copyright 2008 prentice hall publishing the world of the entrepreneur every year in the u.s.,...

Copyright 2008 Prentice Hall Publishing

The world of Entrepreneur - Indonesia -

O,18 % of the total population (400,000)O,18 % of the total population (400,000)

Ideal number : 2% of the total population Ideal number : 2% of the total population (4,400,000)(4,400,000)

Chapter 1: Entrepreneurship

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What Is an Entrepreneur?

One who One who createscreates a new business in the face of a new business in the face of risk and uncertaintyrisk and uncertainty for the purpose of for the purpose of achieving achieving profit and growthprofit and growth by identifying by identifying opportunitiesopportunities and assembling the necessary and assembling the necessary resources to resources to capitalize on themcapitalize on them. .


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Characteristics of Entrepreneurs

Desire for responsibilityDesire for responsibility

Preference for moderate risk – risk Preference for moderate risk – risk eliminatorseliminators

Confidence in their ability to succeedConfidence in their ability to succeed

Desire for immediate feedbackDesire for immediate feedback

High level of energy - activatorHigh level of energy - activator

Future orientationFuture orientation

Skilled at organizingSkilled at organizing


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Entrepreneurship

One characteristic of entrepreneurs stands One characteristic of entrepreneurs stands out:out:

Diversity!Diversity!

AnyoneAnyone – regardless of age, race, gender, – regardless of age, race, gender, color, national origin, or any other color, national origin, or any other characteristic – can become an entrepreneur characteristic – can become an entrepreneur (although not everyone should). (although not everyone should).


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Benefits of Entrepreneurship

The opportunity to:The opportunity to:

Create your own destinyCreate your own destiny

Make a differenceMake a difference

Reach your full potentialReach your full potential

Reap impressive profitsReap impressive profits

Contribute to society and to be recognized for Contribute to society and to be recognized for your effortsyour efforts

Do what you enjoy and to have fun at it Do what you enjoy and to have fun at it


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Drawbacks of Entrepreneurship

Uncertainty of incomeUncertainty of income

Risk of losing your entire investmentRisk of losing your entire investment

Long hours and hard workLong hours and hard work


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Small Business Owners' Work WeekNumber of Hours Worked per Week

Less than 30 hours11%

30 to 40 hours24%

41 to 50 hours28%

51 to 60 hours20%

More than 60 hours17%

Source: Adapted from Dun & Bradstreet 21st Annual Small Business Survey Summary Report, 2002, p. 35.







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Lower quality of life until the Lower quality of life until the business gets establishedbusiness gets established

Entrepreneurs' Age at Business Formation

18 - 2412.0%

25 - 3432.3%

35 - 4430.6%

45 - 5417.4%

55 - 646.7%

Over 651.0%

Source: 2004 Global Entrepreneurship Monitor.






Lower quality of life until the business gets establishedLower quality of life until the business gets established


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High levels of stressHigh levels of stress Complete responsibilityComplete responsibility DiscouragementDiscouragement


Feeding the Entrepreneurial Fire

Entrepreneurs as heroesEntrepreneurs as heroes

Entrepreneurial educationEntrepreneurial education

Economic factorsEconomic factors

Shift to a service economyShift to a service economy

Technological advancementsTechnological advancements

Independent lifestyleIndependent lifestyle

E-commerce and the World Wide WebE-commerce and the World Wide Web


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Feeding the Entrepreneurial Fire

Entrepreneurs as heroesEntrepreneurs as heroes

Entrepreneurial educationEntrepreneurial education

Demographic and economic factorsDemographic and economic factors

Shift to a service economyShift to a service economy

Technological advancementsTechnological advancements

• Independent lifestylesIndependent lifestyles

• E-commerce and the World Wide WebE-commerce and the World Wide Web


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International opportunitiesInternational opportunities


The Cultural Diversity of Entrepreneurship• Young entrepreneursYoung entrepreneurs

• Women entrepreneursWomen entrepreneurs


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Why Women Start Businesses

Gain control over my schedule

46%

Saw a market opportunity and

decided to pursue it

24%

Frustrated with "glass ceiling" at

big companies23%

Other reasons7%

Source: Center for Women’s Business Research, 2004.


The Cultural Diversity of Entrepreneurship

• Young entrepreneursYoung entrepreneurs

• Women entrepreneursWomen entrepreneurs


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Minority-owned enterprisesMinority-owned enterprises Immigrant entrepreneursImmigrant entrepreneurs Part-time entrepreneursPart-time entrepreneurs


The Cultural Diversity of Entrepreneurship

• Home-based businessesHome-based businesses

• Family businessesFamily businesses

• CopreneursCopreneurs

• Corporate castoffsCorporate castoffs

• Corporate dropoutsCorporate dropouts


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Small Business by Industry

Service39.2%

Retail20.5%

Construction11.8%

Wholesale7.4%

Manufacturing5.8%

Finance8.0%

Other7.3%

Source: U.S. Small Business Administration, 2005.

100%

81%

65%

54%46%

40%36%

32% 29% 27% 25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% o

f S

mal

l F

irm

s S

urv

ivin

g

New 1 2 3 4 5 6 7 8 9 10

# of Years in Business

Small Business Survival Rate

Source: NFIB Business Policy Guide, 2003, p. 16.

WHY ???


Ten Deadly Mistakes of Entrepreneurship1.1. Management mistakes Management mistakes

2.2. Lack of experience of the businessLack of experience of the business

3.3. Poor financial controlPoor financial control

4.4. Weak marketing effortsWeak marketing efforts

5.5. Failure to develop a strategic planFailure to develop a strategic plan


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Ten Deadly Mistakes of Entrepreneurship

6.6. Uncontrolled growthUncontrolled growth

7.7. Poor location – Location, location, locationPoor location – Location, location, location

8.8. Improper inventory controlImproper inventory control

9.9. Incorrect pricingIncorrect pricing

10.10. Inability to make the “entrepreneurial Inability to make the “entrepreneurial transition”transition”


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Putting Failure into Perspective• Entrepreneurs are Entrepreneurs are notnot paralyzed by the paralyzed by the

prospect of failure.prospect of failure.

• Failure – a natural part of the creative process. Failure – a natural part of the creative process.


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SO, HOW TO AVOID FAILURES ???


Avoiding the Pitfalls of Small Business Failure• Know your business in depthKnow your business in depth

• Develop a solid business planDevelop a solid business plan

• Manage financial resourcesManage financial resources

• Understand financial statementsUnderstand financial statements

• Learn to manage people effectivelyLearn to manage people effectively

• Keep in tune with yourself – don’t give Keep in tune with yourself – don’t give upup


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percent of adult population