Entrepreneurs: The
Driving Force Behind
Small Business
Chapter 1 Entrepreneurs
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The World of the
Entrepreneur
In the U.S., entrepreneurs start more
than 6 million businesses a year!
 Global Entrepreneurship Monitor (GEM)
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 Approximately
8% of the U.S. population is
actively involved in entrepreneurial activity
 Nearly 11% of people in 49 GEM countries
studied are involved in starting a new
business
Chapter 1 Entrepreneurs
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Chapter 1 Entrepreneurs
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What is an Entrepreneur?
One who creates a new business in
the face of risk and uncertainty for the
purpose of achieving profit and growth
by identifying opportunities and
assembling the necessary resources to
capitalize on them
Chapter 1 Entrepreneurs
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What is an Entrepreneur?
An entrepreneur is someone who
is willing to work 16 hours a day
to keep from working 8 hours a
day for someone else!
Chapter 1 Entrepreneurs
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Characteristics of
Entrepreneurs
Survey: 61% of adults in the U.S. would
like to start their own business
 Willingness to take initiative
 Preference for moderate risk
 Confidence in their ability to succeed
 Self-reliance
 Perseverance
 Desire for immediate feedback
Chapter 1 Entrepreneurs
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Characteristics of
Entrepreneurs
High level of energy
 Competitiveness
 Future orientation

 Serial
entrepreneurs
Skilled at organizing
 Value achievement over money
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Entrepreneurship
One characteristic of entrepreneurs
stands out:
Diversity!
 Anyone – regardless of age, race,
gender, color, national origin, or any
other characteristic – can become an
entrepreneur (although not everyone
should)

Chapter 1 Entrepreneurs
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How to Spot Entrepreneurial
Opportunities

Creativity vs. Innovation
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Chapter 1 Entrepreneurs
Creativity – the ability to develop
new ideas and to discover new
ways of looking at problems and
opportunities
Innovation – the ability to apply
creative solutions to problems and
opportunities to enhance or to
enrich people’s lives
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How to Spot Entrepreneurial
Opportunities

Monitor trends and exploit them early on
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Take a different approach to an existing
market

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Sonic Mule
Poo Poo Paper Company
Put a new twist on an old idea

Chapter 1 Entrepreneurs
Green Grass at Last
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How to Spot Entrepreneurial
Opportunities

Look for creative ways to use existing
resources

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Realize that others have the same problem
that you do

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Greenfields Coal
SkirtSports
Notice what is missing

Chapter 1 Entrepreneurs
Dogs on Wheels
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Benefits of Small Business
Ownership
The opportunity to:
 Control your own destiny
 Make a difference
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Social entrepreneurs
Reach your full potential
Reap impressive profits
Contribute to society and to be recognized
for your efforts
Do what you enjoy and to have fun at it
Chapter 1 Entrepreneurs
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Drawbacks of Small
Business Ownership
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Chapter 1 Entrepreneurs
Uncertainty of income
Risk of losing your entire investment
Long hours and hard work
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Small Business Owners' Work Week
Number of Hours Worked per Week
1 to 39 hours
10%
More than 70 hours
20%
40 to 49 hours
29%
60 to 69 hours
19%
50 to 59 hours
22%
Average workweek = 54 hours
Source: MasterCard Global Small Business Survey, 2007.
Chapter 1 Entrepreneurs
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Drawbacks of Small
Business Ownership
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Chapter 1 Entrepreneurs
Uncertainty of income
Risk of losing your entire investment
Long hours and hard work
Lower quality of life until the business
gets established
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Owner Age at Business Formation
33.5%
35.0%
3 1. 1%
30.0%
25.0%
17 . 8 %
20.0%
15.0%
9.8%
10.0%
6 . 1%
5.0%
1. 7 %
0.0%
Under 25
25-34
35-44
45-54
55-64
65+
Age
Source: National Federation of Independent Businesses and Wells Fargo Bank, 2002.
Chapter 1 Entrepreneurs
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Drawbacks of Small
Business Ownership
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Chapter 1 Entrepreneurs
Uncertainty of income
Risk of losing your entire investment
Long hours and hard work
Lower quality of life until the business gets
established
High levels of stress
Complete responsibility
Discouragement
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Feeding the
Entrepreneurial Fire
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Chapter 1 Entrepreneurs
Entrepreneurs as heroes
Entrepreneurial education
Demographic and economic factors
Shift to a service economy
Technological advancements
Outsourcing
Independent lifestyles
E-Commerce and the World Wide
Web
International opportunities
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The Cultural Diversity
of Entrepreneurship
Young entrepreneurs
 Women entrepreneurs
 Minority-owned enterprises

Chapter 1 Entrepreneurs
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The Cultural Diversity
of Entrepreneurship
Young entrepreneurs
 Women entrepreneurs
 Minority-owned enterprises
 Immigrant entrepreneurs
 Part-time entrepreneurs

Chapter 1 Entrepreneurs
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Avoiding the Pitfalls of
Small Business Failure
Know your business in depth
 Prepare a business plan
 Manage financial resources
 Understand financial
statements

Chapter 1 Entrepreneurs
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Avoiding the Pitfalls of
Small Business Failure
Learn to manage people
effectively
 Set your business apart from
the competition
 Maintain a positive attitude
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Chapter 1 Entrepreneurs
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