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Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-1
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing
Chapter 1Chapter 1
Entrepreneurship in the Entrepreneurship in the New MillenniumNew Millennium
In the Spotlight:Dell Computer Corporationwww.dell.com
In the Spotlight:Dell Computer Corporationwww.dell.com
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-2
Learning Objectives: Chapter 1Learning Objectives: Chapter 1
1. Discuss the availability of entrepreneurial opportunities and give 1. Discuss the availability of entrepreneurial opportunities and give examples of highly successful businesses started by examples of highly successful businesses started by entrepreneurs.entrepreneurs.
2. Identify three rewards and three drawbacks of entrepreneurial 2. Identify three rewards and three drawbacks of entrepreneurial careers.careers.
3. Describe the various types of entrepreneurs, entrepreneurial 3. Describe the various types of entrepreneurs, entrepreneurial management styles, and entrepreneurial ventures.management styles, and entrepreneurial ventures.
4. Explain three aspects of the changing context of small business.4. Explain three aspects of the changing context of small business.
5. Identify three tools that provide a potential competitive edge for 5. Identify three tools that provide a potential competitive edge for small entrepreneurial firms.small entrepreneurial firms.
6. Discuss several factors that indicate a readiness for 6. Discuss several factors that indicate a readiness for entrepreneurship.entrepreneurship.
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-3
Striking Success StoriesStriking Success Stories
Mark Dankberg, Steven Hart, and Mark MillerViaSat Inc.
Using technological expertise
Carla ConnorC&B Industrial Safety, Inc.
Operating profitably on a small scale
William WilliamsGlory Foods
Developing a profitable niche market
William WilliamsGlory Foods
Developing a profitable niche market
www.viasat.com
www.gloryfoods.com
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-4
Entrepreneurial IncentivesEntrepreneurial Incentives
Rewards of EntrepreneurshipRewards of Entrepreneurship
Profit
Freedom fromthe limits of
standardized payfor standardized
work
Profit
Freedom fromthe limits of
standardized payfor standardized
work
Independence
Freedom fromsupervision and
rules of bureaucraticorganizations
Independence
Freedom fromsupervision and
rules of bureaucraticorganizations
Satisfying WaySatisfying Wayof Lifeof Life
Freedom fromFreedom fromroutine, boring,routine, boring,
and and unchallenging jobsunchallenging jobs
Satisfying WaySatisfying Wayof Lifeof Life
Freedom fromFreedom fromroutine, boring,routine, boring,
and and unchallenging jobsunchallenging jobs
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-5
Drawbacks of EntrepreneurshipDrawbacks of Entrepreneurship
• Hard WorkHard Work
• Long HoursLong Hours
• StressStress
• RiskRisk
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-6
Entrepreneurial CharacteristicsEntrepreneurial Characteristics
1. Need for achievement
2. Risk tolerance
3. Self-confidence
4. Enthusiasm
1. Need for achievement
2. Risk tolerance
3. Self-confidence
4. Enthusiasm
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-7
Three Types of EntrepreneursThree Types of Entrepreneurs
1. Founders1. Founders
2. General Managers2. General Managers
3. Franchisees3. Franchisees
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-8
Characteristics of Artisan andOpportunistic Entrepreneurs
Artisan Entrepreneur
1. Technical training
2. Paternalistic approach
3. Reluctance to delegate
4. Narrow view of strategy
5. Personal sales effort
6. Short planning horizon
7. Simple record keeping
Artisan Entrepreneur
1. Technical training
2. Paternalistic approach
3. Reluctance to delegate
4. Narrow view of strategy
5. Personal sales effort
6. Short planning horizon
7. Simple record keeping
Opportunistic Entrepreneur
1. Broad education
2. Rational approach
3. Willing to delegate
4. Broad view of strategy
5. Diversified marketing approach
6. Longer planning horizon
7. Sophisticated accounting andfinancial control
Opportunistic Entrepreneur
1. Broad education
2. Rational approach
3. Willing to delegate
4. Broad view of strategy
5. Diversified marketing approach
6. Longer planning horizon
7. Sophisticated accounting andfinancial control
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-9
Types of Entrepreneurial Ventures
Limited returnsLimited potential
Substantial returnsA “good living” for ownerStability
Big bucksExamples: Apple Computer NikeRapid growth
Marginal firms
Attractive small companies
High-potential ventures
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-10
Three Challenges to Small BusinessesThree Challenges to Small Businesses
1. Growth of superstores1. Growth of superstores
2. Expansion of information technology 2. Expansion of information technology and the Internetand the Internet
3. Emergence of a global economy3. Emergence of a global economy
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-11
Criteria for Defining Criteria for Defining Smallness in BusinessSmallness in Business
Number of employees
Value of assets
Volume of deposits
Insurancein force
Sales volume
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-12
Examples of SBA Size Standards
Sales DollarsAdvertising Agencies $ 3.5 millionEmployment Agencies $ 3.5 millionFurniture Stores $ 3.5 millionGeneral Contractors -
Single family houses $17.0 millionInsurance Agents, Brokers,
and Services $ 3.5 millionMobile Home Dealers $ 6.5 millionRadio and Television
Repair Shops $ 3.5 millionRadio Broadcasters $ 3.5 million
Number of EmployeesCopper Ore Mining 500 employeesHardware Wholesaling 100 employeesMeat Packing 500 employeesMetal Can Manufacturing 1,000 employees
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-13
Applications of New TechnologyApplications of New Technology
• Financial software applicationsFinancial software applications• Internet salesInternet sales• E-mailE-mail• TeleconferencingTeleconferencing• Computer-assisted manufacturing and Computer-assisted manufacturing and
designdesign• Easy access to database information on the Easy access to database information on the
InternetInternet
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-14
Types of Entrepreneurial Types of Entrepreneurial Career OpportunitiesCareer Opportunities
Opportunity Level of Risk
Starting a business High risk
Buying a business Medium risk
Opening a franchised business Medium risk
Entering a family business Variable risk
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-15
Age Concerns in Starting a BusinessAge Concerns in Starting a Business
Early Career Concerns
1. Getting an education
2. Gaining work experience
3. Acquiring financial resources
Early Career Concerns
1. Getting an education
2. Gaining work experience
3. Acquiring financial resources
Late Career Concerns
1. Fulfilling family responsibilities
2. Attaining seniority in employment
3. Earning investment in a retirement program
Late Career Concerns
1. Fulfilling family responsibilities
2. Attaining seniority in employment
3. Earning investment in a retirement program
Age
20 30 40 50
Small Business Management, 11th edition
Longenecker, Moore, and Petty2000 South-Western College Publishing 1-16
Entrepreneurial RefugeesEntrepreneurial Refugees
• Foreign refugeeForeign refugee
• Corporate refugeeCorporate refugee
• Parental refugeeParental refugee
• Feminist refugeeFeminist refugee
• Housewife refugeeHousewife refugee
• Society refugeeSociety refugee
• Educational refugeeEducational refugee
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