The Pros and Cons of Corporate Entrepreneurship

There are two kinds of entrepreneurs. First, there is the entrepreneur that is commonly associated with the noun; this person is the start-up business expert. They are the ones that take dirt and make a castle out of it. However, there is another type of entrepreneur and he or she comes in the form of a corporate business starter. That means that he or she has an expertise in growing and starting up different sections within a corporation. For any company, having an effective entrepreneurial thinker can prove to be an immense asset.

Despite the platform that these entrepreneurs utilize to make money, they are all similar in personality and nature. Conversely, the process is a little different when it comes to being an entrepreneur in a corporation. The upsides and downsides of starting up a project also vary. Here are a few benefits and setbacks that the corporate entrepreneur sees upon starting up a new division within an established entity:

Pros:

The Corporate Entrepreneur Has More Resources Readily Available 
The thing that many start-ups lack is, of course, money, capital, whatever you want to call it. In the majority of cases, when starting a business within a business, a corporate entrepreneur has a lot more monetary resources available to him or her.

The Corporate Entrepreneur Has A Website Set-up 
For many entrepreneurs, the website is a big expense. Also, many website development companies will tend to take advantage of their clients; they take advantage in a major way. The small start-up clients, not having the time to study other alternatives, become easy prey for those selling unnecessary services such as website hosting, search engine optimization, PPC as well as a slew of other ineffective, costly marketing add-ons.

This is a huge advantage for the corporate entrepreneur as dealing with these individuals can be tiresome and costly with no return on investment in site.

The Corporate Entrepreneur Has Name Recognition 
Anyone, large or small business, will tell you just how important name recognition is in any industry. For the corporate business starter, this is fed to them on a platter that, if utilized correctly, can be an advantage which typically takes others years of hard work to successfully acquire.

The Corporate Entrepreneur Has A Sales Force 
In conjunction with the aforementioned name recognition that will lead to sales right off the bat (a.k.a. a quick ramp-up period), the corporate business starter will have a team of business development professionals to add to their already sitting arsenal. This means all types of outbound business calls going around the clock. Additionally, the more senior sales force will probably have contacts within targeted companies thus shortening the sales cycle for the new initiative. On a third note, the corporate entrepreneur will usually have sales support, a luxury the small start-up cannot afford nor provide for their clients. This is a huge selling point.

Cons:

The Corporate Entrepreneur Typically Has Only So Much Time 
Prior to starting any new business initiative, the company entrepreneur has to present a solid, compelling business plan to the CEO and possibly some other heads of the company. This means that the corporate entrepreneur has to ask for resources that could be put towards business models that are already working, thus persuading a group to have those monetary and personnel resources diverted to their business plan.

When this happens, and money doesn’t come in right away, the investors (business heads of the organization in this case) get jittery. When corporate heads get jittery, money begins to get pulled from the new business initiative. At this phase in the game, the entrepreneur will begin to feel a lot of pressure which could lead to the entire plan blowing up. After this, the employee will probably never get a chance at an endeavor such as this again.

The Corporate Entrepreneur Can Be Quickly Fired 
When an employee steps forward within an organization and heavily pitches a business idea that fails, the CFO is very likely to make a case to get that individual out of the company, quickly. When this happens, the entrepreneur has to find a new job and, upon interviewing explain as to the reasons why he or she could not execute. To say the least, this could be quite embarrassing.

 

Ken Sundheim runs KAS Placement, a sales and marketing recruitment agency with multiple divisions:

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