Chapter 1 Flashcards
Entrepreneurial actions begin…
at the nexus of a lucrative opportunity and an enterprising individual.
Entrepreneurial Opportunity
Situations in which new products, services, raw materials, and methods are introduced and sold at greater than their cost of production.
e.g. existing product applied to new market
e.g. new product applied to existing market
Enterprising individuals/groups/organisations
Entrepreneurial opportunities require an enterprising individual, or a group of enterprising individuals to:
- recognise
- evaluate
- explore
- exploit
these possible opportunities.
The nature of entreprenurship
The taking of entrepreneurial action by creating new products/services/processes or entering new markets which may occur by establishing new ventures or by existing ventures
Entrepreneurial action
being able to assess the level of uncertainty around a potential opportunity and being willing to bear the risk and take the opportunity.
Prior knowledge decreases the level of uncertainty
Motivation shows the willingness to bear the uncertainty
Four key ideas when starting an entrepreneurial venture:
- Believe you can do this
- Planning + Action = Success
- Help helps
- Do well Do good
- Believe you can do this
Having self-efficacy
- a person’s belief in his or her ability to achieve a goal
- Planning + Action = Success
Success comes from having the right plan to get you the right action
- Help helps
Learning from experts
- Do well Do good
You depend on your stakeholders; therefore, do good for them
- social responsibility
The Timmons Model of the entrepreneurial process includes:
Opportunity
Resources
Entrepreneur/Team
Entrepreneurial process: Opportunity
The creation and recognition of opportunities is at the heart of the process.
Considerations:
- Market readiness
- Consumer trends and behaviours that seek new products or
services
Entrepreneurial process: Resources
-Let the opportunity guide you toward the level and the extent of
resources needed.
-Minimize and control rather than maximise and own.
-Build a good resource base to facilitate the start-up process
Entrepreneurial process: Entrepreneur/Team
-After identifying an opportunity, an entrepreneur works to start a
business by putting together a team and gathering the required
resources.
-The nature of the opportunity determines the size and shape of the
team.
-A good team is necessary for success.
-Only a good team can unlock a higher potential with any opportunity
and manage the pressures related to growth.
Entrepreneurial process: Creativity, communication and leadership
The success of the prospective business depends on the ability of the entrepreneur to ensure balance by applying creativity, leadership and maintaining effective communication.
Entrepreneurial process: Business plan
-At the center of the framework is a business plan, in which the three
basic components are integrated into a complete strategic plan for
business.
-The business plan provides the language to communicate the quality
of the three driving forces of the model (opportunity, resources,
team)
Entrepreneurial process: Risk vs Capital Market Capture
-Balancing act between managing risks and capturing market share.
-There is always a risk of failure, but it can be minimized with a sound
opportunity, enough resources and a good team.
Competencies
Types of business-related expertise
BRIE Model Elements to get started in a business
- Boundary
- Creating a place for your business (in location and minds)
- leads to basic business competency - Resources
- The money, product, knowledge, etc., that make up the business
- leads to resource competencies - Intention
- The desire to start a business
- determination competencies - Exchange
- Moving resources/products/services in exchange for money
- opportunity competencies
Small businesses are important to our economy and community:
Small businesses contribute new jobs, innovations, new opportunities.
Small businesses and the economy: New jobs
-Small business is the engine for job creation.
-Small businesses are more willing to offer jobs to people with
atypical work histories or needs.
e.g. inexperienced people, people with uneven employment
histories, using part time work
Small businesses and the economy: Innovation
-Small businesses offers an environment where the new can come
into being. More freedom and flexibility.
-Creates creative destruction- a way in which newly created goods,
services, firms can hurt existing goods, services, firms.
Small businesses and the economy: New opportunities
-Small businesses create opportunities not only for the entrepreneur
but the communities they serve.
-Allows people to get into the economic mainstream.
-Small businesses offer goods and services to our communities
Factor-driven economies
-There is little manufacturing
-most industry relates to farming and extracting raw materials
-Entrepreneurial activity is high
-Entrepreneurship is essential to build personal wealth and to break
the cycle of low-wage jobs
e.g. Pakistan, Jamaica, Venezuela
