The Entrepreneurial Revolution

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The Entrepreneurial Revolution

• Chapter 1

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Understanding the Entrepreneurial Perspective in
Individuals

• FASTTRAC PLANNINGTM did a survey
• June 1995 through July 2000
• A total of 4,026 aspiring entrepreneurs attended
  FastTrac Planning sessions.
• I attended in the summer of 2003.
• The following demographics show just who
  entrepreneurs are and why.

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Understanding the Entrepreneurial Perspective in
Individuals

• What kind of education do entrepreneurs have?

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Understanding the Entrepreneurial Perspective in
Individuals

• What types of businesses do we start?

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Understanding the Entrepreneurial Perspective in
Individuals

• Service firms are 30 of new firms, while 19 of
  new firms are in retail merchandising.
• That means 60 more service firms are started
  than retail merchandising firms.
• Why?

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Understanding the Entrepreneurial Perspective in
Individuals

• What drives us to be entrepreneurs?
• Why do we start our own business?

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Understanding the Entrepreneurial Perspective in
Individuals

• Finally, we get respect in the political
  arena?
• Why?

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Understanding the Entrepreneurial Perspective in
Individuals

• Because we create JOBS.

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Understanding the Entrepreneurial Perspective in
Individuals

• We average 2.2 jobs for part-timers and 2.8
  full-time jobs.
• Those numbers may not look like much, but
  multiply them by millions of entrepreneurs, and
  you are looking at serious job creations.
• Entrepreneurs are creating jobs when the large
  firms are laying off and downsizing.

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Understanding the Entrepreneurial Perspective in
Individuals

• What is the bottom line to all this?
• How are we doing?

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Understanding the Entrepreneurial Perspective in
Individuals

• In 1999 a survey asked participants if their
  businesss revenue increased, decreased, or
  stayed the same from the previous year.
• The survey also asked the percentage change they
  experienced.
• The following graphs show the results for 1999
  2000 participants only.

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Changes in Gross Sales
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Understanding the Entrepreneurial Perspective in
Individuals

• So where did all this data come from?
• How geographically diversified were the
  participants?

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Understanding the Entrepreneurial Perspective in
Individuals

• And that is who we are.

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Starting YourSmall Business
1
Chapter

• Business v. Small Business
• Trends, Challenges, Opportunities,
• Concerns of Small Firms
• Characteristics of
• Entrepreneurs.

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Why small firms fail

• 1. They are under capitalized.
• 2. Owners do not understand
• marketing.
• 3. Owners do not know how to run a company.
• I cannot guarantee you will succeed I can and
  will reduce your odds of failure

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Rapid SmallBusiness Growth

• 23 Million small firms
• generate 51 GDP
• Employment
• 75 of new jobs
• 53 of private employment
• 99 of employers
• 97 of exporters

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Entrepreneurship Today

• Male- 1.9 Men Per Woman
• Ethnically Diverse
• 25-34 years old
• Specialty Expertise
• 100 B raised For 3.5 M Startup/Small Businesses

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Public FavorsSmall Business

• Black Enterprise- http//www.blackenterprise.com
• Entrepreneur
• Inc.
• Hispanic Business- http//www.hispanicbusiness.com
  
• Family Business
• Entrepreneurial Woman
• Your Company

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Interest At Schools

• Courses
• 20 Years Ago- None
• Now- Hundreds
• Ages 13-18 Positive
• Potential
• Business Career
• Males 13
• Females 10

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EntrepreneurialStudent Organizations

• Association of College
• Entrepreneurs
• University Entrepreneurial
• Association
• Students in Free Enterprise
• http//www.sife.org

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Self-Employment Trend

• Increased Investor Interest
• Downsized mgt.
• Executives Taking
• Early Retirement
• 55 Want To Be Own Boss
• Technological Advances

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Attractive To All Ages

• More Than ½ Of Independent Workers
• In NYC
• College-Educated
• 25- 40 Years Old
• 84 Of Entrepreneurs Not worried
• about their future
• 40 Have Management Experience
• ¼ Managed/Owned Business Before

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Small Business?

• Independent Management
• Operations Are Local

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SBA Definition

• a small business is one that is independently
  owned and operated and is not dominant in its
  field.
• Small Business Act of 1953

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Classification By Size
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Objectives

• Venture
• Profit
• Growth
• Quick Sellout

• Life-Style Firm
• No New Or Innovative Activities
• Provides Owner a Living

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Most CommonHome-Based Businesses
Source Independent Insurance Agents of America
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Contributions OfSmall Business

• Encourages Innovation Flexibility
• Close Relationship With Customers/
• Community
• Forces Large Firms To
• Be Competitive Why?
• Provides Employees Learning
• Experience
• Develops Risk Takers
• New Employment
• Greater Employee Job Satisfaction

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Problems ForSmall Business

• Recession/Current Economy
• Retirement/Transition
• Capital/Financing
• Unexpected Growth (?)
• Succession problems
• Government Regulations/
• Paperwork (?)

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Inadequate Financing

• Capital shortage is greatest problem facing small
  firms.
• Cannot borrow from banks. Why?
• (List sources of startup capital)
• Without adequate funds owners cannot get
  facilities, hire, produce market products or
  services.

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Inadequate Management

• Limited business knowledge.
• Inadequate planning.
• Inexperienced management.
• Some owners reluctant to vary from one-person
  management. Why?
• Managers must be generalists. Why?
• Owner cannot afford to hire seasoned assistance.
  Why?

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Challenges ToSmall Business

• Exploding Technology
• Global
• Trend - small firms going global
• Up to ½ todays college grads will work in some
  kind of global job
• Large no. U.S. firms are foreign owned.

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Challenges ToSmall Business

• Occupational/Industry Shifts
• Reinvention redesign of firm often resulting in
  size reduction
• Downsizing/Rightsizing-reducing number of
  employees to increase efficiency

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Why Start ASmall Business?
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Why To Not StartA Small Business?
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Job Satisfaction
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Objectives OfSmall Business Owners

• Achieve Independence
• Additional Income
• Help Families
• Products/services Not Available

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Checklist ForAspiring Entrepreneurs

• Passion Not Money
• Something You Know love
• Patience
• Mentor
• Funding

• Cash Manager Why?
• Build Sales
• Dont Rush
• Wary Of Bad Advice/Suppliers

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Business Objectives

• Great customer
• service
• Profit
• Social
• Growth
• Mesh Objectives

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New firms Objective

• To produce sell goods/ services at a cost
  insuring a fair price to customer and adequate
  profits to the owner.
• To set CUSTOMER SERVICE as your primary
  objective.
• But seek profit (Positive cash flow) as a natural
  consequence.
• Remember, you arte not in business to make sales.
  You are not business to make profitable sales.

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Characteristics OfSuccessful Owners

• Want/crave Independence
• Strong Sense Of Initiative
• Personal/Family Motivation
• Quick/Concrete Results

• Able To React Quickly
• Dedicated To Their Business
• Enter Business By Chance And/Or Design

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Successful SmallBusiness Management

• Adequate Market
• Get sufficient Capital
• Recruit Effectively
• Timely Information
• Cope With Govt Regs.
• Expertise
• Flexible

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Personal Analysis

• Values
• Mental Abilities
• Attitudes

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Where Are the New Jobs?
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Factors Affecting Industry/Business

• Economics
• Technology
• Lifestyle
• Political
• Demographics (?)

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Hot Growth Areas

• Education general
• specific (?)
• Health care Harrington, Texas
• Social assistance

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Ideas For Small Business

• Career Counseling
• Catering
• Computer Office Machine Repair
• Day Care
• Education

• Financial Planning
• Home Health
• Marketing
• Senior Fitness Recreation
• Specialized Delivery

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Small Business Concerns

• Poorly Planned Growth
• Must please more people
• Many creative entrepreneurs are poor managers
  Steven Jobs
• If firm grows requires outside , owner may
  lose control-Forest Oil

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Small Business Concerns

• Loss Of Independence
• Threat Of Failure
• Discontinuance - voluntary termination of
• the firm
• Types
• Formal court action
• Personal/Informal unsuccessful firm is
• terminated by owner (most common)

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Understanding the Entrepreneurial Perspective in
Individuals

• There are more entrepreneurs in the U.S. than any
  other country. Why?

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Understanding the Entrepreneurial Perspective in
Individuals

• The end.