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Chapter1:Entrepreneurship1Copyright2002PrenticeHallPublishingCompanyTheFoundationsofEntrepreneurshipChapter1:Entrepreneurship2Copyright2002PrenticeHallPublishingCompanyTheWorldoftheEntrepreneurAnewbusinessisbornevery11secondsintheUnitedStatesStudyofinfluentialAmericans–thedefiningissueofthe21stCentury:Entrepreneurship!Oneof12Americansisactivelyinvolvedintryingtostartanewbusiness.EntrepreneurialActivityAcrosstheGlobe1.4%1.6%1.8%2.0%2.2%3.3%3.4%5.4%6.8%8.5%0.0%2.0%4.0%6.0%8.0%10.0%PercentFinlandJapanFranceDenmarkGermanyGreatBritainItalyIsraelCanadaUnitedStatesCountryPercentageofAdultPopulationWorkingtoStartaNewBusinessChapter1:Entrepreneurship4Copyright2002PrenticeHallPublishingCompanyWhatisanEntrepreneur?Onewhocreatesanewbusinessinthefaceofriskanduncertaintyforthepurposeofachievingprofitandgrowthbyidentifyingopportunitiesandassemblingthenecessaryresourcestocapitalizeonthem.Chapter1:Entrepreneurship5Copyright2002PrenticeHallPublishingCompanyCharacteristicsofEntrepreneursDesireforresponsibilityPreferenceformoderateriskConfidenceintheirabilitytosucceedDesireforimmediatefeedbackHighlevelofenergyFutureorientationSkilledatorganizingValueachievementovermoneyChapter1:Entrepreneurship6Copyright2002PrenticeHallPublishingCompanyBenefitsofSmallBusinessOwnershipTheopportunityto:createyourowndestinymakeadifferencereachyourfullpotentialreapunlimitedprofitscontributetosocietyandberecognizedforyoureffortsdowhatyouenjoyandhavefunatitChapter1:Entrepreneurship7Copyright2002PrenticeHallPublishingCompanyDrawbacksofSmallBusinessOwnershipUncertaintyofincomeRiskoflosingyourentireinvestmentLonghoursandhardworkLowerqualityoflifeuntilthebusinessgetsestablishedHighlevelsofstressCompleteresponsibilityDiscouragementChapter1:Entrepreneurship8Copyright2002PrenticeHallPublishingCompanyFeedingtheEntrepreneurialFireEntrepreneursasheroesEntrepreneurialeducationDemographicandeconomicfactorsShifttoaserviceeconomyTechnologicaladvancementsIndependentlifestylesE-CommerceandtheWorldWideWebInternationalopportunitiesChapter1:Entrepreneurship9Copyright2002PrenticeHallPublishingCompanyTheCulturalDiversityofEntrepreneurshipYoungentrepreneursWomenMinority-ownedenterprisesImmigrantentrepreneursPart-timeentrepreneursHome-basedbusinessesFamilybusinessesCopreneursCorporatecastoffsCorporatedropoutsSmallBusinessbyIndustryServices39.2%Retail20.5%Wholesale7.4%Manufacturing5.8%Construction11.8%Financial8.0%Other7.3%Chapter1:Entrepreneurship11Copyright2002PrenticeHallPublishingCompanySmallBusinessesMakeup99%ofallbusinessesintheUnitedStates.Employ53%ofthenation'sprivatesectorworkforce.Createmorejobsthanbigbusinesses.Areleadersinofferingtrainingandadvancementopportunitiestoworkers.Chapter1:Entrepreneurship12Copyright2002PrenticeHallPublishingCompanyProduce51%ofthenation'sprivateGDP.Accountfor47%ofbusinesssales.Create4XmoreinnovationsperR&Ddollarspentthanmedium-sizefirmsand24Xasmanyaslargecompanies.SmallBusinesses(continued)0%20%40%60%80%100%%ofSmallFirmsSurvivingNew246810#ofYearsinBusinessSmallBusinessSurvivalRateChapter1:Entrepreneurship14Copyright2002PrenticeHallPublishingCompanyTheSmallBusinessFailureRecord24%ofnewbusinessesfailaftertwoyears.51%failwithinfouryears.63%failwithinsixyears.Chapter1:Entrepreneurship15Copyright2002PrenticeHallPublishingCompanyNineDeadlyMistakesofEntrepreneurship1.Managementincompetence2.Lackofexperience3.Poorfinancialcontrol4.Failuretodevelopastrategicplan5.UncontrolledgrowthChapter1:Entrepreneurship16Copyright2002PrenticeHallPublishingCompanyNineDeadlyMistakesofEntrepreneurship(continued)6.Poorlocation7.Improperinventorycontrol8.Incorrectpricing9.Inabilitytomakethe“entrepreneurialtransition”Chapter1:Entrepreneurship17Copyright2002PrenticeHallPublishingCompanyAvoidingthePitfallsofSmallBusinessFailureKnowyourbusinessindepthDevelopasolidbusinessplanManagefinancialresourcesUnderstandfinancialstatementsLearntomanagepeopleeffectivelyKeepintunewithyourself
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