Department of Business, Economics, and Legal Studies

COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP

A View of Entrepreneurship

A way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced.

At the core is the creation and/or recognition of opportunities and the ability to seize opportunities.

Timmons & Spinelli (2004) New Venture Creation. McGraw Hill

I challenge you to find a job that does not require entrepreneurial thought and action!

Instructor: Dr. Mary Beth Klinger

Office: Room BU 496, La Plata

Office Hrs: Tuesdays, 12:30-3:00 pm; Wednesdays, 12-2:30 pm (Waldorf Center)

E-mail: [email protected] Telephone: 301.934.7579 Fax: 301.934.7692

Semester: Fall 2006

Section: ECN 1510-53740

Credit Hrs: 3 credits

Prerequisites: RDG 0800 or placement; ENG 0900 or placement

Req'd Text: Barringer, B.R. & Ireland, R.D. (2006). Entrepreneurship: Successfully Launching New Ventures. Upper Saddle River, NJ: Pearson/Prentice Hall.

Course Description:

This course provides an introduction and overview of the fundamentals of entrepreneurship. Students gain a solid foundation in entrepreneurship and develop a better understanding of the role played by entrepreneurs in the global economy. Students will assess, explore, and critique entrepreneurship as an attitude, behavior,

College of Southern Maryland ECN 1510 – Principles of Entrepreneurship

Dept of Business, Economics, & Legal Studies 1 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP and mindset that can be applied within any organizational setting. This course offers a framework for understanding the entrepreneurial process and exposes students to challenges, problems and issues faced by entrepreneurs who start new ventures.

Course Objectives:  Develop an understanding of the importance of entrepreneurship in society and the different forms of entrepreneurial activity.

 Identify that entrepreneurship is a critical factor of production in an economy and should be nurtured among its citizens to spur economic growth and innovation.

 Identify your entrepreneurial potential, become familiar with entrepreneurial career paths, and develop an entrepreneurial mindset.

 Develop an understanding of the new venture creation process and the life cycle of a new venture from idea development and launch through growth and various exit strategies.

 Gather knowledge of business plans, sources of capital, marketing and distribution strategies, operations, organizational issues, as well as key legal and ethical considerations affecting entrepreneurial ventures.

 Develop an appreciation for opportunity, how to recognize it, how to evaluate it, and how to manage risk.

 Appraise the nature of creative new business concepts that can be turned into sustainable business ventures.

 Identify the ethical issues that are intimately intertwined with entrepreneurial activities, and develop a personal framework for managing ethical dilemmas. Welcome to an exciting exploration into entrepreneurship! An entrepreneur is someone who comes up with a new idea and brings together a country’s resources (land, labor, and capital) to take the idea to the marketplace. An entrepreneur is one who asserts, “There is a better way, and I will find it.” Being entrepreneurial means charging down a new path, staying alert to opportunity and taking risks to seize the opportunity. It means having energy, vision, optimism, and daring to try something new. This course will introduce you to the many aspects required to create a successful new venture and will give you an understanding of what is involved in being entrepreneurial.

STATEMENT ON GENERAL EDUCATION:

Dept of Business, Economics, & Legal Studies 2 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP Principles of Entrepreneurship (ECN 1510) is designated a general education (GenEd) course by the College of Southern Maryland (CSM) and the Maryland Higher Education Commission.

Successful completion of this course provides the transfer student with three (3) general education (“GenEd”) credits in the area of Social and Behavioral Sciences.

CSM faculty consider GenEd a body of values, skills, and knowledge to which all graduates with associates degrees should be exposed and for which we may determine certain levels of competency.

General Education Competencies Addressed in this Course Include: 1. Learning - Graduates should: a. Plan for completion of both long-term and short-term assignments b. Locate and use resources outside the classroom

2. Speaking – Graduates should: a. Ask and answer questions effectively b. Organize and present ideas and feelings in language appropriate to the situation and audience

3. Listening – Graduates should: a. Interpret, analyze, and evaluate spoken messages

4. Interpersonal Communication – Graduates should: a. Accurately describe another’s point of view, even if it is different from one’s own

5. Reasoning - Graduates should: a. Identify, define, evaluate, and solve problems.

6. Cultural/Social - Graduates should: a. Have a basic understanding of how individuals and groups behave, develop, and function.

7. Economic - Graduates should: a. Be aware of the role played by business, consumers, and government in influencing our economy.

Dept of Business, Economics, & Legal Studies 3 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP

COURSE POLICIES:

ATTENDANCE & PARTICIPATION: Participation in this class is essential to your success! This class has been structured to most fully meet your needs by allowing for optimal flexibility in learning. Each student is responsible for keeping up with the assigned materials and being aware of schedule or test date changes.

MAKE-UP EXAM POLICY: As explained above, both the midterm and final exams are structured as take-home exams. Students will have one week to complete the exam during the week assigned.

TERMS OF AUDIT: The last day to change from credit to audit or audit to credit is Thursday, November 16th. In order to change from audit to credit status, you must have completed all assignments and exams of the class through this date.

WITHDRAWAL DATE FOR THE COURSE: The last day to withdraw from the class without a grade is Thursday, November 16th. Keep this date in mind. Incomplete grades will only be given if all assignments are completed and a student has a personal or exceptional problem that cannot be avoided. If this situation occurs before the withdrawal date, you must withdraw from the course rather than receive a grade of Incomplete.

ACADEMIC INTEGRITY: Standards of academic conduct are set forth in the College’s Student Code of Conduct section in the Student Handbook. By registering for this course, you have acknowledged your awareness of this Code, and you are obliged to become familiar with your rights and responsibilities as defined by the Code. Violations of the Student Code of Conduct will not be treated lightly, and disciplinary actions will be taken should such violations occur.

Plagiarism and/or copying another student’s work will result in an “F” for the course and further disciplinary action by the College. As a reminder, when you use a direct quote, you must quote the sentence and refer to the source. Even if you use another person's idea, you must reference the author. Copying another person's work without referencing him or her is not only against College policy, it is also illegal.

UNAUTHORIZED PERSONS: Unauthorized persons (those not enrolled in the class, children, family members, etc.) are not allowed in the classroom. This is part of a college-wide policy to reduce legal liability for the college. More information on this policy can be found in your Student Handbook.

DISABLED STUDENT SERVICES: Students with disabilities who believe that they may need accommodations in this class College of Southern Maryland ECN 1510 – Principles of Entrepreneurship

Dept of Business, Economics, & Legal Studies 5 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP are encouraged to contact Disabled Student Services in the Learning Assistance Department at 301.934.7614 as soon as possible.

So… what is this course about? A scenario:

Christina Smith, who lives near Seattle, just left her job with Microsoft to start a business that will sell a new type of fax machine. She knows she’ll need a feasibility analysis, a well- articulated business model, and a business plan to get funding, but she can’t decide which project to tackle first. If Christina asked you for your advice, what would you tell her, and what rationale for your decision would you provide to Christina?

ASSIGNMENTS:

(1.) Chapter Discussion Questions (15 @ 5 pts each or 75 pts):

Respond to the following Chapter discussion questions during the week in which the chapter is assigned. Responses to these discussion questions can either be submitted to the instructor through e-mail ([email protected]) as a Word attachment or in person/during class. Each response is expected to be at least 250 words in length and should incorporate terms and concepts from your text as well as outside experiences, if applicable. Responses to the discussion questions are worth a possible 5 points each.

Chapter 1 Discussion Question Yesterday in philosophy class, your professor said, “Give me one shred of evidence that demonstrates that entrepreneurship is good for the economy or has ever made a positive contribution to society.” If you were to accept this challenge, what would you say?

Chapter 2 Discussion Question Marshall Hanson, the founder of Santa Fe Hitching Rail, a chain of nine steak restaurants in New Mexico, is considering expanding his menu, which is currently restricted to steak, hamburger, potatoes, and fries. He has just read a book about entrepreneurship and learned that entrepreneurs should study social trends to help identify new product opportunities. List the social trends that might help Martin choose items to add to his menu. Given the trends you list, what items do you suggest Martin add?

Chapter 3 Discussion Question A good friend of yours, Abby Franklin, has decided to open a sporting goods store geared toward adults 55 years of age and older. As far as she knows, her store will be the only sporting goods store in the United States focused specifically on older adults.

Dept of Business, Economics, & Legal Studies 7 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP Using your imagination, write a concept statement for Abby’s proposed venture.

Chapter 4 Discussion Question Troy Pearson is starting a medical products business in Albany, New York. He knows

Dept of Business, Economics, & Legal Studies 8 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP he should put together a competitor analysis but doesn’t know how to go about it. If Troy turned to you for advice, what would you tell him?

Chapter 5 Discussion Question Six months ago, Peter Wilcox retired as an engineer with NASA and used some of his retirement savings to open a chain of three video stores near the Kennedy Space Center in Florida. Peter had never been in the video store business before but likes the retail environment and enjoys watching videos. So far, the business hasn’t done very well. Peter recently went to a bank to get a loan for the business and was startled when the banker told him, “It’s no wonder your business isn’t thriving. As far as I can tell, it doesn’t have a core competency.” Peter can’t figure out what the banker means by this comment. What would you tell Peter if he asked you to interpret the banker’s comment? What core competencies might be particularly important for Peter’s type of business?

Chapter 6 Discussion Question Andrew Powell recently launched a tutoring service to help high school students prepare for college entrance exams. Andrew is very ambitious and plans to have 100 centers open within two years. He recently put together his board of directors. The board consists of himself, his cofounder, his chief financial officer, and two college buddies with whom he plays golf occasionally. Do you think Andrew has formed a board with a high chance of being effective? If not, what would be a better approach for Andrew?

Chapter 7 Discussion Question Trevor Smith has developed a new wireless application that he feels will revolutionize the communications industry. He has been turned down by several potential investors who seemed to like his idea but who insisted on seeing pro forma financial statements as part of a business plan. Trevor doesn’t think it’s a good use of time to develop pro forma financial statements. He believes, “If the product is good enough, the financials will take care of themselves.” Why is Trevor’s thinking unwise? In your opinion, how common is the position Trevor is taking about financial statements?

Chapter 8 Discussion Question Ted Peterson has saved money his entire life. He currently has $260,000 in savings, a $175,000 house that is free of debt, and over $20,000 in college savings funds for each of three kids. He just left a staff job with Ford Motor and plans to open a restaurant. He can’t quite decide on the form of legal entity for his restaurant. He wants to shield his College of Southern Maryland ECN 1510 – Principles of Entrepreneurship

Dept of Business, Economics, & Legal Studies 9 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP personal assets from the liabilities of the restaurant and also plans to bring on some investors to open a second restaurant if the first succeeds. Advise Ted on the form of business organization that might make the most sense for his new firm.

Chapter 9 Discussion Question Recently, Jill, Diane, and Steven, the founders of a digital photography start-up, presented their business plan to a group of investors in hopes of obtaining funding. One of the investors asked the three, “How much of your personal money do you each have invested in the venture?” Is this an appropriate question? Why would an investor want to know how much of their personal money Jill, Diane, and Steven had invested in the start-up?

Chapter 10 Discussion Question Pretend that you are either Leonard Bosack or Sandra Lerner, the year is 1988, your company, Cisco Systems, is four years old, and you have reached the point where you need investment capital. Write a 60 second elevator speech to pitch Cisco Systems to investors.

Chapter 11 Discussion Question Reread the opening case. After reading the case, do you think Curves was effective in positioning its product? Why or why not?

Chapter 12 Discussion Question After working for Prime Optics for five years, Sarah Simic went to work for Tech Optical, one of Prime’s major competitors. A year later, Tech came out with a new product that made a big splash in the marketplace. Prime Optics sued Sarah, complaining that when Sarah worked at Prime, she was part of a team that developed a nearly identical product that Prime planned to roll out later that year. Sarah said that she lived up to her nondisclosure agreement with Prime and didn’t take any documents from Prime to Tech. The only thing that she told her new colleagues at Tech, Sarah said, were the things she remembered about the project she was working on at Prime. Is Sarah in the clear? Why or why not?

Chapter 13 Discussion Question Twelve months ago, Brittany Nelson launched a chain of stores that sells accessories for wireless communications devices. Her first store was in Memphis, and she is now expanding into northern Mississippi and western Tennessee. Brittany’s company has grown quickly from one store to five, and she hopes to add 10 to 20 stores per year College of Southern Maryland ECN 1510 – Principles of Entrepreneurship

Dept of Business, Economics, & Legal Studies 10 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP during the next five years. Recently, a friend told Brittany that maybe she should slow down a bit because a company can grow “too fast.” Brittany brushed the suggestion aside, simply noting that things were going fine and that growth was “no problem.” Do you think Brittany should think again about her friend’s advice? What are the pitfalls of growing too quickly?

Chapter 14 Discussion Question Ann Beaty owns a database software firm in Portland, Oregon. She currently has three

Dept of Business, Economics, & Legal Studies 11 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP products that are sold through office supply stores in the Northwest. Ann is frustrated because she hasn’t increased her revenues during the past three years. Provide Ann some suggestions for growth strategies she might pursue.

Chapter 15 Discussion Question Jason Carpenski is a serial entrepreneur. Although he is only 35, he has already started three businesses. Jason loves launching businesses because he likes being his own boss and enjoys the independence an entrepreneurial career offers him. Recently, Jason sold his latest business, a communications equipment start-up, and is looking for a new opportunity. He just attended a franchise fair and is extremely interested in buying a printing and copying franchise. Do you think Jason is a good candidate to buy a franchise in an established franchise system? Why or why not?

(2.) Case Strategy (3 @ 10 pts each or 30 points) End-of-chapter cases can be found at the end of each chapter with an overview of the company and situation and four discussion questions to contemplate. You are to select a total of three cases to examine throughout the semester and respond to the case questions shown.

Responses to the case questions can either be submitted to the instructor through e-mail ([email protected]) as a Word attachment or in person/during class. Each case analysis is worth a possible 10 points.

(3.) Partner with an Entrepreneur (50 points) Each student will meet with an entrepreneur in the community and then report on your experience. If assistance is needed in locating an entrepreneur, please contact your instructor or the Small Business Development Center (SBDC), located on the La Plata campus at CSM.

The purpose of this meeting is twofold; one, to interview the entrepreneur and find out his or her “strategies for success”, and two, to ask the entrepreneur for input regarding your feasibility analysis project. Your report should be 2-4 pages in length, typed, and double spaced.

º Your Partner with an Entrepreneur Report is due by the end of Week 10

Report Outline

Dept of Business, Economics, & Legal Studies 12 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP I. Entrepreneur Description: Discuss the name of the entrepreneur, the organization s/he began, the date, time, and location of your meeting, and why you chose to meet with this particular entrepreneur instead of another.

II. Entrepreneur’s Business: Briefly describe the entrepreneur’s business. Ask about his or her “strategies for success”. What are the firm’s core competencies? What does the entrepreneur consider to be the business’s strategic advantage? Inquire regarding additional issues pertinent to your selected company.

III. Elevator Speech: What did you plan to say about your particular business idea (feasibility study)? What did you actually end up saying?

IV. What Was Most Difficult: What were your concerns before you arrived for your meeting? What was difficult once you arrived at the meeting?

V. What Was Easier Than You Expected: What went better than you thought it would? What pleasant surprises did you have?

VI. Information, Leads, and Referrals Obtained: What information did you get that will help your business? What information did you get that will help your career? What other important information did you obtain?

VII. Importance of Networking: Did you find this assignment helpful? Why or why not? Why do you think networking is important to entrepreneurs?

VIII. Conclusion: Briefly discuss the most important points about your experience.

(4.) Feasibility Analysis Project (100 points) The purpose of a feasibility study is to examine critical opportunities and obstacles that might make or break the proposed business. The feasibility study should give you a good idea of whether the proposed project is likely to be successful as a business. College of Southern Maryland ECN 1510 – Principles of Entrepreneurship

For this semester-long project, you will research the feasibility of a real business and prepare a formal written report. This will teach you the skills of studying the feasibility of any business concept that you identify in the future, and will prepare you for the Business Plan which is completed in the BAD 1520, Starting & Operating a Small Business course.

Overview of a Feasibility Study: According to Chapter 3 in our text, feasibility analysis is the process of determining whether a business idea is viable. It is a preliminary evaluation of a business idea, conducted for the purpose of determining whether the idea is worth pursuing. It takes the guesswork out of a business launch and provides a more secure notion that a business idea is feasible or viable. Entrepreneurs often underestimate the competition or overestimate their personal chances for success.

Feasibility studies should be conducted after the opportunity recognition stage of starting a new business, and should be completed before considering writing a full business plan. If, upon completion of the feasibility study you discover that the idea is not feasible, you have three options: drop the idea, revise it to the point that it is feasible, or sell it to someone else for whom it is feasible. If indeed the business idea is revealed to be unfeasible, there is no reason to even consider writing a business plan to implement the idea.

If, during the process, it appears your business is not feasible, then look for ways to change your original ideas to make it feasible. Do more bootstrapping, get creative, be flexible. Do not just give up on a good idea without making an honest effort to make it feasible. However, your grade will not be hurt if your concept is truly not feasible, as the objective is for you to learn how to assess the feasibility of any business opportunity or concept.

º By Week 4, please advise the type of business you have selected for your project as well as an explanation as to why you chose this type of business.

º Your Feasibility Report is due by the end of Week 14.

Project Overview:

*Note: Although the basic outline for your report is the same as the outline of Chapter 3, a specific Report Outline for your Feasibility Study is provided in a separate handout.

This project consists of researching information on the four topics below. Begin by identifying the industry that encompasses your business and the consumers or industry (ies) you will be selling to.

Dept of Business, Economics, & Legal Studies 15 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP Information you are seeking includes:

1. Industry trends, past growth rate and future growth projections, target market wants and needs. 2. Typical products/services offered by competitors, client/customer demographic description, pricing, location, promotional methods, distribution methods, customer service reputation, quality track record, etc. Learn how your competitors operate. 3. Sales Forecast; how much revenue can you conservatively expect to generate in your first year in business? 4. Any other information needed to complete your feasibility report.

(5.) Exams (2 @ 100 pts each)

Two exams will be given throughout the semester; a midterm and final. Both exams will consist of multiple choice questions on content covered in the textbook chapters. Exams will be open book-open note and can be obtained from and submitted to the instructor through e-mail ([email protected]) as a Word attachment or in person/during class. The midterm exam will take place half-way through the course content (Chapters 1-7) and the final exam will occur during Week 15 (Chapters 8-15).

GRADING STRUCTURE:

 Chapter Discussion Questions (15 @ 5 pts each) 75  Case Strategy (3 @ 10 pts each) 30  Partner w/an Entrepreneur Project 50  Feasibility Analysis 100  Mid-term exam 50  Final exam 50

Total points available: 355 points

Grade Translation:

A = 319.5 – 355 90 - 100% B = 284 – 319.4 80 - 89% C = 248.5 - 283 70 - 79% D = 213 – 248.4 60 - 69% F = 0 - 212 0 - 59%

TENTATIVE SCHEDULE:

Note: The following schedule is for planning purposes only and is subject to change by the instructor and at her discretion.

WEEK CHAPTERS / ASSIGNMENTS / EXAMS

1 Overview / Introduction Chapter 1, “Introduction to Entrepreneurship” Chapter 1 Discussion

2 Chapter 2: “Recognizing Opportunities & Generating Ideas” Chapter 2 Discussion

3 Chapter 3: “Feasibility Analysis” Chapter 3 Discussion

4 Chapter 4: “Industry & Competitor Analysis” Chapter 4 Discussion Feasibility Plan Idea Due

5 Chapter 5: “Developing an Effective Business Model” Chapter 5 Discussion

6 Chapter 6: “Building a New Venture Team” Chapter 6 Discussion

7 Chapter 7: “Assessing a New Venture’s Financial Strength & Viability” Chapter 7 Discussion

8 Chapter 8: “Preparing the Proper Ethical & Legal Foundation” Chapter 8 Discussion Midterm Exam

9 Chapter 9: “Writing a Business Plan” Chapter 9 Discussion

Dept of Business, Economics, & Legal Studies 18 Dr. Mary Beth Klinger COLLEGE OF SOUTHERN MARYLAND DEPARTMENT OF BUSINESS, ECONOMICS, AND LEGAL STUDIES ECN 1510 – PRINCIPLES OF ENTREPRENEURSHIP 10 Chapter 10: “Getting Financing or Funding” Chapter 10 Discussion Partner w/an Entrepreneur Report Due

WEEK CHAPTERS / ASSIGNMENTS / EXAMS

11 Chapter 11: “Unique Marketing Issues” Chapter 11 Discussion

12 Chapter 12: “The Importance of Intellectual Property” Chapter 12 Discussion

13 Chapter 13: “Preparing for & Evaluating the Challenges of Growth” Chapter 13 Discussion

14 Chapter 14: “Strategies for Firm Growth” Chapter 14 Discussion Feasibility Plan Due

15 Chapter 15: “Franchising” Chapter 15 Discussion Final Exam

*Note: Three end-of-chapter Case Analysis must also be completed during the semester at times selected by you.

 Have a great holiday!!! 

STUDENT INFORMATION SHEET (this sheet is kept by the instructor only)

Name: ______Nickname (if any):______

Address: ______

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E-mail (if any): ______

Employer: ______Position: ______

Day Phone: ______Night Phone: ______

Reason for Taking Course:

( ) Degree/Certificate Requirement - please specify program of study:

______

Credits completed so far (best estimate): ______

( ) Self-Improvement

( ) Other - please specify: ______

______

Other courses you are taking this semester: ______

______

Your expectations of this course: ______

______

______College of Southern Maryland ECN 1510 – Principles of Entrepreneurship

Planned absences (if any): ______

Dept of Business, Economics, & Legal Studies 22 Dr. Mary Beth Klinger