What Is Entrepreneurship and Why Is It Important?

Chap 1

• What is Entrepreneurship and Why is It Important?

-Process by which individuals pursue opportunities without regard to resources they currently control for the purpose of exploiting future goods and services

-“Entrepreneurs, in the purest sense, are those who identify a need—any need—and fill it.”

-This is the true essence of entrepreneurship; define, invest, build repeat.

• Why Do People Become Entrepreneurs?
• Three primary reasons:

• Be the Boss – had ambition to own firm; frustrated working in traditional jobs
• Pursue Own Ideas – difficult (not impossible) to do in traditional corporate environment; speed
• Pursue Financial Rewards – generally fails to live up to hype; average entrepreneur does not make more

• Entrepreneurs who are successful share 

Entrepreneurs who are successful share:

• Passion for their Business – often result of a belief that business/product will positively influence people’s lives
• Product/Customer Focus – two most important elements in any business, product and customer
• Tenacity Despite Failure – experimentation (and failure) will likely be needed before arriving at success
• Execution intelligence – ability to move idea into viable business

• Characteristics of Successful Entrepreneurs

• Passion for their Business – often result of a belief that business/product will positively influence people’s lives
• Product/Customer Focus – two most important elements in any business, product and customer
• Tenacity Despite Failure – experimentation (and failure) will likely be needed before arriving at success
• Execution intelligence – ability to move idea into viable business

• Common Myths about Entrepreneurs

1. Entrepreneurs born, not made
2. Entrepreneurs are gamblers
3. Entrepreneurs are motivated primarily by money
4. Entrepreneurs should be young and energetic
5. Entrepreneurs love the spotlight

• The Positive Effects of Entrepreneurship and Entrepreneurial Firms

• The Entrepreneurial Process

Step 1: Deciding to become an entrepreneur

Step 2: Developing successful business ideas

Step 3: Moving from an idea to an entrepreneurial firm

Step 4: Managing and growing the entrepreneurial firm

Chap 2

• The Differences Between Opportunities and Ideas

-An idea is a thought, impression, or notion; it is a starting point or a “primer” for the entrepreneurial process

-An opportunity is a favorable set of circumstances that creates a need for a new product, service, or business

-Opportunities have four essential qualities:

• Attractive
• Timely
• Durable
• Anchored in a product, service, or business that creates or adds value for buyer or end user

• Three Ways to Identify Opportunities

Observing Trends

Solving the Problem

Finding Gaps in Marketplace

• Personal Characteristics of the Entrepreneur

Prior Experience in an industry helps entrepreneurs recognize business opportunities. Cognitive Process, there are those who think entrepreneurs have a 6th sense that allows them to see opportunities that others miss. Social Networks affects opportunity recognition. And Creativity.

• Techniques for Generating Ideas

Brainstorming, Focus groups, Library and Internet research, and SCAMPER.

Substitute

Combine

Adapt

Magnify or Modify

Put to other uses

Eliminate

Rearrange or Reverse

Chap 3

• Feasibility Analysis

Process of determining if a business idea is viable

• Assessment of potential business
• Designed to critique merits of proposed business

Four components:

• Product/Service feasibility
• Industry/Target Market feasibility
• Organizational feasibility
• Financial feasibility

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• Product/Service Feasibility Analysis

-Assessment of the overall appeal of product or service being proposed

-If a product or service doesn’t appeal to consumers, it most likely will not sell, no need to pursue (may be possible to revise)

-Two components of analysis:

• Product/Service desirability
• Product/Service demand

• Industry/Target Market Feasibility

Assessment of the overall appeal of the industry and the target market

• An industry is a group of firms producing a similar product or service
• A target market is the portion of the market that the industry wants to appeal to

• Entrepreneurial firms tend to select small segments and seek to provide excellent service and/or quality

Two specific issues to consider:

• Industry attractiveness
• Target market attractiveness

• Organizational Feasibility Analysis

-Conducted to determine if business has sufficient management expertise, competence and resources