ENTREPRENEURSHIPENTREPRENEURSHIPAND VENTURE CAPITALAND VENTURE CAPITAL

UNIT 15UNIT 15

FOOD FOR THOUGHT...FOOD FOR THOUGHT...

You want to make a fortune. $ $ $ $You want to make a fortune. $ $ $ $ 'There are three ways to make money. You 'There are three ways to make money. You

can inherit it. You can marry it. You can steal can inherit it. You can marry it. You can steal it.' it.'

conventional wisdom in Italyconventional wisdom in Italy Does making a fortune mean being fortunate Does making a fortune mean being fortunate

or having an exceptional idea?or having an exceptional idea?

LEADERSHIPLEADERSHIPA LEADERA LEADER – provides the vision and the direction – provides the vision and the direction to a businessto a businessA MANAGERA MANAGER – follows the leader to deliver– follows the leader to deliverthe resultsthe resultsENTREPRENEURSENTREPRENEURS – – founders of organisations, founders of organisations, have visionary leadership qualities, leaders not have visionary leadership qualities, leaders not only of their companies, but of public opiniononly of their companies, but of public opinion

ENTREPRENEUR VS. MANAGERENTREPRENEUR VS. MANAGER Who runs the bWho runs the businessesusinesses in the private sector? → in the private sector? →

ssometimes the owners, sometimes the hired managersometimes the owners, sometimes the hired managers What is the basic difference between entrepreneurs and What is the basic difference between entrepreneurs and

managers?managers?

MANAGERMANAGER – someone whose job is to manage all or – someone whose job is to manage all or part of a company or organization, or a particular part of a company or organization, or a particular activityactivity

ENTREPRENEUR ENTREPRENEUR –– anyone who starts a company, anyone who starts a company, arranges business deals, and takes risks in order to arranges business deals, and takes risks in order to make a profitmake a profit

WHAT’S THE CONNECTION?WHAT’S THE CONNECTION? PEOPLEPEOPLE – sources of never-ending change, – sources of never-ending change,

inquisitiveness, alertness and creativityinquisitiveness, alertness and creativity PRODUCERSPRODUCERS – may not be aware of consumers’ – may not be aware of consumers’

wants or of the possibility of satisfying themwants or of the possibility of satisfying them MARKETSMARKETS – full of undiscovered but profitable ‘facts’ – full of undiscovered but profitable ‘facts’ ENTREPRENEURSENTREPRENEURS – attracted by profit opportunities – attracted by profit opportunities

and stimulated to discover previously unconsidered and stimulated to discover previously unconsidered alternativesalternatives

ENTREPRENTREPRENEURS...ENEURS... – FILL IN THE – FILL IN THE MISSING WORDS.MISSING WORDS.

always m____________ alert discover a profitable way of s____________ needs perceive an o____________ to serve the market better than

it is currently being served know that it is p____________ to produce a product, rather

than how to produce it see the possibility of new p____________, or of new

t____________, production processes, forms of organization, m____________ techniques and d____________ methods

more interested in and better at s____________ companies than r____________ them

hire experienced people (m____________) to do this and move on to a new idea

ENTREPRENTREPRENEURS...ENEURS... always always mentallymentally alert alert discover a profitable way of discover a profitable way of satisfyingsatisfying needs needs perceive an perceive an opportunityopportunity to serve the market better than it is to serve the market better than it is

currently being servedcurrently being served know that it is know that it is profitableprofitable to produce a product, rather than to produce a product, rather than

how to produce ithow to produce it see the possibility of new see the possibility of new productsproducts, or of new , or of new technologiestechnologies,,

production processes, forms of organization, production processes, forms of organization, marketingmarketing techniques and techniques and distributiondistribution methodsmethods

more interested in and better at more interested in and better at startingstarting companies than companies than runningrunning themthem

hire experienced people hire experienced people ((managersmanagers) ) to do this and move on to do this and move on to a new ideato a new idea

TO SUM UP...TO SUM UP...

WHAT MOTIVATES WHAT MOTIVATES ENTREPRENEURS?ENTREPRENEURS?

READING – READING – GOING INTO GOING INTO BUSINESS BUSINESS – RB, p 56– RB, p 56

What do you need to start up a business? How can start-ups be funded? What advantages and risks are associated with

privately run businesses?

I Read the text in RB, p 56 and compare your answers.II Then do the vocabulary tasks on pp. 56 & 57.

ENTREPRENEURS OR MANAGERS?ENTREPRENEURS OR MANAGERS?

set objectivesset objectives set up their businessesset up their businesses take riskstake risks make decisionsmake decisions allocate resourcesallocate resources plan, organize and plan, organize and

supervise the supervise the performance of the performance of the companycompany

pay the billspay the bills

train and choose the train and choose the staffstaff

work late hourswork late hours struggle with cash flow struggle with cash flow

problemsproblems evaluate the evaluate the

performanceperformance delegate responsibilitydelegate responsibility do the paperworkdo the paperwork set the rulesset the rules seize the opportunityseize the opportunity

ENTREPRENEURS, MANAGERS ENTREPRENEURS, MANAGERS OR BOTH?OR BOTH?

individualistic self-confident group orientedindividualistic self-confident group orientedimpulsive hard-working careful aggressiveimpulsive hard-working careful aggressivecharismatic persuasive cautious ruthlesscharismatic persuasive cautious ruthlessdecisive adventurous analytical flexibledecisive adventurous analytical flexibleorganised thoughtful motivating creativeorganised thoughtful motivating creativeENTREPRENEURSENTREPRENEURS MANAGERSMANAGERS BOTHBOTH

DO YOU HAVE WHAT IT TAKES TO DO YOU HAVE WHAT IT TAKES TO BECOME AN ENTREPRENEUR?BECOME AN ENTREPRENEUR?

Complete and answer the questions in RB, p. 58 and find out.

ENTREPRENEURS OR MANAGERS?ENTREPRENEURS OR MANAGERS? Do you recognise any of these people?Do you recognise any of these people? Which companies do you associate with them?Which companies do you associate with them?

ENTREPRENEURS OR MANAGERS?ENTREPRENEURS OR MANAGERS? Do you recognise any of these people?Do you recognise any of these people? Which companies do you associate with them?Which companies do you associate with them?

MATCH THE PEOPLE WITH THE CORRESPONDING COMPANIES.

Chad Hurley & Steve Chen Erling Persson Levi Strauss Meg Whitman Andrea Jung Oprah Winfrey Ingvar Kamprad Coco Chanel Steve Jobs H. Lee Scott, Jr. Douglas Ivester Richard Branson Bill Gates Larry Page & Sergey Brin Jack Welch

Levi Straus & Co. Google Inc. Avon Apple Inc. General Electric Virgin Group Ltd. IKEA H&M Microsoft Corporation Harpo Productions The Coca-Cola Company Chanel S.A. YouTube The Body Shop Walmart eBay Inc.

WHAT ABOUT YOUNG WHAT ABOUT YOUNG ENTREPRENEURS?ENTREPRENEURS?

STUDENT ENTREPRENEURS - HOW STUDENT ENTREPRENEURS - HOW DID THEY DO IT?DID THEY DO IT?

Did they have an exceptional idea? Did they have to make sacrifices in their lives to succeed in

business? What is their idea of entrepreneurship? What is the purpose of

their business? How did they raise money for their start-up? What were the problems these entrepreneurs had to deal with? I Complete the text in RB, p 63 and find out.II Watch the video and find out about their global success:

https://www.youtube.com/watch?v=989eL5KRHAQ What is the lesson a new entrepreneur can learn from such

stories? Do you know any other successful entrepreneurial stories from

Croatia?

YOUR TURN – YOUR TURN – FINDING THE FINDING THE FUNDSFUNDS – RB, p. 63 – RB, p. 63

I What is CROWDFUNDING?II PROJECT WORK - Make a business presentation: imagine you want to attract your would-be crowdfunding investors on the Internet for your start-up. You can either use your own business idea or choose one of the ideas listed below: Food delivery service Youth hostel E-commerce site House cleaning service Pet sitting In order to be more efficient, read the crowdfunding tips at: http://www.smarta.com/advice/business-finance/start-up-finance/crowdfunding-advice-top-8-tips-for-small-businesses/

READING – READING – CRAZY DIAMONDSCRAZY DIAMONDS – RB, – RB, p 60p 60

I How would you explain this sentence?“True entrepreneurs find worth in the worthless and possibility in the impossible.”

II PRE-READING TASK – Are the sentences in Task II TRUE or FALSE?

III READING TASKS – a) Check your TRUE/FALSE answers. b) Answer the following questions: 1 What is the difference between a small business owner and an entrepreneur? 2 What should governments do to encourage entrepreneurship? 3 In what ways are governments wrong about what entrepreneurship is?

.

READING – READING – CRAZY DIAMONDSCRAZY DIAMONDS – RB, – RB, p 60p 60

IV VOCABULARY TASKS – IV & VI, RB pp. 61 & 62

V Can you summarize the main ideas about entrepreneurs as suggested in the article? Use the prompts to complete the task V in RB, p 61.

DISCUSSIONDISCUSSION Have you ever had vague ideas for Have you ever had vague ideas for new products and services, and later new products and services, and later seen them developed by seen them developed by an entrepreneur or an established an entrepreneur or an established company?company? Do you have ideas for new products Do you have ideas for new products and services now?and services now? Do you think that if you saw a market Do you think that if you saw a market opportunity you would be able to opportunity you would be able to develop a strategy, raise finance, set develop a strategy, raise finance, set up and manage a company, take care up and manage a company, take care of marketing, advertising and sales, of marketing, advertising and sales, and beat the competitionand beat the competition??

MARKET OPPORTUNITIES AND MARKET OPPORTUNITIES AND VENTURE CAPITALVENTURE CAPITAL

VENTURE CAPITALVENTURE CAPITAL – money invested in a – money invested in a possibly risky new businesspossibly risky new business

MARKET OPPORTUNITIESMARKET OPPORTUNITIES – possibilities of filling – possibilities of filling unsatisfied needs in sectors in which the unsatisfied needs in sectors in which the company can produce the goods and services company can produce the goods and services effectivelyeffectively

MISSION STATEMENT VS. VISION MISSION STATEMENT VS. VISION STATEMENT VS. BUSINESS PLANSTATEMENT VS. BUSINESS PLAN

MISSION STATEMENTMISSION STATEMENT – a short written statement made by – a short written statement made by an organizationan organization about the work that it does about the work that it does, intended to , intended to communicate its aims, purpose and future activities to communicate its aims, purpose and future activities to customers, employees, shareholders etc.customers, employees, shareholders etc.

VISION STATEMENTVISION STATEMENT – a general statement of what an – a general statement of what an organization aims to achieve in the future.organization aims to achieve in the future.

BUSINESS PLANBUSINESS PLAN – a written report stating a company’s plans – a written report stating a company’s plans regarding sales, product development, financing, etc.regarding sales, product development, financing, etc.

DISCUSS THESE MISSION DISCUSS THESE MISSION STATEMENTS. What is each company STATEMENTS. What is each company

trying to achieve?trying to achieve? The business of Newcastle United is football – our The business of Newcastle United is football – our

aim is to play attractive football, to win trophies, to aim is to play attractive football, to win trophies, to satisfy our supporters and shareholders and to satisfy our supporters and shareholders and to continually improve our position as a top European continually improve our position as a top European club.club.

(Newcastle United plc)(Newcastle United plc) Pret creates handmade, natural food, avoiding the Pret creates handmade, natural food, avoiding the

obscure chemicals, additives and preservatives obscure chemicals, additives and preservatives common to so much of the ‘prepared’ and ‘fast’ common to so much of the ‘prepared’ and ‘fast’ food on the market today.food on the market today.

(Pret a Manger)(Pret a Manger)

Glaxo Wellcome is a research-based company whose Glaxo Wellcome is a research-based company whose people are committed to fighting disease by bringing people are committed to fighting disease by bringing innovative medicines and services to patients throughout innovative medicines and services to patients throughout the world and to healthcare providers who serve them.the world and to healthcare providers who serve them.

Glaxo WellcomeGlaxo Wellcome We believe passionately in the power of ideas to change We believe passionately in the power of ideas to change

attitudes, lives and ultimately the world. So we’re attitudes, lives and ultimately the world. So we’re building here a clearing house that offers free knowledge building here a clearing house that offers free knowledge and inspiration from the world’s most inspired thinkers, and inspiration from the world’s most inspired thinkers, and also a community of curious souls to engage with and also a community of curious souls to engage with ideas and each other.ideas and each other.TED (conference) (Technology Entertainment and Design)TED (conference) (Technology Entertainment and Design)

BUSINESS PLANBUSINESS PLANA. THE NATURE AND OBJECTIVES OF THE BUSINESS

B. PREMISES

C. PERSONNEL

D. EQUIPMENT REQUIRED

E. MARKET ANALYSIS (THE PRODUCT/SERVICE IN RELATION TO THE MARKET)

F. MARKETING AND SALES STRATEGY

G. PRODUCTS OR SERVICES OFFERED

H. FINANCIAL DATA

Sort out the following questions.Sort out the following questions. _______Roughly how much funds will you need?_______Roughly how much funds will you need? _______What kind of property will you require? Offices, _______What kind of property will you require? Offices,

factories? Leased or purchased?factories? Leased or purchased? _______Who will be your target customers?_______Who will be your target customers? _______What will be your main business activity?_______What will be your main business activity? _______Who are your major competitors?_______Who are your major competitors? _______What is the name of your firm?_______What is the name of your firm? _______Approximately how many people will the company _______Approximately how many people will the company

employ?employ? _______What is the state of the market? Growing, static, _______What is the state of the market? Growing, static,

seasonal?seasonal? _______How will you market your product or services? Trade _______How will you market your product or services? Trade

press? Mass media? Word of mouth advertising?press? Mass media? Word of mouth advertising? _______What general trading equipment will you require? _______What general trading equipment will you require?

Vehicles, computer hardware?Vehicles, computer hardware?

______________Where will the company be located? Why?Where will the company be located? Why? ______________How will your potential customers learn about yourHow will your potential customers learn about your

product?product? ______________What manufacturing equipment will you require? What manufacturing equipment will you require?

Machinery, tools?Machinery, tools? ______________What is your comparative advantage?What is your comparative advantage? ______________Do you have an overall vision for the company? Include a Do you have an overall vision for the company? Include a

mission statement if possible.mission statement if possible. ______________ What kind of distribution network, if any, will you require? What kind of distribution network, if any, will you require? ______________Do you have marketing, sales, financial, technical and Do you have marketing, sales, financial, technical and

strategic management skills on the team?strategic management skills on the team? ______________ What is the minimum level od sales required to achieve What is the minimum level od sales required to achieve

the break-even point, and what is our expected future revenue?the break-even point, and what is our expected future revenue? ______________Describe your company’s products in terms of what the Describe your company’s products in terms of what the

customer buys – not necessarily what you produce. For example: customer buys – not necessarily what you produce. For example: ‘My business provides access subscriptions to the Internet’ – not, ‘My business provides access subscriptions to the Internet’ – not, ‘My business connects computers to the Internet.’‘My business connects computers to the Internet.’

______________ What are your sales targets for year one? What are your sales targets for year one?

A BUSINESS PLAN – MK, A BUSINESS PLAN – MK, pp. 78 & 79pp. 78 & 79

Compare your answers by putting the parts of Compare your answers by putting the parts of a BUSINESS PLAN in the most logical order.a BUSINESS PLAN in the most logical order.

Then do the VOCABULARY tasks 1 & 2, p. 79.Then do the VOCABULARY tasks 1 & 2, p. 79.

HOMEWORK ASSIGNMENT HOMEWORK ASSIGNMENT – – A BUSINESS PLANA BUSINESS PLAN

With your team (up to 5 mWith your team (up to 5 members) prepare embers) prepare a brief plan for a business you agree to launch a brief plan for a business you agree to launch

following the items in the business plan (skip the following the items in the business plan (skip the ones you are not prepared to address yet). Present ones you are not prepared to address yet). Present the finished plan to a group of financial backers and the finished plan to a group of financial backers and try to convince them to invest in your project.try to convince them to invest in your project.