Entrepreneurship

Presentation

Presented during April 2010 Chapter

Meeting

Taken from presentation created by Gail McDonald and Francine Ross Roden, Queens Alumnae Chapter

Topics Covered

• Interesting Facts• What is an Entrepreneur?• How to Start a Business• Resources

Interesting Facts

• There are approximately 25 million small businesses in the country. More than 10.5 million Americans are self-employed.

• There were more businesses created than children born per month in the year 2005.

• The largest share of new business starters is represented by people over 45 years old: about 65%. However, Entrepreneurs in age group 20-34, are catching up fast since 4 years.

• Over 50% of small businesses fail in the first year, and 95% fail within the first five years.

• In the 1980s, only 1 or 2 percent of graduating MBAs wanted to start out as entrepreneurs; today 10 to 20 percent want to be their own bosses.

• Small businesses currently employ more than half of the country's workforce and account for more than half of the private sector economic output.

• Small businesses provide approximately 75 percent of the new jobs added to the economy

What is an Entrepreneur?• Webster’s defines it as:

– “A person who organizes and directs a business undertaking, assuming the risk for the sake of the profit.”

• This is an adequate definition, however it is not complete

• They are also – Opportunity Seeker – Future Oriented– Committed to Being the Best– Market-Driven & Customer Oriented– Appreciative of their Employees– Realistic– Tolerant– Resilient– Focused and Decisive– Motivated– Enthusiastic– Determined– Persistent– Innovative– Well Organized– Good Communicators– Decisions makers– Problem solvers

The Truth is…

• The DESIRE to become an entrepreneur comes naturally to a lot of people.

• The HARD part is turning that desire into a business enterprise that works.

• It’s not EASY, but it can be done!

Things to Consider• What do I do well enough that people

would pay for?• What do I like to do often enough that

I’ll happily do it for 10 hours a day, 5 or 6 days a week, for years on end?

• What product or service does the community lack?

• Should I do it alone, or work with a partner (s)?

• What legal structure will my business have?

• Where will my business be based?• Do I have the equipment, or will I have

to buy it?• How will I pay for the start-up costs?

How to Start a Business• Self – Evaluation• Choosing the Right Business• Getting Educated• Legal Structures of Businesses• Location! Location! Location!• Start Up Capital• Business Plan – Write it Out!• Record Keeping• Pricing & Business Strategy

1. Self - Evaluation• Ask yourself the following basic

questions:– Am I completely committed to

achieving my goals?– Do I have the ambition and

persistence to achieve and grow?– Am I a hard worker?– Do I know my strengths and

weaknesses?– Am I patient, organized, reliable,

trustworthy, and able to get along well with others?

2. Choose the Right Business

• Have an idea of what type of business you would like to start.

• Find an industry that’s appealing to you.

• Your business should fill a need in the community.

• You must be able and willing to do this business.

• You should have experience, education, and or technical training in the type of business you would like to start.

3. Get Educated• Obtain the technical training,

education, and/or licensing that you’ll need.– Retailer ~ Resale License– Home Business ~ City business

License or Home Occupation Permit– Make or Sell Food ~ Health Permit

4. Decide on a Legal Structure

• When organizing a new business, you’ll need to choose the right legal structure.

• The 3 most common choices are:– Sole Proprietorship ~ 1 owner with

all the risk.– Partnership ~ 2 or more owners

with all the risk.– Corporation ~ 2 or more owners

with no risk.

5. Find a Location• Does the immediate surrounding

area need your product or service?

• How accessible is the potential location to public transportation?

• Does parking and security meet the needs of your customers?

• Does the site project the image you want?

• Can you pay the rent or mortgage and still make a profit?

6. Acquire Start-Up Capital

• Where am I going to get the money to start my business?– Yourself and/or your Partners– Relatives and Friends– Line of Credit– Commercial Loan– Private Investors

7. Write a Business Plan• A written business plan will be

the most important work you do in preparing to open your new business.

• A Business Plan will help you to:– Direct Your Start Up and Growth– Obtain Loans or Attract Investors– Focus the direction of your company– Guide basic decisions and running of

the business

Business Plan Format

• Lenders and Investors expect your business plan to follow a format.

• General Headings are:– Title Page– Executive Summary– Table of Contents– The Business– Marketing– Financial Analysis– Operations– Supporting Documents

8. Develop Record Keeping System• Entrepreneurs must keep

accurate financial records in order for their new business to succeed.

• Glance at how your business is doing from time to time.

• Good Record Keeping includes:– Opening a Business Checking &

Savings Account– Using a general ledger to keep track

of expenses. – Payroll Records– Accounts Receivable and Accounts

Payable

9. Pricing Strategy

• How much is the customer willing to pay?

• Setting the right price is an Art, and part Science.

• Steps to follow in order to ensure the price is right include: – How much did it cost you to make the

product or offer the service?– Learn what your competitors charge – Identify any added value

• Breakeven Point: The point where what you take in equals what you’ve spent. – Revenue = Expenses – This is the point where you start making

money.

10. Don’t be afraid to Ask for Help• Hire an Attorney: new business

owners need someone to give them legal advice, read contracts, article of incorporations, etc.

• Find a Good Accountant: someone to review your financial records and prepare company taxes, etc.

• Other Professional Services: you may need assistance making brochures, designing a logo, servicing computers, printing marketing materials, etc.

Other Basic Tasks

• Order Business Cards and Stationery

• Develop a Marketing Plan

• Buy necessary Business Insurance

• File Tax ID # with the IRS

• Obtain a Trademark for your Company Name and Logo

• Reserve Web Site Domain Name.

Internet Resources• Federal Government:

(http://www.business.gov)• U.S. Small Business Association:

(http://www.sba.gov)• U.S. Patent and Trademark Office:

(www.uspto.org)• Small Business Association’s Business Plan:

(http://www.sbaonline.sba.gov/starting/businessplan.html)

• Business Filings Inc. (www.businessfilings .com). Free guide to incorporating.

• National Association of Small Business Investment Companies (www.nasbic.com). Funding information.

• SBA SCORE program: http://www.scorenyc.org. Counseling for small businesses.

• Center for Women’s Business Research: (http:///www.nfwbo.org)

• Entrepreneur Magazine: (http://www.entrepreneur.com)

Bibliography & Suggested Reading• Bibliography

– Norman, Jan. What No One Ever Tells You About Starting Your Own Business, 2nd Ed. Dearborn Trade Publishing, 2004.

– Harper, Stephen C. Starting Your Own Business, 2nd Ed. McGraw-Hill, 2003.

– http://www.articlesphere.com/Article/Lifestyle-Entrepreneur-Statistics/67279

– http://www.work-at-home-index.net/lifestyle-entrepreneurs.html

• Suggested Reading – Black Enterprise’s Guide to Starting a

New Business.– S.B.A. Small Business Resource Guide.– Choosing to be a Servant Leader by Jack

Kahl.