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EntrepreneurshipEntrepreneurshipMerit BadgeMerit Badge
John Gilbert
AddOptions.org
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The EntrepreneurThe Entrepreneur
• The entrepreneur is our visionary, the The entrepreneur is our visionary, the creator in each of us. We're born with that creator in each of us. We're born with that quality and it defines our lives as we quality and it defines our lives as we respond to what we see, hear, feel, and respond to what we see, hear, feel, and experience. It is developed, nurtured, and experience. It is developed, nurtured, and given space to flourish or is squelched, given space to flourish or is squelched, thwarted, without air or stimulation, and thwarted, without air or stimulation, and dies.dies. - Michael Gerber- Michael Gerber
Author of “The E-Myth Revisited” Author of “The E-Myth Revisited”
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EntrepreneurshipEntrepreneurship
• Entrepreneurship is Applied Scouting
• Know Yourself
• Opportunity Identification, Evaluation, and Execution: Ready – Fire – Aim
Requirement 1
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Characteristics SkillsCharacteristics 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
Requirement 1
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Starting a BusinessStarting a Business
• Opportunity CostOpportunity Cost– Example: Quit your job to start your own Example: Quit your job to start your own
companycompany• Opportunity cost is your current salary Opportunity cost is your current salary
• RiskRisk– Financial lossFinancial loss– Livelihood of employeesLivelihood of employees
Requirement 1
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• 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
Requirement 1
Starting a BusinessStarting a Business
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Roles and ContributionsRoles 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
Requirement 1
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Opportunity IdentificationOpportunity Identification
• N-E-W-S
• Every Problem is an Opportunity– Find the angle– Pain, Pleasure
WOW
Requirement 3
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Identifying OpportunitiesIdentifying Opportunities
• Opportunities exist all around us.Opportunities exist all around us.– Not all opportunities are worth pursuing.Not all opportunities are worth pursuing.
• Compile a list of possible opportunities.Compile a list of possible opportunities. • Do not evaluate opportunities until after Do not evaluate opportunities until after
compiling a list of possibilities.compiling a list of possibilities.
Requirement 3
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Finding The OpportunitiesFinding The Opportunities& Reducing Pain& Reducing Pain
GettingGettingThrough & AroundThrough & Around
BarriersBarriers
New Ideas andCompetitive Angles
© 2002 COPYRIGHTGary K. Rhoads,
Steven Mack Covey Professor of Marketing
Entrepreneurship Entrepreneurship is building a new is building a new
boxbox
It’s not just thinking
outside the box
Requirement 3
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Example
Royal Crown removedcaffeine
Adding fruit juice tosoda
“Locked my keys inmy car”
“Same old cereal”
Time-consumingoven cooking
Phone & MP3 player
Cereal substitute forcereal-avoiding teens
A healthy Popsicle
Healthy Breakfast
Nine methods for new product successNine methods for new product success
Method
1. Take something outof your product
2. Put something inyour product
3. Answer to consumergripes
4. Visible difference
5. Make the taskeasier
6. Use products in anew way
7. Productsubstitutability
8. Don’t be literal,be creative
9. Look overseas
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© 2002 COPYRIGHT
Gary K. Rhoads, Steven Mack Covey Professor of Marketing
Requirement 3
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How to Crap On Your Friends for $39.95(Plus Shipping and Handling)
With regard to time, here's the latest poop
© 2002 COPYRIGHTGary K. Rhoads,
Steven Mack Covey Professor of Marketing
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Evaluating OpportunitiesEvaluating Opportunities
• Evaluate to determine whether an Evaluate to determine whether an opportunity is right for you.opportunity is right for you.– Have the interestHave the interest– Get the knowledgeGet the knowledge– Question yourselfQuestion yourself
Requirement 4
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Feasibility StudiesFeasibility Studies
• Business– Technical (Good or Service)
– Market– Financial– Human Resources (Personnel)
Requirement 4
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Technical FeasibilityTechnical Feasibility• Good or Service
– Simple– Observable– Understandable
Requirement 4
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Target CustomerTarget Customer
• Who is the Perfect Client?
• How Many Clients Are There?
• Try to get a feel for…Try to get a feel for…– Whether they would be interested in your product.Whether they would be interested in your product.
– How much they would pay for your product?How much they would pay for your product?– How much of your product are they willing to buy?How much of your product are they willing to buy?– Ideas that can improve your idea.Ideas that can improve your idea.
• If you have a prototype of your product If you have a prototype of your product you should show it to potential customers.you should show it to potential customers.
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There are three levels of a product
1. Product or Service – What it is.
2. Features – What it has.
3. The Benefits – What does it do for my customer.
Product
Features
Benefits
Product/Service VisionProduct/Service Vision
What are we selling?What are we selling?
Requirement 4
Don’t Be A Feature CreatureDon’t Be A Feature Creature
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CustomersCustomers
• Part of evaluating opportunities might include Part of evaluating opportunities might include interviewing potential customers.interviewing potential customers.
• Try to get a feel for…Try to get a feel for…– Whether they would be interested in your product.Whether they would be interested in your product.
– How much they would pay for your product?How much they would pay for your product?
– How much of your product are they willing to buy?How much of your product are they willing to buy?– Ideas that can improve your idea.Ideas that can improve your idea.
• If you have a prototype of your product you If you have a prototype of your product you should show it to potential customers.should show it to potential customers.
Requirement 4
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Financial FeasibilityFinancial Feasibility
• 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?
Requirement 4
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600600
500500
400400
300300
200200
100100
1010 2020 3030 5050 6060
Fixed ExpensesFixed Expenses
Profit AreaProfit Area
Breakeven PointBreakeven Point
SalesSales
Total CostsTotal Costs
Loss AreaLoss Area
Unit SalesUnit Sales
Exp
ense
s (t
hou
san
ds
of d
olla
rs)
Exp
ense
s (t
hou
san
ds
of d
olla
rs)
Requirement 4
Break Even AnalysisBreak Even Analysis
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Financial FeasibilityFinancial Feasibility
• Finding the Money– Personal Savings– Love Money– D &D– Angels
• Bootstrapping
Requirement 4
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Human Resource FeasibilityHuman Resource Feasibility
• The Entrepreneur’s “SWOT”S – Strengths
W – Weaknesses
O – Opportunities
T - Threats
• Mentoring
• Outsource
Requirement 4
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Interview an EntrepreneurInterview an EntrepreneurRequirement 2
ChapmanChapmanEnochEnoch
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Start a BusinessStart a Business• 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
Requirement 6
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Show Me The MoneyShow Me The Money• 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
Requirement 5
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HomeworkHomework
• 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
www.AddOptions.org/merit-badge
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RememberRemember
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