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Contents

Chapter 1

The Entrepreneurial Process

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• What are the five stages for the entrepreneurial process?.

• Why would people become entrepreneurs?
• What are the different approaches to identifying entrepreneurial types?
• What is the growth issues entrepreneurial companies face?

• What is the Entrepreneurial mindset? What characteristics do entrepreneurs often share?

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Entrepreneurship Self Efficacy Assessment

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Chapter Review

Chapter 1: The Entrepreneurial Process

What are the five stages for the entrepreneurial process?

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Stage I – Opportunity Analysis

The basic objective is to define the criteria that would make a business opportunity worthwhile to pursue. In this stage the founder identifies the opportunity and prepares and focuses on a vision and marketing for the company. If there is no vision for the venture, the new idea is just a dream

Stage 2 – Developing the Plan and Setting Up the Company

This is where ideas are discarded; strategies are documented and converted to a business plan. The focus at this stage is on writing a well-conceived business plan. It is a written plan that details how the vision and market analysis will become a sustainable competitive advantage.

Stage 3 – Acquiring Financial Partners - Sources of Funding

Armed with a well- conceived plan, the next challenge is to focus on acquiring financial investors and partners. In most cases, students and the entrepreneur may not be aware of the many financing options available that would best meet the needs of the business. Therefore, it is important to know the expectations and requirements of funding sources as well as the options available for financing.

Stage 4– Determine the Resources Required and Implementation

• This stage focuses on how the entrepreneur must learn to build the management team, organize the company, develop a human resource capability and create the spirit, culture and incentives for growth.
• The stage also examines the value of intellectual property for patents, trademarks and copyrights to gain competitive advantage in the marketplace and guides you toward effectively developing, protecting and promoting your own IP.
• Entrepreneurs are asked to plan operations and evaluate decisions using financial accounting information. An understanding of “Managing Financial Operations” is designed to analyze and to prepare budgets, ratios and cash flow forecasts will contribute to optimize learning of these skills

Stage 5 – Scaling and Harvesting the Venture

• A number of techniques and strategies can assist the entrepreneur in effectively developing an exit plan. This stage highlights the procedures and options available for entrepreneurs to scale the venture or consider an exit strategy. Described are the most common, sell an equity stake to a partner, sell the business, merge with another company or implement a leverage buy-out.
• Also discussed is the planning for a public offering that offers an option to sell a portion of the venture and scale the business for growth. The objective is to provide the knowledge to identify the best exit

Why would people become entrepreneurs?

• There are many reasons why men and women become entrepreneurs. For many individuals, there is the perception of independence and freedom from the politics and restrictions of corporate America.
• Being able "to do one's own thing," and make one's own decisions, and exert greater control is an attractive alternative to the conformity--real or imagined--associated with life in a big company.
• Some may hit a plateau or see that they are blocked from further promotions or are not progressing as rapidly as they would like and these conditions become motivating factors. They believe building a company can furnish opportunities for sustained growth and mobility.[8] For others, starting their own company provides the flexibility they seek in their lives. And of course, for many, entrepreneurship offers a vehicle for creating huge financial rewards.

[8]What are the different approaches to identifying entrepreneurial types?

• Aspiring entrepreneurs are the entrepreneur who dream of starting a business; they hope for the chance to be their own bosses. But they have not yet made the leap from current employment into the uncertainty of a start-up.

• Lifestyle entrepreneurs are those who have developed an enterprise that fit their individual circumstances and style of life. Their basic intention is to earn an income for themselves and their families. These have been referred to as small businesses or mom-and-pop shops

• Growth entrepreneurs have both the desire and ability to grow as fast and as large as possible. These firms are the most dynamic job generators in the American economy

What are the growth issues entrepreneurial companies face?

• Some businesses may not offer any productivity improvement and therefore may have no significant potential for entrepreneurial growth. On the other, even with growth potential, the business owner may prefer to grow the business only to a certain point.
• Not all entrepreneurs aspire to business growth. Searching for independence and economic support for family and children, many small business founders work toward the goal of growing the business to a level to provide a relatively steady stream of income and employment.
• The true challenge for entrepreneurs is to avoid burnout from the daily operations and keep the entrepreneurial spirit that drove one into business alive and well.
• What distinguishes an entrepreneurial company from a small business is the ability of the venture owner to maneuver successfully through the transition stages necessary to handle distinctive periods of growth. .

What is the Entrepreneurial mindset? What characteristics do entrepreneurs often share?

• An entrepreneurial mindset is creating the conditions under which everyone involved is energized to look for opportunities to change the business model. These might include redesign existing product offerings, reshape markets and change products in novel ways

Common Shared Characteristics

• They passionately seek new opportunities always looking for the chance to profit from change and disruption in the way business is done. They revolutionize business models; examine how revenues are determined, how costs are incurred, and how operations or technology are conducted.
• They pursue opportunities with enormous discipline. And make sure that they act on them. They make investments only if the competitive arena is attractive and the opportunity is ripe.
• They pursue only the very best opportunities and avoid exhausting themselves and their organizations by chasing after every option they go after a tightly controlled portfolio of opportunities in different stages of development.
• They focus on execution—specifically, adaptive execution
• They engage the energies of everyone in their domain. They create and sustain networks of relationships rater than going it alone, making the most of the intellectual and other resources people have to offer and helping those people to achieve their goals as well.