1. Entrepreneurship Merit Badge
John Gilbert
AddOptions.org
BYU/UVSC Merit Badge PowWow
October 27 & November 10, 2007
UVSC Classroom – WB109

2. The Entrepreneur
The entrepreneur is our visionary, the creator in each of us. We're born with that quality and it defines our lives as we respond to what we see, hear, feel, and experience. It is developed, nurtured, and given space to flourish or is squelched, thwarted, without air or stimulation, and dies.
- Michael Gerber Author of “The E-Myth Revisited”

3. Entrepreneurship Entrepreneurship is Applied Scouting Know Yourself
Requirement 1
Entrepreneurship
Entrepreneurship is Applied Scouting
Know Yourself
Opportunity Identification, Evaluation, and Execution: Ready – Fire – Aim
Other Merit Badges – Communications, Personal Management, Public Speaking, Salesmanship
Entrepreneurs always think they are very smart when they have money, but often they get cocky and need a disaster to remind them how “smart” they really are.
Learn from others mistakes
Know your strengths and weaknesses. Play to your strengths and team up on your weaknesses.
Work Hard & Play Hard
A Specialist always beats a Generalist
Success and Failure are both highly overrated
ADD – Focus is inconsistent, Successful because focus comes with passion, Need Balance to survive

4. Characteristics Skills
Requirement 1
Characteristics Skills
Passionate
Faith
In self
Others
Ideas
Opportunity Focused
Want CONTROL
Innovative
Always Learning
Reader
Selling
Planning
Communication
Marketing
Interpersonal
Management
Personally Effective
Team Builder
Leadership
Know your strengths and weaknesses. Play to your strengths and team up on your weaknesses.
Which horse should you buy? Depends on the purpose
Quarter horse = short distance and quick turns
Thoroughbred = strength for harder work
Arabian = Stamina & Energy for long distances
Do what you love, know what you love, so you can know what you do

5. Starting a Business Opportunity Cost Risk
Requirement 1
Starting a Business
Opportunity Cost
Example: Quit your job to start your own company
Opportunity cost is your current salary
Risk
Financial loss
Livelihood of employees
Opportunity cost: the opportunities not taken or given up in order to pursue a course of action.
When quitting your current job in order to start your own company; Opportunity Cost = your current salary
Most entrepreneurs are risking severe financial loss if their idea is unsuccessful.
In many cases they are also risking the livelihood of their employees. 5

6. Requirement 1
Starting a Business
Entrepreneurship is not as RISKY as some would have you believe.
Myth – 90% of businesses fail in 5 years
Truth – 80% of Businesses Succeed
You can systematically improve the probability of your succeeding as an entrepreneur
Entrepreneur is spelled R-I-S-K

7. Roles and Contributions
Requirement 1
Roles and Contributions
Elephant, Mice, and Gazelles
Economic Development
SME represent 99% of all employers and provide 75% of all new jobs.
Providing for People’s Needs & Wants
Providing most innovations
Elephant = Big business (500+ employees)
Mice = small owner managed business (less than 5 employees)
Gazelles = fast growing ( employees) create more jobs than big business loses
Utah has been ranked #1 for entrepreneurs starting businesses
Provo/Orem is ranked first in the state
Just released Inc500 –
#2 uSight is in Orem & owned by 27 yr old Brandt Andersen with 2003 Revenue at $27.6 million and 65 Employees.
Robert Bennett, a former Inc. 500 CEO who now serves as a senator from Utah, was easily re-elected to another term yesterday. But in New Hampshire, first-term Gov. Craig Benson, the founder of the now defunct Inc. 500 company Cabletron, was bounced out of office. The Associated Press quoted Benson as saying, "I believe in fate. What's meant to be is meant to be. I'm an entrepreneur. I see opportunities in everything."
BOOKS – The E-Myth by Michael Gerber
Love is the Killer App by Tim Saunders

8. Opportunity Identification
Requirement 3
Opportunity Identification
N-E-W-S
Every Problem is an Opportunity
Find the angle
Pain, Pleasure
WOW
Needs
Wants
Events
Surprise
Surprise is the “WOW” factor
Opportunity Costs – the next best alternative which you gave up
The Challenge is to find solutions to what people want
Book for ideas at ftp://ftp.business.uvsc.edu/ceoclub

9. Identifying Opportunities
Requirement 3
Identifying Opportunities
Opportunities exist all around us.
Not all opportunities are worth pursuing.
Compile a list of possible opportunities.
Do not evaluate opportunities until after compiling a list of possibilities.
Before deciding on a specific opportunity an entrepreneur should compile a list of possible opportunities.
Think of every problem, need, want, event, or new possibility that you can. 9

10. Finding The Opportunities & Reducing Pain
Requirement 3
Finding The Opportunities & Reducing Pain
Getting
Through & Around
Barriers
New Ideas and
Competitive Angles
Entrepreneurship is building a new box
It’s not just thinking outside the box
70% of new ideas come from ideas conceived at previous employment
Entrepreneurs are Strategic Thinkers, Planners, and Analysts
Adversity weeds out the fearful and refines entrepreneurs
2002 COPYRIGHT
Gary K. Rhoads,
Steven Mack Covey Professor of Marketing

11. Nine methods for new product success
Requirement 3
Nine methods for new product success
Method
1. Take something out of your product
2. Put something in your product
3. Answer to consumer gripes
4. Visible difference
5. Make the task easier
6. Use products in a new way
7. Product substitutability
8. Don’t be literal, be creative
9. Look overseas
Example
Royal Crown removed caffeine
Adding fruit juice to soda
“Locked my keys in my car”
“Same old cereal”
Time-consuming oven cooking
Phone & MP3 player
Cereal substitute for cereal-avoiding teens
A healthy Popsicle
Healthy Breakfast
Result
First decaffeinated cola
Slice
Warning bell, OnStar, Keyless Entry
Flavoring the O’s in Cheerios
Jet Stream Oven, Pre-cooked meals
iPhone
Total Breakfast Bars
Fruit Juice Bars / Longboard
Yoplait Yogurt
Slight variations are 94% successful as compared to 30% success for wildly new ideas
2002 COPYRIGHT
Gary K. Rhoads,
Steven Mack Covey Professor of Marketing

12. With regard to time, here's the latest poop
How to Crap On Your Friends for $39.95 (Plus Shipping and Handling)
2002 COPYRIGHT
Gary K. Rhoads,
Steven Mack Covey Professor of Marketing

13. Evaluating Opportunities
Requirement 4
Evaluating Opportunities
Evaluate to determine whether an opportunity is right for you.
Have the interest
Get the knowledge
Question yourself
Finding an opportunity does not mean you should automatically pursue it. Evaluate it to determine whether it is the right opportunity for you.
Pick something that you are interested in personally. If you are not interested in what you are doing, you may be limiting how well you can or how long you want to do it.
Do you know enough about it to pursue this opportunity? The more you know about the opportunity, the greater the chance of success. Learn all you can about your opportunity.
Will your idea allow you to compete successfully? Would enough people actually be willing to purchase your product or service? What risks are there for competition? How expensive will it be to pursue this opportunity?
Be honest with yourself. You may have a good idea, but if your research shows that you cannot be successful, change or abandon your idea. 13

14. Feasibility Studies Business Technical (Good or Service) Market
Requirement 4
Feasibility Studies
Business
Technical (Good or Service)
Market
Financial
Human Resources (Personnel)

15. Technical Feasibility
Requirement 4
Technical Feasibility
Good or Service
Simple
Observable
Understandable
If your product depends on you educating people why they want it, then watch out

16. Target Customer Who is the Perfect Client? How Many Clients Are There?
Try to get a feel for…
Whether they would be interested in your product.
How much they would pay for your product?
How much of your product are they willing to buy?
Ideas that can improve your idea.
If you have a prototype of your product you should show it to potential customers.
Know Your Customer
Not Everyone is your customer and Not all your customers are like yourself.

17. Don’t Be A Feature Creature
Product/Service Vision
Requirement 4
There are three levels of a product
Product or Service – What it is.
2. Features – What it has.
3. The Benefits – What does it do for my customer.
Benefits
Features
Product
What are we selling?
Don’t Be A Feature Creature
Sell the sizzle not the steak

18. Requirement 4
Customers
Part of evaluating opportunities might include interviewing potential customers.
Try to get a feel for…
Whether they would be interested in your product.
How much they would pay for your product?
How much of your product are they willing to buy?
Ideas that can improve your idea.
If you have a prototype of your product you should show it to potential customers.
Sample questions to ask potential customers:
Do you like my business idea? Why or why not?
Would you be willing to buy my business product? Why or why not?
At what price would you be willing to buy one unit of my business product?
How many units would you be willing to buy at alternative prices? (List possible alternative prices, from high to low.)
Do you think my business product is better than that of my competitors? Why or why not?
Do you think this product or service will be too expensive to produce or provide?
What could I do to improve my business product that would encourage you to buy more or pay a higher price for the same product or service?
Do you think the market for my business product will last long enough for it to be worth my starting a business? 18

19. Financial Feasibility
Requirement 4
Budget
Start-Up Costs & Operating Costs
Fixed Costs & Variable Costs
Financial Model
Profit & Loss Statement - Am I going make money?
Cash Flows - When will I make money?
The biggest challenge for most entrepreneurs
The devil is in the details
Industry Ratios
Excel templates at ftp://ftp.business.uvsc.edu/ceoclub

20. Expenses (thousands of dollars)
Break Even Analysis
Requirement 4
600
500
400
300
200
100 10 20 30 50 60
Fixed Expenses
Profit Area
Breakeven Point
Sales
Total Costs
Loss Area
Unit Sales
Expenses (thousands of dollars)

21. Financial Feasibility
Requirement 4
Financial Feasibility
Finding the Money
Personal Savings
Love Money
D &D
Angels
Bootstrapping
The biggest challenge for most entrepreneurs
The devil is in the details
Industry Ratios
Excel templates at ftp://ftp.business.uvsc.edu/ceoclub

22. Human Resource Feasibility
Requirement 4
Human Resource Feasibility
The Entrepreneur’s “SWOT”
S – Strengths
W – Weaknesses
O – Opportunities
T - Threats
Mentoring
Outsource
Who is going to do the work?
You
Employees
Outsource
NICE - Mentorship
E-Myth
Technician – Does the work
Manager – Organizes the work
Entrepreneur – Envisions the work
Work in the Business or Work on the Business

23. Interview an Entrepreneur
Requirement 2
Interview an Entrepreneur
Chapman
Enoch

24. Start a Business Do a Good Turn Daily
Requirement 6
Do a Good Turn Daily
Any service can be turned into a business opportunity
During the next two weeks do the following
Pick an idea & ask others about it
Write about what you are going to do
Do Feasibility Study on idea
Promote your Business
Make promotional materials
Advertise your business
Start your Business
Bring back Evidence
Raking Leaves
Cleaning Gutters
Pre-paid snow shoveling
Tree trimming
Paint house
If you want a job or want to find out if a job is what you would want to do, work for free.
You gain skills, experience, and insight to become better focused on your goals.

25. Show Me The Money Option #1 Option #2 Choose 2 Option #3 Option #4
Requirement 5
Option #1
Sketch Prototype
Write Detailed Description
Option #2
Create a Prototype
Write about Creation
Materials list
Option #3
Design a Promotional Poster or Flier
Option #4
Proforma Income Statement
Describe Assumptions
Choose 2

26. Homework Finish Requirement #3 d & e
Do Requirement #4 – all four sections
Do Requirement #5 – Do 2
Do Requirement #6 – Start a business
You can download files from
Week 1 – Requirements 1, 2, 3 abc
Introduce Feasibility Studies (4)
Week 2 – Requirements 3de, 4, 5 (choose 2), 6
Week 3 – 10 Truths Entrepreneurs Violate at their own risk
Basic Web Business Elements
Business Planning (4, 5 – especially option 4)
Report, Review, Sign Cards

27. Remember If your mind can conceive it, and your heart can believe it,
then you can achieve it!
&
An Opportunity is
Hard Work and Preparation
Mixed with
a Vision and Passion