2. The Entrepreneurial Process
The Main Idea
The entrepreneurial start-up process includes:
the entrepreneur
the environment
the opportunity
start-up resources
the new venture organization
Content Vocabulary
enterprise zones opportunity start-up resources
discontinuance new venture organization business failure
The History of Entrepreneurship
Entrepreneurship has been a distinct feature of American culture since the American Revolution, but it was not until the 1980s that it became a popular topic.
1960s Large diversified companies
1970s Volatile economic climate; beginning of technology revolution
1980s More government regulation; smaller companies emerge
1990s No job security; move to service-based economy influenced by technology
The Entrepreneurial Start-Up Process
- The five components of the entrepreneurial start-up process work together to create a new business.
the entrepreneur
the environment
the opportunity
start-up resources
the new venture organization
- The entrepreneur is the driving force of the start-up process.
Entrepreneurs recognize opportunities and pull together the resources to exploit opportunities.
The Environment
Four Categories of Environmental Variables
1.The nature of the environment
2.The availability of resources
3.Ways to realize value
4.Incentives to create new businesses
- New businesses seek enterprise zones that provide incentives.
Enterprise zones specially designated areas of a community that provide tax benefits to new businesses locating there; communities may also provide grants for new product development
The Opportunity
A good opportunity can be turned into a business. An idea plus a market equals an opportunity.
Opportunity an idea that has commercial value
Start-Up Resources
When entrepreneurs are ready to start up a new business, they must use creative talent to put together the necessary start-up resources.
Start-up resources the capital, skilled labor, management expertise, legal and financial advice, facilities, equipment, and customers needed to start a business
The New Venture Organization
The fifth component of the start-up process is the execution of the new venture organization.
New venture organization the infrastructure or foundation that supports all the products, processes, and services of a new business
The Facts About Business Failure
A business failure
A business that disappears from the tax rolls may be a failure or a discontinuance.
Discontinuance a business that disappears from the tax rolls because it may be operating under a new name or because the owner has purposely discontinued in order to start a new business
How Entrepreneurs Can Succeed
1. Recognize opportunity
2. Test the opportunity in the marketplace
3. Assemble an expert team to execute the business concept
4. Plan and manage effectively
1. Discuss the five components of the entrepreneurial start-up process.
The entrepreneurial start-up process includes the entrepreneur, the environment, the opportunity, start-up resources, and the new venture organization.
2. Explain how to achieve business success.
The chances of a new business succeeding are good with effective planning and management. Entrepreneurs must learn how to recognize opportunity, test that opportunity in the marketplace, and assemble a team with the necessary expertise to execute the business concept.