Entrepreneurial New Venture Skills

David C. Kimball, Robert N. Lussier

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781135955977
• Edition: 3
• Topic: Commerce
• Subtopic: Commerce Général

As business schools expand their entrepreneurship programs and organizations seek people with entrepreneurial skills, it has become clear that the skills and mindset of an entrepreneur are highly valued in all business contexts. This latest edition of Entrepreneurial New Venture Skills continues to focus on helping students develop entrepreneurial skills, whether they seek to become entrepreneurs or employees.

Focusing on the entrepreneurial start-up process, the third edition of Entrepreneurial New Venture Skills takes the reader through the steps of selecting, planning, financing, and controlling the new venture. The authors cover multiple forms of new ventures, as well as ways to utilize entrepreneurial skills in other contexts, encouraging students to engage with the material and apply it to their lives in ways that make sense for them. Skill development features include:

• Entrepreneurial profiles of small business owners

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• Personal applications for students to apply questions to their new venture or a current business

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• Global and domestic cases

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• Elevator pitch assignments, which put students in the venture capitalist position

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• Application exercises and situations covering specific text concepts

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• Business plan prompts to help students construct a business plan over the course of a semester

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Featuring pedagogical tools like review questions and learning outcomes, and a full companion website that expands upon skill development and offersinstructor resources, the third edition of Entrepreneurial New Venture Skills is the perfect resource for instructors and students of entrepreneurship.

Part I

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Selecting the New Venture

CHAPTER 1 What’s Entrepreneurship About?

CHAPTER 2 New Venture Options

CHAPTER 3 What Business?

CHAPTER 4 How do You Assess the Chances of Venture Success?

Chapter 1

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What’s Entrepreneurship About?

Do You Want to Start Your Own Business?

In the first section, you will learn some basic concepts used throughout the book, followed by reasons for and against your becoming an entrepreneur. In the third section, you will find out if you have the characteristics of successful entrepreneurs and how to identify any organization as conservative or entrepreneurial. The fourth section explains the process that entrepreneurs go through from thinking about to running a new venture. To end, you will learn things you can do to prepare for becoming an entrepreneur.

ENTREPRENEURS AND SMALL BUSINESS

Defining Entrepreneurs and Small Business

The Importance of Entrepreneurship Worldwide

Contributions of Entrepreneurs and Changing Demographics

Why Study Entrepreneurship: What’s in it for Me?

PROS, CONS, AND MYTHS OF ENTREPRENEURSHIP

Advantages of Entrepreneurship

Potential Disadvantages of Entrepreneurship

Myths and Realities of Entrepreneurship

ENTREPRENEURSHIP CHARACTERISTICS AND ORIENTATION

Characteristics of Entrepreneurs

Entrepreneurship Orientation

THE ENTREPRENEURIAL PROCESS

Selecting the New Venture (Chapters 1–4)

Planning the New Venture (Chapters 5–10)

Financing and Controlling the New Venture (Chapters 11–12)

PREPARING TO BECOME AN ENTREPRENEUR

Get Moral Supporters

Get a Mentor

Develop a Professional Network

Get Professional Assistance

Learn About Entrepreneurs and Your New Venture Industry

Learning Outcomes

After completing this chapter you should be able to:

1. Compare entrepreneurs and entrepreneurial behavior and replicative and innovative entrepreneurs;
2. Discuss why entrepreneurship is important globally;
3. Describe advantages and potential disadvantages of entrepreneurship;
4. Compare and contrast entrepreneurial characteristics and entrepreneurial orientation;
5. Explain the entrepreneurial process;
6. Identify how to prepare for entrepreneurship;
7. Define the thirteen key terms identified in this chapter.

Entrepreneur Profile—Anne Beiler, Auntie Anne’s Pretzels

We begin each chapter with a short biography of an entrepreneur and provide a link so you can learn more about the person and his or her business venture. Short 3–5-minute videos of each entrepreneur can be found at the PBS Small Business School at www.smallbusinessschool.org/. Auntie Anne’s video can be found at www.smallbusinessschool.org/video.cfm?clip=1068.

In Gap, Pennsylvania’s Amish Country, it is a simpler place. And though it may be an unlikely place to have a fast-growing business, maybe there are lessons here for all of us. Auntie Anne’s is not small any more. In this episode of Small Business School, you learn why Anne Beiler stirred up a highly successful product. However, it required vision, cash, and courage to open hundreds of locations.

An angel investor stood by her while bank after bank turned her down because the purpose of this business was to make money then give it away. Her generous spirit is infused throughout this company and it is a secret ingredient. Anne has proven that her franchisees want to run a business built on love. While most franchise companies have to market to find new owners, Anne has to turn away hundreds who want to buy into her concept. Products topped with her love of people make Anne Beiler an entrepreneur to follow.

In 1988 Anne Beiler turned a mistake into a new product. She was preparing food to sell at Saturday’s farmers’ market. Like so many of us, she did not have the right ingredients and began to substitute things she had on hand. What came out of her oven was a wonderful soft pretzel. But, she wasn’t satisfied there. She and her husband further tweaked that new recipe until she heard, “Wow!” from her hungry customers.

Today, Auntie Anne’s Hand-Rolled Soft Pretzels are baked fresh in over 800 locations and are the perfect high-carbohydrate, low-fat, back-to-the-basics snack so many people crave. Customers will part with nearly $500 million a year to enjoy this hot treat.

Anne Beiler is mission-driven. She felt that mission statements are plastic, even transparent; and most are too long. Anne’s company’s first mission statement was several paragraphs. Later she decided that it should be a useful tool—a mission statement should be easy to remember. A team of people at Auntie Anne’s came up with the word LIGHT, which is a working philosophy for Auntie Anne’s. “L”—lead by example. “I”— invest in others. “G”—give freely. “H”—honor God. “T”—treat others with respect.¹

Think it over.

Does Anne Beiler exhibit the characteristics of an entrepreneur?

Entrepreneurs and Small Business

In this section, we will define entrepreneurship and small business, discuss the importance of entrepreneurship worldwide, and explain why you should study entrepreneurship, or “What’s in it for you?”

Learning Outcome

1. Compare entrepreneurs and entrepreneurial behavior and replicative and innovative entrepreneurs.

Defining Entrepreneurs and Small Business

Let’s begin with some important definitions.

Entrepreneurship, Creativity, and Innovation

The word entrepreneur comes from the French words entre, meaning “between,” and prendre, meaning “to take.” So its origin described people who take on the risk between buyers and sellers or who undertake a task like starting a new business venture. Entrepreneurship is about creativity and innovation,² and they are not the same. Creativity is coming up with new ideas, but innovation is the actual implementation of new ideas to create new products and services and improve productivity. Let’s face it, lots of people come up with good ideas that are never implemented; this is a distinguishing factor between entrepreneurs and non-entrepreneurs.

Entrepreneur and Entrepreneurial Behavior

Entrepreneurship often refers to the “creation of organizations,”³ or the recognition and exploitation of new business opportunities by founding new ventures.⁴ Today, there is no generally accepted definition of entrepreneur. However, it does tend to have at least two principal meanings.⁵ First, entrepreneurship refers to taking the risk of owning and managing a business. Those who take the risk are called entrepreneurs, self-employed, and business owners. Second, entrepreneurship refers to entrepreneurial behavior in the sense of seeking opportunity and innovating new products and services or methods of doing business. So to be an entrepreneur you do not need to be a business owner. For example, you could start a nonprofit or a new venture for an existing company as a corporate entrepreneur. We’ll discuss six options for starting a new venture in the next chapter.

Personal Application

1. Identify an entrepreneur and the new venture he or she created.

2. Describe an entrepreneurial behavior where you work(ed).

The creation of new business ventures is considered to be a central element of entrepreneurship.⁶ So combining these two meanings, here are our definitions. An entrepreneur is a person who creates a new business venture. Entrepreneurial behavior is innovation by creating new products or services or productivity techniques. Entrepreneurial behavior is concrete and observable,⁷ for example developing or improving a product, speeding up manufacturing, or delivering existing products to the customer in a new, faster way. So, without being an entrepreneur, you can engage in entrepreneurial behavior by being innovative. But no n...