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8/8/2019 Session 1-Entrep Process Review
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The Entrepreneurial Process
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The Entrepreneurial Process
(Coulter)
1. Exploring the Entrepreneurial Context
2. Identifying Opportunities and Possible
Competitive Advantage
Opportunities are positive external trends or changes
that provide unique and distinct possibilities for
innovating and creating value
Competitive advantage is what sets an organizationapart; its competitive edge
3. Starting the Venture
4. Managing the Venture
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Entrepreneurial Process (Hisrich)
1) Identify/Evaluate Opportunity
2) Develop Business Plan
3) Determine Resources Required
4) Manage The Enterprise
McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved.
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The Entrepreneurial Process
(Kaplan)
Identify an Opportunity
Develop the Concept - Write the Business
Plan
Determine the resources Required
Acquire the Necessary Financing/Partners
Implement and Manage
Harvest the Venture - Exit Strategy
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The Entrepreneurial Process
Identify an Opportunity
Develop the Concept and
write the plan
Changing DemographicsEmergence of New Market
Process Needs
New Technologies
Regulatory Change
Social Change
New Product/Services
New Processes
Enter New Markets
New Organizational Structures/Forms
Use New Technologies
Use Sales or Distribution Channels
Start Writing the Plan
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The Entrepreneurial Process
Determine the Required
Resources
Acquire the Necessary
Financing/Partners
Need for:Marketing and Sales Expertise
Technical Expertise
Financing Needs
Distribution Channels
Sources of Supply
Licenses, Patents, & Legal Protection
Complete the Business Plan
Debt Supplier FinancingEquity Joint Ventures
Outsourcing Partnerships
Leasing Barter
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The Entrepreneurial Process
Implement and Manage
Harvest the Venture
Implementation of Plan/Pilot Program
Monitor Performance
Payback to Resources Providers
Reinvestment
ExpansionAchievement of Performance Goals
Licensing of Rights
Sell or Merge
Go Public
Shut down Venture
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Why Become an Entrepreneur
For many individuals, there is the perception of
independence and freedom from the politics andrestrictions 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
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The Entrepreneurial Mindset
"A key aspect of establishing an
entrepreneurial mindset is creating the
conditions under which everyone involved
is energized to look for opportunities to
change the business model-Professor RitaMcGrath
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Commonly Shared Entrepreneurial
Characteristics
1.They passionately seek new opportunities always
looking for the chance to profit from change anddisruption in the way business is done.
2.They pursue opportunities with enormousdiscipline..
3.They pursue only the very best opportunities andavoid exhausting themselves and their organizations by chasing after every option.
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Commonly Shared Entrepreneurial
Characteristics
4. The focus is on executionspecifically, adaptive
execution.
5. The entrepreneur engages the energies of
everyone in the company. .
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The Entrepreneurial Process:
Framework for Evaluating VentureProjectFINAL PROJECT REPORT CONTAINS:
Project Performance
what was achieved and reasons for resulting performance. This isthe personal opinion of the group and lessons learned should alsobe included
Administrative Performance
review of how well administrative practices worked (e.g.subcontracting system, sales and collection system, financialreporting system, HR related system, etc.)
Copyright 2007 John Wiley & Sons, Inc. 8-12
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The Entrepreneurial Process:
Framework for Evaluating VentureProject Organizational Structure
identify modifications to help future
Project Teamwork confidential section that identifiedteam members who worked particularly well and possibly
those who have worked poorly with others.
Recommendations for individuals who will be kept for
future assignments
Project Management Techniques recommendations for improvements in skills and techniques for planning,
budgeting, scheduling, resource allocation, control, and risk management
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Principles forSuccessful New Venture (Hisrich)1) Defined Market
2) Durable Products- 18Month Customer Payback
3) Market Growth = 30-50%
in 5 Years
4) Patent Protection
5) No Product SubstitutionsAvailable
6) Products Variants7) No Strong Competition
Present
8) Quick Market Dominance
9) Gross Margin 30-50%
10) Staged Financing
11) ROI = 10X in 5 Years (25-
30%/Year)
12) Positive Cash Flow in 18
Months
13) Strong Management in
Industry
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Successful Entrepreneur
Initiates Creation Process
Devotes Time/Effort
Assumes Risk
Receives Rewards
Independence
Satisfaction
Money
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The Rewards and Challenges of
Being an Entrepreneur