Entrepreneurship, 2nd ed.

Abstract

The green shoots of entrepreneurship give an economy its vitality. They give rise to new products and services, fresh applications for existing products and services, and new ways of doing business. Entrepreneurship stirs up the existing economic order and prunes out the dead wood. Established companies that fail to adapt to the changes cease to be competitive in the marketplace and go out of business. Within the broadest definition, entrepreneurs are found throughout the world of business because any firm, big or small, must have its share of entrepreneurial drive if it is to survive and prosper. This textbook focuses on starting and growing independent new ventures. It is based on entrepreneurship courses taught at Babson College and at universities around the world. One of the most common questions that entrepreneurship educators are asked is, Can entrepreneurship be taught? Our response is that anyone with a desire to become an entrepreneur will be more successful if he or she has taken a course on how to start and grow a new venture. About 30% of the students who have taken the new-venture course at Babson College since 1985 have gone on to start full-time businesses at some time in their careers. Many have started more than one. While this textbook empowers would-be entrepreneurs to start and grow their new ventures, it’s not only for them. Any student who reads this book will learn about the entrepreneurial process and the role of entrepreneurship in the economy. We believe that all business students, whether or not they start a new business, will benefit from learning about entrepreneurship. After all, entrepreneurship and small business create most of the jobs in the U.S. economy and account for almost half the GDP. They are ubiquitous, and so integral to the economy that almost every student will work in one way or another with entrepreneurs and small businesses after graduation. This textbook will stand students in good stead—not only for starting their own firms, but also for dealing with startups as investors, bankers, accountants, lawyers, customers, vendors, employees, landlords, and in any other capacity. An entrepreneurial revolution has transformed the economy since the mid-1970s. Central to that revolution is information technology, especially personal computers and the Internet. Information technology has profoundly changed the way companies do business, none more so than startup companies. Today’s students were born after the personal computer came into common use, and they came of age in the era of the Web. We believe they need an entrepreneurship text in which information technology is completely integrated all the way through. This book combines concepts and cases to present the latest theory about entrepreneurship and relate actual experiences. The concepts cover what would-be entrepreneurs need to know to start and grow their businesses, and the cases illustrate how real entrepreneurs have gone out and done it. They cover all stages of the entrepreneurial process, from searching for an opportunity to shaping it into a commercially attractive product or service, launching the new venture, building it into a viable business, and eventually harvesting it. Chapter 1 discusses the role of entrepreneurship in the U.S. economy and looks at the entrepreneurial competitiveness of nations throughout the world. Chapter 2 is an overview of the factors critical for starting a new enterprise and building it into a successful business. Chapters 3 through 8 look in detail at what budding entrepreneurs need to do before they open their doors for business. The section starts with searching for opportunities and evaluating them. It explains how to build a workable business model and covers marketing, strategy, team building, financial projections, and business planning. At the end of this section students know how to write a business plan and how much startup capital they need to start their ventures.