entrepreneurship and Small Business PDF

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Summary

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Social enterprise- using a business as a tool to create a societal good, a benefit to many 

is the application of the mindset, processes tools and techniques of business entrepreneurships to the pursuit of a social and/or environmental mission.

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"social" derives from the Latin word sociales, meaning associate ally or companion. Defining "social" o The organization of associates, allies, companions, or confederates into a cooperatively interdependent group- a community or society o Includes concepts of laissez faire and caveat emptor.

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Defining entrepreneurship  An economic definition of "entrepreneurship" o A production innovator who perceives the opportunity t provide a new product or implement a new production method and then organizes the needed production inputs and assumes financial risk  A networking definition of "entrepreneurship" o A marriage broker between what is desirable from an economic point of view and what is possible from a technological (i.e., operational) point of view.  "entrepreneurship" as a profession involving cognitive processes and actual practice. o Way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach and leadership balanced.  "entrepreneurship" as growth and development of skills needed to move a firm through the stages of the business life cycle. o Anyone who innovates and ho has a goal of growth and development themselves and their business Social Entrepreneurs as change agents 

Social Entrepreneurs play the role of change agents in the social sector by: o Adopting a mission to create and sustain social value (not just private value) o Recognizing and relentlessly pursuing new opportunities to serve that mission. o Engaging in process of continuous innovation, adaptation and learning. o Acting boldly without being limited by resources currently in hand o Exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created.

Thinking about social Entrepreneurship 

Approaches to social entrepreneurship o As the trading activities of nonprofit organizations that are seeking to enhance their effectiveness by behaving more like entrepreneurial businesses o As the activities of or-profit or nonprofit private entities that pursue a social mission (social enterprise) as their triple bottom line. o As hybrid business ventures straddling the boundary between forprofit business and social mission driven public and nonprofit organizations. o As organizations that use the pursuit of economic value as a tool for achieving social mission

Similarities between social Entrepreneurship and business Entrepreneurship

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Both employ the behaviors, skills, processes, tools, and techniques of entrepreneurs: o Opportunity recognition( adding value by addressing needs) o Bootstrapping (being creative and efficient when assembling resources) o Risk tolerance through risk management o Innovation o Desire for control o Network building capability o Continuous learning

Difference: social Entrepreneurs…..  Focus on social mission achievement as opposed to he commercial entrepreneur's focus on profits for the enterprise's owners. Social Entrepreneurs appear to use the pursuit of economic value as a took for achieving social mission.  Tend to have more democratic or participatory decision making processes than do commercial Entrepreneurs  Are particularly unsatisfied with that status quo, making them better positioned to recognize opportunities for social change  Are generally more skilled than commercial Entrepreneurs at building networks of support across diverse constituencies.  Social Entrepreneurs are unique because they know how to operate at the Nexus between the private, public and nonprofit worlds from which their multiple stakeholders come.

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The business sector and the social sector use different thought processes and languages. The successful and social Entrepreneur must act as a translator, ambassador, and facilitator between these two worlds. Social Entrepreneurship is not about simply making social sector more business-like, nor merely giving biasness a social conscience. These things may happen, but they are products of a more complex and sophisticated process. Social Entrepreneurship blends these two spheres to add social value in the most efficient, effective, equitable and sustainable manner possible.

What motivates social Entrepreneurs?  "background" : how the individual Entrepreneur was raised and socialized o Includes influences from family, friends, religious leaders, teachers. o My also reflect personal characteristics. That heighten the individuals sensitivity to a particular social problem.

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"content" provides the milieu in which the social Entrepreneurs background interacts with the social sector as they are exposed to social problems. o Which cause them to exercise their altruism and focus their anger at social injustice. o It also helps them to recognize an opportunity for adding social value and of developing a mission for delivering on that value proposition. Internal and external forces o Internal motivation comes from the personal values that foster empathy for the plight of others and from a self-confidence born of relevant experience. o External motivation comes from an encounter with a social problem and from the support of others who share concern regarding that problem

Modeling the social Entrepreneurship process  The Timmons model of the Entrepreneurship process

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The PCDO framework

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The CASE model

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The social Entrepreneurship framework

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The social Entrepreneurship process model

General sources of ideas  Personal experiences  Hobbies or avocations  Systematic or intentional search  Awareness generated by media,  Serendipity Entrepreneurs can monitor four major areas of society (PEST)  "P" - Political arena: changes in regime, ideology, leadership and so forth.  "E"- economic and evolves change in structure, monetary policy, trade policy  "S" social may include demographic and cultural shifts  "T" technology, accounts for a host of change stemming from development and implementation of new technologies. General entrepreneurial ideas  Ideas are those that involve identifying a new b for an existing product or service  Ideas are those that represent the creation of an entirely new product or service often through a technical breakthrough

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Ideas are those that involve creating new processes for producing and/ or delivering existing products of services.

Creativity is the development of original ideas or inventions Innovation is the implementation of those inventions

Entrepreneurs, by definition, are innovators, but they are not always inventors

Vale preposition:  The problem being solved for the customer  The emotions the customer feels when using the product/ service

Opportunity Recognition  Involves movement from an idea to an opportunity  Question: if opportunities are implementable ideas, what makes them implementable?

What is opportunity?  Is a business concept for a product or service that adds value to the lives of its customers by uniquely addressing an identified need or desire in a way that takes advantage of existing market conditions and the skill set of the entrepreneurs and ensures the financial viability of the enterprise delivering the product or service.  Key elements o Business concept o Adds value o Addresses a need or desire o Takes advantages of conditioned and skills o Ensure viability Social enterprise opportunities  "window of opportunity" o Time frame to provide benefit to "customers"  Must be financially sustainable  How do we recognize those opportunities? o On a systematic basis o Need to be able to predict when an opportunity is a good one  Review of available tools… Tools: evaluation of internal and external contexts  Tools that evaluate the internal and external contexts within which the enterprise pursuing the opportunity operates and the tangible and intangible resources necessary and available o SWOT analysis o Outside- in/ inside-out analysis  Looks at potential at the outside context and the internal availability of the enterprise to do something  Tells us how opportunities might be shaped.

Tools: evaluating the ideas  Evaluate the attractiveness of the idea relative to criteria such as industry, market, economics, competition, management, and the personal goals of the entrepreneur o Bygrave- seven areas for assessment  Industry and market  Economics  Harvest issues  Competitive advantage issues  Management team  Personal criteria  Strategic differentiation o Timmons and Spinelli- three areas (quick screen)  Market and margin relative issues  Need/want/problem/pain-point  Competitive advantages: relative to the current and evolving set of competitors  Value creation and realization issues o Opportunity checklist - Bygrave and zacharakis  Variation on Bygrave model  Some new categories  entrepreneur can evaluate an idea as either "better opportunity" or weaker opportunity" Social opportunity assessment tool  Attempts to capture o The pursuit of social vale and o The market- driven aspects of business opportunities

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Social need o The need has been recognized Mission alignment o Once an idea has been determines to be a genuine opportunity, admission can be clearly articulated i.e the mission statement. Social return on investment o Should the investment pay off by producing social gain the exceed the initial input Community support o The community has to believe in the idea o And has to be supportive Achievable impact o Is there a transformation o Is there a deep and lasting social change

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Barriers to entry o Obstacles that make it difficult for new ventures to enter market. Social o Prevent an entrepreneur from having access to social networks in the market that are crucial to success Formal

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Those that lack of formal institutions for governance, legal interactions, market interactions, and financial capital provisions in the context that the company is trying to enter

Venture capacity o Resources, over time Venture capability o Skills of the team Investor intrest Ability to generate income o By charging fees o Selling goods Compelling mission o What attracts a lot of the other things

Elements of value

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Social impact o

Self- transcendence  Helping other people or society more broadly  When TOMS sells a pair of shoes or eyewear, a new pair of shoes goes to an impoverished child or part of the profit

goes to save the eyesight of people in developing countries 

Life changing o

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Motivation 

Spurring people to achieve their goals  Example: Spotify added a musicstreaming feature for runners that detects their tempo and finds music to match it

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A good investment for future generation  Example: Patek Philippe positions its watches as cherished possessions designed to last and accompany successive generations.

Heirloom

Affiliation and belonging  helping people become part of a group or identify with people they admire  Example: The Boston Red Sox have built a loyal customer base by appealing to tradition and local patriotism in New England. Emotional o Reduces anxiety  Helping people worry less and feel more secure  Example: Discover allows cardholders to instantly freeze and unfreeze their accounts without canceling their cards. o Rewards me  Providing benefits for being a loyal customer o

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Provides hope  Providing something to be optimistic about  Example: GNC stores sell a wide range of weight loss, nutritional supplements and other products designed to improve consumers' health and fitness. Self actualization  Providing a sense of personal accomplishment or improvement  Example: Consumers buy a Leica camera in part from the pride of owning a camera used by famous photographers over the course of the brand's century-long history.

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Nostalgia 

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Example: Starwood has earned strong customer loyalty among frequent travelers through a robust rewards program.

Reminding people of something positive in the past  Example: Volkswagen's Beetle line of cars emulates the popular design originally created in the 1930s and produced through the 1970s

Design/ aesthetics  Providing an appealing form or design  Example: Apple's attention to design has helped differentiate its computers, smartphones and other products from those of competitors. Badge value  Representing achieved status or aspirations  Example: Prada's understated luxury clothing and accessories are designed to be recognized by fashionistas. Wellness  Improving people's physical or mental state  Example: Westin added fitness equipment in some guest rooms, "superfoods," and exercise clothing rentals to reposition the brand as part of the well-being movement. Therapeutic value  Providing therapeutic value or well-being  Example: Dr. Scholl's products aim to soothe a broad range of foot conditions. Fun/ entertainment  Offering fun or entertainment  Example: Norwegian, Royal Caribbean and other cruise lines offer almost roundthe-clock entertainment ranging from indoor sky diving to bumper cars to art auctions. Attractiveness  Helping people feel more attractive  Example: Victoria's Secret created bold retail designs in an undergarment industry that had been quiet and discreet. Provides access

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Providing access to information, goods, services or other valuable items  Example: CVS Health added in-pharmacy clinics that provide basic medical services and assorted wellness services.

Functional o

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Saves Times

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Saving time in tasks or transactions  Example: Target, REI and other retailers have in-store pickup for online orders and/or same-day rush delivery from store.

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Reducing complexity and simplifying  Example: Amazon's 1-Click feature simplifies the order checkout process.

Simplifies

Makes money 

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Helping to make money  Example: Google's AdSense helps independent blogs and websites to generate advertising revenue

Reduces risk 

Protecting from losses  Example: Charles Schwab's Accountability Guarantee refunds fees if clients are not fully satisfied with the investment product.

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Becoming more organized  Example: The Container Store helps people organize their possessions at home.

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Integrating different aspects of life  Example: Square offers invoice management, payroll and other services that integrate billing functions into its point-of-sale hardware and software.

Organizes

Integrates

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Connects

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Connecting with other people  Example: Energy drink maker Red Bull sponsors extreme sports competitions and communities that connect enthusiasts around the world. Reduces effort 

Getting things done with less effort  Example: Facebook added the ability to send money directly to friends via its Messenger app. Avoids hassles  Avoiding or reducing hassles  Example: Zappos offers free shipping and generous return policies. Reduces cost  saving money in purchases, fees or subscriptions  Example: Nordstrom, J. Crew and other retailers introduced budget brands. Quality  Providing high-quality goods or services  Example: USAA delivers high-quality insurance, banking and investment products and services tailored to its members―those who have served in the military and their families. Variety  Providing a variety of things to choose from  Example: Fitbit has branched out from a simple step counter to different products for everyday users and highperformance athletes. Sensory appeal  Appealing in taste, smell, hearing and other senses.  Example: Starbucks acquired tea company Teavana and bakery La Boulange to improve its non-coffee products. Informs  Providing reliable and trusted information about a topic  Example: Vanguard added low-fee advice to its core investment services 

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Social business model canvas

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Mission

All social-purpose businesses are on a mission to change society for the better. What change are you planning to make in the world? Describe in broad terms how you will pursue your cause and tackle the social or environmental problems that matter. Customer relationships o Good businesses make a conscious decision about which customer segments to target and which to ignore. For whom are we creating value? Who are our most important customers? Focus in on your ideal customer(s) and define them clearly. Social innovation o You are bringing forward an important solution to a social or environmental problem. What makes your more proposed solution more likely to be effective than those that have gone before? Think about how you will apply new methods, ideas, or products to solve the problem. Value proposition o To be successful your social enterprise must stand out from the crowd and deliver real value to customers. What pains are you solving for your customers? What combination of benefits will you bring? Think about the things you might say to convince your customers to buy from you. Channels o There are various communication, distribution, and sales channels that you can use. What channels will you use to reach your target customers? Which ones will be most effective? Focus initially on the channels most likely to bring success. Consumer benefits o There are various communication, distribution, and sales channels that you can use. What channels will you use to reach your target customers? Which ones will be most effective? Focus initially on the channels most likely to bring success. Key activities o There are things that your social enterprise must do, deliver, or produce to deliver value to customers and make an impact. What are the mission critical activities you must pursue? Key resources o All business rely on resources to carry out their work. These could be human, financial, physical, or technological. What resources do you own or will you need to acquire or develop? Which resources will be most important to achieving success? Key allies o It’s unlikely that your social enterprise will succeed by going it alone. Who are the people and groups that you must involve to achieve success? What value will they bring? Think about the funders, partners, suppliers and others that will influence your success and how you will work with them. Cost of delivery o

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Everything costs money, and sometimes much more than you think. What are the major elements of cost involved in delivering your work and meeting needs? What resources and activities are most expensive? How will you control your main costs?  Revenue streams o Most social enterprises rely on a mix of revenue streams to become financially sustainable. What are the main sources of earned income, grants, and donations that you will generate to support our w...