1. 1-1 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Chapter 1 Entrepreneurship in the New Millennium

2. Small Business Statistics 9Approx. 25 million S.B.’s in the U.S. 9Represent 99%(+) of all employers 9Provide 67% of workers w/first job 9Approx. 75% of new jobs 946% of all sales in the U.S. 9Represent 96% of all exporters of goods 9Provide55% of innovations

3. Small Business “No” official certification process. SBA uses Standard Industrial Classification (SIC) codes in determining size standards.“No” official certification process. SBA uses Standard Industrial Classification (SIC) codes in determining size standards. However, it is usually a firm with fewer than 500 employees.However, it is usually a firm with fewer than 500 employees.

4. 1-11 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Criteria for Defining Smallness in Business Number of employees Value of assets Volume of deposits Insurance in force Sales volume

5. Entrepreneur Traditional: a person who starts and/or operates a businessTraditional: a person who starts and/or operates a business Broader Definition: includes owner- managers; second generation family owners; and those who buy out existing firmsBroader Definition: includes owner- managers; second generation family owners; and those who buy out existing firms

6. 1-4 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Entrepreneurial Incentives Rewards of Entrepreneurship Profit Freedom from the limits of standardized pay for standardized work Profit Freedom from the limits of standardized pay for standardized work Independence Freedom from supervision and rules of bureaucratic organizations Independence Freedom from supervision and rules of bureaucratic organizations Satisfying Way of Life Freedom from routine, boring, and unchallenging jobs Satisfying Way of Life Freedom from routine, boring, and unchallenging jobs

7. 1-5 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Drawbacks of Entrepreneurship Hard WorkHard Work Long HoursLong Hours StressStress RiskRisk

8. 1-6 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Entrepreneurial Characteristics 1.Need for achievement 2.Risk tolerance 3.Self-confidence 4.Enthusiasm 1.Need for achievement 2.Risk tolerance 3.Self-confidence 4.Enthusiasm

9. 1-7 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Three Types of Entrepreneurs 1. Founders 2. General Managers 3. Franchisees

10. 1-8 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Characteristics of Artisan and Opportunistic Entrepreneurs Opportunistic Entrepreneur 1.Broad education 2.Rational approach 3.Willing to delegate 4.Broad view of strategy 5.Diversified marketing approach 6.Longer planning horizon 7.Sophisticated accounting and financial control Opportunistic Entrepreneur 1.Broad education 2.Rational approach 3.Willing to delegate 4.Broad view of strategy 5.Diversified marketing approach 6.Longer planning horizon 7.Sophisticated accounting and financial control Artisan Entrepreneur 1. Technical training 2. Paternalistic approach 3. Reluctance to delegate 4. Narrow view of strategy 5. Personal sales effort 6. Short planning horizon 7. Simple record keeping

11. 1-16 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Entrepreneurial Refugees Foreign refugeeForeign refugee Corporate refugeeCorporate refugee Parental refugeeParental refugee Feminist refugeeFeminist refugee Housewife refugeeHousewife refugee Society refugeeSociety refugee Educational refugeeEducational refugee

12. 1-15 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Age Concerns in Starting a Business Late Career Concerns 1. Fulfilling family responsibility 2. Attaining seniority in employment 3. Earning investment in a retirement program Late Career Concerns 1. Fulfilling family responsibility 2. Attaining seniority in employment 3. Earning investment in a retirement program Age 20 30 40 50 Early Career Concerns 1. Getting an education 2. Gaining work experience 3. Acquiring financial resources

13. 1-10 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Three Challenges to Small Businesses 1. Growth of superstores 2. Expansion of information technology and the Internet 3. Emergence of a global economy