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of others. Few successful entrepreneurs succeed alone or straight out of college.
Most spend time working in successful companies or partner with others to bring more
expertise to a new business.
Finally, luck also plays a role in the success of some firms. For example, after Alan
McKim started Clean Harbors, an environmental cleanup firm based in New England,
he struggled to keep his business afloat. Then the U.S. government committed
$1 6 billion to toxic waste cleanup—McKim’s specialty. He was able to get several
large government contracts and put his business on solid financial footing. Had the
government fund not been created at just the right time, McKim may well have
failed. Similarly, when retailers like Circuit City and Linens and Things close their
doors, others firms that specialize in liquidating inventories of bankrupt companies
step in.
32
Similarly, in the wake of such recent disasters—both natural and industrial—
as Hurricane Sandy, the Japanese tsunami and nuclear plant disaster, and the BP Deep-
water oil spill, new businesses have sprung up to help cope with the aftermath, including
relocating people, waste clean-up, and so forth.
33
SUMMARY OF LEARNING OUTCOMES AND KEY POINTS
1.
Discuss the nature of entrepreneurship.
• Entrepreneurship is the process of planning,
organizing, operating, and assuming the risk
of a business venture.
• An entrepreneur is someone who engages in
entrepreneurship. In general, entrepreneurs
start small businesses.
2.
Describe the role of entrepreneurship in
society.
• Small businesses are an important source of
innovation.
• Small businesses create numerous jobs.
• Small businesses contribute to the success of
large businesses.
3.
Understand the major issues involved in choos-
ing strategies for small firms and the role of
international management in entrepreneurship.
• In choosing strategies, entrepreneurs have
to consider the characteristics of the
industry in which they are going to
conduct business.
• Small businesses generally have several
distinctive competencies that they should
exploit in choosing their strategy. They are
usually skilled at identifying niches in estab-
lished markets, identifying new markets, and
acting quickly to obtain first-mover
advantages.
• Small businesses are usually not skilled at
exploiting economies of scale.
• Once an entrepreneur has chosen a strategy, the
strategy is normally written down in a business
plan. Writing a business plan forces an entre-
preneur to plan thoroughly and to anticipate
problems that might occur.
4.
Discuss the structural challenges unique to
entrepreneurial firms.
• With a strategy and business plan in place,
entrepreneurs must choose a structure to
implement them. All of the structural issues
summarized in the next five chapters of this
book are relevant to the entrepreneur.
• In addition, the entrepreneur has some unique
structural choices to make. For example, the
entrepreneur can buy an existing business or
start a new one.
• In determining financial structure, an entre-
preneur has to decide how much personal
capital to invest in an organization, how much
bank and government support to obtain, and
whether to encourage venture capital firms to
invest.
• Entrepreneurs can also rely on various sources
of advice.
5.
Understand the determinants of the performance
of small firms.
• Several interesting trends characterize new
business start-ups today.
• There are several reasons some new businesses
fail and others succeed.
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