Entrepreneurship and Small Business
1
,Table of Contents
Entrepreneurship and Small Business ................................................................................ 1
Part 1: Entrepreneurship ................................................................................................... 4
1.1 Entrepreneurship: The Social And Business Revolution ......................................................... 4
Learning outcomes ....................................................................................................................................... 4
Summary ...................................................................................................................................................... 4
1.2 The economics of entrepreneurship and public policy........................................................... 6
Learning outcomes ....................................................................................................................................... 6
Summary ...................................................................................................................................................... 6
1.3 The entrepreneurial character .............................................................................................. 9
Learning outcomes ....................................................................................................................................... 9
Summary ...................................................................................................................................................... 9
1.4 Discovering a business idea................................................................................................. 11
Learning outcomes ..................................................................................................................................... 11
Summary .................................................................................................................................................... 11
1.5 Researching and evaluating the business idea..................................................................... 14
Learning outcomes ..................................................................................................................................... 14
Summary .................................................................................................................................................... 14
Part 2: Start up ................................................................................................................ 16
2.6 Start-up: Developing the business model ............................................................................ 16
Learning outcomes ..................................................................................................................................... 16
Summary .................................................................................................................................................... 16
2.7 Adding values to the business model .................................................................................. 18
Learning outcomes ..................................................................................................................................... 18
Summary .................................................................................................................................................... 18
2.8 Launching your business ..................................................................................................... 20
Learning outcomes ..................................................................................................................................... 20
Summary .................................................................................................................................................... 20
2.9 Legal foundations ............................................................................................................... 23
Learning outcomes ..................................................................................................................................... 23
Summary .................................................................................................................................................... 23
2.10 Operations and risk........................................................................................................... 26
Learning outcomes ..................................................................................................................................... 26
Summary .................................................................................................................................................... 26
2.11 Financial management ...................................................................................................... 28
Learning outcomes ..................................................................................................................................... 28
Summary .................................................................................................................................................... 28
Part 3: Growth................................................................................................................. 30
3.12 Growth: Building the foundations ..................................................................................... 30
Learning outcomes ..................................................................................................................................... 30
Summary .................................................................................................................................................... 30
3.13 Strategies for growth ........................................................................................................ 34
Learning outcomes ..................................................................................................................................... 34
Summary .................................................................................................................................................... 34
2
, 3.14 Financing the business ...................................................................................................... 36
Learning outcomes ..................................................................................................................................... 36
Summary .................................................................................................................................................... 36
3.15 From business model to business plan .............................................................................. 39
Learning outcomes ..................................................................................................................................... 39
Summary .................................................................................................................................................... 39
Business plan structure .............................................................................................................................. 41
Part 4: Maturity .............................................................................................................. 45
4.16 Maturity – The exit ........................................................................................................... 45
Learning outcomes ..................................................................................................................................... 45
Summary .................................................................................................................................................... 45
4.17 Family business ................................................................................................................. 47
Learning outcomes ..................................................................................................................................... 47
Summary .................................................................................................................................................... 47
4.18 From entrepreneur to entrepreneurial leader ................................................................... 49
Learning outcomes ..................................................................................................................................... 49
Summary .................................................................................................................................................... 49
4.19 Corporate entrepreneurship ............................................................................................. 52
Learning outcomes ..................................................................................................................................... 52
Summary .................................................................................................................................................... 52
3
, Part 1: Entrepreneurship
1.1 Entrepreneurship: The Social And Business Revolution
Learning outcomes
When you have read this chapter and undertaken the related activities you wil
be able to:
• Critically analyse the changing commercial environment and how it impacts on
entrepreneurship;
• Explain how the approach entrepreneurs take to management in a risky, uncertain
environment differs from 'traditional' management;
• Define an entrepreneur and understand the different forms entrepreneurship might
take;
• Define small firms and understand their characteristics;
• Explain why entrepreneurs and small firms are so important to the economies of
modern countries;
• Understand the role of social and civic entrepreneurs and the issues they face;
• Understand the meaning of sustainable entrepreneurship.
Summary
• We are living in an age of uncertainty characterized by continuing,
unpredictable and rapid change - change that is both incremental and
discontinuous. It is an increasingly complex world full of interconnections
formed by a global market place linked by technology allowing instant
communication.
• While large firms find this environment challenging, small, entrepreneurial
firms have thrived and, while their contribution to economic prosperity has
become recognized, many entrepreneurs have become millionaires.
• The key to this success has been the ability of entrepreneurs to work with
change to recognize and create opportunities.
• Entrepreneurial management is characterized as being a social activity that
has a different approach to dealing with risk and uncertainty. Successful
entrepreneurs generate strong relationships with stakeholders that allow
them to mitigate risk and maintain flexibility of action. They develop strategy
differently, creating strategic intent but maintaining a loose, flexible strategy
and continuously strategizing and creating as many strategic options as
possible.
• Entrepreneurs are defined primarily by their actions. They create and/or
exploit change for profit by innovating, accepting risk and moving resources to
areas of higher return.
4
1
,Table of Contents
Entrepreneurship and Small Business ................................................................................ 1
Part 1: Entrepreneurship ................................................................................................... 4
1.1 Entrepreneurship: The Social And Business Revolution ......................................................... 4
Learning outcomes ....................................................................................................................................... 4
Summary ...................................................................................................................................................... 4
1.2 The economics of entrepreneurship and public policy........................................................... 6
Learning outcomes ....................................................................................................................................... 6
Summary ...................................................................................................................................................... 6
1.3 The entrepreneurial character .............................................................................................. 9
Learning outcomes ....................................................................................................................................... 9
Summary ...................................................................................................................................................... 9
1.4 Discovering a business idea................................................................................................. 11
Learning outcomes ..................................................................................................................................... 11
Summary .................................................................................................................................................... 11
1.5 Researching and evaluating the business idea..................................................................... 14
Learning outcomes ..................................................................................................................................... 14
Summary .................................................................................................................................................... 14
Part 2: Start up ................................................................................................................ 16
2.6 Start-up: Developing the business model ............................................................................ 16
Learning outcomes ..................................................................................................................................... 16
Summary .................................................................................................................................................... 16
2.7 Adding values to the business model .................................................................................. 18
Learning outcomes ..................................................................................................................................... 18
Summary .................................................................................................................................................... 18
2.8 Launching your business ..................................................................................................... 20
Learning outcomes ..................................................................................................................................... 20
Summary .................................................................................................................................................... 20
2.9 Legal foundations ............................................................................................................... 23
Learning outcomes ..................................................................................................................................... 23
Summary .................................................................................................................................................... 23
2.10 Operations and risk........................................................................................................... 26
Learning outcomes ..................................................................................................................................... 26
Summary .................................................................................................................................................... 26
2.11 Financial management ...................................................................................................... 28
Learning outcomes ..................................................................................................................................... 28
Summary .................................................................................................................................................... 28
Part 3: Growth................................................................................................................. 30
3.12 Growth: Building the foundations ..................................................................................... 30
Learning outcomes ..................................................................................................................................... 30
Summary .................................................................................................................................................... 30
3.13 Strategies for growth ........................................................................................................ 34
Learning outcomes ..................................................................................................................................... 34
Summary .................................................................................................................................................... 34
2
, 3.14 Financing the business ...................................................................................................... 36
Learning outcomes ..................................................................................................................................... 36
Summary .................................................................................................................................................... 36
3.15 From business model to business plan .............................................................................. 39
Learning outcomes ..................................................................................................................................... 39
Summary .................................................................................................................................................... 39
Business plan structure .............................................................................................................................. 41
Part 4: Maturity .............................................................................................................. 45
4.16 Maturity – The exit ........................................................................................................... 45
Learning outcomes ..................................................................................................................................... 45
Summary .................................................................................................................................................... 45
4.17 Family business ................................................................................................................. 47
Learning outcomes ..................................................................................................................................... 47
Summary .................................................................................................................................................... 47
4.18 From entrepreneur to entrepreneurial leader ................................................................... 49
Learning outcomes ..................................................................................................................................... 49
Summary .................................................................................................................................................... 49
4.19 Corporate entrepreneurship ............................................................................................. 52
Learning outcomes ..................................................................................................................................... 52
Summary .................................................................................................................................................... 52
3
, Part 1: Entrepreneurship
1.1 Entrepreneurship: The Social And Business Revolution
Learning outcomes
When you have read this chapter and undertaken the related activities you wil
be able to:
• Critically analyse the changing commercial environment and how it impacts on
entrepreneurship;
• Explain how the approach entrepreneurs take to management in a risky, uncertain
environment differs from 'traditional' management;
• Define an entrepreneur and understand the different forms entrepreneurship might
take;
• Define small firms and understand their characteristics;
• Explain why entrepreneurs and small firms are so important to the economies of
modern countries;
• Understand the role of social and civic entrepreneurs and the issues they face;
• Understand the meaning of sustainable entrepreneurship.
Summary
• We are living in an age of uncertainty characterized by continuing,
unpredictable and rapid change - change that is both incremental and
discontinuous. It is an increasingly complex world full of interconnections
formed by a global market place linked by technology allowing instant
communication.
• While large firms find this environment challenging, small, entrepreneurial
firms have thrived and, while their contribution to economic prosperity has
become recognized, many entrepreneurs have become millionaires.
• The key to this success has been the ability of entrepreneurs to work with
change to recognize and create opportunities.
• Entrepreneurial management is characterized as being a social activity that
has a different approach to dealing with risk and uncertainty. Successful
entrepreneurs generate strong relationships with stakeholders that allow
them to mitigate risk and maintain flexibility of action. They develop strategy
differently, creating strategic intent but maintaining a loose, flexible strategy
and continuously strategizing and creating as many strategic options as
possible.
• Entrepreneurs are defined primarily by their actions. They create and/or
exploit change for profit by innovating, accepting risk and moving resources to
areas of higher return.
4
