Copyright 2008 Prentice Hall Publishing 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. Chapter 1: Entrepreneurship 2

Source: 2004 Global Entrepreneurship Monitor.

Copyright 2008 Prentice Hall Publishing The world of Entrepreneur - Indonesia - O,18 % of the total population (400,000) Ideal number : 2% of the total population (4,400,000) Chapter 1: Entrepreneurship 4

Copyright 2008 Prentice Hall Publishing The World of the Entrepreneur Global Entrepreneur Monitoring (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. Chapter 1: Entrepreneurship 5

Copyright 2008 Prentice Hall Publishing 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: Entrepreneurship 6

Copyright 2008 Prentice Hall Publishing 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 - activator Future orientation Skilled at organizing Chapter 1: Entrepreneurship 7

Copyright 2008 Prentice Hall Publishing 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: Entrepreneurship 8

Copyright 2008 Prentice Hall Publishing 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 Chapter 1: Entrepreneurship 9

Copyright 2008 Prentice Hall Publishing Drawbacks of Entrepreneurship Uncertainty of income Risk of losing your entire investment Long hours and hard work Chapter 1: Entrepreneurship 10

Source: Adapted from Dun & Bradstreet 21 st Annual Small Business Survey Summary Report, 2002, p. 35.

Copyright 2008 Prentice Hall Publishing Drawbacks of Entrepreneurship Uncertainty of income Risk of losing your entire investment Long hours and hard work Chapter 1: Entrepreneurship 12 Lower quality of life until the business gets established Lower quality of life until the business gets established

Source: 2004 Global Entrepreneurship Monitor.

Copyright 2008 Prentice Hall Publishing 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 Chapter 1: Entrepreneurship 14 High levels of stress High levels of stress Complete responsibility Complete responsibility Discouragement Discouragement

Copyright 2008 Prentice Hall Publishing Feeding the Entrepreneurial Fire Entrepreneurs as heroes Entrepreneurial education Economic factors Shift to a service economy Technological advancements Independent lifestyle E-commerce and the World Wide Web Chapter 1: Entrepreneurship 15

Source: eMarketer, 2005.

Copyright 2008 Prentice Hall Publishing 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 Chapter 1: Entrepreneurship 17 International opportunities International opportunities

Copyright 2008 Prentice Hall Publishing The Cultural Diversity of Entrepreneurship Young entrepreneurs Women entrepreneurs Chapter 1: Entrepreneurship 18

Source: Center for Women’s Business Research, 2004.

Copyright 2008 Prentice Hall Publishing The Cultural Diversity of Entrepreneurship Young entrepreneurs Women entrepreneurs Chapter 1: Entrepreneurship 20 Minority-owned enterprises Minority-owned enterprises Immigrant entrepreneurs Immigrant entrepreneurs Part-time entrepreneurs Part-time entrepreneurs

Copyright 2008 Prentice Hall Publishing The Cultural Diversity of Entrepreneurship Home-based businesses Family businesses Copreneurs Corporate castoffs Corporate dropouts Chapter 1: Entrepreneurship 21

Source: U.S. Small Business Administration, 2005.

Copyright 2008 Prentice Hall Publishing 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. Chapter 1: Entrepreneurship 23

Copyright 2008 Prentice Hall Publishing 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! Chapter 1: Entrepreneurship 24

Source: NFIB Business Policy Guide, 2003, p. 16. WHY ???

Copyright 2008 Prentice Hall Publishing Ten Deadly Mistakes of Entrepreneurship 1.Management mistakes 2.Lack of experience of the business 3.Poor financial control 4.Weak marketing efforts 5.Failure to develop a strategic plan Chapter 1: Entrepreneurship 26

Copyright 2008 Prentice Hall Publishing Ten Deadly Mistakes of Entrepreneurship 6.Uncontrolled growth 7.Poor location – Location, location, location 8.Improper inventory control 9.Incorrect pricing 10.Inability to make the “entrepreneurial transition” Chapter 1: Entrepreneurship 27

Copyright 2008 Prentice Hall Publishing Putting Failure into Perspective Entrepreneurs are not paralyzed by the prospect of failure. Failure – a natural part of the creative process. Chapter 1: Entrepreneurship 28 SO, HOW TO AVOID FAILURES ???

Copyright 2008 Prentice Hall Publishing 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 – don’t give up Chapter 1: Entrepreneurship 29