Description
The Entrepreneurial Process
OXFORD
UNIVERSITY PRESS
Oxford University Press is a department of the University of Oxford.
It furthers the University's objective of excellence in research, scholarship,
and education by publishing worldwide. Oxford is a registered trade mark of
Oxford University Press in the UK and in certain other countries
Published in South Africa by
Oxford University Press Southern Africa (Pty) Limited
Vasco Boulevard, Goodwood, N1 City, Cape Town, South Africa, 7460
P 0 Box 12119, N1 City, Cape Town, South Africa, 7463
©Oxford University Press Southern Africa (Pty) Ltd 2014
The moral rights of the author have been asserted
First published 1997 by International Thompson Publishing Southern Africa (Pty) Ltd
Second edition published in 2000
Third edition published in 2008
Fourth edition published in 2011
Fifth edition published in 2014
All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system, or transmitted, in any form or by any means, without the
prior permission in writing of Oxford University Press Southern Africa (Pty) Ltd,
or as expressly permitted by law, by licence, or under terms agreed
with the appropriate reprographic rights organisation, DALRO, The Dramatic, Artistic
and Literary Rights Organisation [email protected]. Enquiries concerning
reproduction outside the scope of the above should be sent to the Rights Department,
Oxford University Press Southern Africa (Pty) Ltd, at the above address.
You must not circulate this work in any other form
and you must impose this same condition on any acquirer.
Entrepreneurship and New Venture Management
Fifth edition
ISBN 978 0 19 905402 2
Typeset in Minion Pro 10pt on 12pt
Printed on 70 gsm woodfree paper
Acknowledgements
Publishing manager: Alida Terblanche
Publisher: Janine Loedolff
Editor: Allison Lamb
Designer: Bongiwe Beja
Cover designer: Cindy Armstrong
Typesetter: Orchard Publishing
Cover image: iStockphoto.com
Printed and bound by ABC Press, Cape Town
121896
The authors and publisher gratefully acknowledge permission to reproduce copyright material
in this book. Every effort has been made to trace copyright holders, but if any copyright
infringements have been made, the publisher would be grateful for information that would enable
any omissions or errors to be corrected in subsequent impressions.
Links to third party websites are provided by Oxford in good faith and for information only.
Oxford disclaims any responsibility for the materials contained in any third party website
referenced in this work.
Contents in brief
Part one: Introduction
1 Entrepreneurship defined KAREN BooYSEN
2 The entrepreneurial mindset KAREN BooYSEN
Part two: The entrepreneurial process
3 Creativity and generating new business ideas I sA VAN AARDT & CLINTON MASSYN
4 Opportunity recognition and evaluation IsA VAN AARDT
Part three: New venture creation
5 Information technology for SMEs ELANA SwANEPOEL
6 Entrepreneurial strategy lsA VAN AARDT
7 Business start-up IsA VAN AARDT & WESLEY CLARENCE
8 Franchising IsA VAN AARDT
9 Business ethics and social responsibility HANNELI BEN DEMAN
10 Basic financial concepts STEFAN BEZUIDENHOUT
11 Financial planning and forecasting STEFAN BEZUIDENHOUT
12 The business plan STEFAN BEZUIDENHOUT
13 Entrepreneurial management ELANA SwANEPOEL
14 Marketing ELANA SwANEPOEL
15 Operations lsA VAN AARDT
16 Managing human resources ELAN A SwANEPOEL
17 Legal aspects IsA VAN AARDT
Part four: Managing the venture
18 Business cycles and the entrepreneur CAREL VAN AARDT AND PATRICK NAmoo
19 Managing growth and harvesting ELANA SwANEPOEL
20 Corporate entrepreneurship lsA VAN AARDT
21 Decline and turnaround ELANA SwANEPOEL
22 Contemporary issues ELAN A SwANEPOEL
Bibliography
Index
3
22
41
63
85
99
128
157
189
209
233
257
275
294
313
328
348
371
392
411
426
445
460
471
r
Table of contents
PART THREE:
Chapter 7: Business start-up 128
New venture creation 83
Learning outcomes 128
Introduction 129
Chapter 5: Information technology for SMEs 85 7.1 Characteristics, traits, abilities of
Learning outcomes
85
the prospective entrepreneur 129
PART ONE:
PART TWO:
Introduction
86
7.2 The market and a marketing
Introduction 7 The entrepreneurial process 39
5.1 Technology 86
strategy 129
5.2
Information-technology
7.3 The presence of competitors 130
7.4 Resource needs 130
Chapter 1: Entrepreneurship defined 3 Chapter 3: Creativity and generating
management versus information
7.5 The size of the proposed enterprise 131
new business ideas 41
technology 86
Learning outcomes 3
5.3
The benefits of information
7.6 The location of the business 131
Introduction 4 Learning outcomes 41
technology 87
7.7 Types of ownership 134
1.1 Innovation and entrepreneurship 6 Introduction 42
5.4
Business-information alignment
7.8 Business industries 142
1.2 Importance of entrepreneurship 7 3.1 Creativity 42
risks 87
7.9 Business support systems 143
1.3 Types of entrepreneurs 9 3.2 Myths and realities surrounding
5.5 Information technology and
7.10 Challenges during start-up 151
1.4 The entrepreneurial process 11 creativity 44
planning 88
Conclusion 152
1.5 The impact of the environment on 3.3 Barriers to creativity 44
5.6 Basic principles when selecting
Self-assessment questions 153
the entrepreneur 13 3.4 The creative process 47
information technology 90
Discussion questions 154
Conclusion 17 3.5 Sources of product or service ideas 49
5.7 Implementations of information
Experiential exercise 154
Self-assessment questions 17 3.6 Methods for generating new
technology 91
Case study: Intentional entrepreneur:
Discussion questions 17 product or service ideas 53
Conclusion 95
Bukiwe Ndengezi 154
Experiential exercises 18 3.7 Initial screening of ideas 56
Self-assessment questions 95
Suggested website links 155
Case study: South Africa: A land of
Conclusion 57
Discussion questions 96
References 155
extremes for entrepreneurs 18 Self-assessment questions 57
Experiential exercise 96
Suggested website links 21 Discussion questions 58
Chapter 8: Franchising 157
Case study: HP thin clients help transform
References 21 Experiential exercise 59
customer experience, boost sales 97
Learning outcomes 157
Chapter 2: The entrepreneurial mindset
Case study: Medical Diagnostech
Suggested website links 98
Introduction 158
22
(Pty) Ltd 59
References 98
8.1 Definition of franchising 158
Learning outcomes 22
Suggested website links 61
8.2 Franchising in South Africa 159
Introduction 23
References 61 Chapter 6: Entrepreneurial strategy 99
8.3 Types offranchising 159
2.1 History of entrepreneurship 24
Learning outcomes 99
8.4 Franchise models 161
2.2 Developing an entrepreneurship
Chapter 4: Opportunity recognition and
8.5 Classification of franchises 165
evaluation 63
Introduction 100
culture in South Africa 25
6.1 Importance of strategic planning
8.6 Advantages and disadvantages of
2.3 Entrepreneurial mindset 26 Learning outcomes 63
for the entrepreneur 100
franchising 166
2.4 Characteristics of successful
Introduction 64
6.2 The process of entrepreneurial
8.7 Finding the most suitable ranchise 168
individuals 28 4.1 Foundations of opportunity
strategic management 101
8.8 Evaluating a franchising
2.5 The risks to the entrepreneur 31 recognition and evaluation 64
6.3 Strategy formulation 102
opportunity 168
Conclusion 34 4.2 Venture capitalists' evaluation
6.4 Strategy evaluation 116
8.9 Franchising a business 171
Self-assessment questions 35 criteria for new ventures 69
6.5 Strategy implementation 118
8.10 Franchisee recruitment: A five-
Discussion questions 35 4.3 Opportunity assessment and
6.6 Obtaining sustainable competitive
step approach 174
Experiential exercises 35 screening 71
advantage 119
8.11 The franchise package 175
Case study: Capsicum Culinary 4.4 The idea-screening guide 77
Conclusion 123
8.12 Start-up assistance package 178
Studio turns 10 35 Conclusion 79
Discussion questions 124
8.13 Ongoing franchisee support 179
Suggested website links 37 Self-assessment questions 79
Experiential exercise 124
8.14 Competition legislation and
References 37 Discussion questions 80
Case study: The Kraal Gallery 125
franchising 180
Experiential exercise 80
Suggested website links 126
8.15 The CPA and franchising 181
Case study: iFix 81
References 126
8.16 International franchising 182
Suggested website links 82
Conclusion 184
References 82
,---
Table of contents
PART THREE:
Chapter 7: Business start-up 128
New venture creation 83
Learning outcomes 128
Introduction 129
Chapter 5: Information technology for SMEs 85
7.1 Characteristics, traits, abilities of
Learning outcomes 85
the prospective entrepreneur 129
PART ONE: PART TWO:
Introduction 86
7.2 The market and a marketing
Introduction 7 The entrepreneurial process 39
5.1 Technology 86
strategy 129
5.2 Information-technology
7.3 The presence of competitors 130
7.4 Resource needs 130
Chapter 1: Entrepreneurship defined 3 Chapter 3: Creativity and generating
management versus information
7.5 The size of the proposed enterprise 131
new business ideas 41
technology 86
Learning outcomes
3
5.3 The benefits of information
7.6 The location of the business 131
Introduction 4 Learning outcomes 41
technology 87
7.7 Types of ownership 134
1.1 Innovation and entrepreneurship 6 Introduction 42
5.4 Business-information alignment
7.8 Business industries 142
1.2 Importance of entrepreneurship 7 3.1 Creativity 42
risks 87
7.9 Business support systems 143
1.3 Types of entrepreneurs 9 3.2 Myths and realities surrounding
5.5 Information technology and
7.10 Challenges during start-up 151
1.4 The entrepreneurial process 11 creativity 44
planning 88
Conclusion 152
1.5 The impact of the environment on 3.3 Barriers to creativity 44
5.6 Basic principles when selecting
Self-assessment questions 153
the entrepreneur 13 3.4 The creative process 47
information technology 90
Discussion questions 154
Conclusion 17 3.5 Sources of product or service ideas 49
5.7 Implementations of information
Experiential exercise 154
Self-assessment questions 17 3.6 Methods for generating new
technology 91
Case study: Intentional entrepreneur:
Discussion questions 17 product or service ideas 53
Conclusion 95
Bukiwe Ndengezi 154
Experiential exercises 18 3.7 Initial screening of ideas 56
Self-assessment questions 95
Suggested website links 155
Case study: South Africa: A land of Conclusion 57
Discussion questions 96
References 155
extremes for entrepreneurs 18 Self-assessment questions 57
Experiential exercise 96
Suggested website links 21 Discussion questions 58
Chapter 8: Franchising 157
Case study: HP thin clients help transform
References 21 Experiential exercise 59
customer experience, boost sales 97
Learning outcomes 157
Chapter 2: The entrepreneurial mindset
Case study: Medical Diagnostech
Suggested website links 98
Introduction 158
22
(Pty) Ltd 59
References 98
8.1 Definition of franchising 158
Learning outcomes 22
Suggested website links 61
8.2 Franchising in South Mrica 159
Introduction 23
References 61 Chapter 6: Entrepreneurial strategy 99
8.3 Types of franchising 159
2.1 History of entrepreneurship 24
Learning outcomes 99
8.4 Franchise models 161
2.2 Developing an entrepreneurship
Chapter 4: Opportunity recognition and
8.5 Classification of franchises 165
evaluation 63
Introduction 100
culture in South Africa 25
6.1 Importance of strategic planning
8.6 Advantages and disadvantages of
2.3 Entrepreneurial mindset 26 Learning outcomes 63
for the entrepreneur 100
franchising 166
2.4 Characteristics of successful
Introduction 64
6.2 The process of entrepreneurial
8.7 Finding the most suitable ranchise 168
individuals 28 4.1 Foundations of opportunity
strategic management 101
8.8 Evaluating a franchising
2.5 The risks to the entrepreneur 31 recognition and evaluation 64
6.3 Strategy formulation 102
opportunity 168
Conclusion 34 4.2 Venture capitalists' evaluation
6.4 Strategy evaluation 116
8.9 Franchising a business 171
Self-assessment questions 35 criteria for new ventures 69
6.5 Strategy implementation 118
8.10 Franchisee recruitment: A five-
Discussion questions 35 4.3 Opportunity assessment and
6.6 Obtaining sustainable competitive
step approach 174
Experiential exercises 35 screening 71
advantage 119
8.11 The franchise package 175
Case study: Capsicum Culinary 4.4 The idea-screening guide 77
Conclusion 123
8.12 Start-up assistance package 178
Studio turns 10 35 Conclusion 79
Discussion questions 124
8.13 Ongoing franchisee support 179
Suggested website links 37 Self-assessment questions 79
Experiential exercise 124
8.14 Competition legislation and
References 37 Discussion questions 80
Case study: The Kraal Gallery 125
franchising 180
Experiential exercise 80
Suggested website links 126
8.15 The CPA and franchising 181
Case study: iFix 81
References 126
8.16 International franchising 182
Suggested website links 82
Conclusion 184
References 82
294 Conclusion
345
Self-assessment questions
185
Chapter 11: Financial planning and
Chapter 14: Marketing
Self-assessment questions
345
Discussion questions
185 forecasting
233
Learning outcomes
294
Discussion questions
345
Experiential exercise
186
233 Introduction
295
Experiential exercise
345
Learning outcomes
Case study: Paws and Snouts pet shops
186
Introduction
234 14.1
Marketing contextualised
295
Case study: The changing landscape
Suggested website links
187
Financial planning
234 14.2
The target market - the customer
296
of change
346
11.1
References
187
The financial plan
237 14.3
The marketing strategy
297
Suggested website links
347
11.2
Financial forecasting
242 14.4
The marketing mix
299
References
347
Chapter 9: Business ethics and social
11.3
306
Conclusion
254 14.5
Services marketing
responsibility
189
309 Chapter 17: Legal aspects
348
Self-assessment questions
254 Conclusion
Learning outcomes
189
Discussion questions
254
Self-assessment questions
310
348
310
Learning outcomes
Introduction
190
Experiential exercise
255 Discussion questions
Introduction
349
Experiential exercise
310
9.1 Business ethics
190
Case study: Deconite Traders
255
17.1
The establishment of the venture
349
b ki . I
9.2 Values
191
Suggested website links
256
Case study: Ground rea ng convemence.
17.2
South African Revenue Service
9.3 The personal ethics of the References
256
FreshStop Airport City sets the bar
(SARS)
352
192
for convenience stores
311
356
entrepreneur
17.3 Contracts
9.4 Operating the venture and ethical
Chapter 12: The business plan
257
Suggested website links
312
359
312
17.4 Personnel
dilemmas
194
Learning outcomes
257
References
17.5 Insurance
363
9.5 Creating an ethical culture in
Introduction
258
Chapter 15: Operations
313 17.6
Registering patents, designs,
a small business
196
12.1 The purpose of a business plan
258
copyrights, and trademarks
364
9.6 Developing a code of ethics
198
12.2 Preparing a business plan
260 Learning outcomes
313
Conclusion
366
9.7 Ethics resources
201
12.3
Aspects covered in the business
Introduction
314
Self-assessment questions
366
9.8
The social responsibilities of
plan
261 15.1
Operations management
314
Discussion questions
367
entrepreneurs
202
12.4
International business plans
264 15.2 Operational plan
316
Experiential exercise
367
Conclusion
205
12.5
A pro forma business plan
265 15.3
Operations management plan
Case study: Lerumo Ia Basadi
Self-assessment questions
206
Conclusion
271
checklist
322
cleaning services
367
Discussion questions
206
Self-assessment questions
271 Conclusion
324
Suggested website links
368
Experiential exercise
206
Discussion questions
272
Self-assessment questions
324
References
368
Case study: Helping an ex-employee
207
Experiential exercise
272
Discussion questions
325
Suggested website links
208
Experiential exercise
325
Case study: Deadliest start-up sins
272
PART FOUR:
References
208 Case study: South Africa's self-made
Suggested website links
274
Managing the venture
369
References
274
media mogul with a twist
326
Chapter 10: Basic financial concepts
209
Suggested website links
327
Learning outcomes
209 Chapter 13: Entrepreneurial References
327 Chapter 18: Business cycles and the
371
Introduction
210 management
275
entrepreneur
Chapter 16: Managing human resources
328
10.1 Accounting
210
Learning outcomes
275
Learning outcomes
371
10.2 Financial statements
211
Introduction
276
Learning outcomes
328
Introduction
372
10.3 Financial management
220
Business functions
276
Introduction
329
18.1
The nature of business cycles
372
13.1
10.4
Financing capital requirements
227
13.2 Entrepreneurial leadership and
16.1
Human resources concepts and
18.2
Business cycles in South Mrica: A
Conclusion
230
teams in the workplace
280
functions
329
historical perspective and lessons
Self-assessment questions
231
13.3 Entrepreneurial management
284 16.2
Relationship of the human- for entrepreneurs
374
Discussion questions
231
Conclusion
290
resources strategy to the business
18.3
Ensuring profitability during the
Experiential exercise
231
Self-assessment questions
291
strategy
330
different phases of the business
Case study: Aqua Traders
232
Discussion questions
291 16.3
Human resource provisioning
334
cycle
383
Suggested website links
232
Experiential exercise
291 16.4
Orientation
337
Conclusion
388
References
232
Case study: Eastern Cape female farmer
16.5
Recent developments in human Self-assessment questions
389
named as Job Creator of the Year 2012 292
resources
338
Discussion questions
389
Suggested website links
292 16.6
Future trends and implications for
Experiential exercise
389
References
292
human resources
343
Chapter 14: Marketing
294 Conclusion
345
Self-assessment questions 185 Chapter 11: Financial planning and
Self-assessment questions 345
185 forecasting 233
294
Discussion questions
Learning outcomes
Discussion questions 345
Experiential exercise 186
Learning outcomes 233
Introduction
295
Experiential exercise 345
Case study: Paws and Snouts pet shops 186
Introduction 234
14.1
Marketing contextualised 295
Case study: The changing landscape
Suggested website links 187
11.1 Financial planning 234
14.2
The target market - the customer 296
of change
346
References 187
11.2 The financial plan 237
14.3
The marketing strategy
297
Suggested website links
347
11.3 Financial forecasting 242
14.4
The marketing mix
299
References
347 Chapter 9: Business ethics and social
Conclusion 254
14.5
Services marketing 306
responsibility 189
309
Chapter 17: Legal aspects
348 Self-assessment questions 254
Conclusion
Learning outcomes 189
Discussion questions 254 Self-assessment questions
310
348
Learning outcomes
Introduction 190
Experiential exercise 255 Discussion questions
310
349
Introduction
9.1 Business ethics 190
Case study: Deconite Traders 255 Experiential exercise
310
The establishment of the venture 349
17.1
9.2 Values 191
Suggested website links 256 Case study: Groundbreaking convenience!
17.2 South African Revenue Service
9.3 The personal ethics of the
References 256 FreshStop Airport City sets the bar
(SARS)
352
192
for convenience stores
311
entrepreneur
17.3 Contracts
356
9.4 Operating the venture and ethical Chapter 12: 7he business plan 257
Suggested website links
312
359
17.4 Personnel
dilemmas 194
References
312
363
Learning outcomes 257
17.5 Insurance
9.5 Creating an ethical culture in
Introduction 258
313 17.6 Registering patents, designs,
a small business 196
12.1 The purpose of a business plan 258
Chapter 15: Operations
copyrights, and trademarks
364
9.6 Developing a code of ethics 198
12.2 Preparing a business plan 260 Learning outcomes
313
Conclusion
366
9.7 Ethics resources 201
12.3 Aspects covered in the business
Introduction
314
Self-assessment questions
366
9.8 The social responsibilities of
plan 261
15.1 Operations management
314
Discussion questions
367
entrepreneurs 202
12.4 International business plans 264
15.2 Operational plan
316
Experiential exercise
367
Conclusion 205
12.5 A pro forma business plan 265 15.3 Operations management plan
Case study: Lerumo la Basadi
Self-assessment questions 206
Conclusion 271 checklist
322
cleaning services
367
Discussion questions 206
Self-assessment questions 271 Conclusion
324
Suggested website links
368
Experiential exercise 206
Discussion questions 272 Self-assessment questions
324
References
368
Case study: Helping an ex-employee 207
Experiential exercise 272 Discussion questions
325
Suggested website links 208
Case study: Deadliest start-up sins 272 Experiential exercise
325
References 208
Case study: South Africa's self-made
PART FOUR:
Suggested website links 274
Managing the venture 369
References 274 media mogul with a twist 326
Chapter 10: Basic financial concepts 209
Suggested website links
327
Learning outcomes 209 Chapter 13: Entrepreneurial
References
327 Chapter 18: Business cycles and the
371
Introduction 210 management 275
entrepreneur
Chapter 16: Managing human resources 328 10.1 Accounting 210
Learning outcomes 275
Learning outcomes 371
10.2 Financial statements 211
Introduction 276 Learning outcomes 328
Introduction
372
10.3 Financial management 220
13.1 Business functions 276 Introduction
329
18.1 The nature of business cycles 372
10.4 Financing capital requirements 227
13.2 Entrepreneurial leadership and 16.1 Human resources concepts and
18.2 Business cycles in South Mrica: A
Conclusion 230
teams in the workplace 280 functions
329
historical perspective and lessons
Self-assessment questions 231
13.3 Entrepreneurial management 284 16.2 Relationship of the human-
for entrepreneurs 374
Discussion questions 231
Conclusion 290 resources strategy to the business
18.3 Ensuring profitability during the
Experiential exercise 231
Self-assessment questions 291 strategy
330
different phases of the business
Case study: Aqua Traders 232
Discussion questions 291 16.3 Human resource provisioning 334
cycle
383
Suggested website links 232
Experiential exercise 291 16.4 Orientation 337
Conclusion
388
References 232
Case study: Eastern Cape female farmer 16.5 Recent developments in human
Self-assessment questions 389
named as Job Creator of the Year 2012 292 resources
338
Discussion questions
389
Suggested website links 292 16.6 Future trends and implications for
Experiential exercise 389
References 292 human resources 343
Case study: Gavin Peters starts a
new business 390
Suggested website links 391
References 391
Chapter 19: Managing growth
and harvesting 392
Learning outcomes 392
Introduction 393
19.1 Barriers to enterprise growth 393
19.2 Internal and external motivations
for growth 394
19.3 Growth and the business life cycle 394
19.4 Generic growth strategies 395
19.5 Growth strategies 397
19.6 Entrepreneur's growth orientation 397
19.7 Growing the business 399
19.8 Harvesting the business 404
Conclusion 407
Self-assessment questions 408
Discussion questions 408
Experiential exercise 408
Case study: Centralisation leads to
ultimate efficiency- The Jwayelani
retail operation showcases its success 409
Suggested website links 410
Reference list 410
Chapter 20: Corporate
entrepreneurship 411
Learning outcomes 411
Introduction 412
20.1 South Africa's need for job
creation 412
20.2 Defining corporate entrepreneur-
ship 412
20.3 Forms of corporate entrepreneur-
ship 413
20.4 Corporate entrepreneurial life
cycle 415
20.5 Corporate entrepreneurial
intensity 415
20.6 Corporate entrepreneurial culture 416
20.7 Characteristics of the corporate
entrepreneur 418
20.8 Constraints on corporate
entrepreneurship 418
20.9 Promoting corporate
entrepreneurship
20.10 Measuring instruments
Conclusion
Self-assessment questions
Discussion questions
Experiential exercise
Case study: Element Six
Suggested website links
References
Chapter 21: Decline and turnaround
Learning outcomes
Introduction
21.1 The troubled business
21.2 Stages in business failure
21.3 The drivers and moderators of
business decline
21.4 The business turnaround model
21.5 Bankruptcy and insolvency
21.6 Entrepreneurial management
needed in turnaround
Conclusion
Self-assessment questions
Discussion questions
Experiential exercise
Case study: English for advancement
Suggested website links
References
Chapter 22: Contemporary issues
Learning outcomes
Introduction
22.1 Corporate social responsibility
22.2 Sustainable development
22.3 Broad-based Black Economic
Empowerment- new codes
Conclusion
Self-assessment questions
Discussion questions
Experiential exercise
Case study: Making more beer using
less water
Suggested website links
Reference list
Bibliography
Index
r
419
421
422
422
423
423
424
425
425
426
426
427
427
428
430
432
439
440
441
442
442
442
443
444
444
445
445
446
446
452
452
456
457
457
457
458
459
459
460
471
Preface
This book is about entrepreneurship and covers a comprehensive set of aspects and entre-
preneurial dilemmas that should be considered when starting a new business venture. This
fifth edition takes a new approach to entrepreneurship, it includes not only a theoretical
framework and discussion, but also includes successful South African entrepreneurial
stories, practical examples and case studies.
The entrepreneurial and business environments are both dynamic and therefore the
fifth edition has been updated with the latest changes in legislation, trends and contem-
porary issues that entrepreneurs face.
1be writers of this book come from various backgrounds and experience, including
research, general, financial and operations management, entrepreneurship, and consultancy.
They are, furthermore, involved in the teaching of entrepreneurship and elements of
entrepreneurship on different levels at various academic institutions in South Africa. This
has been brought together to add to the practical and academic value of the book.
The first part of the book introduces the reader to the concept of entrepreneurship and
the entrepreneurial environment. The second part of the book explores the entrepreneurial
process and investigates creativity as a means for opportunity recognition. In the third
part of the book the creation of a new venture is discussed. The discussion in this part of
the book includes, among others, the information available and needed in the small busi-
ness environment, entrepreneurial strategy, the start-up process, franchising, business
ethics and social responsibilities, the establishment of an entrepreneurial team and the
different business functions. Part three further discusses the operational requirements of
a venture, finances and the management thereof in order to develop a financial plan. The
importance of the elements to consider in the writing of a business plan and the legal
aspects are also discussed in this part of the book. The fourth and final part of the book
explores the management of the venture by discussing business cycles, aspects surrounding
the growth and harvesting within an organisation, corporate entrepreneurship as well as
turnaround strategies and the possibility of business failure. The book concludes with a
discussion of various contemporary issues.
South Africa is in dire need of entrepreneurs and small business ventures because this
is the major source of job creation and the key of sustainability in the country's economy.
We hope that we will inspire prospective entrepreneurs to start their businesses and also
to keep on studying and growing to become successful entrepreneurs.
We would like to thank the following people for their contribution towards this book:
The contributing authors Hanneli Bendeman, Karen Booysen, Wesley Clarence,
Clinton Massyn, Patrick Naidoo, Elana Swanepoel and Carel van Aardt.
Mine Venter, Nicola van Rhyn and Allison Lamb for their efforts in editing and
reminding us to keep to our deadlines.
Isa van Aardt and Stefan Bezuidenhout
Centurion
doc_234850330.pdf
The Entrepreneurial Process
OXFORD
UNIVERSITY PRESS
Oxford University Press is a department of the University of Oxford.
It furthers the University's objective of excellence in research, scholarship,
and education by publishing worldwide. Oxford is a registered trade mark of
Oxford University Press in the UK and in certain other countries
Published in South Africa by
Oxford University Press Southern Africa (Pty) Limited
Vasco Boulevard, Goodwood, N1 City, Cape Town, South Africa, 7460
P 0 Box 12119, N1 City, Cape Town, South Africa, 7463
©Oxford University Press Southern Africa (Pty) Ltd 2014
The moral rights of the author have been asserted
First published 1997 by International Thompson Publishing Southern Africa (Pty) Ltd
Second edition published in 2000
Third edition published in 2008
Fourth edition published in 2011
Fifth edition published in 2014
All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system, or transmitted, in any form or by any means, without the
prior permission in writing of Oxford University Press Southern Africa (Pty) Ltd,
or as expressly permitted by law, by licence, or under terms agreed
with the appropriate reprographic rights organisation, DALRO, The Dramatic, Artistic
and Literary Rights Organisation [email protected]. Enquiries concerning
reproduction outside the scope of the above should be sent to the Rights Department,
Oxford University Press Southern Africa (Pty) Ltd, at the above address.
You must not circulate this work in any other form
and you must impose this same condition on any acquirer.
Entrepreneurship and New Venture Management
Fifth edition
ISBN 978 0 19 905402 2
Typeset in Minion Pro 10pt on 12pt
Printed on 70 gsm woodfree paper
Acknowledgements
Publishing manager: Alida Terblanche
Publisher: Janine Loedolff
Editor: Allison Lamb
Designer: Bongiwe Beja
Cover designer: Cindy Armstrong
Typesetter: Orchard Publishing
Cover image: iStockphoto.com
Printed and bound by ABC Press, Cape Town
121896
The authors and publisher gratefully acknowledge permission to reproduce copyright material
in this book. Every effort has been made to trace copyright holders, but if any copyright
infringements have been made, the publisher would be grateful for information that would enable
any omissions or errors to be corrected in subsequent impressions.
Links to third party websites are provided by Oxford in good faith and for information only.
Oxford disclaims any responsibility for the materials contained in any third party website
referenced in this work.
Contents in brief
Part one: Introduction
1 Entrepreneurship defined KAREN BooYSEN
2 The entrepreneurial mindset KAREN BooYSEN
Part two: The entrepreneurial process
3 Creativity and generating new business ideas I sA VAN AARDT & CLINTON MASSYN
4 Opportunity recognition and evaluation IsA VAN AARDT
Part three: New venture creation
5 Information technology for SMEs ELANA SwANEPOEL
6 Entrepreneurial strategy lsA VAN AARDT
7 Business start-up IsA VAN AARDT & WESLEY CLARENCE
8 Franchising IsA VAN AARDT
9 Business ethics and social responsibility HANNELI BEN DEMAN
10 Basic financial concepts STEFAN BEZUIDENHOUT
11 Financial planning and forecasting STEFAN BEZUIDENHOUT
12 The business plan STEFAN BEZUIDENHOUT
13 Entrepreneurial management ELANA SwANEPOEL
14 Marketing ELANA SwANEPOEL
15 Operations lsA VAN AARDT
16 Managing human resources ELAN A SwANEPOEL
17 Legal aspects IsA VAN AARDT
Part four: Managing the venture
18 Business cycles and the entrepreneur CAREL VAN AARDT AND PATRICK NAmoo
19 Managing growth and harvesting ELANA SwANEPOEL
20 Corporate entrepreneurship lsA VAN AARDT
21 Decline and turnaround ELANA SwANEPOEL
22 Contemporary issues ELAN A SwANEPOEL
Bibliography
Index
3
22
41
63
85
99
128
157
189
209
233
257
275
294
313
328
348
371
392
411
426
445
460
471
r
Table of contents
PART THREE:
Chapter 7: Business start-up 128
New venture creation 83
Learning outcomes 128
Introduction 129
Chapter 5: Information technology for SMEs 85 7.1 Characteristics, traits, abilities of
Learning outcomes
85
the prospective entrepreneur 129
PART ONE:
PART TWO:
Introduction
86
7.2 The market and a marketing
Introduction 7 The entrepreneurial process 39
5.1 Technology 86
strategy 129
5.2
Information-technology
7.3 The presence of competitors 130
7.4 Resource needs 130
Chapter 1: Entrepreneurship defined 3 Chapter 3: Creativity and generating
management versus information
7.5 The size of the proposed enterprise 131
new business ideas 41
technology 86
Learning outcomes 3
5.3
The benefits of information
7.6 The location of the business 131
Introduction 4 Learning outcomes 41
technology 87
7.7 Types of ownership 134
1.1 Innovation and entrepreneurship 6 Introduction 42
5.4
Business-information alignment
7.8 Business industries 142
1.2 Importance of entrepreneurship 7 3.1 Creativity 42
risks 87
7.9 Business support systems 143
1.3 Types of entrepreneurs 9 3.2 Myths and realities surrounding
5.5 Information technology and
7.10 Challenges during start-up 151
1.4 The entrepreneurial process 11 creativity 44
planning 88
Conclusion 152
1.5 The impact of the environment on 3.3 Barriers to creativity 44
5.6 Basic principles when selecting
Self-assessment questions 153
the entrepreneur 13 3.4 The creative process 47
information technology 90
Discussion questions 154
Conclusion 17 3.5 Sources of product or service ideas 49
5.7 Implementations of information
Experiential exercise 154
Self-assessment questions 17 3.6 Methods for generating new
technology 91
Case study: Intentional entrepreneur:
Discussion questions 17 product or service ideas 53
Conclusion 95
Bukiwe Ndengezi 154
Experiential exercises 18 3.7 Initial screening of ideas 56
Self-assessment questions 95
Suggested website links 155
Case study: South Africa: A land of
Conclusion 57
Discussion questions 96
References 155
extremes for entrepreneurs 18 Self-assessment questions 57
Experiential exercise 96
Suggested website links 21 Discussion questions 58
Chapter 8: Franchising 157
Case study: HP thin clients help transform
References 21 Experiential exercise 59
customer experience, boost sales 97
Learning outcomes 157
Chapter 2: The entrepreneurial mindset
Case study: Medical Diagnostech
Suggested website links 98
Introduction 158
22
(Pty) Ltd 59
References 98
8.1 Definition of franchising 158
Learning outcomes 22
Suggested website links 61
8.2 Franchising in South Africa 159
Introduction 23
References 61 Chapter 6: Entrepreneurial strategy 99
8.3 Types offranchising 159
2.1 History of entrepreneurship 24
Learning outcomes 99
8.4 Franchise models 161
2.2 Developing an entrepreneurship
Chapter 4: Opportunity recognition and
8.5 Classification of franchises 165
evaluation 63
Introduction 100
culture in South Africa 25
6.1 Importance of strategic planning
8.6 Advantages and disadvantages of
2.3 Entrepreneurial mindset 26 Learning outcomes 63
for the entrepreneur 100
franchising 166
2.4 Characteristics of successful
Introduction 64
6.2 The process of entrepreneurial
8.7 Finding the most suitable ranchise 168
individuals 28 4.1 Foundations of opportunity
strategic management 101
8.8 Evaluating a franchising
2.5 The risks to the entrepreneur 31 recognition and evaluation 64
6.3 Strategy formulation 102
opportunity 168
Conclusion 34 4.2 Venture capitalists' evaluation
6.4 Strategy evaluation 116
8.9 Franchising a business 171
Self-assessment questions 35 criteria for new ventures 69
6.5 Strategy implementation 118
8.10 Franchisee recruitment: A five-
Discussion questions 35 4.3 Opportunity assessment and
6.6 Obtaining sustainable competitive
step approach 174
Experiential exercises 35 screening 71
advantage 119
8.11 The franchise package 175
Case study: Capsicum Culinary 4.4 The idea-screening guide 77
Conclusion 123
8.12 Start-up assistance package 178
Studio turns 10 35 Conclusion 79
Discussion questions 124
8.13 Ongoing franchisee support 179
Suggested website links 37 Self-assessment questions 79
Experiential exercise 124
8.14 Competition legislation and
References 37 Discussion questions 80
Case study: The Kraal Gallery 125
franchising 180
Experiential exercise 80
Suggested website links 126
8.15 The CPA and franchising 181
Case study: iFix 81
References 126
8.16 International franchising 182
Suggested website links 82
Conclusion 184
References 82
,---
Table of contents
PART THREE:
Chapter 7: Business start-up 128
New venture creation 83
Learning outcomes 128
Introduction 129
Chapter 5: Information technology for SMEs 85
7.1 Characteristics, traits, abilities of
Learning outcomes 85
the prospective entrepreneur 129
PART ONE: PART TWO:
Introduction 86
7.2 The market and a marketing
Introduction 7 The entrepreneurial process 39
5.1 Technology 86
strategy 129
5.2 Information-technology
7.3 The presence of competitors 130
7.4 Resource needs 130
Chapter 1: Entrepreneurship defined 3 Chapter 3: Creativity and generating
management versus information
7.5 The size of the proposed enterprise 131
new business ideas 41
technology 86
Learning outcomes
3
5.3 The benefits of information
7.6 The location of the business 131
Introduction 4 Learning outcomes 41
technology 87
7.7 Types of ownership 134
1.1 Innovation and entrepreneurship 6 Introduction 42
5.4 Business-information alignment
7.8 Business industries 142
1.2 Importance of entrepreneurship 7 3.1 Creativity 42
risks 87
7.9 Business support systems 143
1.3 Types of entrepreneurs 9 3.2 Myths and realities surrounding
5.5 Information technology and
7.10 Challenges during start-up 151
1.4 The entrepreneurial process 11 creativity 44
planning 88
Conclusion 152
1.5 The impact of the environment on 3.3 Barriers to creativity 44
5.6 Basic principles when selecting
Self-assessment questions 153
the entrepreneur 13 3.4 The creative process 47
information technology 90
Discussion questions 154
Conclusion 17 3.5 Sources of product or service ideas 49
5.7 Implementations of information
Experiential exercise 154
Self-assessment questions 17 3.6 Methods for generating new
technology 91
Case study: Intentional entrepreneur:
Discussion questions 17 product or service ideas 53
Conclusion 95
Bukiwe Ndengezi 154
Experiential exercises 18 3.7 Initial screening of ideas 56
Self-assessment questions 95
Suggested website links 155
Case study: South Africa: A land of Conclusion 57
Discussion questions 96
References 155
extremes for entrepreneurs 18 Self-assessment questions 57
Experiential exercise 96
Suggested website links 21 Discussion questions 58
Chapter 8: Franchising 157
Case study: HP thin clients help transform
References 21 Experiential exercise 59
customer experience, boost sales 97
Learning outcomes 157
Chapter 2: The entrepreneurial mindset
Case study: Medical Diagnostech
Suggested website links 98
Introduction 158
22
(Pty) Ltd 59
References 98
8.1 Definition of franchising 158
Learning outcomes 22
Suggested website links 61
8.2 Franchising in South Mrica 159
Introduction 23
References 61 Chapter 6: Entrepreneurial strategy 99
8.3 Types of franchising 159
2.1 History of entrepreneurship 24
Learning outcomes 99
8.4 Franchise models 161
2.2 Developing an entrepreneurship
Chapter 4: Opportunity recognition and
8.5 Classification of franchises 165
evaluation 63
Introduction 100
culture in South Africa 25
6.1 Importance of strategic planning
8.6 Advantages and disadvantages of
2.3 Entrepreneurial mindset 26 Learning outcomes 63
for the entrepreneur 100
franchising 166
2.4 Characteristics of successful
Introduction 64
6.2 The process of entrepreneurial
8.7 Finding the most suitable ranchise 168
individuals 28 4.1 Foundations of opportunity
strategic management 101
8.8 Evaluating a franchising
2.5 The risks to the entrepreneur 31 recognition and evaluation 64
6.3 Strategy formulation 102
opportunity 168
Conclusion 34 4.2 Venture capitalists' evaluation
6.4 Strategy evaluation 116
8.9 Franchising a business 171
Self-assessment questions 35 criteria for new ventures 69
6.5 Strategy implementation 118
8.10 Franchisee recruitment: A five-
Discussion questions 35 4.3 Opportunity assessment and
6.6 Obtaining sustainable competitive
step approach 174
Experiential exercises 35 screening 71
advantage 119
8.11 The franchise package 175
Case study: Capsicum Culinary 4.4 The idea-screening guide 77
Conclusion 123
8.12 Start-up assistance package 178
Studio turns 10 35 Conclusion 79
Discussion questions 124
8.13 Ongoing franchisee support 179
Suggested website links 37 Self-assessment questions 79
Experiential exercise 124
8.14 Competition legislation and
References 37 Discussion questions 80
Case study: The Kraal Gallery 125
franchising 180
Experiential exercise 80
Suggested website links 126
8.15 The CPA and franchising 181
Case study: iFix 81
References 126
8.16 International franchising 182
Suggested website links 82
Conclusion 184
References 82
294 Conclusion
345
Self-assessment questions
185
Chapter 11: Financial planning and
Chapter 14: Marketing
Self-assessment questions
345
Discussion questions
185 forecasting
233
Learning outcomes
294
Discussion questions
345
Experiential exercise
186
233 Introduction
295
Experiential exercise
345
Learning outcomes
Case study: Paws and Snouts pet shops
186
Introduction
234 14.1
Marketing contextualised
295
Case study: The changing landscape
Suggested website links
187
Financial planning
234 14.2
The target market - the customer
296
of change
346
11.1
References
187
The financial plan
237 14.3
The marketing strategy
297
Suggested website links
347
11.2
Financial forecasting
242 14.4
The marketing mix
299
References
347
Chapter 9: Business ethics and social
11.3
306
Conclusion
254 14.5
Services marketing
responsibility
189
309 Chapter 17: Legal aspects
348
Self-assessment questions
254 Conclusion
Learning outcomes
189
Discussion questions
254
Self-assessment questions
310
348
310
Learning outcomes
Introduction
190
Experiential exercise
255 Discussion questions
Introduction
349
Experiential exercise
310
9.1 Business ethics
190
Case study: Deconite Traders
255
17.1
The establishment of the venture
349
b ki . I
9.2 Values
191
Suggested website links
256
Case study: Ground rea ng convemence.
17.2
South African Revenue Service
9.3 The personal ethics of the References
256
FreshStop Airport City sets the bar
(SARS)
352
192
for convenience stores
311
356
entrepreneur
17.3 Contracts
9.4 Operating the venture and ethical
Chapter 12: The business plan
257
Suggested website links
312
359
312
17.4 Personnel
dilemmas
194
Learning outcomes
257
References
17.5 Insurance
363
9.5 Creating an ethical culture in
Introduction
258
Chapter 15: Operations
313 17.6
Registering patents, designs,
a small business
196
12.1 The purpose of a business plan
258
copyrights, and trademarks
364
9.6 Developing a code of ethics
198
12.2 Preparing a business plan
260 Learning outcomes
313
Conclusion
366
9.7 Ethics resources
201
12.3
Aspects covered in the business
Introduction
314
Self-assessment questions
366
9.8
The social responsibilities of
plan
261 15.1
Operations management
314
Discussion questions
367
entrepreneurs
202
12.4
International business plans
264 15.2 Operational plan
316
Experiential exercise
367
Conclusion
205
12.5
A pro forma business plan
265 15.3
Operations management plan
Case study: Lerumo Ia Basadi
Self-assessment questions
206
Conclusion
271
checklist
322
cleaning services
367
Discussion questions
206
Self-assessment questions
271 Conclusion
324
Suggested website links
368
Experiential exercise
206
Discussion questions
272
Self-assessment questions
324
References
368
Case study: Helping an ex-employee
207
Experiential exercise
272
Discussion questions
325
Suggested website links
208
Experiential exercise
325
Case study: Deadliest start-up sins
272
PART FOUR:
References
208 Case study: South Africa's self-made
Suggested website links
274
Managing the venture
369
References
274
media mogul with a twist
326
Chapter 10: Basic financial concepts
209
Suggested website links
327
Learning outcomes
209 Chapter 13: Entrepreneurial References
327 Chapter 18: Business cycles and the
371
Introduction
210 management
275
entrepreneur
Chapter 16: Managing human resources
328
10.1 Accounting
210
Learning outcomes
275
Learning outcomes
371
10.2 Financial statements
211
Introduction
276
Learning outcomes
328
Introduction
372
10.3 Financial management
220
Business functions
276
Introduction
329
18.1
The nature of business cycles
372
13.1
10.4
Financing capital requirements
227
13.2 Entrepreneurial leadership and
16.1
Human resources concepts and
18.2
Business cycles in South Mrica: A
Conclusion
230
teams in the workplace
280
functions
329
historical perspective and lessons
Self-assessment questions
231
13.3 Entrepreneurial management
284 16.2
Relationship of the human- for entrepreneurs
374
Discussion questions
231
Conclusion
290
resources strategy to the business
18.3
Ensuring profitability during the
Experiential exercise
231
Self-assessment questions
291
strategy
330
different phases of the business
Case study: Aqua Traders
232
Discussion questions
291 16.3
Human resource provisioning
334
cycle
383
Suggested website links
232
Experiential exercise
291 16.4
Orientation
337
Conclusion
388
References
232
Case study: Eastern Cape female farmer
16.5
Recent developments in human Self-assessment questions
389
named as Job Creator of the Year 2012 292
resources
338
Discussion questions
389
Suggested website links
292 16.6
Future trends and implications for
Experiential exercise
389
References
292
human resources
343
Chapter 14: Marketing
294 Conclusion
345
Self-assessment questions 185 Chapter 11: Financial planning and
Self-assessment questions 345
185 forecasting 233
294
Discussion questions
Learning outcomes
Discussion questions 345
Experiential exercise 186
Learning outcomes 233
Introduction
295
Experiential exercise 345
Case study: Paws and Snouts pet shops 186
Introduction 234
14.1
Marketing contextualised 295
Case study: The changing landscape
Suggested website links 187
11.1 Financial planning 234
14.2
The target market - the customer 296
of change
346
References 187
11.2 The financial plan 237
14.3
The marketing strategy
297
Suggested website links
347
11.3 Financial forecasting 242
14.4
The marketing mix
299
References
347 Chapter 9: Business ethics and social
Conclusion 254
14.5
Services marketing 306
responsibility 189
309
Chapter 17: Legal aspects
348 Self-assessment questions 254
Conclusion
Learning outcomes 189
Discussion questions 254 Self-assessment questions
310
348
Learning outcomes
Introduction 190
Experiential exercise 255 Discussion questions
310
349
Introduction
9.1 Business ethics 190
Case study: Deconite Traders 255 Experiential exercise
310
The establishment of the venture 349
17.1
9.2 Values 191
Suggested website links 256 Case study: Groundbreaking convenience!
17.2 South African Revenue Service
9.3 The personal ethics of the
References 256 FreshStop Airport City sets the bar
(SARS)
352
192
for convenience stores
311
entrepreneur
17.3 Contracts
356
9.4 Operating the venture and ethical Chapter 12: 7he business plan 257
Suggested website links
312
359
17.4 Personnel
dilemmas 194
References
312
363
Learning outcomes 257
17.5 Insurance
9.5 Creating an ethical culture in
Introduction 258
313 17.6 Registering patents, designs,
a small business 196
12.1 The purpose of a business plan 258
Chapter 15: Operations
copyrights, and trademarks
364
9.6 Developing a code of ethics 198
12.2 Preparing a business plan 260 Learning outcomes
313
Conclusion
366
9.7 Ethics resources 201
12.3 Aspects covered in the business
Introduction
314
Self-assessment questions
366
9.8 The social responsibilities of
plan 261
15.1 Operations management
314
Discussion questions
367
entrepreneurs 202
12.4 International business plans 264
15.2 Operational plan
316
Experiential exercise
367
Conclusion 205
12.5 A pro forma business plan 265 15.3 Operations management plan
Case study: Lerumo la Basadi
Self-assessment questions 206
Conclusion 271 checklist
322
cleaning services
367
Discussion questions 206
Self-assessment questions 271 Conclusion
324
Suggested website links
368
Experiential exercise 206
Discussion questions 272 Self-assessment questions
324
References
368
Case study: Helping an ex-employee 207
Experiential exercise 272 Discussion questions
325
Suggested website links 208
Case study: Deadliest start-up sins 272 Experiential exercise
325
References 208
Case study: South Africa's self-made
PART FOUR:
Suggested website links 274
Managing the venture 369
References 274 media mogul with a twist 326
Chapter 10: Basic financial concepts 209
Suggested website links
327
Learning outcomes 209 Chapter 13: Entrepreneurial
References
327 Chapter 18: Business cycles and the
371
Introduction 210 management 275
entrepreneur
Chapter 16: Managing human resources 328 10.1 Accounting 210
Learning outcomes 275
Learning outcomes 371
10.2 Financial statements 211
Introduction 276 Learning outcomes 328
Introduction
372
10.3 Financial management 220
13.1 Business functions 276 Introduction
329
18.1 The nature of business cycles 372
10.4 Financing capital requirements 227
13.2 Entrepreneurial leadership and 16.1 Human resources concepts and
18.2 Business cycles in South Mrica: A
Conclusion 230
teams in the workplace 280 functions
329
historical perspective and lessons
Self-assessment questions 231
13.3 Entrepreneurial management 284 16.2 Relationship of the human-
for entrepreneurs 374
Discussion questions 231
Conclusion 290 resources strategy to the business
18.3 Ensuring profitability during the
Experiential exercise 231
Self-assessment questions 291 strategy
330
different phases of the business
Case study: Aqua Traders 232
Discussion questions 291 16.3 Human resource provisioning 334
cycle
383
Suggested website links 232
Experiential exercise 291 16.4 Orientation 337
Conclusion
388
References 232
Case study: Eastern Cape female farmer 16.5 Recent developments in human
Self-assessment questions 389
named as Job Creator of the Year 2012 292 resources
338
Discussion questions
389
Suggested website links 292 16.6 Future trends and implications for
Experiential exercise 389
References 292 human resources 343
Case study: Gavin Peters starts a
new business 390
Suggested website links 391
References 391
Chapter 19: Managing growth
and harvesting 392
Learning outcomes 392
Introduction 393
19.1 Barriers to enterprise growth 393
19.2 Internal and external motivations
for growth 394
19.3 Growth and the business life cycle 394
19.4 Generic growth strategies 395
19.5 Growth strategies 397
19.6 Entrepreneur's growth orientation 397
19.7 Growing the business 399
19.8 Harvesting the business 404
Conclusion 407
Self-assessment questions 408
Discussion questions 408
Experiential exercise 408
Case study: Centralisation leads to
ultimate efficiency- The Jwayelani
retail operation showcases its success 409
Suggested website links 410
Reference list 410
Chapter 20: Corporate
entrepreneurship 411
Learning outcomes 411
Introduction 412
20.1 South Africa's need for job
creation 412
20.2 Defining corporate entrepreneur-
ship 412
20.3 Forms of corporate entrepreneur-
ship 413
20.4 Corporate entrepreneurial life
cycle 415
20.5 Corporate entrepreneurial
intensity 415
20.6 Corporate entrepreneurial culture 416
20.7 Characteristics of the corporate
entrepreneur 418
20.8 Constraints on corporate
entrepreneurship 418
20.9 Promoting corporate
entrepreneurship
20.10 Measuring instruments
Conclusion
Self-assessment questions
Discussion questions
Experiential exercise
Case study: Element Six
Suggested website links
References
Chapter 21: Decline and turnaround
Learning outcomes
Introduction
21.1 The troubled business
21.2 Stages in business failure
21.3 The drivers and moderators of
business decline
21.4 The business turnaround model
21.5 Bankruptcy and insolvency
21.6 Entrepreneurial management
needed in turnaround
Conclusion
Self-assessment questions
Discussion questions
Experiential exercise
Case study: English for advancement
Suggested website links
References
Chapter 22: Contemporary issues
Learning outcomes
Introduction
22.1 Corporate social responsibility
22.2 Sustainable development
22.3 Broad-based Black Economic
Empowerment- new codes
Conclusion
Self-assessment questions
Discussion questions
Experiential exercise
Case study: Making more beer using
less water
Suggested website links
Reference list
Bibliography
Index
r
419
421
422
422
423
423
424
425
425
426
426
427
427
428
430
432
439
440
441
442
442
442
443
444
444
445
445
446
446
452
452
456
457
457
457
458
459
459
460
471
Preface
This book is about entrepreneurship and covers a comprehensive set of aspects and entre-
preneurial dilemmas that should be considered when starting a new business venture. This
fifth edition takes a new approach to entrepreneurship, it includes not only a theoretical
framework and discussion, but also includes successful South African entrepreneurial
stories, practical examples and case studies.
The entrepreneurial and business environments are both dynamic and therefore the
fifth edition has been updated with the latest changes in legislation, trends and contem-
porary issues that entrepreneurs face.
1be writers of this book come from various backgrounds and experience, including
research, general, financial and operations management, entrepreneurship, and consultancy.
They are, furthermore, involved in the teaching of entrepreneurship and elements of
entrepreneurship on different levels at various academic institutions in South Africa. This
has been brought together to add to the practical and academic value of the book.
The first part of the book introduces the reader to the concept of entrepreneurship and
the entrepreneurial environment. The second part of the book explores the entrepreneurial
process and investigates creativity as a means for opportunity recognition. In the third
part of the book the creation of a new venture is discussed. The discussion in this part of
the book includes, among others, the information available and needed in the small busi-
ness environment, entrepreneurial strategy, the start-up process, franchising, business
ethics and social responsibilities, the establishment of an entrepreneurial team and the
different business functions. Part three further discusses the operational requirements of
a venture, finances and the management thereof in order to develop a financial plan. The
importance of the elements to consider in the writing of a business plan and the legal
aspects are also discussed in this part of the book. The fourth and final part of the book
explores the management of the venture by discussing business cycles, aspects surrounding
the growth and harvesting within an organisation, corporate entrepreneurship as well as
turnaround strategies and the possibility of business failure. The book concludes with a
discussion of various contemporary issues.
South Africa is in dire need of entrepreneurs and small business ventures because this
is the major source of job creation and the key of sustainability in the country's economy.
We hope that we will inspire prospective entrepreneurs to start their businesses and also
to keep on studying and growing to become successful entrepreneurs.
We would like to thank the following people for their contribution towards this book:
The contributing authors Hanneli Bendeman, Karen Booysen, Wesley Clarence,
Clinton Massyn, Patrick Naidoo, Elana Swanepoel and Carel van Aardt.
Mine Venter, Nicola van Rhyn and Allison Lamb for their efforts in editing and
reminding us to keep to our deadlines.
Isa van Aardt and Stefan Bezuidenhout
Centurion
doc_234850330.pdf