ACCTG 1 Lecture Notes - Lecture 9: Takers, Small Business, Millennials
CHAPTER 1 – The Foundations of Entrepreneurship
The world of the entrepreneur
- Entrepreneurs now are the celebrities of the global economy
- They create companies, jobs, wealth, and innovative solutions
- Entrepreneurship is the desired career path for many people who are still in college
- Large companies in the US and elsewhere around the world have engaged in massive downsizing
campaigns → spawned a new population of entrepreneurs (“castoffs” from large corporations)
- Generation X and generation Y no longer see launching a business as being a risky career path
- Downsizing trend created a more significant philosophical change: “small is beautiful”
- With the pace of constantly accelerating, fleet-footed, agile, small companies have the competitive
advantage (and not large corporations)
- Entrepreneurship has become mainstream
- World is rapidly moving away from an industrial economy to a knowledge-based one, favours small
businesses because the cost of managing and transmitting knowledge and information is very low
What is an entrepreneur?
= one who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and
growth by identifying significant opportunities and assembling the necessary resources to capitalize on
them
- Entrepreneurs are accustomed to making do without resources
- They are disrupters, upsetting the traditional way of doing things by creating new ways to do them
- The constant churn of businesses is an indication of a healthy, growing, economic system that is
creating new and better ways of serving people´s needs and improving their quality of life and
standard of living → makes an economy more flexible and capable of adapting to structural changes
in the competitive landscape
- The desire for autonomy is the single most important factor motivating entrepreneurs to start
businesses
Brief summary of the entrepreneurial profile:
1. Desire for responsibility
- Deep sense of personal responsibility for the outcome of ventures they start
- They prefer to be in control of their resources
2. Preference for moderate risk
- Entrepreneurs are not wild risk takers but are instead calculated risk takers
- They spot opportunities in areas that reflect their passions, knowledge, backgrounds, or
experiences → increases the probability of success
- Successful entrepreneurs are not as much risk takers as they are risk eliminators
3. Willingness to break the rules
- Entrepreneurs are innovators who are willing to bend or break the rules to disrupt business as usual
4. Self-reliance
- Entrepreneurs end up performing many jobs themselves → still demonstrate a high level of self-
reliance
5. Confidence in their ability to succeed
6. Determination
- Also called “grit”, the ability to focus intently on achieving a singular, long-term goal → combination
of passion and perseverance
7. Desire for immediate feedback
8. High level of energy
- Entrepreneurs are more energetic than the average person → long hours and hard work are the rule
9. Competitiveness
10. Future orientation
- Well-defines sense of searching for opportunities
- Entrepreneurs see potential where most other see only problems or nothing at all
➔ Traditional managers are concerned with managing available resources → entrepreneurs are
more interested in spotting and capitalizing on opportunities
Opportunities entrepreneurs = entrepreneurs who start businesses because they spot an
opportunity in the marketplace
Necessity entrepreneurs = entrepreneurs who start businesses because they cannot find work any
other way
Serial entrepreneurs = entrepreneurs who repeatedly start businesses and grow them to a
sustainable size before striking out again
11. Skill at organizing
12. Value of achievement over money
- Achievement seems to be entrepreneurs´ primary motivating force
➔ Money is simply a way of “keeping score” of accomplishments (=symbol of achievements)
13. High degree of commitment
14. Tolerance for ambiguity
- High tolerance for ever-changing situations, the environment in which they most often operate
15. Flexibility
- Successful entrepreneurs learn to be masters of improvisation, reshaping and transforming their
businesses as conditions demand
16. Resourceful
- Entrepreneurs excel at getting the most out of the resources that are available
- They are skilled at bootstrapping (= a strategy theta involves conserving money and cutting costs
during start-ups so that entrepreneurs can pour every available dollar into their business
17. Willingness to work hard
18. Tenacity
- Entrepreneurs simply keep trying
The benefits of entrepreneurship
1. Opportunity to create your own destiny
- Independence and opportunity to achieve whatever is important for the entrepreneur
- Primary incentive “being my own boss”
2. Opportunity to make a difference
- Social entrepreneurs = entrepreneurs who use their skills not only to create profitable businesses
but also to achieve economic, social, and environmental goals for the common good
3. Opportunity to reach your full potential
- Little difference between work and play → entrepreneurs´ business become their instruments for
self-expression and self-actualization
- Sense of empowerment
4. Opportunity to reap impressive profits
- Important motivating factor
5. Opportunity to contribute to society and be recognized for your efforts
- Small business owners are among the most respected and most trusted members of their
communities
6. Opportunity to do what you enjoy and have fun at it
➔ Three reasons: change the world, make customers´ lives better, and create an organization of
lasting value
