The
The Foundations
Foundations of
of
Entrepreneurship
Entrepreneurship
The World of the Entrepreneur
A new business is born every 11 seconds
in the United States
n Study of influential Americans – the
defining issue of the 21st Century:
Entrepreneurship!
n One of 12 Americans is actively involved
in trying to start a new business.
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Entrepreneurial Activity Across the Globe
Percentage of Adult Population Working to Start a New Business
8.5%
Unit e d S t a t e s
6.8%
Canada
5.4%
Country
Isr a e l
3.4%
It a ly
3.3%
Great Britain
2.2%
Germany
2.0%
Denmark
France
J a pan
Finland
0.0%
1.8%
1.6%
1.4%
2.0%
4.0%
6.0%
Percent
8.0%
10.0%
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.
Characteristics of Entrepreneurs
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Desire for responsibility
Preference for moderate risk
Confidence in their ability to succeed
Desire for immediate feedback
High level of energy
Future orientation
Skilled at organizing
Value achievement over money
Benefits of Small Business
Ownership
The opportunity to:
n create your own destiny
n make a difference
n reach your full potential
n reap unlimited profits
n contribute to society and be recognized for
your efforts
n do what you enjoy and have fun at it
Drawbacks of Small Business
Ownership
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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
Feeding the
Entrepreneurial Fire
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Entrepreneurs as heroes
Entrepreneurial education
Demographic and economic factors
Shift to a service economy
Technological advancements
Independent lifestyles
E-Commerce and the World Wide
Web
International opportunities
The Cultural Diversity of
Entrepreneurship
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Young entrepreneurs
Women
Minority-owned enterprises
Immigrant entrepreneurs
Part-time entrepreneurs
Home-based businesses
Family businesses
Copreneurs
Corporate castoffs
Corporate dropouts
Small Business by Industry
Financial
8.0%
Other
7.3%
Services
39.2%
Construction
11.8%
Manufacturing
5.8%
Wholesale
7.4%
Retail
20.5%
Small Businesses
Make up 99% of all businesses in the
United States.
n Employ 53% of the nation's private
sector workforce.
n Create more jobs than big businesses.
n Are leaders in offering training and
advancement opportunities to
workers.
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Small Businesses
(continued)
Produce 51% of the nation's private
GDP.
n Account for 47% of business sales.
n Create 4X more innovations per R & D
dollar spent than medium-size firms
and 24X as many as large companies.
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% of Small Firms
Surviving
Small Business Survival Rate
100%
80%
60%
40%
20%
0%
New
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4
6
# of Years in Business
8
10
The Small Business
Failure Record
24% of new businesses fail after two
years.
n 51% fail within four years.
n 63% fail within six years.
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Nine Deadly Mistakes of
Entrepreneurship
1.
2.
3.
4.
5.
Management incompetence
Lack of experience
Poor financial control
Failure to develop a strategic plan
Uncontrolled growth
Nine Deadly Mistakes of
Entrepreneurship
(continued)
6.
7.
8.
9.
Poor location
Improper inventory control
Incorrect pricing
Inability to make the “entrepreneurial
transition”
Avoiding the Pitfalls of
Small Business Failure
Know your business in depth
n Develop a solid business plan
n Manage financial resources
n Understand financial statements
n Learn to manage people effectively
n Keep in tune with yourself
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