The foundations of entrepreneurship
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The Foundations of Entrepreneurship. Edited by : Noémi Piricz Based on : Thomas W. Zimmerer – Norman M. Scarborough: Essentials of Entrepreneurship and Small Business Management, Pearson Education International 2005, Chapter 1. Who is an Entrepr e neur?.

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The foundations of entrepreneurship

The Foundations of Entrepreneurship

Edited by: Noémi Piricz

Based on: Thomas W. Zimmerer – Norman M. Scarborough: Essentials of Entrepreneurship and Small Business Management, Pearson Education International 2005, Chapter 1

Who is an entrepr e neur
Who is an Entrepreneur?

  • Let’s collect his/her most important characteristics!

  • Entrepreneur is one who creates a new business, taking certain risks and uncertainty,

  • for the purpose of achieving profit and growth,

  • by identifying opportunities and assembling the necessary resources

Personal benefits of entrepreneurship
Personal Benefits of Entrepreneurship

  • 1. Opportunity to create your own destiny – „being able to follow his/her own interests, desire and fun”

  • 2. Opportunity to reap more profits (e.g. Bill Gates, M. Dell)

  • 3. Opportunity to contribute to society – trust and respect

Drawbacks of entrepreneurship
Drawbacks of Entrepreneurship

  • Uncertainty of income

  • Risk of losing your entire investment

  • Long hours and hard work

  • High level of stress

  • Complete responsibility

  • Discouragement and disillusionment

The cultural diversity of entrepreneurship
The Cultural Diversity of Entrepreneurship

  • Young entrepreneurs – comparing with other generations they are 3 times more likely to launch businesses

  • Women entrepreneurs- still certain discrimination in work market,- the rate of women entrepreneurs is growing dynamically

The foundations of entrepreneurship

  • Part-time entrepreneurs- popular gateway to entrepreneurship,- lower risk

  • Family business: two or more members of the same family have the financial control of the company- deep roots in family values, long term plans, trust etc.- bitter disputes, business and private life mixed, problem of finding a good leader after retirement

The power of small business
The Power of „Small” Business

  • Small business: employs fewer than 100 people (US)

  • In the US small firms employ 51 % of the nation’s private sector workforce, even though they posses less than one-fourth of total business assets!

  • Small businesses produce 51% of the American private GDP.

The foundations of entrepreneurship

The 10 deadly mistakes of entrepreneurship
The 10 Deadly Mistakes of Entrepreneurship research and development dollar than medium-sized firms

  • 1. Management mistakes – capacity, leadership ability, knowledge etc.

  • 2. Lack of experience – professional, economic, organizational, dealing with human resources etc.

  • 3. Poor financial control – undercapitalization (consequence: the firm runs out of capital before it is able to generate positive cash flow)

The foundations of entrepreneurship

  • 4. Weak marketing efforts research and development dollar than medium-sized firms – mistake: if the entrepreneurs dream it, customers will automatically come; instead of providing them with value, quality, convenience, service and fun!

  • 5. Failure to develop a strategic plan – „I don’t have time for it”

  • 6. Uncontrolled growth – expansion should be financed by the profit they generate or by capital contributions from the owners

The foundations of entrepreneurship

  • 7. Poor location research and development dollar than medium-sized firms – they often choose a vacant building

  • 8. Improper inventory control – neglected in many cases, problems: too much or too few inventory, and even too much of the wrong type of inventory

  • 9. Incorrect pricing – costs, aims, methods

  • 10. Inability to make the „entrepreneurial transition” – after the start up, growth usually requires radical changes in several fields…

Key definitions of chapter 1
Key Definitions (of Chapter 1): research and development dollar than medium-sized firms

  • Entrepreneur

  • Part-time entrepreneurs

  • Family business

  • Small business

  • undercapitalization

  • cash flow