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Entrepreneurial small businesses are the mainstay of economies around the world.

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Entrepreneurial companies are domestic and global, as are their potential benefits and problems.

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What is Entrepreneurship?

Entrepreneurship can be practiced by individuals or companies.

entrepreneurship

the process of starting up a new company or business

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Individual Entrepreneurs

When an entrepreneur starts a business, one of four results can occur:

entrepreneur

a person who starts a new business

1. The company survives but stays small.

2. The company grows and becomes a major corporation.

3. The company is purchased and merges with another company.

4. The company fails, which is the most common result.

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Advantages of Entrepreneurship

Innovation and frustration can motivate individuals to start new businesses.

An entrepreneur is a risk manager, not a risk taker.

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Advantages of Entrepreneurship

Advantages ofEntrepreneurship

Self-Direction andSelf-Reliance

FlexibilityPotentialProfits

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Advantages for Others

In the United States, small businesses and entrepreneurial operations provided nearly 75 percent of all new jobs in the 1990s.

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Advantages for Others

Most new products and services reach the market through entrepreneurships.

Small business ownership is an alternative to corporate America.

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Disadvantages of Entrepreneurship

Disadvantages of Entrepreneurship

Long hours and complete responsibility for the business

Owners at work or at home worrying about work

Complete responsibility including potential for liability lawsuits

Complete financial risk

Potential problems with employees

Potential loss of personal funds and investment

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Intrapreneurship

The primary advantages of intrapreneurship involve financing and expertise.

intrapreneurship

the process of starting a new business that is spun off from an existing business

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Intrapreneurship

A corporation has access to both internal and external capital.

A corporation has access to well-skilled and knowledgeable employees.

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Entrepreneurial Trends The world’s cultures include both individualistic (self-oriented) and collectivist (group-oriented) cultures. Within all types of cultures, research has shown that many people would prefer to be their own bosses.

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Global Entrepreneurship

A domestic company’s owner or management team may decide to engage in global entrepreneurship.

global entrepreneurship

the process of selling new products, starting a new operating division, or starting up a new company in another country

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Ability to Compete

A company should consider its ability to compete globally on four different levels.

Country Level Company Level

Industry Level Product Level

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A company must examine the target country’s natural, human, and capital resources.

A company must analyze the success of its industry within the target country.

A company must have enough capital, staff, and relationships with companies in the target country.

A company must consider competing products that already exist in the target country.

Ability to Compete

Country-Level Ability

Industry-Level Ability

Company-Level Ability

Product-Level Ability

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Benefits of Global Entrepreneurship

Gain increased sales

Enter new and potentially profitable markets

Smooth out sales by selling out-of-season goods overseas

Smooth out sales by selling older versions of products overseas

Benefits of Global Entrepreneurship

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Risks of Global Entrepreneurship

A government could take over the company, or the government might change laws affecting the business.

Political or Country Risk

Economic risks include higher interest rates and rising unemployment.

Economic Risk

There is a greater risk of losing money when recovering an investment; or getting the money back, takes a long time.

TimeRisk

Certain products can be risky if they are not accepted, or if competition is strong.

ProductRisk

Recovering an investment in a business and making a profit can take several years.

Financial (or Cost) Risk

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Support Systems

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International Support

The World Bank helps countries develop and participate in international trade.

The World Bank also supports joint ventures with companies or governments.

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International Support

International exchange organizations include:

The Asian Development Bank (AsDB)

The European Bank for Reconstruction and Development (EBRD)

The Inter-American Development Bank (IDB)

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Local Support

Local support can come from:

The local chamber of commerce

State governments

The U.S. Department of Commerce

The Small Business Administration