Chapter 2: Entrepreneurship Today

1. Chapter 2: Entrepreneurship Today

2. Learning Objectives • To realize there is no consensus concerning the definition of entrepreneur. • Understand the decision to become an entrepreneur is influenced by an individual’s personality, the ethno-cultural environment, circumstances in society, and the interaction of these forces. • To comprehend the many advantages and disadvantages of being an entrepreneur and, therefore, the decision to start a business must be weighted very carefully.

3. The Entrepreneurial Process • The entrepreneurial process is common in the United States • Each year, 1 of every 25 people is actively involved in trying to start a new business • Many of these ventures start out as part-time businesses

4. Entrepreneurial Activities • New concept/new business • Existing concept/new business • Existing concept/existing business

5. Factors of Entrepreneurship • The individual • Cultural factors • Circumstances in society • Combination of factors

6. The Individual • Passion for the business • Tenacity despite failure • Confidence

7. The Individual (cont.) • Self-determination • Management of risk • Seeing changes as opportunities

8. The Individual (cont.) • Tolerance for ambiguity • Initiative and need for achievement • Detail orientated and perfectionism

9. The Individual (cont.) • Perception of passing time • Creativity • Ability to see the big picture

10. The Individual (cont.) • Motivating Factors • To use personal skills and abilities • To gain control over his/her life • To build something for the family • Because he/she liked the challenge • To live how and where he/she chooses

11. The Individual (cont.) • Self-Efficacy • A person’s belief in his or her ability to perform a task • Belief that success as an entrepreneur is possible

12. Cultural Factors • Some ethno-cultural groups have higher rates of entrepreneurship than do others • Effect or culture and traits may be intertwined • Cultural differences also affect the status of entrepreneurs

13. Circumstances in Society • Downsizing • Immigrants • Called “adaptive-response behavior”

14. The Entrepreneur and the Business Plan • When writing a business plan, key information will include the entrepreneur’s: • Education • Work experience • Entrepreneurial personality characteristics

15. Advantages of Entrepreneurship • Autonomy • Challenge of a start-up • Financial control

16. Disadvantages of Entrepreneurship • Personal sacrifices • Burden of responsibility • Little margin for error