, TABLE OF CONTENTS
CHAPTER 1: THE NATURE AND DEVELOPMENT OF ENTREPRENEURSHIP ........................................................ 4
ENTREPRENEURIAL VENTURE .................................................................................................................................... 4
SMALL BUSINESS VENTURE ....................................................................................................................................... 4
MODEL FOR ENTREPRENEURIAL ENVIRONMENT .............................................................................................. 4
(MAASDORP AND VAN VUUREN MODEL)...................................................................................................................... 4
MANAGEMENT AND LEADERSHIP ............................................................................................................................... 5
The Entrepreneurial Process ......................................................................................................................... 5
ENTREPRENEURS AND THE ECONOMY ......................................................................................................................... 5
CHAPTER 2: THE ENTREPRENEUR ................................................................................................................... 7
MANAGERIAL SUCCESS FACTORS ............................................................................................................................... 7
PUSH AND PULL FACTORS ......................................................................................................................................... 7
CHALLENGES: ENTREPRENEURS AND SMMES .............................................................................................................. 7
CHAPTER 7: LEGAL OBLIGATIONS AND LEGISLATION AFFECTING ENTREPRENEURS ........................................ 9
INTELLECTUAL PROPERTY ......................................................................................................................................... 9
CHAPTER 8: GETTING STARTED .................................................................................................................... 10
LOCATION OF BUSINESS ......................................................................................................................................... 10
RISK MANAGEMENT .............................................................................................................................................. 10
Types of risk ................................................................................................................................................ 10
Management of risk ................................................................................................................................... 11
PROCESS OF MANAGEMENT.................................................................................................................................... 11
CHAPTER 11: ENTERING THE FAMILY BUSINESS ........................................................................................... 12
FAMILY BUSINESS ................................................................................................................................................. 12
Defining a family business .......................................................................................................................... 12
Systems in family business ......................................................................................................................... 12
Problems in family business........................................................................................................................ 13
Succession................................................................................................................................................... 13
CHAPTER 13: THE BUSINESS BUYOUT .......................................................................................................... 15
EVALUATING AVAILABLE BUSINESSES ........................................................................................................................ 15
TRAPS WHEN BUYING A BUSINESS ............................................................................................................................ 15
VALUING A BUSINESS ............................................................................................................................................ 15
Asset based method ................................................................................................................................... 15
Market based method ................................................................................................................................ 16
Earnings based method .............................................................................................................................. 16
Capitalised earning method ....................................................................................................................... 17
CHAPTER 14: MANAGING GROWTH............................................................................................................. 18
PROCESS OF GROWTH ........................................................................................................................................... 18
STAGES OF GROWTH ............................................................................................................................................. 18
CHAPTER 15: GROWTH STRATEGIES AND OPTIONS...................................................................................... 21
INTERNAL GROWTH .............................................................................................................................................. 21
Differentiating strategies for internal growth ............................................................................................ 21
EXTERNAL GROWTH .............................................................................................................................................. 21
Factors in macro environment.................................................................................................................... 21
EXTERNAL GROWTH METHODS ................................................................................................................................ 22
Challenges with mergers and acquisitions ................................................................................................. 22
CHAPTER 17: HARVESTING AND EXITING THE VENTURE .............................................................................. 24
HARVESTING POTENTIAL ........................................................................................................................................ 24
HARVEST OPTIONS................................................................................................................................................ 25
2
,CHAPTER 18: INTERNATIONAL BUSINESS OPPORTUNITIES ........................................................................... 27
ENTRY INTO INTERNATIONAL BUSINESS ..................................................................................................................... 27
OPPORTUNITIES IN SOUTH AFRICA ........................................................................................................................... 27
CHALLENGES IN SOUTH AFRICA ............................................................................................................................... 28
3
, CHAPTER 1: THE NATURE AND DEVELOPMENT OF
ENTREPRENEURSHIP
ENTREPRENEURIAL VENTURE
Main goals are PROFIT AND GROWTH
These ventures create employment.
• Innovation: technological, product/service, marketing, distribution, management
• Potential for growth: have the potential to create their own market
• Strategic objectives: target market, increase market share and position
SMALL BUSINESS VENTURE
Main goals are AUTONOMY AND SECURITY
An independently owned and operated business, not dominant in the field. Does stabilise at
certain stage.
• Qualitative criteria: ownership structure
o Separate entity
o Not part of group
o Managed by owners
• Quantitative criteria: classified a micro, small or medium
o # of full time employees
o Total annual turnover
o Gross asset value
MODEL FOR ENTREPRENEURIAL ENVIRONMENT
(MAASDORP AND VAN VUUREN MODEL)
1. Entrepreneurial orientation
– Culture: “fear of failure”, independence
– Family and role models: entrepreneurial inclinations
– Education: can be learnt
– Work experience: knowledge, experience, skills gained
– Personal orientation: risk-taking, proactive, creativity
4
CHAPTER 1: THE NATURE AND DEVELOPMENT OF ENTREPRENEURSHIP ........................................................ 4
ENTREPRENEURIAL VENTURE .................................................................................................................................... 4
SMALL BUSINESS VENTURE ....................................................................................................................................... 4
MODEL FOR ENTREPRENEURIAL ENVIRONMENT .............................................................................................. 4
(MAASDORP AND VAN VUUREN MODEL)...................................................................................................................... 4
MANAGEMENT AND LEADERSHIP ............................................................................................................................... 5
The Entrepreneurial Process ......................................................................................................................... 5
ENTREPRENEURS AND THE ECONOMY ......................................................................................................................... 5
CHAPTER 2: THE ENTREPRENEUR ................................................................................................................... 7
MANAGERIAL SUCCESS FACTORS ............................................................................................................................... 7
PUSH AND PULL FACTORS ......................................................................................................................................... 7
CHALLENGES: ENTREPRENEURS AND SMMES .............................................................................................................. 7
CHAPTER 7: LEGAL OBLIGATIONS AND LEGISLATION AFFECTING ENTREPRENEURS ........................................ 9
INTELLECTUAL PROPERTY ......................................................................................................................................... 9
CHAPTER 8: GETTING STARTED .................................................................................................................... 10
LOCATION OF BUSINESS ......................................................................................................................................... 10
RISK MANAGEMENT .............................................................................................................................................. 10
Types of risk ................................................................................................................................................ 10
Management of risk ................................................................................................................................... 11
PROCESS OF MANAGEMENT.................................................................................................................................... 11
CHAPTER 11: ENTERING THE FAMILY BUSINESS ........................................................................................... 12
FAMILY BUSINESS ................................................................................................................................................. 12
Defining a family business .......................................................................................................................... 12
Systems in family business ......................................................................................................................... 12
Problems in family business........................................................................................................................ 13
Succession................................................................................................................................................... 13
CHAPTER 13: THE BUSINESS BUYOUT .......................................................................................................... 15
EVALUATING AVAILABLE BUSINESSES ........................................................................................................................ 15
TRAPS WHEN BUYING A BUSINESS ............................................................................................................................ 15
VALUING A BUSINESS ............................................................................................................................................ 15
Asset based method ................................................................................................................................... 15
Market based method ................................................................................................................................ 16
Earnings based method .............................................................................................................................. 16
Capitalised earning method ....................................................................................................................... 17
CHAPTER 14: MANAGING GROWTH............................................................................................................. 18
PROCESS OF GROWTH ........................................................................................................................................... 18
STAGES OF GROWTH ............................................................................................................................................. 18
CHAPTER 15: GROWTH STRATEGIES AND OPTIONS...................................................................................... 21
INTERNAL GROWTH .............................................................................................................................................. 21
Differentiating strategies for internal growth ............................................................................................ 21
EXTERNAL GROWTH .............................................................................................................................................. 21
Factors in macro environment.................................................................................................................... 21
EXTERNAL GROWTH METHODS ................................................................................................................................ 22
Challenges with mergers and acquisitions ................................................................................................. 22
CHAPTER 17: HARVESTING AND EXITING THE VENTURE .............................................................................. 24
HARVESTING POTENTIAL ........................................................................................................................................ 24
HARVEST OPTIONS................................................................................................................................................ 25
2
,CHAPTER 18: INTERNATIONAL BUSINESS OPPORTUNITIES ........................................................................... 27
ENTRY INTO INTERNATIONAL BUSINESS ..................................................................................................................... 27
OPPORTUNITIES IN SOUTH AFRICA ........................................................................................................................... 27
CHALLENGES IN SOUTH AFRICA ............................................................................................................................... 28
3
, CHAPTER 1: THE NATURE AND DEVELOPMENT OF
ENTREPRENEURSHIP
ENTREPRENEURIAL VENTURE
Main goals are PROFIT AND GROWTH
These ventures create employment.
• Innovation: technological, product/service, marketing, distribution, management
• Potential for growth: have the potential to create their own market
• Strategic objectives: target market, increase market share and position
SMALL BUSINESS VENTURE
Main goals are AUTONOMY AND SECURITY
An independently owned and operated business, not dominant in the field. Does stabilise at
certain stage.
• Qualitative criteria: ownership structure
o Separate entity
o Not part of group
o Managed by owners
• Quantitative criteria: classified a micro, small or medium
o # of full time employees
o Total annual turnover
o Gross asset value
MODEL FOR ENTREPRENEURIAL ENVIRONMENT
(MAASDORP AND VAN VUUREN MODEL)
1. Entrepreneurial orientation
– Culture: “fear of failure”, independence
– Family and role models: entrepreneurial inclinations
– Education: can be learnt
– Work experience: knowledge, experience, skills gained
– Personal orientation: risk-taking, proactive, creativity
4
