Entrepreneurship

1. Entrepreneurship

2. Entrepreneurship Glenn Muske Micro Business Specialist Oklahoma State University

3. Outline • Entrepreneurship • Myths • Defined • Opportunity, Risk and Reward • What the social sciences tell us • Entrepreneurs and the community • Entrepreneurs vs. small business owners & others • Role of entrepreneurs in the local economy • Building an entrepreneurial community • Entrepreneurial examples • Special entrepreneurial situations • Final thoughts CM 4.02 Am I An Entrepreneur

4. The freedom to pursue personal passion leads many to start businesses. “Nothing great in the world has been accomplished without passion.” George Wilhelm Friedrich Hegel German Philosopher (1770-1831) Personal Passion CM 4.02 Am I An Entrepreneur

5. Questions often asked but aren’t the most important • What can I do? What business should I start? • Can I get a grant? • What business will earn lots of money? • What about e-commerce? CM 4.02 Am I An Entrepreneur

6. Questions often not asked but should be!! • Am I an entrepreneur? • Is there a market? • Can I profitably tap that market? • How do I get to market? - E-commerce is just a means to market CM 4.02 Am I An Entrepreneur

7. The Myths of Entrepreneurship

8. Myth #1 • Get Rich Quick! • Truth is • Life as an entrepreneur is not about money. • Success rarely happens overnight. • It's about what you want to do with your life. CM 4.02 Am I An Entrepreneur

9. Myth # 2 • You must be born an entrepreneur (trait theory) • Truth is: • some of the most successful entrepreneurs are the most unlikely. • It is a lifestyle choice, not an accident. CM 4.02 Am I An Entrepreneur

10. Myth # 3 • You must be at the right place at the right time (environment theory) • Truth is: • successful entrepreneurs operate whatever the macroeconomic and structural factors are CM 4.02 Am I An Entrepreneur

11. Myth # 4 • "I'll have all this free time…" • Truth is entrepreneurs work many hours • advantages are: • control of time • variety of tasks CM 4.02 Am I An Entrepreneur

12. Myth # 5 • It get easier. • Truth is it gets more challenging • must work faster, smarter & longer • must enjoy the battle CM 4.02 Am I An Entrepreneur

13. Myth # 6 • If you build it, they will come. • Truth is building your business is just the start. Next is the real work: • planning • timing • strategizing and more. CM 4.02 Am I An Entrepreneur

14. Myth # 7 • It's all about the bottom line. • Truth is that the bottom line is necessary but not sufficient • purpose and meaning to the business • inspire customers and employees CM 4.02 Am I An Entrepreneur

15. Myth # 8 • Entrepreneurs are risk takers • Truth – Entrepreneurs are calculators • Studies show entrepreneurs are only moderate risk takers CM 4.02 Am I An Entrepreneur

16. Myth # 9 • You have to have a great idea • Truth • Your idea must be good • Your idea must be doable • Your idea must be wanted or needed • Your idea must be priced right CM 4.02 Am I An Entrepreneur

17. Myth # 10 • It takes a lot of money • Truth – Over 50% start for under $10,000 • Also look for • Certain business types • Turn-around situations • Possibility of using other people’s money CM 4.02 Am I An Entrepreneur

18. Entrepreneur’s goal is • By finding new solutions to existing problems • Or by connecting existing solutions to unmet needs or new opportunities” SOURCE: Lichtenstein & Lyons, Incubating New Enterprises: A Guide to Successful Practice, 1996 “to create or capitalize on new economic opportunities through innovation CM 4.02 Am I An Entrepreneur

19. Entrepreneurship Definitions: • Creation of an innovative economic organization for the purpose of gain or growth under conditions of risk and uncertainty • Self-employment through business ownership that includes significant elements of risk, control, and reward (Coleman Foundation) • Organizing a business venture assuming a certain amount of risk to make a profit (Burns and Bolton) CM 4.02 Am I An Entrepreneur

20. More Definitions: • Profits from bearing uncertainty and risk • Purposeful activity to initiate and develop a profit-oriented business • Moderate risk taking • Creation of new organizations • The pursuit of opportunity without regard to resources currently controlled CM 4.02 Am I An Entrepreneur

21. Opportunity recognition Creation and/or innovation Resource gathering and the founding of an economic organization Desiring the chance for gain while accepting risk and uncertainty Entrepreneurship:Basic Elements CM 4.02 Am I An Entrepreneur

22. Other Entrepreneurial Motivators

23. Be my own boss! Time With Family LIFE STYLE MONEY CM 4.02 Am I An Entrepreneur

24. ?? Tell a time when you were entrepreneurial ?? Were you successful??

25. Opportunity Recognition CM 4.02 Am I An Entrepreneur

26. An Entrepreneurial Opportunity defined: • A situation in which changes in which changes in technology, or economic, political, social, and demographic conditions generate the potential to create something new or to remarket something existing. CM 4.02 Am I An Entrepreneur

27. Entrepreneurial Opportunity Grid Product/Service Market Existing New Existing New Market Penetration New Offering Development Market Development Diversification CM 4.02 Am I An Entrepreneur

28. What are opportunities? • Small steps • Little jumps • Huge leaps CM 4.02 Am I An Entrepreneur

29. "Don't be afraid to take a big step if one is indicated; you can't cross a chasm in two small jumps." David Lloyd George CM 4.02 Am I An Entrepreneur

30. Technical or scientific Political and regulatory Process or production method Organizing New market and marketing Personnel Social & demographic changes New raw material Product obsolescence Corporate stagnation One-product vulnerability Chance Opportunities can be... CM 4.02 Am I An Entrepreneur

31. Think like a….. • Manager – Problem solving • Entrepreneur – Opportunity Exploitation CM 4.02 Am I An Entrepreneur

32. Opportunities • External • Unexpected event • Technology changes and convergence • Change in methods • Demographics/market – size, • Changes in competition • Internal • Other methods CM 4.02 Am I An Entrepreneur

33. The Opportunity Myth An Idea does not equal an Opportunity CM 4.02 Am I An Entrepreneur

34. Creation & Innovation CM 4.02 Am I An Entrepreneur

35. Creativity “ Imagination is more important than knowledge” - Einstein CM 4.02 Am I An Entrepreneur

36. The Creative Process • Planning & definition • focus on building the RIGHT product • Design, demonstration & customer support • focus on building the product RIGHT CM 4.02 Am I An Entrepreneur

37. Customer requirement Product solution NOT Technology Find a consumer Product CM 4.02 Am I An Entrepreneur

38. Basic questions • What is the customer’s need? • How large is the opportunity? • How likely is it to happen? • What is the market timing? • Is it aligned with our organizational strengths? CM 4.02 Am I An Entrepreneur

39. Time is money! Delays give others time to develop the same product. CM 4.02 Am I An Entrepreneur

40. Reduce product development time by 1/3 & you will triple profits & growth. CM 4.02 Am I An Entrepreneur

41. Exercise • In groups of 3-4, think of 3 things you have observed externally lately that would be a potential business opportunity. CM 4.02 Am I An Entrepreneur

42. Resource Gathering Resourced-based Theory of Entrepreneurship

43. Dimensions of Entrepreneurship Individual Characteristics New Venture Creation Environment Organization Constraints in the Environment CM 4.02 Am I An Entrepreneur

44. Resource • any thing or quality that is useful • used to develop sustainable competitive advantage • heterogeneous & immobile • you have them, others cannot easily get them CM 4.02 Am I An Entrepreneur

45. Strategic Resources • Valuable – Exploit an environmental opportunity • Rare – Not enough for all competitors • Imperfectly imitable – Cannot be merely copied • Non-substitutable CM 4.02 Am I An Entrepreneur

46. Competitive Advantage CM 4.02 Am I An Entrepreneur

47. Types of Resources • Financial • Physical • Human • Technology • Reputation • Organizational CM 4.02 Am I An Entrepreneur

48. Risk and Reward CM 4.02 Am I An Entrepreneur

49. If the business succeeds, the entrepreneur reaps the reward of profits; if it fails, one takes the loss. CM 4.02 Am I An Entrepreneur

50. Business Failure Rate CM 4.02 Am I An Entrepreneur