance • Investment • Speculation • Gambling

  7. Value • Value can be measured in money. What other types of value do entrepreneurs create?

  8. Small Business and the Economy • New Jobs: small businesses created 75% of the last 3.4 million jobs created • Small business is the engine of job creation • Occupational Structure: the sequence or organization of jobs and careers in the economy • Small businesses employ more than half of all Americans • Small businesses are key employers – they employ people who have atypical work histories or needs

  9. Small Business and the Economy • Innovations: promotes creative destruction • Creative Destruction: the way that newly created goods, services, or firms can hurt existing competitors • Small businesses generate 13-14 times more patents than big businesses

  10. Small Business and the Economy • New Opportunities: Entrepreneurship presents the best opportunities for many people who foresee problems fitting into mainstream jobs • Small businesses are the support for the boat that carries the economy: high-growth ventures and large companies • Small businesses provide cheaper alternatives for product ideas, manufacturing & distribution

  11. Measuring Value • What is the Fundamental Question? • Example • You have an opportunity to buy a magic machine which is guaranteed to produce a $100 bill every month for five years. It costs nothing to run and disappears at the end of that time. What would you pay for it right now?

  12. Measuring Value • $100/month for 5 years = $6,000 revenue • If the cash flows come in as predicted, the amount you are willing to pay determines the return • Considerations: • Desired return • Other investment opportunities • Inflation • Time to break even (payback period) • Availability of cash to invest

  13. Measuring Value • What are we valuing? …but remember, the payments are monthly • Present Value at…

  14. Why Not Just Invest? • Pros & cons of entrepreneurship • Pros & cons of investing • Does investing create value in our economy?

  15. Creating Value as an Entrepreneur • Entrepreneurs are vitally important to our communities and our economy • Jobs • Innovations • New opportunities • Personal wealth & satisfaction • Entrepreneurs take on risks to achieve these things

  16. Risk Aversion • Are entrepreneurs really risk averse? • How many businesses survive long term? • What are the reasons for failure? • Entrepreneurs are not risk averse, they are willing to take action to mitigate the risk.

  17. From Side-project to Startup • Should your hobby be a business? • Should you start a business as a part-time effort?

  18. From Startup to Success • 4 out of 5… • What are the reasons? • What can be done to beat the odds?

  19. FIND A GOOD OPPORTUNITY DEVELOP A PLAN ORGANIZE NECESSARY RESOURCES RUN THE BUSINESS The Entrepreneurial Process • This is the basic process all successful entrepreneurs follow • How do we find opportunities? • How good does the plan have to be? • Where do we find resources? • How do we manage the venture?

  20. Getting Started as an Entrepreneur • Action is great, but forethought will help you succeed • Overcoming obstacles • First steps

  21. Begin with the End in Mind • How do you want to end up? • How will you know how you did? • How will you make it happen? • Who will be your customers? • How will you begin?

  22. Exit Strategies • You may not want to exit • IPO • Being acquired • Selling • Less successful exits • Knowing how you did • Financial success • Other success • The Triple Bottom Line (Profit, People & the Planet)

  23. Money • Financial Accounting • Knowing how you did • Evidence of success • Legitimacy to lenders and others • Managerial Accounting • Knowing how you are doing right now • Controlling the operation, expenses, cost structure, pricing • Finance • Knowing what you are going to make happen • Managing sources of funds • Choosing projects wisely

  24. Operations • Operations support the financial goals • Operations Execution • What happens • Making it happen • Operations Planning • Getting everyone on the same page • What needs to happen • How to make it happen

  25. Connecting with Customers • Customer transactions drive the operational need • Sales, advertising and marketing will connect to your customers to generate needed revenue. • “Marketing” is a misused expression • Marketing is about identifying and defining the market you want to capture • Advertising is broadcast to that market • Selling is the process of making the transaction happen • Dialog with customers is key.

  26. Do you have what it takes? • What does it take to work as an entrepreneur? • Is it always full-time? • What are the paths to become an entrepreneur? • What if you work for someone else?

  27. Traits of Entrepreneurs

  28. What You Should Have Learned • Business competencies • What basic business knowledge did you learn from business classes? • What skills do you have as a result? • How do you create value? • Planning & managing… • Money (finance & accounting) • Operations • Marketing

  29. Removing barriers • Filling the gaps you find • Anticipating problems

  30. Three Experts Every Entrepreneur Needs

  31. FIND A GOOD OPPORTUNITY DEVELOP A PLAN ORGANIZE NECESSARY RESOURCES RUN THE BUSINESS How will you begin? • Recognize what you have available • Examine the opportunities • Follow the entrepreneurial process

  32. Workshop 1

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