McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Chapter Entrepreneurship McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Learning Objectives After reading this chapter, you should be able to: z Distinguish between an entrepreneurship and a small business z Develop negotiation, networking, and leadership skills that can help you as an entrepreneur z Recognize why some entrepreneurships fail z Analyze the advantages and disadvantages of the legal forms of enterprises McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Learning Objectives(continued) z Learn how capital is raised through debt and equity financing and recognize the merits of each approach z Evaluate alternative forms of entrepreneurship, such as franchising, spin-offs, and intrapreneurships z Recognize and evaluate entrepreneurship as a career path and a source of innovation and new job opportunities McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Introduction z Creating a new enterprise is one of the greatest management challenges z Entrepreneurs have built successful companies by being able to exploit unmet needs in the market McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved What is Entrepreneurship? z The process of creating a business enterprise capable of entering new or established markets z It involves deploying resources and people in a unique way to develop a new organization z An entrepreneur is an individual who creates an enterprise that becomes a new entry to a market McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Entrepreneurship Myths z Myth 1: Entrepreneurs are born, not made z Myth 2: It is necessary to have access to money to become an entrepreneur z Myth 3: An entrepreneur takes a large or irrational risk in starting a business z Myth 4: Most successful entrepreneurs start with a break-through invention z Myth 5: Entrepreneurs become successful on their first venture McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Entrepreneurial Venture versus Small Business Management Small Business z Independently owned and operated z Small in size z Does not dominate its markets z Has less than 100 employees McGraw-Hill Entrepreneurship z Growth is one of the most important goals z The goal is to become a medium-sized firm of 100499 employees; or z A large firm with 500 or more employees © 2004 The McGraw-Hill Companies, Inc All rights reserved The Importance of Entrepreneurship z Job Creation ¾ Entrepreneurship accounts for most new jobs in the U.S economy z Innovation ¾ Entrepreneurships are responsible for introducing a major proportion of new and innovative products and services into market z Opportunities for Diverse People ¾ People of diverse background can improve their economic status by becoming entrepreneurs McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Key Characteristics of Entrepreneurs z High need for achievement z Internal locus of control z Willingness to take risks z Self-confidence McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved .. .Chapter Entrepreneurship McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Learning Objectives After reading this chapter, you should be able