Vous êtes sur la page 1sur 17

Chapter 1: Entrepreneurship

Entrepreneurs: The Driving Force Behind Small Business

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

The World of the Entrepreneur


In the U U.S., 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
Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

Chapter 1: Entrepreneurship

Entrepreneurial Activity Across the Globe


Persons per 100 Adults, 18-64 Years Old Engaged in Entrepreneurial Activity
25.0 Total E ntrepreneuria al Activity (TE A) Inde x 20.0 15.0 10.0 5.0 0.0 B elg ium Ja apan I taly S we den UA E U G erm any Fra nc e enia S lov e Rus s s ia S ingap pore Finl and m ark Denm M ex x ic o So outh Netherla nds Un ited gary Hung Tur rk ey La atv ia Can ada pain Sp Irelland Cz ec h G re ec e Cro atia way Norw C hile Un ited A rgen tina ndia In M alay y s ia Ic elland Br raz il A us tr ralia Urug uay Thailland Ch hina Indone es ia J am a aic a P hillpi nes Colom m bia Global TEA Average TEA Index

Country
Source: 2006 Global Entrepreneurship Monitor.

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

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 i li on them h

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

Chapter 1: Entrepreneurship

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!

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Characteristics of Entrepreneurs
Survey: 72% of adults in the U.S. have Survey: considered starting their own businesses Willingness to take initiative Preference for moderate risk Confidence in their ability to succeed Self S Selflf-reliance li Perseverance Desire for immediate feedback
Chapter 1 Entrepreneurs 6

Chapter 1: Entrepreneurship

Characteristics of Entrepreneurs
High level of energy Competitiveness Future orientation

Serial

entrepreneurs

Skilled at organizing Value achievement over money

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

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)

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

Chapter 1: Entrepreneurship

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 ti solutions l ti to t problems bl and d opportunities to enhance or to enrich peoples lives

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

How to Spot Entrepreneurial Opportunities


Monitor trends and exploit them early on

Starwich

Take a different approach to an existing market

Goodwin Heart Pine PODS

Put P t a ne new t twist ist on an old idea

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

10

Chapter 1: Entrepreneurship

How to Spot Entrepreneurial Opportunities

Look for creative ways to use existing resources

Alaska Glacial Mud Company

Realize that others have the same problem that you do

Stroller Strides Dogs on Wheels

Notice what is missing

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

11

Benefits of Small Business Ownership


The opportunity to: Control your own destiny Make a difference

Social entrepreneurs

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
Copyright 2009 Pearson Education, Inc.
12

Chapter 1 Entrepreneurs

Chapter 1: Entrepreneurship

Drawbacks of Small Business Ownership


Uncertainty of income Risk of losing your entire investment Long hours and hard work

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

13

Small Business Owners' Work Week


Number of Hours Worked per Week More than 70 hours 20% 1 to 39 hours 10%

40 to 49 hours 29%

60 to 69 hours 19% 50 to 59 hours 22%

Average workweek = 54 hours

Source: MasterCard Global Small Business Survey, 2007.

Chapter 1: Entrepreneurship

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

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

15

Owner Age at Business Formation

35.0% 30 0% 30.0% 25.0% 20.0% 15.0%


9.8%

33.5% 3 1. 1%

17 . 8 %

10.0% 5.0% 0 0% 0.0% Under 25 25-34 35-44 Age 45-54

6 . 1% 1. 7 %

55-64

65+

Source: National Federation of Independent Businesses and Wells Fargo Bank, 2002.

Chapter 1: Entrepreneurship

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

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

17

Feeding the Entrepreneurial Fire



Chapter 1 Entrepreneurs

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
Copyright 2009 Pearson Education, Inc.
18

Chapter 1: Entrepreneurship

The Cultural Diversity of Entrepreneurship

Young entrepreneurs

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

19

Aspiring Teenage Entrepreneurs Percent Interested in Starting a Business


89%

86% 79% 69%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Asian/Pacific Islander African-American

Hispanic-American

White

Source: Milken Institute, 2003.

10

Chapter 1: Entrepreneurship

The Cultural Diversity of Entrepreneurship


Young entrepreneurs Women entrepreneurs

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

21

Growth of Women-Owned Companies


1997 to 2006
45. 0% 40. 0% 35. 0% 30. 0% 23. 3% 25. 0% 20. 0% 15. 0% 10. 0% 4.4% 5. 0% 0. 0% N u mb e r o f f i r ms N u mb e r o f e mp l o y e e s Sa l e s 0. 4% 12.3% 15. 6% 42. 3%

Women-owned firms All firms

C at e gor y

Source: National Federation of Women Business Owners, 2003.

11

Chapter 1: Entrepreneurship

The Cultural Diversity of Entrepreneurship


Young entrepreneurs Women entrepreneurs Minority Minority-owned enterprises Immigrant entrepreneurs Part Part-time entrepreneurs

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

23

The Cultural Diversity of Entrepreneurship


Home-based business owners Home Family business owners Copreneurs Corporate castoffs Corporate dropouts Retired baby Boomers

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

24

12

Chapter 1: Entrepreneurship

Entrepreneurial Activity by Age Group

0.34% 0.35% 0.30%

Perce entage of Age Group Starting a Com mpany

0.29%

0.30% 0.26% 0.25%

0.21%

0.20%

0.15%

0.10%

0.05%

0.00% 20-34 35-44 45-54 55-64 65 and older

Age Group

Source: Kauffman Foundation, Kauffman Index of Entrepreneurial Activity, 2006.

Small Businesses by Industry

Other, 5.53%

Construction, 12.81% Manufacturing, 4.74% Wholesale, 5.63%

Services, 49.77%

Retail, 12.47%

Finance & Real Estate, , 9.05%

Source: Small Business Administration, 2006.

13

Chapter 1: Entrepreneurship

Small Businesses...

Make up 99 99.7% 7% of all the 29.3 29 3 million businesses in the U.S. Employ 52% of the nations private sector workforce Pay 45% of total private payroll Create more j jobs than big g businesses

1996 to 2006: Between 60% and 80% of all net new jobs in the U.S.

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

27

Small Businesses...

Are leaders in offering training and advancement opportunities to workers

Provide 67% of workers with their first jobs

Produce 51% of the nations private GDP Account for 47% of business sales Key role in innovation: Produce 13X to 14X more patents per employees than large companies

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

28

14

Chapter 1: Entrepreneurship

Small Business Survival Rate


100% % of Small Firms Survivi ing 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% New 1 2 3 4 5 6 7 8 9 10 # of Years in Business 100% 81% 65% 54% 46% 40% 36% 32% 29% 27%

25%

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

Putting Failure into Perspective


Median age of U U.S. 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

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

30

15

Chapter 1: Entrepreneurship

Avoiding the Pitfalls of Small Business Failure


Know your business K b i in i depth d th Prepare a business plan Manage financial resources Understand financial statements

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

31

Avoiding the Pitfalls of Small Business Failure


Learn to manage people effectively Set your business apart from the competition Maintain a positive attitude

Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

32

16

Chapter 1: Entrepreneurship

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, electronic, mechanical, photocopying, p py g, recording, g, or otherwise, , without the prior p written permission of the publisher. Printed in the United States of America.

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall


Chapter 1 Entrepreneurs

Copyright 2009 Pearson Education, Inc.

33

17