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Int - Business Slide - No.5

This document provides an overview of entrepreneurship and small business ownership. It discusses why people become entrepreneurs, the types of entrepreneurs, and characteristics of successful entrepreneurs. Small businesses make up over 99% of businesses and produce about half of US economic output. The document outlines the steps to starting a business, including choosing a business structure and creating a business plan. It also discusses managing a small business and trends shaping entrepreneurship like increasing numbers of women, minority, and older entrepreneurs as well as growth of web-based companies.

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Fayyaz Malik
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42 views

Int - Business Slide - No.5

This document provides an overview of entrepreneurship and small business ownership. It discusses why people become entrepreneurs, the types of entrepreneurs, and characteristics of successful entrepreneurs. Small businesses make up over 99% of businesses and produce about half of US economic output. The document outlines the steps to starting a business, including choosing a business structure and creating a business plan. It also discusses managing a small business and trends shaping entrepreneurship like increasing numbers of women, minority, and older entrepreneurs as well as growth of web-based companies.

Uploaded by

Fayyaz Malik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter # 05

Entrepreneurship: Starting and Managing Your


Own Business
Learning Outcomes:

After reading this chapter, you should be able to answer these questions:

Why do people become entrepreneurs, and what are the different types of entrepreneurs?

What characteristics do successful entrepreneurs share? How do small businesses contribute to the U.S. economy?

What are the first steps to take if you are starting your own business?

Why does managing a small business present special challenges for the owner?

What are the advantages and disadvantages facing owners of small businesses?

How does the Small Business Administration help small businesses?

What trends are shaping entrepreneurship and small-business ownership?


Entrepreneurship Today

1. Why do people become entrepreneurs, and what are the different types of entrepreneurs?

Entrepreneurs are innovators who take the risk of starting and managing a business to make a profit. Most want
to develop a company that will grow into a major corporation. People become entrepreneurs for four main
reasons: the opportunity for profit, independence, personal satisfaction, and lifestyle. Classic entrepreneurs may
be micropreneurs, who plan to keep their businesses small, or growth-oriented entrepreneurs. Multipreneurs
start multiple companies, while intrapreneurs work within large corporations
Why Become an Entrepreneur?

desire to control their own destiny. Other reasons include financial independence and the frustration of working for
someone else. Two important motives mentioned in other surveys are a feeling of personal satisfaction with their
work, and creating the lifestyle that they want.
Characteristics of Successful Entrepreneurs:
The Entrepreneurial Personality

Studies of the entrepreneurial personality find that entrepreneurs share certain key traits. Most entrepreneurs are

• Ambitious: They are competitive and have a high need for achievement.

• Independent: They are individualists and self-starters who prefer to lead rather than follow.

• Self-confident: They understand the challenges of starting and operating a business and are decisive and confident in their ability to solve problems.

• Risk-takers: Although they are not averse to risk, most successful entrepreneurs favor business opportunities that carry a moderate degree of risk where they can better
control the outcome over highly risky ventures where luck plays a large role.

• Visionary: Their ability to spot trends and act on them sets entrepreneurs apart from small-business owners and managers.

• Creative: To compete with larger firms, entrepreneurs need to have creative product designs, bold marketing strategies, and innovative solutions to managerial problems.

• Energetic: Starting and operating a business takes long hours. Even so, some entrepreneurs start their companies while still employed full-time elsewhere.

• Passionate. Entrepreneurs love their work, as Miho Inagi demonstrated by opening a bagel shop in Tokyo despite the odds against it being a success.

• Committed. Because they are so committed to their companies, entrepreneurs are willing to make
What Is a Small Business?

Small businesses play an important role in the economy. They account for over 99 percent of all employer firms and
produce about half of U.S. economic output. Most new private-sector jobs created in the United States over the past
decade were in small firms. The Small Business Administration defines a small business as independently owned and
operated, with a local base of operations, and not dominant in its field. It also defines small business by size, according to its
industry. Small businesses are found in every field, but they dominate the service, construction, wholesale, and retail
categories.
Ready, Set, Start Your Own Business:

After finding an idea that satisfies a market need, the small-business owner should choose a form of business
organization. Preparing a formal business plan helps the business owner analyze the feasibility of his or her idea. The
written plan describes in detail the idea for the business and how it will be implemented and operated. The plan also
helps the owner obtain both debt and equity financing for the new business.
Managing a Small Business:

At first, small-business owners are involved in all aspects of the firm’s operations. Hiring and retaining key
employees and the wise use of outside consultants can free up an owner’s time to focus on planning, strategizing,
and monitoring market conditions, in addition to overseeing day-to-day operations. Expanding into global markets
can be a profitable growth strategy for a small business.
Small Business, Large Impact:

Because of their streamlined staffing and structure, small businesses can be efficiently operated. They have the
flexibility to respond to changing market conditions. Small firms can serve specialized markets more profitably than
large firms, and they provide a higher level of personal service. Disadvantages include limited managerial skill,
difficulty in raising capital needed for start-up or expansion, the burden of complying with increasing levels of
government regulation, and the major personal commitment that is required by the owner.
Trends in Entrepreneurship and Small-Business
Ownership:

Changes in demographics, society, and technology are shaping the future of entrepreneurship and small business in
America. More than ever, opportunities exist for entrepreneurs of all ages and backgrounds. The numbers of women
and minority business owners continues to rise, and older entrepreneurs are changing the small-business landscape.
Catering to the needs of an older population and a surge in web-based companies fuel continues technology growth.
Entrepreneurs typically follow the money and set up shop in places where there is venture capital money easily
available.
Thank You:

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