Entrepreneurship & Small Business

The Global Economic Engine!

How to Get Rich & Stay Rich

1. Inheriting it or Marrying it

2. Winning a Lottery

3. Unique Personal Skill

4. Investing in Stock Market

5. Investing in Real Estate

6. Starting & Growing Your Own Business

1/2 of 1%

} 3%

} 15%6%

Over Over 80%80%

1/10 of 1%2-3%

8%

Source: Young, F. J. (1988). Source: Young, F. J. (1988). How to Get Rich & Stay How to Get Rich & Stay RichRich. Hollywood, FL: Frederick Fell Publishers.. Hollywood, FL: Frederick Fell Publishers.

“The One Who Dies With The Most Toys (Money) Wins!”

Right?

In 1923, a group of the world's most successful financiers met at the Edgewater Beach Hotel in Chicago. Present were:

World's Most Successful Financiers• The greatest wheat speculator.• The president of the New York Stock

Exchange.• A member of the President's cabinet.• The greatest "bear" on Wall Street.• The president of the largest independent steel

company. • The president of the Bank of International

Settlements. • The head of the world's greatest monopoly.

World's Most Successful Financiers

• Collectively, these tycoons controlled more wealth than there was in the United States Treasury.

• For years newspapers and magazines had been printing their success stories and urging the youth of the nation to follow their examples.

Twenty-five years later, here's what had happened to these men:

• The president of the largest independent steel company - Charles Schwab - lived on borrowed money the last five years of his life, and died broke.

• The greatest wheat speculator - Arthur Cutteu - died abroad, insolvent.

• The president of the New York Stock Exchange - Richard Whitney - was released from Sing Sing in the mid-1940's.

Twenty-five years later, here's what had happened to these men:

• The member of the President's cabinet - Albert Fall - was pardoned from prison so that he could die at home.

• The greatest "bear" on Wall Street - Jesse Livermore - committed suicide.

• The president of the Bank of International Settlements - Leon Fraser - committed suicide.

• The head of the world's greatest monopoly - Ivar Kreuger - committed suicide.

So?

• All of these men had learned to make money - but none of them had learned how to live happily.

Moral

• If you think you’re in college to learn how to make money and get wealthy, you’ve missed the point.

Moral• Learn how to live a rich life

– One that is full of joy, laughter, and love

– One that is full of time spent doing things you value

– One that is full of time spent doing things you enjoy

– One that is full of things that stretch you and help you grow

– One that is full of plenty of success that you can enjoy and failure from which you can learn

• And you’ll find that you have plenty of money.

A “Not So Silent” Revolution Entrepreneurship is flourishing around the world. 95% of the wealth in the U.S. today has been created since 1980! In U.S., nearly 4 million new businesses are started each year. Small/medium-sized firms have created new economic value around the globe; larger firms have lost it.

A “Not So Silent” Revolution 5% of new emerging firms accounted for 77% of new net jobs in the 1990’s. 95% of all radical inventions and 50% of all innovations have come from new, small firms. An estimated 45M Americans are working out of their homes. 3X more women are starting businesses today than men.

A “Not So Silent” Revolution The vast majority of millionaires in the U.S. (over 6M in 1999) are entrepreneurs. 1/3 of all MBA’s work for themselves after graduation! Provides the highest levels of personal satisfaction and fulfillment. How many of you dream of starting your own business?

Organizational Life Cycle

Startup

Growth

Maturity

Decline

E-shipE-ship

SME MgtSME Mgt

Sm Bus MgtSm Bus Mgt

NV MgtNV MgtBE

Organizational Life Cycle

X

X

X

X

XX

XIdea Decide

IPO

Prof Mgt

Self Sustain

Founder IndNVC

X

9,000Public Firms

BE

U.S. Business Distribution

X

X

X

X

XX

XIdea Decide

IPO

Prof Mgt

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Founder IndNVC

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Fortune 1000

24,991,000Non-Public US

Firms

0.04%99.96%

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8,000,0008,000,000Nascent Nascent

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The Myths and Realities of Entrepreneurship!

True or False?

Entrepreneurs work longer and harder than managers in larger, established companies.

True or False?

Any entrepreneur Any entrepreneur with a good idea with a good idea can raise venture can raise venture capital.capital.

True or False?

Entrepreneurs Entrepreneurs are motivated are motivated solely by money!solely by money!

True or False?

Entrepreneurs Entrepreneurs are gamblers.are gamblers.

True or False?

Anyone can start a Anyone can start a business.business.

True or False?

Entrepreneurs want to run everything themselves.

True or False?

Entrepreneurs Entrepreneurs experience a great experience a great deal of stress and deal of stress and pay a high price.pay a high price.

True or False?

Money is the most Money is the most important start-up important start-up ingredient.ingredient.

True or False?

Entrepreneurs Entrepreneurs are born, not are born, not made.made.

True or False?

Entrepreneurs are Entrepreneurs are always completely always completely independent of independent of others.others.

True or False?

Starting a business is risky and often ends in failure.

True or False?

Entrepreneurs should be young and energetic.

True or False?

A talented entrepreneur will assure success in a year or two.

True or False?

If an entrepreneur has enough start-up capital, he/she can’t miss!

The Failure Rule!• What are the “odds of survival” after 3

years?

• Failure is the RULE!

• There are exceptions!

– Higher potential ventures more likely to survive.

– Size and market growth thresholds

• Question is: What’s going on here!

E Course Designed For:• 1) classic entrepreneurs – if you want to start or

purchase your own business, now or later

• 2) family entrepreneurs – if you plan to join or

to take over your family’s business

• 3) corporate entrepreneurs -- if you plan to work for a large existing organization (either public or private) either within new venture department, or in an organization that values entrepreneurial activities

• 4) service providers – if you plan to work in a firm that provide services to entrepreneurial firms (i.e., CPA's, bankers, attorneys, venture capitalists, financial planners, consultants, etc.)