Determining Entrepreneurial Potential
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Determining Entrepreneurial Potential. Some Definitions of an Entrepreneur. someone who seeks to capitalize on new and profitable endeavors or business; usually with considerable initiative and risk . . . Wikipedia

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Some Definitions of an Entrepreneur

someone who seeks to capitalize on new and profitable endeavors or business; usually with considerable initiative and risk . . . Wikipedia

one who organizes, manages, and assumes the risks of a business or enterprise . . . Merriam-Webster Online

an individual engaged in the process of starting and growing one's own business or idea . . . The Public Forum Institute

those who perceive and pursue opportunities that enhance the regional and global economy . . . LA Tech University Center for Entrepreneurship and Information Technology (CEnIT)


More Descriptions of Entrepreneurs

6 – 7% of U.S. population is in the process of starting a business at any given time

53% of new small businesses begin in the home with less than $10,000

entrepreneurial activity for men has declined

activity for women remained the same

immigrants outpace native-born Americans

older individuals (55-64) increasingly engaged in new business starts


What is Entrepreneurship?

http://abese.org/videos/FinalLarge.wmv


Indicators of Entrepreneurial Aptitude

Persistence Desire for immediate feedback

Inquisitiveness Strong drive to achieve

High energy level Goal oriented behavior

Independent Demanding

Self-confidentCalculated risk taker

Creative Innovative

Vision Commitment

Problem solving skills Tolerance for ambiguity

Strong integrity Highly reliable

Personal initiative Ability to consolidate resources

Competitive Change agent

Tolerance for failure Desire to work hard

Strong management Organizational skills

Luck


More Characteristics of Successful Entrepreneurs

Able to do many things at once

Likes a challenge

Likes to work for self and be in control

Not easily discouraged

Good health, lots of energy and handles stress well

Positive thinker, does not dwell on setbacks

Focused on success rather than chances of failure

Often has close friend or relative who owns a business

Recent immigrant to N America (within two generations)


Common Reasons for Business Startup

Seize an opportunity (17%)

Personal accomplishment (13%)

Dream to run own business (9%)

Use experience or skills (9%)

Be own boss (8%)

Economic necessity to make living (7%)

Had previous experience (7%)

Supplement income from other employment (5%)

Create job for self (4%)

Frustrated in previous job (3%)

Make lots of money (3%)

Other reasons (15%)


Importance of Entrepreneurship

  • about 50% of private sector employment

  • youngest and smallest firms are the biggest job producers

  • firms with fewer than 20 employees generate majority of net newjobs in the U.S

  • fast-growth companies responsible for about two-thirds of new jobs created between 1993 and 1996

  • since 1980, Fortune 500 companies have lost five million jobs, while the United States as a whole has added 34 million new jobs

  • JOBS


Importance of Entrepreneurship

  • Small businesses developed significant number of this nation’s most important inventions and innovations

  • Entrepreneurs responsible for 67 percent of inventions and 95 percent of radical innovations since World War II

  • Small firms produce more highly cited patents than large firms

  • Small patenting firms produce 13-14 times more patents per employee

  • Small companies represent 65% of new companies in the list of most highly innovative companies in 2002

  • INNOVATION


Importance of Entrepreneurship

  • American small business is the world’s third largest economy, trailing only the U.S. as a whole and Japan

  • mall businesses generate about half of nonfarm private gross domestic product

  • Economic models show that firm births are positively correlated with innovation and regional growth (employment, wage and productivity)

  • In 2004, the median net worth for self employed households was $335,600 compared to $67,200 for those that worked for others

  • WEALTH CREATION


Sobering Statistics

About 50% of small businesses fail/close within the first five years

Of the 50% closing, only about one-third closed under circumstances that owners considered unsuccessful

Within a 10 year period, about 64.2% of businesses fail/close, but only 5.3% actually filed for bankruptcy during a decade

NFIB estimates that over the lifetime of a business, 39% are profitable, 30% break even, and 30% lose money, with 1% falling in the "unable to determine" category


Striving to Survive

More likely to close:

Relatively young owners

Services or retail trade

Insufficient start-up capital

Being in an urban/suburban area

Greater chance of survival:

Starting with some resources and size

Having employees

Sufficient starting capital

Educated owner

Previously owning another business

Having multiple owners

Home-based at startup

Being an employer main factor leading to survival


Common Reasons for Business Failure

Lack of experience

Insufficient capital

Poor location

Poor inventory management

Over-investment fixed assets

Poor credit arrangements

Personal use of business funds

Unexpected growth

Competition

Low sales


Defining the Opportunity

Improves understanding of factors affecting sales potential

Provides tools for basic assessment of business feasibility


Bringing the Right People on Board

Provides understanding for development of initial management team

Introduces framework for defining and prioritizing staffing needs


Calculating the Financial Need

Provides understanding of basic budgeting

Allows rough estimate of funding needs


Choosing an Ownership Structure

Provides understanding of factors influencing choice of legal entity

Helps with deciding on best form of business organization


Learning from Experienced Entrepreneurs

Provides understanding of how to prepare for business ownership

Helps avoid common mistakes



Assistance and Support for New Ventures

  • Technology Business Development Center (TBDC)

  • Kathy Wyatt, Director: [email protected]

  • Center for Entrepreneurship & Information Technology (CEnIT)

  • Jon Pratt, Director: [email protected]

  • Association of Business, Engineering, & Science Entrepreneurs

  • Dr. Mark Barker and Mrs. Debbie Inman, Advisors: [email protected]

  • LSU-S Small Business Development Center

  • Cooper Cochran, Director: [email protected]

  • LA SBDC State Office: https://www.lsbdc.org


Reports & Studies on Entrepreneurship

Kauffman Index of Entrepreneurial Activity, 1996-2005

http://www.kauffman.org/items.cfm?itemID=704

National Dialogue on Entrepreneurship

http://www.publicforuminstitute.org/nde/entre/index.htm

SBA Office of Advocacy

http://www.sba.gov/advo/index.html

National Federation of Independent Business

http://www.nfib.com/

Kauffman eVenturing

http://www.eventuring.com/eShip/appmanager/eVenturing/eVenturingDesktop


Next Steps

Decide whether you are committed enough to continue

Determine how you want to conclude/exit

Develop brief, but clear and compelling, explanation of your concept

Start building the team needed to succeed

Set some goals and timelines

Get the plan in writing


Next Steps

The beginning is the most important part of the work.

Plato

Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible.

St. Francis of Assisi


LA Tech TBDC

Louisiana Tech University

Technology Business Development Center

P.O. Box 3145, Ruston, LA 71272

Phone: (318) 257-3537

Fax: (318) 257-4442

Email: [email protected]

Contact: Kathy Wyatt, Director


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