ENTREPRENEURSHIP
The Entrepreneurial Life
- The entrepreneur and owners of small business are some of our greatest heroes. We believe that the words of Theodore
Roosevelt, when he described “the man in the arena,” apply perfectly to these individuals.
-Entrepreneurship can provide an exciting life and offer substantial personal rewards. We passionately contend that there
is no finer calling.
1-1 Small Size but Large Significance
Paul Reynolds, a leading researcher in the field, says that entrepreneurship is “on the scale of a lot of other
major social phenomena.
1-2 Small Business and Entrepreneurial Opportunity: The Same or Different?
What is a Small Business?
Small Business- a business with growth potential that is small compared to large companies in an industry,
has geographically localized operations, is financed by only a few individuals, and has a small management
team.
High-potential venture (gazelle)- a small firm that has great prospects for growth.
Attractive small firm- a small firm that provides substantial profits to its owner.
Microbusiness – a small firm that provides minimal profits to its owner.
Lifestyle business – a microbusiness that permits the owner to follow a desired pattern of living.
Microloans – very small loans, often provided to entrepreneurs in developing countries.
Criteria engaging in Small Business:
1. Compared to the largest firms in the industry, the business is small; in most instances, they business has
fewer than 100 employees.
2. Except for its marketing function, the business’s operations are geographically localized.
3. Financing for the business is provided by no more than a few individuals.
4. The business may begin with a single individual, but it has the potential to become more than a “one-
person show” and may eventually grow to be a mid-sized company or even a large firm.
5. The business must have growth potential, whether or not the owner chooses to capture that growth.
What are an Entrepreneurial Opportunity, and Who Are the Entrepreneurs?
Entrepreneurial opportunity-an economically attractive and timely opportunity that creates value for
interested buyers or end users.
Entrepreneur-a person who relentlessly pursues an opportunity, in either a new or an existing business, to
create value while assuming both the risk and the reward for his or her efforts.
Bootstrapping-doing more with less in terms of resources invested in a business, and, where possible,
controlling the resources without owning them.
1-3 Entrepreneurial Qualities: No Big Ego Required
People often ask, “Are entrepreneurs born or made?” That question has long been debated with little
agreement. However, Stephen Spinelli and Robert Adams have nicely summarized research on entrepreneurial
characteristics. The entrepreneurs they describe as having and exhibiting “desirable and acquirable attitudes
and behaviors” fall under the following six descriptors:
1. Commitment and determination – tenacious, decisive, and persistent in problem solving.
2. Leadership – self-starters and team builders who focus on honesty in their business relationships
3. Opportunity obsession - aware of market and costumer needs
4. Tolerance of risk, ambiguity, and uncertainty – risk takers, risk minimizers, and uncertainty tolerators.
5. Creativity, self-reliance, and adaptability – open-minded, flexible, uncomfortable with the status quo, quick
learners
6. Motivation to excel – goal oriented and aware of personal strengths and weaknesses.
On the other side of the coin, there are some attitudes and behaviors that should be avoided at all cost. An
almost certain way to fail as an entrepreneur, as may have learned by experience, is to do the following:
1. Overestimate what you can do
2. Lack an understanding of the market
3. Hire mediocre (ordinary) people
4. Fail to be a team player, which is usually the result of taking oneself too seriously
5. Be a domineering manager
6. Fail to share ownership in the business in an equitable way
Founders versus other entrepreneurs
Founder - an entrepreneur who brings a new firm into existence.
Franchisees
Franchisee – an entrepreneur whose power is limited by a contractual relationship with a franchising
organization.
Entrepreneurial Teams
Entrepreneurial Team – two or more people who work together as entrepreneurs on one endeavor.
Social Entrepreneurs
Social Entrepreneurship – entrepreneurial activity whose goal is to find innovative solutions to social needs,
problems, and opportunities.
Women Entrepreneurs
Ba a Small Business Owner Who Thinks and Acts Like an Entrepreneur
Mentor – a knowledgeable person who can offer guidance based on experience in a given field.
1-4 Your Motivations for Owning a Business
Reluctant Entrepreneur – a person who becomes an entrepreneur as a result of some severe hardship.
Corporate Refuge – a person who becomes an entrepreneur to escape an undesirable job situation.
Types of Entrepreneurial Motivations
1. Personal fulfillment- making a difference, and sense of belonging and working together
2. Personal satisfaction – intellectually challenging, passion’s for firm product or service, and recognition
and respect.
3. Independence – being my own boss, controlling my own future, and discretionary time and flexibility.
4. Financial rewards – building personal financial wealth
Understanding Your Business Paradigm
(One Person, Three Personalities)
Technician Personality
A personality that focuses on an already developed technical skill, wants to be left alone to get the job done,
and is primarily concerned about the present.
Technician
Is short-term oriented
Is paternalistic
Uses only traditional marketing strategies
Is reluctant to delegate
Relies on personal selling
Manager Personality
A personality that is pragmatic and likes order and planning operations.
Manager
Avoids paternalism
Delegates authority
Varies marketing strategies
Uses different sales approaches
Seeks multiple financing sources
Entrepreneurial Personality
A personality that focuses on the business as a whole and providing results for the customer.
Entrepreneur
Asks how the business must work
Sees the business as a system
Visualizes the future
Develops strategies for the business by first seeing the whole picture.
Five potential competitive advantages of small entrepreneurial companies over large firms
1. Costumer focus
Small business owners have an opportunity to know their costumers well and to focus on meeting their needs.
2. Quality performance
By emphasizing quality in products and services, small firms can build a competitive advantage.
3. Integrity and responsibility
Independent business owners can build an internal culture based on integrity and responsibility that is reflected
in relationships both inside and outside the firm. Such a culture helps strengthen the firm’s position in a
competitive environment.
4. Innovation
Many small firms have demonstrated a superior talent for finding innovative products and developing better
ways of doing business
5. Niche markets
Small firms that find a distinct market segment of some type can gain an advantage in the marketplace.
