16 January Small businesses and entrepreneurships

News Presentation Find a story in the press that discusses the use of technology in developing a business or other entrepreneurial enterprise Fairly loose definitions Be prepared to lead a short discussion about the value or importance PowerPoint summary or copy of article Example Sign up on calendar – dates may change because of outside speakers

Entrepreneurial technology companies are changing our world Large portion of growth of US economy over the past 30 years can be attributed to entrepreneurial ventures 20 years ago, Apple referred to a fruit company 5 years ago was a river in South America 5 years ago was something that cowboys yelled 10 years ago was a very big number

Entrepreneurial media companies have changed our world too Twenty years ago, who would have thought that we’d be watching news, sports, music videos and the weather 24 hours a day?

Are all Start-Ups Entrepreneurships?

Small Businesses Defined Independent Management - not part of smaller/larger company Capital from 1 or small group -Capital includes $,assets, equipment Located in small area-One location sales may go outside of region Small in comparison to competition

Why People Start Businesses To achieve a sense of accomplishment (82%) To be their own boss (73%) To have an element of variety & adventure (66%) To make better use of their training and skills (63%) To be able to adapt their own approach to their work (62%) To be challenged by new opportunities (61%) -- Canadian study

A person who destroys the existing economic order by introducing new products and services, by creating new forms of organization, or by exploiting new raw materials -- Schumpeter Austrian economist, Someone who perceives an opportunity and creates an organization to pursue it -- Bygrave Entrepreneur and author What is an entrepreneur?

One story Late ’70s, Steve Jobs and Steve Wozniak had an idea for a personal computer There is no reason for any individual to have a computer in their home Digital, 1977 The two worked on the project in their garage and so Apple was born

Women Entrepreneurs 8 million women in US with own business 1/3 of all business from women led firms have created more jobs than the top 100 companies in Canada women have been creating jobs 4 x as fast as average of all firms women led business have higher survival rate Why? Glass ceiling Alternative life style Other?

Start-up Stats Approximately 2 million new businesses are started each year in the United States About 700,000 actually register and these businesses will probably grow However, the eight year survival is only about 50%

But small companies can succeed Fortune 500 start-up capital 25% started with less than $5,000 50% started with less than $25,000 75% started with less than $100,000 Fewer than 5% began with more than $1 million (Forbes 500 list is calculated based on sales, profits, assets, market value, and employees)

Primary Components of a New Business Opportunity Market demand Market size and structure Margin analysis (can you make money?) Resources Team An “A” team with a “B” idea is better than a “B” team with an “A” idea

Market demand Ability to gain market share Market growth Durable products and services People will want them for a long time into the future Reachable customers Customers sense of payback feeling as though the purchase had some value

Market size and structure Emerging markets room for new businesses Fragmented markets large number of players, none with significant market share No strong competition Proprietary barriers to entry keep large players from entering the market patents, trademarks, etc. Potential for high level of sales Worth the investment