Executive Summary

Description of TopicIn the course of this paper, we hope to define and show the

importance of entrepreneurship, highlight the best practices for start-ups, and showcase the most desirable attributes of a successful entrepreneur.

Why is it Important to Managers?Entrepreneurial skills are increasingly important for managers to acquire

because they encapsulate all the essential qualities of running a small business, department, or even an entire organization. The lessons showcased in this paper are not only relevant for small startup companies, but can be used to manage any task at hand (be it large or small). It is also important for all managers to be aware of the importance of entrepreneurship in the American economy. Anyone in business is effected by the combined power that small companies hold in this country.

Size of MarketThe size of the market, as this paper will go into later, is surprisingly

large. The numbers are astounding and really relate the relevance of this topic to any management position. For instance, a study done by the Small Business Association (a government agency) showed that small businesses account for 60-80 percent of new jobs per year.24

Benefits and PitfallsThe benefits of having entrepreneurial skills and the know-how to starting

a successful business are endless. Not only would an individual with entrepreneurial skills possess great intuitive creativity, but he or she would also be exceptional at adaptation, a smart risk-taker, determined, have a good sense of the concept of competition, legal know-how, experience with setting up framework for an organization, and a good handle on financials. These types of concepts may be applied to various situations.

Someone in business who does not possess these qualities is unfortunately doomed for failure. Although the previous statement may sound harsh, all of the concepts discussed in this paper are pertinent for managers to absorb and to use in their own business practices.

Research MethodThe methods that the researchers used to prepare this paper are:

Academic studies of entrepreneurial concepts, statistical information, and best practices

Information collected on various small businesses with creative ideas

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Research done on three entrepreneurs of our day to showcase similarities and traits of successful businessmen

An in-depth view of some of these entrepreneurs taken from recorded interviews

Personal experience and common knowledge on the subject to relate to a common individual’s feelings about the topic

Summary of Overall Lessons/FindingsThe paper will cover and elaborate on the following topics:

Entrepreneurship—What is it, Who’s Doing it, and How Important is it? Where Should Entrepreneurs Go to Start Their Businesses? Mind-Blocks and Getting Over Them Formulating an idea 3 Successful Entrepreneurs

1. Richard Branson: “Virgin Group”2. Narayan Murthy: “Infosys Technologies”3. Ingvar Kamprad: “IKEA”

A Comparison of the 3 Showcased Entrepreneurs General Commonalities Between Entrepreneurs Best Practices for Startups Developing Habits for Business Success Ways to be a Better Entrepreneur

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How to Start Your Own IT Company:(What does it take to be an entrepreneur?)

Do you have an idea for a business? Do you have what it takes to be an Entrepreneur? These are good questions to ask yourself if you are thinking about starting your own company. Our objective is to define and show the importance of entrepreneurship, highlight the best practices for start-ups and showcase desirable attributes of an entrepreneur. You will have a clear understanding of what an entrepreneur is and what characteristics you will need to have to be successful. We also will take a look at what mind blocks deter individuals from starting their own business.

Looking at what others have done is a great way to learn about what one can do as they start their own business. We will look at three very successful entrepreneurs. First we will explore Richard Branson who is responsible for the launch of Virgin brand. Next we will look at Narayan Murthy who started the IT powerhouse Infosys. Finally we will look at Ingvar Kamrad, who is the founder of IKEA, the world’s largest furniture company. All of these men built their companies from the ground up. After exploring the similarities of the three, we will develop some best practices that everyone can use when start their own companyEntrepreneurship--What is it, Who’s Doing it, and How Important is it?

DefinitionBefore we look at our three Entrepreneurs, we first need to

establish what entrepreneurship is. There are several definitions of entrepreneurship, but the one provided by Wikipedia seems to be the best fit for our purpose. According to them:

“Entrepreneurship is the practice of starting new organizations, particularly new businesses generally in response to identified opportunities. Entrepreneurship is often a difficult undertaking, as a majority of new businesses fail. Entrepreneurial activities are substantially different depending on the type of organization that is being started. Entrepreneurships ranges in scale from solo projects to major undertakings creating many job opportunities.” 9

Characteristics of EntrepreneurshipSome of the characteristics that entrepreneur must have to start a

business entail:

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Has an enthusiastic vision, the driving force of an enterprise. The vision is usually supported by an interlocked collection of

specific ideas not available to the marketplace. The overall blueprint to realize the vision is clear, however

details may be incomplete, flexible, and evolving. Promotes the vision with enthusiastic passion. With persistence and determination, the entrepreneur develops

strategies to change the vision into reality. Takes the initial responsibility to cause a vision to become a

success. Take prudent risks. They assess costs; market/customer needs

and persuade others to join and help. Usually a positive thinker and a decision maker.9

Entrepreneurs traditionally are seen as having 6 key traits in their background:

1. Commitment and determination 2. Leadership3. Opportunity obsession4. Tolerance of risk, ambiguity and uncertainty5. Creativity, self-reliance and ability to adapt 6. Motivation to excel

There is also research showing that there are additional life experiences that may leave a person more likely to become an entrepreneur. These characteristics take in to account demographic and ethnic traits.

1. Being an offspring of self-employed parents;2. Being fired from more than one job; 3. Being an immigrant or a child of immigrants;4. Previous employment in a firm with more than 100 people; 5. Being the oldest child in the family and 6. Being a college graduate.stanford

When an entrepreneur starts a new business, it is generally referred to as a startup. A startup has a limited operating history. As time passes and the company grows through the stages of the business cycle the company will naturally no longer be referred to as a startup.25

Startups are key in generating new ideas and sources of jobs in the market place. While these companies are at high risk and many fail, they can develop into large successful business.

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“In today's international marketplace, entrepreneurship is America's unmatched advantage. It is an infinitely renewable resource, one that economist William Baumol has called the ‘indispensable component’ of growth and prosperity. We must respect and teach it in our schools. We must make sure our tax and regulatory policies don't create barriers to it. Most of all, we must recognize it as essential to America's continued economic and political leadership in the world.”newsweek

How Important are small business to the U.S economy?Many may not believe it, but small businesses are very important

to the United States economy. The government classifies any business with under five hundred employees as being small. Small firms in the U.S. over the past decade have accounted for 60 to 80 percent of net new jobs Small businesses account for 99.7% of all employment firms. These small businesses keep injecting jobs into the economy and are responsible for 45% of total U.S. private sector payroll. Last year there were approximately 25.8 million small businesses in the United States.24 Thus, small business can almost be classified as the backbone of American economy.

Where should Entrepreneurs go to start their businesses?

According to Entrepreneur Magazine, there are several cities in the U.S. that offer more opportunity than others when it comes to starting a business. Below is the “Top Ten” list of Hot Cities for Entrepreneurs in 2006.

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Mind-Blocks and Getting Over Them

RANK CITY1 Phoenix-Mesa, AZ.2 Charlotte-Gastonia-Rock hill, NC SC3 Raleigh-Durham-Chapel hill, NC4 Las Vegas, NV-AZ5 Austin-San Marcos, TX6 Washington-Baltimore, DC-MD-VA-WV7 Memphis, TN-AR-MS8 Nashville, TN9 Norfolk-Virginia Beach-Newport News, VA-NC10 San Antonio, TX

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Mind-BlocksWhen an individual thinks of starting his or her own company, there

are several mind blocks that discourage them to think in that direction. Depending on personalities, people can have many different excuses and be comfortable where they are currently in their lives. Questions and thoughts that come to mind when presented with the option of starting a company may include:

“Why should I start my own company in the first place?” “I have no idea what products and services to offer!” “I do not have enough capital” “What if my venture fails?” “I don’t have enough technical skills to start my own firm.”

Doug Bartlett and EntrepreneurshipThus, in most cases we find that many people do not even want

to think in an entrepreneurial direction in spite of having all the talent and all the resources available to them. In order to provide a relevant example, a short video clip can be viewed on Ernst & Young’s website showcasing an interview of Doug Bartlett. Bartlett was the Ernst & Young “Entrepreneur of the Year” and was given the award for turning a simple idea of a children’s cart used in supermarkets into a big venture.11 For more details, see www.ey.com.

Looking at the video, it is evident that potential entrepreneurs can start a big venture after observing some of the small problems that people of the world are facing. In Bartlett’s case, he noticed children kicking and screaming while their parents shopped in supermarkets. He recognized this as a world-wide phenomena and he wanted to do something big about it. In order to do so, he opened a successful venture called Cabco Group Ltd. He discusses some of the elements necessary in being an Entrepreneur and mentions that both “determination” and “thinking big” are the top requirements success. In fact, Doug asserts that it is very dangerous not to think big while one is trying to establish him or herself as an entrepreneur.11

There are two main ideas to ponder while viewing the video clip:

1. To consider the thoughts (or mind-blocks) that come to mind if one puts themselves in Doug’s shoes or in their own situation. Writing them down on paper can help obtain an understanding of entrepreneurship as the paper progresses.

2. To give the reader a belief in oneself that it does not take an “Einstein” to think of an idea and get a company

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started. As you will see, some very successful entrepreneurs do not even have a college education.

By observing simple problems in the daily lives of the public (such as crying children in a supermarket), one can obtain a starting point or inspiration in starting a business.

Formulating an Idea

As we continued our research on the most common mind-blocks people face, it seemed as if they do not believe that they have a business idea at all. But the fact is, there is never a shortage of human needs and problems! Therefore, this world is full of ideas that entrepreneurs can capitalize on and start an enterprise.

An article called “Coolest Little Startups” found on Inc. Magazine’s website, several successful start ups are showcased that are based upon ideas that the common person may think are very trivial:

The company CollegeBoxes primarily provides renting and shipping services to college students with a product line including basic household items such as refrigerators. The entrepreneurs of CollegeBoxes smartly target unusual market niches like college campuses, which may not be very popular among the more widely known rental companies.

TerraCycle Inc., another successful startup, makes money out of recycling trash. This company is revolutionary in the sense that it not only recycles the waste but also uses it to make food. The “waste food” serves as nutrition to organic plants. This is an extremely revolutionary solution to environment control against waste caused by soda bottles and such.

Silent Technology Inc. is run by a couple who noticed that it would be a great help to kids taking the SAT exam if they provided them with an instrument that calculates the time taken to answer each question in the exam.

Digium, a world-class tech support company, came into existence by deriving an idea from its own need of phone solutions for its own company.

CIK Enterprises is a marketing firm who focuses on marketing exclusive to the rental company market.40

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All of the above examples simply reiterate the point that that it did not take an “Einstein” to come up with an idea and get a company started. In actuality, we need to keep our eyes and ears open towards the needs and problems of the world. Furthermore, once we have some belief that a particular idea can make a global impact, we should start working in that direction.

Three Successful Entrepreneurs

This paper will explore the lives of three successful entrepreneurs in the world today with an attempt to discover commonalities between the three and what it really takes to start and succeed at business. The three entrepreneurs are:

1. Richard Branson of Virgin Group2. Narayan Murthy of Infosys3. Ingvar Kamprad of IKEA

These three men have all excelled at business in several ways. Branson and Murthy are both on the list of “Most Admired CEOs”38 and IKEA leads the list of European companies that have the greatest impact on consumers’ lives with Virgin coming in at a close second.8

1. Richard Branson: “Virgin Group”

Richard Branson is best known for being the founder of the conglomerate Virgin Group. However, there is more to this man than meets the eye. A long story is to be told about this fascinating individual. If anyone exemplifies some of the admirable qualities of entrepreneurship, it is Richard Branson.

BackgroundBranson was born in 1950 in Shamley Green in Surrey, England.

He was educated at two schools: Scaitliffe School in his younger years and Stowe School when he was older.22 Family was always important to Branson. He mentions in his book that they would “kill” for each other and still would to this day. “Ricky” was always one of the popular children because he excelled at sports and was even the captain of the cricket and football teams. Taking a leadership position never seemed to be a problem for him and he loved the spotlight. However, Branson suffered from dyslexia, which tended to get in the way of his academics.3 Richard always had a generally curious and witty spirit that would oftentimes get him into trouble, but for the most part was a good quality to have. By the time Branson was 15 years old, he had already started two failed business ventures: selling Christmas trees and raising budgerigars (Americans call these

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creatures “parakeets”).22 Richard quit school at the age of 16 and moved to London. There, he set up Student Magazine with some friends which ran successfully for quite a while. A year later, Branson started a charity called The Student Advisory Centre to help young people.20

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ProfileToday, Richard Branson has a net worth of a whopping $5

billion. He is also viewed by most as the No. 1 Admired Businessman in Britain and is voted second choice by most youth for Prime Minister (after the current PM, Tony Blair). In 1999, Branson was given the honor of “knighthood” by the Queen for his contributions to entrepreneurship.22 He currently resides near London and is married with two children.20

viewed November 4, 2006

Company InformationBranson began buying “cut-out” records from a discounter and

selling them to some of the higher-priced retail shops on London’s high streets. He had no store of his own and operated solely out of the trunk of his car. In 1970, Branson got together with some old friends and began to operate a mail-order business under the name “Virgin.” He capitalized on selling records at lower prices than all of his competitors.22 Finally, while scouting out locations for a potential shop on London’s famous Oxford Street, Branson found an unoccupied lot. He decided to run his business from this location for free until it was rented out and his frugality paid off. After collecting some profits, Branson hoped to purchase a piece of land on which to build a recording studio. Unfortunately, he did not have all the money he needed, but an aunt who had a lot of faith in Richard loaned him the extra money (about £2,500) for a gorgeous castle right outside of London to build Virgin Recording Studios in. 3

Richard Branson allowed Virgin to explode after the beginnings. He started new ventures every second and incorporated almost every industry conceivable into his company. For example, Richard launched his pride and joy, Virgin Atlantic Airways, in 1984. In the next 20 years, he started Virgin Publishing, sold his record label, entered the vodka and cola market, began offering financial services, opened Virgin

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Virgin Group: “Through the Years”

1970: Start of virgin mail-order 1971: 1st Virgin record shop opens 1973: Record Label launches 1984: Virgin Atlantic Airways is

born 1991: Virgin Publishing is formed 1992: Virgin Records is sold to

Thorn EMI 1994: Virgin Vodka & Cola launch 1995: Virgin Direct Personal

Financial Services opens 1996: Virgin Trains launches 1999: Virgin Mobile launches

Trains, and released Virgin Mobile. These are just a handful of the many things Virgin has done throughout the decades. More recently, Branson has launched a Virgin credit card and shared his ideas about having a shuttle take travelers into space for leisure.26

Today, the Virgin brand is ranked second among brands that have the greatest impact on consumers’ lives (according to a poll of thousands). Virgin Group includes more than 350 companies worldwide and reaps over $8 million in sales annually.8 It is involved in almost every industry imaginable including planes, trains, finance, soft drinks, music, mobile phones, holidays, cars, wine, publishing, and even bridal wear. The company hosts a minimum of 25,000 employees, but the number is difficult to determine considering that it has so many small components.32 Virgin Group is based in Europe, but does approximately 10% of its business in the US. Branson says it operated on what he like to call “branded venture capital” because most of the investment comes from smaller companies or individuals. He doesn’t plan on expanding the business scope in the future, but is always looking to improve processes.23

“The next phase of growth for the Virgin Brand will be starting businesses in new countries and markets, rather than expanding the range of things that we do… That gives us lots of opportunities to create a truly global presence, and to do some good, too.”-Richard Branson23

Elements of Success There are certain factors that experts and Branson believe to be factors in his success. These principles have all allowed Richard Branson and his Virgin empire to flourish the way it has.

Constantly looking for opportunities: Virgin companies are always attempting to implement ideas that are more innovative than the last. They seek to offer products that exceed all of their predecessors in price and service. 32 Branson believes his fearlessness has given Virgin a reputation for success.23

Base decisions on hard research and analysis: Branson stresses that although they make so many business decisions on a regular basis, they are all made after extensive market research and industry analysis. No single venture is entered into blindly

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and the rewards are always measured out in relation to potential risks.32

Networking: This may be the best tool for expanding a business. Richard exclaims that treating his friends, contacts, and partners with the utmost respect has gotten him a long way.

Branding: Branson says,

“If you get your face and your name out there enough, people will start to recognize you. Many people know the Virgin brand better than the names of the individual companies within the group.”-Richard Branson virgin richardreplies

This is the main reason he creates marketing hype by implementing extremely provocative campaigns—and it has worked to give the Virgin name immense recognition power.

Diversifying the company: Since Virgin sticks its hands into so many industries across the board, it has a good chance of surviving if the economy dips. Virgin richardreplies For example, after the events of 9/11, airline business suffered. However, the other ventures that Virgin stood for kept the company afloat.

Empowering talent: Virgin promotes almost entirely from within, so Branson takes this element seriously. He gives his current employees seniority over outsiders and values their ideas and experience at Virgin in working with new ventures. This is why he tends to put his current employees on new projects. Virgin richard replies

Sense of community: Virgin Group entails hundreds of companies, but their relation is viewed as a family and not a hierarchy. Virgin The company philosophy is that all of Virgin is a community with a shared culture and value system. Virgin whatwereabout

Management style: Virgin Group and Branson himself pride themselves on the way they do business. More specifically, everyone in the company values the management style that it is based on. Virgin companies are all run individually without a big board to make decisions and guidelines for them. Virgin whatwereabout Branson thinks that this helps keep his companies more focused and the decision-making relevant to for

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each business. Virgin richardreplies He empowers individuals rather than creating multiple layers of management and high bureaucracy. Virgin whatwereabout

Character TraitsAfter a doing a thorough study of this entrepreneur, it is very

difficult to provide a list of traits that encapsulate Richard Branson. He is an amazing individual that has succeeded on so many levels due to some of these personality characteristics:

Daring/Risk-taker: First and foremost, Branson is undoubtedly a risk-taker in both business and his personal endeavors. He values the risk factor in business and truly believes he would not be where he is today without it. Virgin Richard replies

“It is impossible to run a business without taking risks… I have enjoyed all the challenges we have taken at Virgin, so because I’m having fun at what I’m doing what I do, the risk factor takes second place.” Virgin askrichard-Richard Branson

He goes on to explain that Virgin is so big that it possesses the leverage to invest in new, risky ideas without being greatly effected. Any investment in innovative ideas seems minimal compared to Virgin’s buying power as a whole.

Adventurous: Most people know Branson because of his numerous record-breaking attempts involving circumnavigating the globe in a hot-air balloon and crossing the Atlantic Ocean by boat in record time. Virgin whosrichard Branson has a truly adventurous spirit that is reflected in his business practices as well. It has helped Virgin evolve from a small mail-order business to the huge conglomerate that it is today.

“The conventional wisdom is you should specialize in what you know and never stray from that, but no other brand has become a way-of-life brand the way Virgin has… It was me continually being interested in learning new things.”-Richard Branson inc.com 26 most fascinating

Selfless: Another trait that the common individual does not know about Richard Branson is that he is extremely selfless. He uses his power to do good in the world because he can and he values

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all of his family--at home and in the workplace. For example, in 1992, he distributed the settlement from a lawsuit against British Airways to all of his Virgin Atlantic employees in what was called the “BA Bonus” and he also currently donates a good percentage of his profit to researching environmentally friendly fuels along with other causes. In 2006, he pledged to invest $3 billion in the next 10 years to help fight global warming. wiki In addition, Branson is a donor and trustee for charities including The Healthcare Foundation which campaigns against the promotion of tobacco use. Askmen

Green: Richard Branson can be described as “green” because he devotes a lot of time and money to various causes that benefit the environment. It is important to him that he uses some of his good fortune to contribute to the world in this way. As already mentioned, he has taken initiative in investigating environmentally healthy fuels and ways to fight the progress of global warming.

“Transformational Leader”: Branson has been quoted by many as being a “Transformational Leader” due to his success of using a non-traditional management style to run his company. He has effectively found a way to give his individual companies the decision-making power instead of having them adhere to generic company standards on a global scale set by upper management. Wiki This is an extremely difficult element to achieve, but Branson’s value-based hiring and promotion methods aid him in choosing the right people for each business.

2. Narayan Murthy: Infosys Technologies

Narayan Murthy, one of the founders of Infosys Technologies, is considered a source of inspiration in and out of the Indian IT industry. He is passionate about human values and he believes this made him and his company the huge global technology firm that it is today.

BackgroundMurthy was born on August 20, 1946 in a small town called

Mysore in Karnataka, India. He received his Masters Degree from IIT, Kanpur, one of the premier technology institutes in the country. Narayan worked for accompany called Patni Computers for years as a software engineer, but did not truly enjoy it. He soon realized that he was meant to be an entrepreneur and started investigating options to open a business of his own. Infosys website

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Company InformationMurthy began discussing the possibility of designing a

company with his colleagues when he got the idea to start a business of his own. He borrowed 10,000 Rupees ($250) from his wife which acted as seed money (starting capital) for what he called Infosys Technologies. He left Patni Computers and took with him a project he was working to apply it to Infosys’ business. Murthy, along with six of his co-workers from Patni, had started the company. cite

Currently Infosys Technologies has market capitalization worth $20 billion with a revenue of $2.2 Billion annually. Even in the current corporate environment, Narayan considers the value system as Infosys’ source of strategic strength. India presents a huge English-speaking population of youth with sharp technical knowledge and Infosys has the capability to harness these resources very well. Last year, Infosys hired only 2% of the 200,000 applications for its technical positions which gives Infosys Technologies a talented selection and an edge over its global rivals. The quality of the Infosys’ technical workforce is superior. Infosys Technologies is one of the three top Companies in India to work for. Wiki and infosys website

Through the YearsAn interview given by Narayan Murthy himself outlines a lot of

information about the progress of the company over time. He said that when himself and six of his friends began to think about what their motto should be their, they had a large amount of difficulty. However, all of them were sure of one thing--their value system. They wanted to serve clients across the world in the best possible way without concentrating much on the profit. This leaves it as no surprise that Infosys had to wait ten years before making any profit at all. Businessweek Contrary to common assumption, those ten years were not in vain. During that time, Murthy was attempting to learn how to compete globally. Most Indian companies did not have the proper information technology services to take care of their business, so he had look outside their country for projects. Due to this essential practice, Infosys was forced to learn how to compete globally right from the start. Furthermore, when the US government made changes in their telecom policies, Infosys Technologies was one of the biggest gainers in terms of information technology projects. Shortly after came Y2K and the company continued to grow. Now, Infosys is considered among the top three brand names for IT service providers in the entire world. iipi

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Elements of SuccessIn order to evolve as a global leader, companies like Infosys

Technologies must define the key principles of their success. In the highly competitive business of fast-paced, changing technologies, Infosys’ success can be attributed to the following five elements:

Openness to learn: Technology leaders like Microsoft, IBM, GE, HP etc. had been in their respective field of innovation much before Infosys Technologies. In this industry, it is very important that they should form partnerships with these leaders and always be open to learn from them. One can easily find numerous joint projects going on at hundreds of Infosys campuses (such as an Infosys-Microsoft project). After all, the key strengths of the company lie within the young and experienced, knowledge-based professionals. They have constantly been learning what they know from their associations with other leaders in the field.

Meritocracy: Infosys Employee badges have a quote that reads, “Power by intellect, Driven by people.” With 5,800 employees globally, Infosys is able to create an environment where the best ideas are implemented for the right reasons via discussion among the employees and their clients.

Speed: Infosys Technologies is a service-based company and not a product making institution. All customers have Infosys people on their projects working on tight deadlines to compete projects. Every client desires to be a leader in their respective marketplace using the technical solutions provided to them by Infosys Technologies. Therefore, the learning, meritocracy and implementation processes must be done accurately and with great speed .

Imagination: Innovation is a key requirement for both Infosys Technologies business and the clients who put their faith and money in them. Imagination breaks the boundary of the current mode of thinking and gives striking results beyond imagination of the clients.

Excellence in execution: All the above elements of success have to be executed in the most efficient way because proper execution is what will drive business. iipi

Murthy’s stress on leadership and learningAs the founders of Infosys Technologies become old, they

continue to focus upon building the business and technology leaders of tomorrow. In an effort to grow in that direction, they have opened a

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global 355-acre training facility in Mysore, India with total costs of about $200 million. This includes a training facility that can house 9000 people and 7500 hostel rooms for the employees being trained at the facility. In brief, the center will provide the following: iipi

Infosys leadership Institute 98 member faculty, including 65 PhDs 160+ continuing education courses Individual training program for all employees iipi

3. Ingvar Kamprad: IKEA

BackgroundIngvar at an early age realized that he could make a profit by

buying matches in bulk and then dividing them up and selling them in smaller bundles to the neighboring farmers around his family farm in Sweden. After a while he expanded into other items including Christmas decorations, pens and pencils. When he turned 17, his father gave him some money. Ingvar used the money to open a store. In 1943, the first IKEA store was opened. When IKEA first opened it was very different than the IKEA of today. The store originally carried small items such as wallets and picture frames. Eventually, IKEA became the largest furniture store in the world. (Timeline )

Company InformationIngvar Kamprad became one of the richest men in the world after

starting his company, IKEA, from basically nothing. IKEA is now a worldwide furniture company that specializes in inexpensive modern furniture that is unassembled when purchased. IKEA is known for its large stores and cheap pricing. IKEA operates 226 stores and has 410 million shoppers a year. Ingvar’s mammoth company also printed 160 million copies of its 2006 catalog which, according to IKEA, is more then the number of bibles that were printed in the same year (business weekly).

Through the YearsIKEA did not magically become a billion dollar business

overnight. Ingvar was responsible for key choices in IKEA expansion. In 1947 Ingvar decided to drop all lines except for furniture from the business. This step was the beginning of IKEA changing into what it is today. Another key move in IKEA development happened in 1956 when Ingvar had to remove the legs from a table so he could load it into his car. At the moment flat packaging was developed. Flat packaging is when furniture is shipped in pieces and is assembled when it arrives. This allows packaging to be flat and gives consumers the freedom to order furniture pieces that prior to this they would have

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had to pick up in the store. Also flat packing allows IKEA to store more products in their stores. Since then, IKEA has shipped all of its furniture unassembled to its customers, which reduces shipping, manufacturing, and storage costs. (Timeline)

Personality CharacteristicsKamprad is very different then other billionaires. He is known for

being very frugal. He lives very modestly and has driven the same Volvo for over fifteen years. Ingvar is very elusive and rarely gives interviews. Ingvar takes the subway to work and requires others to reduce costs with in the company.(about.com) He has been called everything from “cheap” to a “penny pincher.”

It helps that frugality is as deeply ingrained in the corporate DNA as the obsession with design. Managers fly economy, even top brass. Steen Kanter, who left IKEA in 1994 and now heads his own retail consultancy in Philadelphia, Kanter International, recalls that while flying with Kamprad once, the boss handed him a coupon for a car rental he had ripped out from an in-flight magazine. (businessweekly).

That way of life has transferred over to his products. IKEA reduce their prices 2% to 3% a year. Buying in bulk, negotiating with suppliers, and most importantly eliminating waste is key to this annual decrease. businessweekly

Kamprad also believes in giving back to society. IKEA has long been a large contributor to charities around the world particularly UNICEF. Along with donating lots of money he believes that his products should some how contribute to the greater good. A new furniture innovation should provide something to society that was not there before. (businessweekly)

Kamprad has a lot of passion for his company. He believes in furniture having function as well as being inexpensive. He also believes in protecting his company. IKEA remains a privately held company. After an early battle with suppliers in Sweden Kamprad develop a complex business structure to protect IKEA from takeovers. The company is owned by a trust based out of the Netherlands and controlled by the family. Ingvar has also placed his three sons in key position to help control the company after his death. (theage.com)

Elements of Success Ingvar strives to reduce cost of his products and but he also

chose to make sure his products have the best design possible. “Good

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design, good function, and good quality, with low prices: Kamprad’s vision has been the driving force behind IKEA successes,” according to Scott Allen of about.com. (about.com)

Ingvar has developed a monster of a company that long left behind its days of selling matches door to door. Quality, design, and reduced costs are the most important values that Kamprad has engrained in his company culture. IKEA is a classic example of what the entrepreneurial spirit can do.

Comparison of Entepreneurs and Their Respective Companies

After researching the lives of these three great entrepreneurs of our era and their companies we found that there were several similarities amongst them. Following are the main ones:

1. Risk Takers: All the three entrepreneurs took risks not only while they started their Entrepreneurships but also they continue to take calculated risks based decisions almost everyday. To start with Branson left school just before his final exam and his belief and passion was so high that in publishing that he did not think about what career path he was going to have after his studies.

Similarly Narayan Murthy left his Patni Computers job to start his own company along with six of his friends/colleagues. Back in 1981 the Information Technology job in India was not very common. Not only that they did not have profit for six straight years. To make the matters worse, a few of the six friends quit the venture and took another job but Murthy did not quit and those who quit are still doing a job, whereas Murthy heads a Global empire.

2. Look for innovative ideas: Entrepreneurship is about innovation and innovative ideas. Looking at Branson’s Virgin growth path we see that he kept on trying new ventures one after the other. He started with publishing then moved to records. While selling records he used so many innovative ways starting out of the trunk of his car then mail order and finally through shop at Oxford Street in London. Now he has been successful in almost every type of venture. In fact he encourages everyone who visits his website to send an email if anyone has an innovative idea and he reads them personally. Recently during the launch of his Virgin Mobile in USA he humbled himself by using himself in the advertisement so that this would have greater impact.

Similarly Ingvar moved quickly to Stockholm to sell matches when he found that he could make better profit there. Then he did not limit himself to the matches but moved to selling fish, decorative items etc. Even now one of the key features of

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IKEA furniture is that they look so great that even low cost furniture looks expensive.

3. Based decisions on hard research and analysis: Infosys Technologies has opened their Global Training Center in Mysore which is primarily focused doing research and creating future leaders. Similarly Virgin empire puts a lot of emphasis on marketing research and analysis before starting a new venture. For example Virgin targeted the teen age phone users when they launched in the U.S. instead of following everyone else who was focusing on adult users

4. Sense of community within the company : One of the biggest investments in the company is their employee and once those investments have been made the greatest challenge is to keep those employees. All the three companies put a lot of efforts towards community development within the company. Infosys technologies created golf course and luxury hotels for their Employees which are adjacent to their campus. Richard Branson philosophy is that corporations should put their employees ahead of customers. This creates a strong sense of community within the organization.

5. Put great value on their stakeholders (people): Stakeholders includes customer, Employees and partners. A lot of corporations put great emphasis on only customers or partners or both. Because they argues that money comes from them and they forget the Employees. But the fact is unless employees are happy it is less likely that the customers are going to be happy. Infosys invests heavily in the growth of their employees and Branson a lot of times put their employees ahead of their customers. Similar is the case with Ikea. Needless to say during the times of economic slowdown these companies had the confidence of all the three quarters of the people and they are not only survivors but also the gainers during that time. In fact Infosys technologies recorder 38% growth in these years, highest by any means. They are transparent as far as information is concerned as far as possible to the people from all the quarters. They use media to their best and keep their stake holders informed.

6. Value based hiring : All the three companies believe in value based global hiring. An Employee can be mould to the requirement s to limited extent only and one wrong employee hired for a key position may result into failures of several key projects and millions of dollars in their training .So what resource

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is coming is very important. In order to address that they follow value based hiring. Last years Infosys hired just 2% of the people who applied but it is not just limited to that, they have several strategic partnerships with leading technical and management universities of global repute. And Infosys recruits interns from all over the world including that from United States.

7. Recognizing the importance of globalization: All the three companies operate beyond national boundaries. Right from the beginning Infosys Technologies aimed at their global clients simply because India had close to zero IT based customers So they had to compete globally right at the beginning which in turn created a foundation for truly global firm. Most recently Infosys Technologies has major emphasis on employment growth in the US. Similarly Virgin Empire has client base all over the world. Branson’s innovative ideas come from people from any part of the world .When Virgin Mobile was launched in the US around the same Virgin Airlines started their strategic partnerships with Indian domestic airlines.

Are You Cut Out to be an Entrepreneur?

Brian Tracy of Entrepreneur Magazine writes a very helpful article on commonalities between successful entrepreneurs in general. Here are some of the qualities that most entrepreneurs are suggested to possess and are essential for prospective business-starters: are you cut out

Optimistic and Future-Oriented: Entrepreneurs are quick to adapt to change, they are not afraid of taking risks for a potential profit, and are determined to succeed.

Competitive: They are capable of developing a unique and innovative image for their product and find ways to make their company look better than all other competitors.

Dealing with Legal Issues: Entrepreneurs must have the know-how or connections to acquiring licenses and meeting regulations to run their businesses. They must be quick to fix any complications that arise in the process.

Setting up an IT System: Entrepreneurs must be capable of finding a way to establish a central system for their business along with procedures for accounting and other essential processes.

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Financial Know-How: Any entrepreneur must have the common knowledge and business skills necessary to evaluate the finances in their company. Are you cut out

Best Practices for Startups

Tracy also outlines some essential thought-processes and practices for people considering opening a business:

What Opportunities Exist? Investigate what the market at hand needs and wants. Then come up with different options that could satisfy these needs and wants.

Where is the Best Opportunity? Create the most effective combination of your resources--people, money, and product--to create the best possible outcome.

Be creative! Find a less-expensive, better, more innovative way than your competitors to sell your product so that you can reduce operating costs.

Stay Determined: DO NOT let failure be an option—take risks and think outside of the box to keep your idea alive. are you cut out

Developing Habits for Business Success

It takes a certain kind of individual to be able to effectively run a business. There are seven habits outlined in Entrepreneur Magazine to help potential entrepreneurs acquire some valuable insight when considering opening a business:

1. Plan Ahead: Be very thorough in your planning and be able to answer any potential questions about your product. Decide who exactly you are going to market to and where you are going to do this from.

2. Get Organized Beforehand: Allocate all of your resources and decide where everything will go and what function they will have before you start doing business. A single flaw in organization can cost a lot in the long-run.

3. Find the Right People: Your people will be the main factor determining how successful the business will be—Do not jeopardize this.

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4. Learn How to Delegate: Part of being a manager is being able to delegate; Stop doing everything yourself and learn to manage the tasks at hand.

5. Inspect What You Expect: Make sure that your people are performing the way you want them to.

6. Set Standards for Results: Communicate the results you expect and do regular evaluations to see if these needs are being met.

7. Be Determined: Unleash your competitive instinct to face all obstacles in your way and stay motivated. Develop the habits

Ways to be a Better Entrepreneur

To dive even further into successful entrepreneurial practices, a Startup candidate can refer to an article in Entrepreneur Magazine highlighting “100 Ways to be a Better Entrepreneur.” The literature actually divides these best practices into main categories including:

Expanding Your Business: Get financing, consider new locations, and attempt to target new markets.

Continue Personal Development: Relax, do some networking, accept new ideas, and keep yourself current with new practices.

Save money: Take advantage of discounts, insurance, and promotions.

Be More Tech Savvy: Get all the recent information about the operating systems you’ll need to do business, use computers to stay organized, and save all of your information.

Get Your Marketing Together: Take time to make an effective marketing plan and choose a specific market.

Time Management: Make the best, most effective use of your time—all the time.

Take Control of Your Finances: Hire a CFO if you need to, spend profits wisely, have a close relationship with your banker, and learn about cash-flow.

Work on Negotiation Skills: Learn from mistakes and get tough to achieve what you want.

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Be Smart with Your Taxes: ..

Improve Professional Relationships: .

Be a Better Boss: Keep learning, acquire the trust of your employees, and show that you care.

Put Your Business in the Spotlight: Throw a party and contact the press for free publicity.

Get Organized:

Work on Your Sales Skills: Practice makes perfect.

Protect the Business: Get insurance, write up contracts, and hire the right people.

Work/Life Balance: Work hard and play harder.

Get Involved With Your Community: This is therapeutic, makes you feel good, and will give your company a good name.

Creating Loyal Customers: Keep offering premium services and they will come back to you.

Achieving Your Business Goals: Monitor performance on your old ones and keep creating new ones that are worth reaching. 100 ways

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