What does it take to be an Entrepreneur
Self-directed, self-nurturing, action-oriented, highly energetic, tolerant of uncertainty
What you earn after expenses and another reason that people take the Entrepreneurial challenge
Not having to work for someone else is another reason that people take the Entrepreneurial challenge
More than the excitement of taking a gamble, reaching achievements is another reason people take the Entrepreneurial challenge
In order to succeed as an Entrepreneur you must be thoroughly comfortable being your own boss
In order to succeed as an Entrepreneur you must be able to replenish your own enthusiasm
In order to succeed as an Entrepreneur you must be able to realize and actualize your dream to build it into reality
In order to succeed as an Entrepreneur you must be able to emotionally, physically, and mentally work long hours
Tolerant of uncertainty
In order to succeed as an Entrepreneur you must not be afraid to fail and able to take some risk
What three questions can you ask to identify opportunities
What do I want but can never find? What product or service would improve my life? What really irritates me and what product or service would help?
What is a good opportunity
It fills customers' needs, you have the skills and resources to start a business, you can sell the product or services at a price customers are willing and able to pay and still make a profit, you can get your product or service to people before the window closes or before competition, you can keep the business going
A group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product
Entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle.
Most owned by people combining home and business not just moms with young children but 60% are men
Reasons for the growth of home-based business
Technology has leveled the competitive playing field so that these businesses can look and act like big businesses, corporate downsizing has led many to venture out on their own and some corporations are outsourcing to small companies, social attitudes have changed so that these jobs are considered real jobs, lastly tax laws have loosened restrictions on deducting expenses for home offices
Challenges of working at home
Getting new customers, managing time, keeping work and family tasks separate, abiding by city ordinances, and managing risk
An internet-based marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to its website.
What government can do to encourage Entrepreneurship
Increase investor visas, enterprise zones, or incubators
Part of the Immigration Act of 1990 that allowed 10,000 people to come to the US if they invest $1 million in an enterprise
Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support aka empowerment zones or enterprise communities
States create programs that offer new businesses low-cost offices which basic services like accounting, legal advice, and secretarial help.
Self-Employment Assistance (SEA) program
Program allows participants to collect unemployment checks while they build their businesses; they also can receive training and counseling.
Small Business Administration (SBA)
A federal agency that sets the standard that defines a small business and helps them by providing management, training, and financial advice about loans
A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size in terms of employees or annual receipts
Small business failures
under or over pricing, underestimating how much time it takes, too little capital, not enough experience or knowledge of the industry, borrowing money with no planning on how to pay it back, buying too much on credit, poor record keeping, overspending, not paying taxes or insurance
Increase the success of small business
Customer requires a lot of attention, product is not easily made my mass-production, sales are not large enough to attract large firms, the neighborhood is not attractive due to crime or poverty, large business sells a franchise to local buyers, the owner pays attention to competitors, and the business is in a growth industry
Managing a small business
Plan the business, finance the business, know your customers (marketing), manage employees (HR), keep records (accounting)
A detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resource and qualifications of the owner(s)
Writing a business plan
Cover letter, Executive summary, company background, management team, financial plan, capital required, marketing plan, location analysis, manufacturing plan, appendix
Since bankers receive many business plans, this is the point where you must catch their interest quickly.
Community development financial institutions (CDFIs)
A source of funding for businesses in lower-income communities that have an incentive to make sure their clients succeed. Only 1% did not repay the loan in the past three decades.
Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses
Small Business Investment Company (SBIC)
A program through which private investment companies licensed by the SBA lend money to small businesses
People with unsatisfied wants and needs who have both the resources and the willingness to buy
Service Corps of Retired Executives (SCORE)
An SBA office with volunteers from industry, trade associations, and education who counsel small businesses at no cost (except for expenses)