PowerPoint Presentation Section 1.2Section 1.2 Pages 12-15Pages 12-15

What you’ll learnWhat you’ll learn The process of The process of entrepreneurshipentrepreneurship

The components of a new The components of a new venture organizationventure organization

How businesses succeedHow businesses succeed

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Why it’s importantWhy it’s important Understanding the Understanding the entrepreneurial process will entrepreneurial process will help you build a more help you build a more effective business that creates effective business that creates value.value.

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Why it’s importantWhy it’s important Learning the facts about Learning the facts about business success and failure business success and failure will help you make wiser will help you make wiser business decisions.business decisions.

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Key TermsKey Termsenvironmentenvironment

enterprise zonesenterprise zones

opportunityopportunity

start-up resourcesstart-up resources

new venturenew venture

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Key Terms (Cont.)Key Terms (Cont.)

business failurebusiness failure

discontinuancediscontinuance

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I. ENTREPRENEURIAL I. ENTREPRENEURIAL START-UPSTART-UP

The entrepreneurial start-up The entrepreneurial start-up process includes five key process includes five key components.components.

A.A. The entrepreneur The entrepreneur

C.C. The opportunity The opportunity

D.D. Start-up resources Start-up resources

E.E. The new venture The new ventureorganizationorganization

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B.B. The environment The environment

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II. THE ENTREPRENEURII. THE ENTREPRENEUR

A.A. The entrepreneur pulls The entrepreneur pulls together the different together the different components involved in components involved in creating a new business.creating a new business.

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B.B. The entrepreneur brings to The entrepreneur brings to the business all the behaviors the business all the behaviors and experience from his or and experience from his or her life to that point.her life to that point.

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III. THE ENVIRONMENTIII. THE ENVIRONMENT

A.A. The business The business environmentenvironment refers to the variables refers to the variables affecting it that are not affecting it that are not controlled by the controlled by the entrepreneur.entrepreneur.

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B.B. There are four general There are four general categories of environmental categories of environmental variables affecting a new variables affecting a new venture.venture.

1.1. The nature of the The nature of the environment (uncertain, environment (uncertain, fast-changing, stable, fast-changing, stable, highly competitive etc.)highly competitive etc.)

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2.2. The availability of resources The availability of resources

3.3. Ways to realize value Ways to realize value (favorable taxes, good (favorable taxes, good markets, supportive markets, supportive government policies)government policies)

4.4. Incentives to create new Incentives to create new businesses, such as businesses, such as enterprise zonesenterprise zones

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Enterprise zones Enterprise zones - Specially - Specially designated area of a community designated area of a community that provide tax benefits to new that provide tax benefits to new businesses locating there and businesses locating there and grants for new product grants for new product development.development.

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Springboard

Analyze the current business environment.

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IV. THE OPPORTUNITYIV. THE OPPORTUNITY

A.A. An An opportunityopportunity is an idea that is an idea that has commercial value.has commercial value.

B.B. New businesses are founded New businesses are founded on recognized opportunities on recognized opportunities in the environment.in the environment.

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V. START-UP RESOURCESV. START-UP RESOURCES

A.A. The The start-up resourcesstart-up resources an an entrepreneur needs to start a entrepreneur needs to start a business include the business include the following.following.

1.1. Capital Capital

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2.2. Skilled labor Skilled labor

3.3. Management expertise Management expertise

4.4. Legal and financial advice Legal and financial advice

5.5. A facility A facility

6.6. Equipment Equipment

7.7. Customers Customers

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B.B. The most important start-up The most important start-up resource is customers.resource is customers.

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VI. THE NEW VENTURE VI. THE NEW VENTURE ORGANIZATIONORGANIZATION

A.A. The The new venture new venture organizationorganization is the shell is the shell that surrounds all the that surrounds all the parts of a new business. parts of a new business.

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B.B. The parts of a new business The parts of a new business include the following.include the following.

1.1. Products Products

2.2. Processes Processes

3.3. Services Services

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C.C. Entrepreneurs are able to Entrepreneurs are able to create value for a business create value for a business through new venture through new venture organization.organization.

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VII. HOW BUSINESSES VII. HOW BUSINESSES SUCCEEDSUCCEED

A.A. The myth that most new The myth that most new businesses fail is not true.businesses fail is not true.

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B.B. A recent study done by Dun A recent study done by Dun & Bradstreet found that & Bradstreet found that more businesses succeed than more businesses succeed than fail.fail.

C.C. The problem with most The problem with most reports on business failure is reports on business failure is that they don’t define failure that they don’t define failure properly.properly.

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VIII. WHAT IS BUSINESS VIII. WHAT IS BUSINESS FAILURE?FAILURE?

A.A. A A business failurebusiness failure is a is a business that files Chapter 7 business that files Chapter 7 bankruptcy or loses money bankruptcy or loses money for creditors and their for creditors and their investors.investors.

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B.B. Businesses that disappear Businesses that disappear from public lists are not from public lists are not always failures.always failures.

C.C. Some businesses that Some businesses that disappear from public lists disappear from public lists are are discontinuancesdiscontinuances..

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D.D. A discontinuance is a A discontinuance is a businesses that is either businesses that is either operating under a new name operating under a new name or has been purposely or has been purposely discontinued to start a new discontinued to start a new one. one.

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Discussion Starter

Name a business in the community that is considered a discontinuance--not a failure.

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E.E. Discontinuances are not Discontinuances are not failures because they are failures because they are planned and cause no harm planned and cause no harm to creditors.to creditors.

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F.F. Failure is also sometimes Failure is also sometimes mistakenly reported when an mistakenly reported when an owner changes the legal owner changes the legal status of a business.status of a business.

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IX. HOW CAN IX. HOW CAN ENTREPRENEURS ENTREPRENEURS SUCCEED?SUCCEED?

A.A. The chances of a new The chances of a new business succeeding are business succeeding are good with effective good with effective planning.planning.

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B.B. The number–one cause of The number–one cause of business failure is poor business failure is poor management.management.

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C.C. Entrepreneurs can improve Entrepreneurs can improve their chances of success.their chances of success.

1.1. Learn how to build a new Learn how to build a new businessbusiness

2.2. Assemble a team that has Assemble a team that has the expertise they needthe expertise they need

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