Kapitel 1 - Decision to become an entrepreneur PDF

Preview

Summary

Download Kapitel 1 - Decision to become an entrepreneur PDF

Description

Afsnit 1 – Decision to Become an Entrepreneur The classic entrepreneurial story Fraser Doherty spent his childhood coming up with ideas for new products. Not all of them were a success, but he had a hunger to set up a business. At the age of 14, Doherty gave Jam-making a try and it took of into local shops, farmers markets and even further away. To expand the business, he did some research and came up with the idea of making it with completely from fruit juice, no sugar and no artificial flavouring. At the age of 17, Fraser, was in no position to start his own and leave his parents kitchen. He didn’t have the money to pay a design agency to create a brand and he also didn’t know how to approach the supermarkets either. On a buyer’s day Fraser approached his first supermarket, Waitrose, and got declined because of the missing brand and production facility. He the set off around the United Kingdom trying to convince food manufacturers to believe in him, and after 2 years of persistence a market and an advertising agency accepted to corporate. He still keeps in touch with his customers and since his business took of, his company runs these SuperJam tea Parties for elderly people who live alone, primarily in care homes or sheltered accommodation. To date, they have run over 350 events across the United Kingdom.

Dialogue with Fraser Doherty  

Best advice I’ve received? Go with your passion. Makes it so much easier! I love bikes, and it makes my job infinitely easier.



My biggest worry as an entrepreneur? That we’re not innovating fast enough to keep ahead of the competition.



What I do when I’m not working? Drive my 40-year-old VW camper van round the countryside.



My favorite smartphone app? SuperJam’s recipe app.



My first entrepreneurial experience? Hatching chickens on top of the TV, age 10, and selling their eggs.



Favorite band on my smartphone list? The smiths.



Favorite person I follow on twitter? Has to be Stephen Fry.

Introduction to Entrepreneurship Tremendous interest in entrepreneurship around the world. The evidence supporting it is provided by the Global Entrepreneurship Monitor (GEM), which joint research among several international universities and the International Council for Small business, which tracks entrepreneurship in 112 countries, including USA. Of particular interest to GEM is total early stage entrepreneurial activity (TEA), which consists of business that are just being started and businesses that have been in existence for less than 3,5 year. The GEM study also identifies whether its respondents are starting a new business to take advantage of an attractive opportunity or because of necessity to earn an income. Most people in the GEM study do it to take advantage of an attractive opportunity. A criticism of entrepreneurship, which is often repeated in the press, is that the majority of new businesses fail. It isn’t true, the often-used statistics that 9 out of 10 fails in their first few years is an exaggeration. Over half of the businesses in the United States, according to the Bureau of Labor Statistics, are still existing five years later. But some also are so successful that they are sold or were acquired by another firms. Motivation, solid business idea, good financial management and effective execution is required to build a good business.

What is Entrepreneurship and why is it important? The word comes from the French word “entre”, meaning between, and “prendre”, meaning to take. Originally used to describe people who “take on the risk” between buyers and sellers or who “undertake” a task such as starting a new venture. Inventor  Create something new Entrepreneur  Assembles and integrate all the resources needed; money, people, business model, strategy, risk-bearing ability to transform the invention into a viable business.

Entrepreneurship is defined as the process by which individuals pursue opportunities without regard to resources, they current control for the purpose of exploiting future goods and services. Other defined it more simply, as the art of turning an idea into a business. Require creativity, drive and a willingness to take risks. Kirsten Blowers: created a new type of women’s clothing boutique and online store and a new type

of shopping experience for women in her target market. She risked her career by passing up alternatives to work in Riffraff full time.

In spite of the books focus on entrepreneurship launching new business, the book also look at firms who are established, but still behave entrepreneurially. Google is a good example, where they still motivate their employees to develop innovative products. They are currently working on a bevy of far-reaching innovations, such as a virtual reality platform for Android and self-driving cars. These firms who act entrepreneurially practice Corporate Entrepreneurship. All firms along a conceptual continuum that ranges from highly conservative to highly entrepreneurial. The position of a firm on this continuum is referred to as its entrepreneurial intensity. Entrepreneurial firms Proactive innovators

Conservative firms Wait and see posture

Taking risk

Less innovative Risk averse

Why do people become entrepreneurs? Primary reason why people become entrepreneurs are to be their own boss, pursue their own ideas and pursue financial rewards. 1. Entrepreneurs aren’t necessarily difficult to work with or having trouble with authorities. Instead they often have had a long-time ambition to own their own firm or because they have become frustrated working in traditional jobs. 2. Some people are naturally alert, and when they recognize ideas for new products or services, they have a desire to see those ideas realized. Established firms often resist innovation, then the employees are left with good ideas that go unfulfilled. 3. This motivation is typically secondary to the first two and often fails to live up to its hype. Making a profit and increasing the value of a company is a solidifying goal that people can rally around. Usually the start-up of a firm will bring in the same amount of money, as you will get in a normal job with responsibilities.

Characteristics of Successful Entrepreneurs 1. Passion for business

 The passion for the idea is the main thing that gets a business going and keeps it going when the times are tough. Making a difference in people’s lives is the primary motivator behind many social enterprises. There are five primary reasons passions is important: the ability to learn and iterate, a willingness to work hard for an extended period of time, ability to overcome setbacks and “no’s”, the ability to listen to feedback on the limitations of your organization and yourself, perseverance and persistence when the going gets tough.

2. Product/Customer focus  The most important elements in any business is product and customers. While it’s important to think about management, marketing, finance and the like – none of those functions makes any difference if a firm does not have a good product with the capability to satisfy customers. It also involves the diligence to spot product opportunities and to see them through to completion.

3. Tenacity Despite Failure  Because entrepreneurs are typically trying something new, the possibility of failure exists. In addition, the process of developing a new business is somewhat similar to what a scientist experiences in the laboratory. A chemist has to try multiple combinations of chemicals before finding an optimal combination that can accomplish a certain objective, just like in entrepreneurship. It’s important that entrepreneurs have sufficient tenacity to overcome personal obstacles along with professional ones.

4. Execution Intelligence  In many cases, execution intelligence is the factor that determines whether a start-up is successful or fails. The ability to effectively execute a business idea means developing a business model, putting together a new venture team, raising money, establishing partnerships, managing finances, leading and motivation employees and so on. It also demands the ability to translate thought, creativity and imagination into action and measurable results.

Common myths about entrepreneurs Myth 1. Entrepreneurs are born, not made. Entrepreneurs are genetically not different from other people. Everyone has potential to become one. Whether someone does or doesn’t is a function of environment, life experience and personal

choices. However, there are personality traits and characteristics that are commonly associated with entrepreneurs. A moderate risk tasker Persuasive Promoter Resource assembler/leverage Creative Self-starter Tenacious Tolerant of ambiguity Visionary

Optimistic disposition A networker Achievement motivated Alert to opportunities Self-confident Decisive Energetic A strong work ethic Lengthy attention span

Myth 2. Entrepreneurs are gamblers. Entrepreneurs are usually moderate risk takers, as most people. The idea originates from two sources: 1. Entrepreneurs typically have jobs that are less structured, and so they face more uncertain set of possibilities than managers or rank-and-file employees. 2. Many entrepreneurs have a strong need to achieve and often set challenging goals, a behaviour that is sometimes equated with risk taking.

Myth 3. Entrepreneurs are motivated primarily by money. Is naive to think that entrepreneurs don’t seek financial rewards. A discussed previously, money is rarely the primary reason.

Myth 4. Entrepreneurs should be young and energetic. According to the report in the Kauffman Index of start-up activity, the percentage of owners is quite evenly distributed across 4 major age categories. And of course entrepreneurs should be energetic, because venture capitalists often express is that they would rather fund a strong entrepreneur with mediocre business idea than fund a strong business idea and a mediocre entrepreneur.

Myth 5. Entrepreneurs love the spotlight. Indeed, some entrepreneurs are flamboyant, however the vast majority of them do not attract public attention. Some entrepreneurs, like most, have either avoided the attention or been passed over by the popular press. The defy the myth that entrepreneurs, more than other groups in our society, love the spotlight.

Types of start-up firms There are 3 types of start-up firms. Salary-Substitute Firm Firms that basically provide

Lifestyle Firms Firms that provide their owner

Entrepreneurial Firms Firms that bring new products

their owner or owners a

or owners the opportunity to

and services to the market by

similar level of income to

pursue a particular lifestyle

creating and seizing

what they would be able to

and make a living at it

opportunities regardless of the

earn in a conventional job

resources they currently control

Changing Demographics of Entrepreneurs Over the past ten years the demographic makeup of entrepreneurial firms has changed in the USA and around the world. Of the 27,9 million businesses in USA, women, minorities and seniors own an increasing larger number of them. Women – according to a study commissioned by American Express OPEN, in 2016, there were 11,3 million women-owned businesses in USA. Between 2007 and 2016 the number of women-owned firms increased by 45%, compared to just a 9% increase among all businesses. Women are now the majority owners of 38% of U.S. businesses, up from 29% in 2007. Minority Senior Millennial -

The positive effects of entrepreneurship and entrepreneurial firms Entrepreneurs develop new products and technologies that over time make current products and technologies obsolete. This process Schumpeter called creative destruction, because new products are typically better than those they replace and the availability of improved products and technologies increases consumer demand, creative destruction stimulates economic activity.  Economic impact of Entrepreneurial Firms Innovation is the process of creating something new, which is central to the entrepreneurial process. Small innovation firms are 16 times more productive than large innovating firm in terms of patents per employee. Job Creation. According to the SBA, small businesses create a substantial number of net new jobs in the USA. Example, firms with fewer than 500 employees created nearly 2 million of the roughly

three million private sector in jobs in 2014.

 Entrepreneurial Firms’ Impact on Society Think of all the new products and services that make our lives easier, enhance our productivity at work, improve our health and entertain us. Innovation do create moral and ethical issues with which society are forced to grapple.

 Entrepreneurial Firms’ Impact on Larger Firms. Some entrepreneurial firms are original equipment manufacturers, producing parts that go into products that larger firms manufactures and sell. So the entrepreneurial firms help the larger firms, because it’s easier and cheaper.

The entrepreneurial process The process consist of 4 steps: 1. Decision to become an entrepreneur Usually a triggering event prompts an individual to become an entrepreneur. It could be because an individual may lose her job and decide that the time is right to start her own business or a person might receive an inheritance and for the first time in his life have the money to start his own company.

2. Developing successful business ideas This step includes opportunity recognition, feasibility analysis, the development of an affective business model, industry analysis and writing a business plan.

3. Moving from an idea to an entrepreneurial firm The first step here is to prepare a proper ethical and legal foundation for a firm, including selecting an appropriate form of business ownership. Then assessing a new venture’s financial strength and viability and building a new venture team. It’s also here where they get financing or funding.

4. Managing and growing an entrepreneurial firm Unique marketing issues, the importance of intellectual property, preparing for and evaluating the challenges of growth, strategies for firm growth and franchising.

Developing skills for your career The tools, technique and concepts discussed in this book will further develop some of your “employability skills”. In particular, by studying entrepreneurship, you will learn about importance of using ethical business practices in entrepreneurial firms while simultaneously making certain that those firms commit to being socially responsible in all of their actions. Making these outcomes possible is a strong organizational culture which you will better understand after reading this book. By contemplating how to use the entrepreneurial tools, techniques and concepts featured in this book, you will enhance your critical thinking skills and the importance of collaborating with other firms desired objectives such as serving customers and societies and earning positive returns on your investments while doing so.

Learning objectives 1. Describe entrepreneurship, corporate entrepreneurship and the characteristics of entrepreneurial firms. 2. Discuss three main reasons people decide to become entrepreneurs. 3. Identify four main characteristics of successful entrepreneurs. 4. Explain five common myths regarding entrepreneurship. 5. Describe the three types of start-up firms. 6. Discuss the changing demographics of entrepreneurs in the United State. 7. Discuss the positive effects of entrepreneurship and entrepreneurial firms on economies and societies. 8. Explain the entrepreneurial process. 9. Learn how understanding entrepreneurship and the entrepreneurial process can facilitate your career success....