Entrepreneurial Opportunities

Entrepreneurial opportunities exist for those who can produce enough products or services
desired by customers to make the enterprise economically attractive. A promising entrepreneurial
opportunity is more than just an interesting idea. It involves a product or service
that is so attractive to customers that they are willing to pay their hard-earned money for it.
In other words, an entrepreneur must fi nd a way to create value for customers.
Our working defi nition of entrepreneurial opportunity, as an economically attractive
and timely opportunity that creates value for interested buyers or end users, distinguishes
between opportunities and ideas. It is important to note, however, that a given opportunity
will not be equally attractive to everyone. Because of differences in experiences and
perspectives, one person may see an opportunity where others do not. But, in any case,
a true opportunity exists only for the entrepreneur who has the interest, resources, and
capabilities required to succeed.
Entrepreneurial opportunities exist today in a business world that differs markedly
from the business world of yesterday. Let’s look at three successful entrepreneurial ventures
started by some present-day entrepreneurs.

Entrepreneurship and Small Business

Thus far, we have discussed entrepreneurship and small business opportunities in a
very general way. However, it is important to note that, despite many similarities, the
terms entrepreneur and small business manager are not synonymous. Some entrepreneurial
endeavors, for example, begin as small businesses but quickly grow into large
businesses. They may still be entrepreneurial. We need, then, to clarify the meanings of
these terms.
Who Are the Entrepreneurs?
Entrepreneurs are frequently thought to be individuals who discover market needs and
launch new fi rms to meet those needs. They are risk takers who provide an impetus
for change, innovation, and progress in economic life. (In contrast, salaried employees
receive some specifi ed compensation and do not assume ownership risks.)
For our purposes, we consider all active owner-managers to be entrepreneurs. We do
not limit the term entrepreneur to only founders of business fi rms; we also apply the term
to second-generation operators of family-owned fi rms, franchisees, and owner-managers
who have bought out the founders of existing fi rms. Our defi nition, however, does exclude
salaried managers of larger corporations, even those sometimes described as entrepreneurial
because of their fl air for innovation and willingness to accept risk

What Is Small Business?

What does it mean to talk about “small business”? A neighborhood restaurant or bakery is
clearly a small business, and Toyota is obviously not. But among small businesses, there
is great diversity in size.
Being labeled a “small business” may convey the impression that the business is
unimportant. That impression, however, would be totally incorrect. The signifi cance of
small business in today’s society is clearly expressed in this excerpt from Business Week:
Small businesses produce 14 times as many patents per employee as large companies
do, and they are twice as likely to turn those inventions into successes, according
to a Congressional report. They account for half of the private gross domestic
product, create more than 60% of net new jobs each year, and pay 44.3% of the
private payroll.7
Let’s hear it for the “little guys”!
There have been many efforts to defi ne the term small business, using such criteria
as number of employees, sales volume, and value of assets. There is no generally
accepted or universally agreed-on defi nition. Size standards are basically arbitrary,
adopted to serve a particular purpose. For example, legislators sometimes exclude fi rms
with fewer than 10 or 15 employees from certain regulations, so as to avoid imposing a
fi nancial burden on the owner of a very small business.
In this book, primary attention is given to businesses that meet the following criteria:
1. Financing for the business is supplied by one individual or only a few individuals.
2. Except for its marketing function, the business’s operations are geographically
localized.
3. Compared to the biggest fi rms in the industry, the business is small.
4. The number of employees in the business is fewer than 100.

The Payoff of Entrepreneurship

What might cause you to consider running your own business? Clearly, different individuals
have varied reasons and motivations for wanting to own their own business. In one
study, researchers identifi ed 38 different reasons for self-employment.8 But we suggest a
primary reason for becoming an entrepreneur and owning your own business: to make
the world a better place. John Doerr, one of the most famous venture capitalists of all
time, inspired the phrase make meaning.9 Your fi rst goal should be to create a product or
service that makes the world a better place. Your company should be about something