Page 9 Page 12 Page 13 Page 14 Entrepreneurship class 3003 study guide test 1 pages 9 96 complete The Small Business association defines a small business as one with fewer than 500 employees Small businesses generate on average 60 80 percent By the SBA it represents 99 7 employers More than 45 of total U S private payroll In 2005 there was an estimated 25 8 million business of all forms in the U S The SBA s Office of Advocacy reports that 2 3 of new businesses survive atleast 2 years The survival rate at 4 years is 44 Survival has been attributed to Sufficent Capital having Employees the entrepreneur s intention for starting the business Entrepreneur has existed for more than 250 years The U S was founded on free enterprise The word entrepreneur didn t come into use until 1980 s Mark Andressen young entrepreneur who was with Netscape Communications for bringing web interface on the internet to the average person Howard Shultz Starbucks rekindled the love of coffee and turned it into an art form under him In the 1970 s there was 3 significant trends that would forever change the face of business 1 Macroeconomic turmoil 2 International competition 3 Technological revolution The Vietnam war economy caused inflation the dollar was devalued food prices skyrocketed and the formation of OPEC caused gas prices to go up 50 The Federal Reserve interest rates were up to 20 the result was No borrowing no spending a recession that spilled into the 1980 s and an unemployement rate of 10 By 1980 almost 1 5 of companies were in foreign competition because they had far more structure and a lot lower labor costs Page 15 Page 17 Page 18 Page 26 The 1980 s was called the Decade of Entrepreneurship because the United States was rapidly becoming an entrepreneurial economy This was when the emergence of a huge industrial powerhouse came into play the Silicon Valley The way a business needed to succeed was the exact opposite way that companies were founded on and it was being different and being able to reorganize the way that you do business This resulted in improved performance increased profits and higher stock prices Cons were that many jobs wouldn t exist employees would receive fewer benefits and the secure jobs would be left to the civil services A significant number of ventures in the 1980 s were in the high tech industry The 1990 s was characterized as the Information Age Employees learned that job security was no longer a fact of life The internet made it available for Entrepreneurs to compete alongside huge companies This was also the age of the dot com bubble Women tend to redefine how business is done rather than attempt to make a huge impact on the economy More than 55 of all women owned businesses are in services and such businesses tend to be in smaller size Social responsibility is about the accountability to society which can range from proactive social programs to rewarding employees for getting involved in community activities It takes a lot of money to start a small business False Lori Bonn Gallagher started off with 1000 in jewelry from France and bought it back to the U S and now has made it into 2 8 million dollar company It takes a great idea False The lasting companies didn t start with a great team Often it s the not the idea but the execution plan that makes it a success The Bigger the risk the bigger the reward false Risk is a relative term in the case that entrepreneurs want to reduce risk as little as possible to make the probability of the success higher It is to the advantage of the entrepreneur to reduce the risk so that he or she can retain more equity Page 27 A business plan is required for success false Research has not concluded that having a structured business plan or knowing what the components of a business plan are correlates with the success of a business Entrepreneurship is for the young and reckless false Ray Kroc started McDonalds at 52 Colonel Sanders started KFC at well over 60 Being older can be an asset to your business The age group of 45 64 is responsible for over 36 of the U S Economy and 22 globally Entrepreneurship cannot be taught false Also known as entrepreneurs are taught not made Serial entrepreneur who starts one business and then moves on to start another They are trying to build off of the experience before they start a new one Portfolio entrepreneur one who owns a minority or majority stake in several ventures Tend to be constantly on the hunt for new businesses Wayne Huizenga started waste management then started blockbuster and auto nation Corporate ventures are distinct from other types of projects that these firms take on They involve activites that are new typically to the company so the risk of failure is high Page 29 Page 31 Page 35 Networking is the exchange of information and resources among individuals groups or organizations whose common goals are to mutually benefit and create value for the members Page 40 Page 41 Page 42 Page 46 Effective networks have the following characteristics consistent network growth large network size network cultivation interaction and exchange network balance in terms of resources legitimacy provided by credible network partners The ability to analyze a situation extract the important and ignore the superfluous compare potential outcomes and explorate from other experiences to the current one is vital Critical entrepreneurship skills analysis and critical thinking opportunity recognition resource gathering organizational and time management persuasion and recognition written and oral communication leadership and people management decision making One of the best ways to discover an opportunity is study an industry in depth maybe even work in the industry for a period of time An industry is a group of companies that are engaged in a similar or related activity The value chain is compromised of all the businesses involved in the production of a product or service for raw materials through the final delivery to the final customer Business is about relationships with partners customers and suppliers Relationships require building on honesty and integrity An entrepreneurs integrity is something that they guard more carefully than anything else because they cannot afford to taint or lose it Your business can increase their chances of international success by 1 Imitation or entering the same countries as others in the industry 2 Avoidance or refusing to enter a country where the risk is unacceptably high 3