Entrepreneurship Is small business for you?

It’s an interesting time to be in small business The number of small businesses is growing (23 mill) The number of small businesses is growing (23 mill) Small business creates more new jobs (75%) Small business creates more new jobs (75%) The public favors small business (vs. Walmart) The public favors small business (vs. Walmart) Classes in entrepreneurship are growing Classes in entrepreneurship are growing Trend is towards self-employment: 55% say they want to be their own boss Trend is towards self-employment: 55% say they want to be their own boss Home-based businesses are growing Home-based businesses are growing Entrepreneurship attracts people of all agesEntrepreneurship attracts people of all ages

What is “small business”? Management is independent (manager is usually owner) Management is independent (manager is usually owner) Capital is supplied and ownership is help by a few individuals Capital is supplied and ownership is help by a few individuals Area of operations is primarily local Area of operations is primarily local The business is small compared to competitors The business is small compared to competitors

What is “small business”? Small Business Administration: Under 20 employees = Very Small Under 20 employees = Very Small = Small = Small 100 – 499 = Medium 100 – 499 = Medium 500 or more = Large 500 or more = Large

What is the difference between “small business” and “entrepreneurial venture”? Small business – independently owned; not dominant in it’s field; does not engage in many new or innovative practices. Growth is not a primary objective. Small business – independently owned; not dominant in it’s field; does not engage in many new or innovative practices. Growth is not a primary objective. Entrepreneurial Venture – principal objectives are growth and profit; pursues innovation and aggressive marketing in order to grow fast; owners seek to turn profit and move on. Entrepreneurial Venture – principal objectives are growth and profit; pursues innovation and aggressive marketing in order to grow fast; owners seek to turn profit and move on.

What are the contributions of small business? Encourage innovation and flexibility Encourage innovation and flexibility Close ties with communities in which they exist Close ties with communities in which they exist Keep larger firms competitive Keep larger firms competitive Provide well-rounded experience for employees Provide well-rounded experience for employees Help develop risk takers Help develop risk takers Generate new employment Generate new employment Provide greater employee job satisfaction Provide greater employee job satisfaction

What are the challenges to small business? Economic downturns Economic downturns Retirement or owner transition (family owned biz problems) Retirement or owner transition (family owned biz problems) Capital or financing (banks look askance) Capital or financing (banks look askance) Unexpected growth Unexpected growth

Why do people start small businesses? Satisfy personal objectives Satisfy personal objectives Achieve independence Achieve independence Obtain a higher income Obtain a higher income Help their families Help their families Fill niches (new inventions: what can we think of?) Fill niches (new inventions: what can we think of?)

Characteristics of Successful Entrepreneurs Desire independence Desire independence Have a strong sense of initiative Have a strong sense of initiative Motivated by personal and family (fire in the belly) Motivated by personal and family (fire in the belly) Driven to achieve quick results Driven to achieve quick results Able to make decisions and react quickly Able to make decisions and react quickly Dedicated to their businesses Dedicated to their businesses Enter business as much by chance(!) as by design (eBay) Enter business as much by chance(!) as by design (eBay)

Self Analysis