Entrepreneurship MANAGING: A COMPETENCY

Fostering
BASED APPROACH
11th Edition

Chapter 6: Fostering
Entrepreneurship

Don Hellriegel
Susan E. Jackson
John W. Slocum, Jr. Prepared by
Argie Butler
Chapter 6: PowerPoint 6.18 (Adapted from Table 6.1)
Texas A&M University
 Entrepreneurship
Fostering

 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
 Entrepreneurship
Entrepreneurship: Its Meaning
and Scope
Fostering

What is Common Components of Entrepreneurship

Entrepreneurship?
 The creation of Something Something
an innovative new better
organization for
the purpose of
economic gain
or growth New delivery Entering an
under system or underserved or
conditions of distribution new market
risk or channel
uncertainty
Chapter 6: PowerPoint 6.2
 Entrepreneurship
How Does the Environment Affect
Fostering 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

 Entrepreneurship
How Does the Environment
Fostering
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
 Entrepreneurship
Fostering

 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

 Entrepreneurship
Are Family Businesses
Fostering 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
 Entrepreneurship
Fostering

Self management Communication

 Need for
achievement Planning Teamwork
and Strategic Successful
 Desire for
administration action entrepreneurs
independence
 Self confidence
 Self sacrifice Multicultural

Specialized Knowledge

Varies by type of
business launched
Chapter 6: PowerPoint 6.7 (Figure 6.1)
 Entrepreneurship Importance of Self-Confidence
Fostering
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

 Entrepreneurship
Fostering
Delivering products and
services that are perceived as
high quality and that are seen
by its customers or clients
as adding value
Generating new customers
or clients that expand
revenue
Maintaining financial
control of the firm
Chapter 6: PowerPoint 6.9
Developing or improving
products and services on a
regular basis
Focusing marketing
expenditures and
developing customer-
oriented employees
Establishing a strong
commitment to ethical
practices
 Entrepreneurship
Planning and Administration
Fostering
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 did
not offer in my original business plan.
Daniel Driesenga
Founder and CEO
Driesenga & Associates
Chapter 6: PowerPoint 6.10
 Entrepreneurship
Communication
Fostering 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
 Entrepreneurship
Planning Essentials for Entrepreneurs
Fostering

 Business Plan  Snapshot

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

Chapter 6: PowerPoint 6.13 (Adapted from Table 6.1) (continued)

 Entrepreneurship
Business Plan: Essential
Fostering Components (cont’d)

III. Marketing Component

 Convince investors that sales projections
and competition can be met
 Identify target market, market position,
market share, pricing strategy
 Evaluate all competition and state why and
how you will be better than your competitors
 Identify advertising plans with cost estimates

Chapter 6: PowerPoint 6.14 (Adapted from Table 6.1)

 Entrepreneurship
Business Plan: Essential
Fostering 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)

 Entrepreneurship
Business Plan: Essential
Fostering 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)

 Entrepreneurship
Business Plan: Essential
Fostering 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)

 Entrepreneurship
Business Plan: Essential
Fostering 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)

 Entrepreneurship
Business Plan: Essential
Fostering
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)

 Entrepreneurship
How to Start the Business
Fostering

Buy Strategy Start-up

strategy

Other Franchise
options strategy

Chapter 6: PowerPoint 6.20

 Entrepreneurship Principle of Affordable Loss
Fostering

 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
 Entrepreneurship
Finding Funds
Fostering

Venture capitalist Business angel

Entrepreneur,
family,
Business friends Private sector
incubators, financial
government institutions
agencies (SBA)

Chapter 6: PowerPoint 6.22

 Entrepreneurship
Factors That Favor a Global Start-up

Fostering
Foreign
Human Financing Target
Resources Are is Better Customers
Dispersed Among Require an
Countries International
Presence
Global
Start-Up
Domestic
Foreign Inertia Could
Competition Will Impede Later
Domestic
Quickly Enter the Efforts to
Market is Too
Market Internationalize
Small to Support
Expenses

Chapter 6: PowerPoint 6.23 (Adapted from Figure 6.2)

 Entrepreneurship
Recommendations to Ensure a
Fostering Successful Family Business

Clear Job Explicit Hiring Criteria

Responsibilities For Family Members
And Authority
Relationships Commitment to
Resolving Conflicts
Quickly
Plan for Management Use of Outside
Transitions Advisors/Directors

Chapter 6: PowerPoint 6.24 (Figure 6.3)

 Entrepreneurship
Corporate Entrepreneurship
Fostering

 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
 Entrepreneurship
How is Corporate Entrepreneurship
Fostering
Fostered?

Commitment from senior management

Flexible organization Autonomy of the
design venture team

Incentives
and rewards
Appropriately for risk taking Competent and
designed control talented people who
system exhibit entrepreneurial
behaviors and attitudes

Chapter 6: PowerPoint 6.26