16 January

1
16 January

• Small businesses and entrepreneurships

2
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

3
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

4
Entrepreneurial media companies have changed our w
orld too

• Twenty years ago, who would have thought that
  wed be watching news, sports, music videos and
  the weather 24 hours a day?

5
Are all Start-Ups Entrepreneurships?
6
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

7
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

8
What is an entrepreneur?

• 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, 1883-1950
• Someone who perceives an opportunity and creates
  an organization to pursue it
• -- Bygrave
• Entrepreneur and author

9
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

10
Women Entrepreneurs

• 8 million women in US with own business
• 1/3 of all business
• from 1991-1994 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?

11
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

12
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)

13
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

14
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

15
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