Entrepreneurs: The Driving

Force Behind Small Business

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 Course Objective:

1. provide a hands-on introduction to the venture

creation process for students with a strong interest in
Small business entrepreneurship.
2. Understand the concept of business and
entrepreneurship
3. Know the skills that contribute to entrepreneurship and
recognize them in oneself
4. Know the basic requirements for launching a small
business
5. Know how to translate a commercial idea into a
business plan
6. Make students visionaries and innovators
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 What is a business?
• The origin of the word ‘ business’ was “busy-
ness”; the state of being busy!
• Business are activities that provide goods
and/or services in exchange for money or
other goods and services.

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 A variety of businesses contribute to our local
economy
• Designing (buildings)
• Manufacturing or producing (goods like
clothing or furniture, or parts of goods to be
used by other to make complete goods, such
as processing paper to make books)
• Supply and distribution ( moving goods from
producer to client)

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 Cont..
• Selling (retailing-buying from a producer or another
intermediary business and selling to the consumer,
or wholesaling-buying from a business and selling to
other retailers or repair businesses)
• Installing ( fitting or connecting the product to the
customer’s home or business)

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 Cont..
• Repairing (restoring broken or defective goods
to working order)
• Service industries (tourism, information and
communication services, education)

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 Open discussion
• What type of businesses you found in your
community?
• Give examples of each of the types you seen
in your community?

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The World of the Entrepreneur

• In the U.S., entrepreneurs start more than

6 million businesses a year!
• Global Entrepreneurship Monitor (GEM)
– Approximately 10% of U.S. population is
actively involved in trying to start a new
business
– Approximately 9.5% of people in 42 GEM
countries studied are involved in starting a new
business
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 Total Entrepreneurial
Activity (TEA) Index

0.0
5.0
10.0
15.0
20.0
25.0
Belgium
Japan
Italy
Sweden
UAE
Germany
France
Slovenia
Russia
Singapore
Finland

Source: 2006 Global Entrepreneurship Monitor.

Denmark
Mexico
South
Netherlands
United
Hungary
Turkey
Latvia
Canada
Spain
Ireland

Country
Czech
Greece
Croatia
Norway
Chile
United
Argentina
India
Malaysia
Iceland
Brazil
Australia
Uruguay

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Thailand
China
Indonesia
Jamaica
Phillpines
Colombia
Entrepreneurial Activity Across the Globe
Persons per 100 Adults, 18-64 Years Old Engaged in Entrepreneurial Activity

Average
TEA Index

Global TEA
 What Is an Entrepreneur?
One who creates a new business in the face of
risk and uncertainty for the purpose of
achieving profit and growth by identifying
opportunities and assembling the necessary
resources to capitalize on them

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 What Is an Entrepreneur?

An entrepreneur is someone who is

willing to work 16 hours a day to
keep from working 8 hours a day for
someone else!

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 Characteristics of Entrepreneurs
Survey: 72% of adults in the U.S. have considered
starting their own businesses
• Willingness to take initiative
• Preference for moderate risk (good Entrepreneurs
become risk reducers, and one of the best ways to minimize the
risk is to create a sound business plan)
• Confidence in their ability to succeed
They tend to be optimistic about their chances for
success, and usually their optimism is based in reality.

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 Characteristics of Entrepreneurs
• Desire for immediate feedback
‘Entrepreneurs like to know how they are doing
and are constantly looking for reinforcement’
• High level of energy ‘Entrepreneurs are more energetic
than the average person that energy may be a critical factor
given the incredible effort required to launch a start-up
company’

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 Characteristics of Entrepreneurs

• Competitiveness
• Future orientation (Big Dreams may came
true)
• Skilled at organizing (Entrepreneurs know how to
put the right people and resources together to
accomplish a task)

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 Characteristics of Entrepreneurs
• Value achievement over money
(Achievement is the primary motivating
force behind entrepreneurs)

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 Entrepreneurship
• One characteristic of entrepreneurs stands
out:
Diversity!
• Anyone – regardless of age, race, gender,
color, national origin, or any other
characteristic – can become an entrepreneur
(although not everyone should)

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 How to Spot Entrepreneurial
Opportunities

• Creativity vs. Innovation

– Creativity – the ability to develop new
ideas and to discover new ways of
looking at problems and opportunities
– Innovation – the ability to apply
creative solutions to problems and
opportunities to enhance or to enrich
people’s lives

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 How to Spot Entrepreneurial
Opportunities

• Monitor opportunities and exploit them early on

• Take a different approach to an existing market
• Put a new twist on an old idea

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 How to Spot Entrepreneurial
Opportunities

• Look for creative ways to use existing resources

• Realize that others have the same problem that
you do
• Notice what is missing

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 Benefits of Small Business Ownership

The opportunity to:

• Control your own destiny
• Make a difference
• Reach your full potential
• Reap impressive profits
• Contribute to society and to be recognized for
your efforts
• Do what you enjoy and to have fun at it

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 Drawbacks of Small Business
Ownership
• Uncertainty of income
• Risk of losing your entire investment
• Long hours and hard work
• Lower quality of life until the business gets established

 High levels of stress

 Complete responsibility
 Discouragement

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 What is Feeding the
Entrepreneurial Fire
• Entrepreneurs as heroes
• Entrepreneurial education
• Demographic and economic factors
• Shift to a service economy
• Technological advancements
• Independent lifestyles
• E-Commerce and the World Wide
Web
• International opportunities
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 Growth of Women-Owned Companies
1997 to 2006
42. 3 %
45. 0%

40. 0%

35. 0%

30. 0%
2 3. 3 %

Women-owned firms
25. 0%

20. 0% 15 . 6%

15. 0%
1 2 . 3% All firms
10. 0%
4. 4 %
5 . 0% 0. 4 %

0 . 0%
N umbe r o f fi r ms N umbe r o f e mpl o y e e s Sa l e s

Categor y

Source: National Federation of Women Business Owners, 2003.

 The Cultural Diversity of
Entrepreneurship
• Young entrepreneurs
• Women entrepreneurs
 Minority-owned enterprises
 Immigrant entrepreneurs
 Part-time entrepreneurs

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 The Cultural Diversity of
Entrepreneurship

• Home-based business owners

• Family business owners
• Copreneurs (traditional ”Mom& Pop”)

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 Small Businesses...

• Make up 99.7% of all the 29.3 million

businesses in the U.S.
• Employ 52% of the nation’s private sector
workforce
• Pay 45% of total private payroll
• Create more jobs than big businesses
– 1996 to 2006: Between 60% and 80% of all net
new jobs in the U.S.

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 Small Businesses...

• Are leaders in offering training and

advancement opportunities to workers
– Provide 67% of workers with their first jobs
• Produce 51% of the nation’s private GDP
• Account for 47% of business sales

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 Small Business Survival Rate

100%
100%
90%
% of Small Firms Surviving

81%
80%
70% 65%
60% 54%
50% 46%
40%
40% 36%
32% 29%
30% 27% 25%
20%
10%
0%
New 1 2 3 4 5 6 7 8 9 10
# of Years in Business

Source: National Federation of Independent Businesses Business Policy Guide, 2003.

 Putting Failure into Perspective
• Median age of U.S. companies = 12 years
• Entrepreneurs are not paralyzed by the
prospect of failure
• Failure – a natural part of the creative process
• Successful entrepreneurs learn to fail
intelligently

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 Avoiding the Pitfalls of
Small Business Failure

• Know your business in depth

• Prepare a business plan
• Manage financial resources
• Understand financial statements

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 Avoiding the Pitfalls of
Small Business Failure
• Learn to manage people
effectively
• Set your business apart from the
competition
• Maintain a positive attitude

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Questions