18 January Small businesses and entrepreneurships

News Story: Mirror, mirror on the wall, is this dress for me? Mirror designed by IconNicholson: Social RetailingSocial Retailing Enables shopping with their friends -- remotely mirrors intended for outside store fitting rooms mirror sends live video feed allowing text message responses touch screens on the three-paneled mirror choose matching shoes or accessories select a different outfit without physically putting the garment on Reuters, Jan 17 (article)article

Primary Components of a New Business Opportunity Market demand Market size and structure Margin analysis (can you make money?) Resources Team An “A” team with a “B” idea is better than a “B” team with an “A” idea

Market size and structure Emerging markets room for new businesses Fragmented markets large number of players, none with significant market share No strong competition Proprietary barriers to entry keep large players from entering the market patents, trademarks, etc. Potential for high level of sales Worth the investment

Margin analysis Differentiate opportunity from idea An idea may not be practical An opportunity is Initial goal: reasonable break-even Longer term Low cost provider Lower capital requirement than competition Premium price

What makes a company succeed? A unique business idea “Outside the box” thinking Customer focus Continued innovation and diversification Good management Smart partnerships

Consider Starbuck’s Started 33 years ago as a single store Changed the way the world thinks about coffee How did they do it? What was their unique idea?

And sometimes we need a break … Look Like My Dog Contest

Myths about Entrepreneurs Entrepreneurs are born, not made may be born with a flair for innovation, energy work experience, know-how, contacts, business skills can be acquired Anyone can start a business; it's luck and guts difference between idea and opportunity entrepreneur, not bureaucrat Entrepreneurs are gamblers calculated risks Entrepreneurs want to run the whole show doing everything yourself limits growth Entrepreneurs are their own bosses and completely independent partners, investors, customers, employers, suppliers, community Entrepreneurs work longer and harder than corporate managers some do some don't

Myths about Entrepreneurs Entrepreneurs have greater stress, pressure, and pay a higher personal price no evidence that it is more stressful sense of accomplishment, fun, flexibility Starting a Business is risky and often ends in failure true in many cases; 80% fail in first 5 years success is higher with right people and finances Money is the most important part of success if the other important parts are there, money tends to follow New Business startup is for young and energetic age brings experience; financial stability or obligations Entrepreneurs are motivated for quest for money most motivated by a market opportunity and the chance to make a difference in a particular industry. some motivated by the opportunity to make a contribution to society. Entrepreneurs seek power, control over others to feel in charge responsibility, achievement, results rather than power thrive on accomplishment, outperforming competition control comes from results they achieve

Advantages & Disadvantages Advantages Sense of autonomy Own decisions to some extent Challenge of being involved in a start-up Positive feelings from knowing this is your creation Financial control Ability to mold the business to meet your goals Disadvantages Burden of responsibility Never being able to leave the job at work Little margin for error Your future is at stake Financial insecurity e.g., pensions Personal sacrifices Time away from your family and other activities that you enjoy

Women Entrepreneurs 8 million women in US with own business 1/3 of all business from women led firms have created more jobs than the top 100 companies in Canada women have been creating jobs 4 x as fast as average of all firms women led business have higher survival rate Why? Glass ceiling Alternative life style Other?

Social Entrepreneurs Social entrepreneurs: change agents for society Power of a new idea equally as applicable to business or social concept Business entrepreneur: new industries Social entrepreneur: new solutions to social problems Both visionary and realist -- practical implementation of the vision Ideas must be user-friendly, understandable, and ethical Solve problem by changing the system Local change makers

Historical Examples Susan B. Anthony (U.S., ) women's rights Florence Nightingale (U.K., ) modern nursing John Muir (U.S., ) conservationist Margaret Sanger (U.S., ) family planning Jean Monnet (France, ) European unity Vinoba Bhave (India, ) land gift (Bhoodhan) movement (redistribution of more than 7,000,000 acres of land) Maria Montessori (Italy, ) early childhood education

Look at the Dates Why are they all in the nineteenth or twentieth century? When did entrepreneurial businesses begin? What has happened since then? Last 25 years?