Strayer University IT/Entrepreneurs (SUITE) Club Sept 11th 2010 Seminar Prof. Mort Anvari The World of the Entrepreneur Every year in the U.S., entrepreneurs launch 850,000 new businesses. Entrepreneurial spirit - the most significant economic development in recent history. GEM study: 11.3 percent of adult population in the U.S. is actively involved in trying to start a new business. Mort Anvari 2 Mort Anvari The World of the Entrepreneur GEM study Globally 9.4 percent of adults are actively engaged in trying to start a business. Men are twice as likely as women to start a business (exactly the opposite trend in the U.S., however). Nearly one-third of global entrepreneurs are between the ages of 25 and 44. Mort Anvari 4 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. Mort Anvari 5 Characteristics of Entrepreneurs Desire for responsibility Preference for moderate risk – risk eliminators Confidence in their ability to succeed Desire for immediate feedback High level of energy Future orientation – serial entrepreneurs Skilled at organizing Value achievement over money Mort Anvari 6 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). Mort Anvari 7 Benefits of Entrepreneurship The opportunity to: Create your own destiny Make a difference 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 Mort Anvari 8 Drawbacks of Entrepreneurship Uncertainty of income Risk of losing your entire investment Long hours and hard work Mort Anvari 9 Small Business Owners' Work Week Number of Hours Worked per Week Less than 30 hours 11% More than 60 hours 17% 30 to 40 hours 24% 51 to 60 hours 20% 41 to 50 hours 28% Mort Anvari Drawbacks of Entrepreneurship Uncertainty of income Risk of losing your entire investment Long hours and hard work Lower quality of life until the business gets established Mort Anvari 11 Entrepreneurs' Age at Business Formation 55 - 64 6.7% Over 65 1.0% 18 - 24 12.0% 45 - 54 17.4% 25 - 34 32.3% 35 - 44 30.6% Mort Anvari Drawbacks of Entrepreneurship 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 Mort Anvari 13 Feeding the Entrepreneurial Fire Entrepreneurs as heroes Entrepreneurial education Demographic and economic factors Shift to a service economy Technological advancements Independent lifestyle E-commerce and the World Wide Web Mort Anvari 14 U.S. Retail E-Commerce Revenues $250.0 $232.1 $199.3 $200.0 Revenues (in Billions) $169.5 $142.5 $150.0 $117.7 $100.0 $94.0 $50.0 $2003 2004 2005 2006 Year Mort Anvari 2007 2008 Feeding the Entrepreneurial Fire 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 Mort Anvari 16 The Cultural Diversity of Entrepreneurship Young entrepreneurs Women entrepreneurs Mort Anvari 17 Why Women Start Businesses Frustrated with Other reasons 7% "glass ceiling" at big companies 23% Saw a market opportunity and decided to pursue it 24% Mort Anvari Gain control over my schedule 46% The Cultural Diversity of Entrepreneurship Young entrepreneurs Women entrepreneurs Minority-owned enterprises Immigrant entrepreneurs Part-time entrepreneurs Mort Anvari 19 The Cultural Diversity of Entrepreneurship Home-based businesses Family businesses Copreneurs Corporate castoffs Corporate dropouts Mort Anvari 20 Small Business by Industry Finance 8.0% Other 7.3% M anufacturing 5.8% Service 39.2% Wholesale 7.4% Construction 11.8% Retail 20.5% Mort Anvari Small Businesses... Make up 99.7 percent of all businesses in the U.S. Employ 51 percent of the nation’s private sector workforce. Create more jobs than big businesses. Are leaders in offering training and advancement opportunities to workers. Mort Anvari 22 Small Businesses... Produce 51 percent of the nation’s private GDP. Account for 47 percent of business sales. Create 13X more innovations per employee than large companies. Zipper, FM radio, laser, air conditioning, escalator, light bulb, personal computer, automatic transmission, and many more! Mort Anvari 23 Small Business Survival Rate % of Small Firms Surviving 100% 100% 90% 81% 80% 70% 65% 60% 54% 50% 46% 40% 40% 36% 30% 32% 29% 27% 25% 20% 10% 0% New 1 2 3 4 5 6 # of Years in Business Mort Anvari 7 8 9 10 Ten Deadly Mistakes of Entrepreneurship 1. 2. 3. 4. 5. Management mistakes Lack of experience Poor financial control Weak marketing efforts Failure to develop a strategic plan Mort Anvari 25 Ten Deadly Mistakes of Entrepreneurship 6. 7. 8. 9. 10. Uncontrolled growth Poor location Improper inventory control Incorrect pricing Inability to make the “entrepreneurial transition” Mort Anvari 26 Putting Failure into Perspective Entrepreneurs are not paralyzed by the prospect of failure. Failure – a natural part of the creative process. Successful entrepreneurs learn to fail intelligently. Mort Anvari 27 Avoiding the Pitfalls of Small Business Failure Know your business in depth Develop a solid business plan Manage financial resources Understand financial statements Learn to manage people effectively Keep in tune with yourself Mort Anvari 28