SMALL BUSINESS OVERVIEWWhat is entrepreneurship?
Derived from the French entreprendre “to undertake, to pursueopportunities, to fulfill needs and wants through innovation”
• When Michael Dell started a business selling custom made PC’s in his dorm room at the University of Texas, reaching the list of the most wealthy people in the US was only a dream. Yet he has realized his dream.• Dell sells more than $50 million worth of computer products on the Internet each day and he has obtained a net worth of $16.5 billion.
The Entrepreneurial Process1. Conducting opportunity analysis2. Developing the plan and setting up the company3. Acquiring financial partners and sources of funding4. Determining the resources required and implementing the plan5. Scaling and harvesting the venture
Entrepreneurship is the creation of an innovative economicorganization (or network of organizations) for the purpose of gain or growth under conditions of risk or uncertainty.An opportunity is the creation of an idea to begin a business. A venture is a business undertaking involving risk.
Common Elements of Entrepreneurship• Creativity and Innovation• Resource gathering and the founding of an economic organization• The chance for gain (or increase) under risk and uncertainty
The Sacrifice That is Paid to Be an Entrepreneur. Entrepreneur “Once you agree upon the price you and yourfamily must pay to be successful, it enables you toignore minor hurts, the opponent’s pressure, and the temporary failures.” -Vince Lombardi
Opportunity to do what you enjoy and have fun at it• Mike Becker transformed his passion for nostalgia-based toys into a successful business venture FUNKO INC.• He invested $35K of his own money to resurrect the “Bobblehead” selling over 2 million since 1998. “As long as I’m doing what I want to doand we’re making a profit…I can’t imagine anything better.”
Components of an Entrepreneurial Venture• The Entrepreneur• Opportunity• Structure – Form of Ownership/Operations/Etc.• Resources – Human/Financial/Equipment/Etc.• Strategy – Goal/Plan
Major Factors Contributing to the Success of a Small Business• Competence of the entrepreneur – has a knowledge of how to start a business• Product/service – provide a produce/service that the public will buy.• Financing – Money or investors to financially back the venture• Planning – Plans before beginning• Management– Ability to coordinate people, processes, and resources.• Resources– Material, funds, etc. needed to begin a small business.• Image– Can earn the trust of the public.
PERSONAL CHARACTERISTICSTHAT ENTREPRENEURS POSSESS• ENERGETIC & SELF-DEMANDING - requires good health, work till the job gets done.• TAKE CHARGE ATTITUDE - assertive, persistent, and self-confident, desires to be the decision maker.• RESOURCEFUL - inquisitive, creative and innovative, has the ability to think of several ways to accomplish goals.• INTEGRITY - reputation for long term success.• RISK TAKER - willing to and enjoys risk.• PROFIT ORIENTED - the bottom line.
Richard Foreman President & CEO of Register.com“Don’t give up. Don’t ever give up. And when things look worst, just don’t give up.”
SKILLS NECESSARY FOR SUCCESS• COMMUNICATION - speak, write, listen, and understand.• HUMAN RELATION - people make your business. Must be able to make customers feel welcome and maintain a working relationship with business associates.• MATH - real world.• DECISION MAKING - have the skills to work out problems and create new opportunities.• PLANNING and ORGANIZATIONAL - don’t let things happen, plan and make things happen.• TECHNOLOGICAL – must have practical knowledge of the tools and crafts that are necessary to successfully operate your business.
LEADERSHIP STEPS IN THE DECISION MAKING PROCESS• IDENTIFY THE PROBLEM - problems have symptoms. You need to look beyond the obvious to determine what is going on.• LIST POSSIBLE SOLUTIONS/OPTIONS - gather information to help you solve the problem. Do not rule out any possibility.• EVALUATE ALTERNATIVES - keep in touch with reality. Get rid of wishful thinking. Be honest with yourself and the people you are dealing with.• CHOOSE A SOLUTION - the option that offers you the highest chance for success. Think of the cost involved with each option. Not only what it costs you but what it may cost you if you do something else.• ACT and GET FEEDBACK - Once you have selected a solution to a problem, you need to take action to implement your plan. Seek out feedback. What was the effect of your decision.