SMALL BUSINESS ENTREPRENEURSHIP ECONOMIC

ROCKET FUEL

WHY SMALL BUSINESS ?

• Financial Success
• Independence
• Flexibility
• Challenge
• Survival

SMALL BUSINESS IS BIG BUSINESS

 Small businesses play a vital role in the U.S. economy
 99.9 % of all businesses in the US have fewer than 500 employees
 Create new jobs: In total, around 50% of the nation’s private workforce
are employed by small businesses
 Fuel innovation: Create new technologies, new patents
 Re-vitalize inner cities

ENTREPRENEURIAL

“People who risk their time, money and other resources to start and manage
a business.”

 Aim to change the world through blockbuster goods or services

 Deliver the best ideas, changing the economic and social landscape BUT
always to earn a profit for themselves
 Entrepreneurial Mindset and Characteristics
 Entrepreneurial mind-set: Attitude to change the world through goods
or services
 Characteristics
 Vision and self-reliance
 Energy and confidence
 Tolerance of uncertainty and failure
REAL LIFE
 Are entrepreneurs always realistic?
 Are they always clear about the finances required?
 Remember, “Do what you love and the money will follow…”
 But also remember that you will have to work like a beast to accomplish
this goal!
 Do not underestimate the time, money, effort, discouragements, and
failures along the way…

LOCUS OF CONTROL
• Internal locus of control:
• Deep-seated sense that an individual is personally responsible for
what happens in his or her life
• Results in self-reliance
 • External locus of control
• Feeling buffeted by forces such as random luck and the actions of
others

FUNDING OPTIONS FOR SMALL BUSINESS

 Finding money is always a BIG challenge, starting points are:

 Personal resources:
Family or friends, personal credit cards
 Loans:
 Sources include commercial banks, U.S. Small Business
Administration (SBA), and peer-to-peer lending
 but not always easy to get and can have high interest rates

FINDING MONEY, THE CHALLENAGE

 Angel investors: individuals who invest in start-up companies with high
growth potential in exchange for a share of ownership
 Crowd funding: The process of funding ventures by raising money from a
large number of investors via the internet (such as Kickstarter)

VENTURE CAPITAL(VC)
 Venture capital firms (VCs) invest in start-up businesses with high
growth potential in exchange for a share of ownership
 VCs have funded many major companies in digital industries,
including Facebook, Twitter, Instagram, Uber, etc.
 VCs also play a major role in funding Fashion start-ups

OPPORTUNITIES AND THREATS

Opportunities
 Identifying a market niche*
 Personal customer service
 Lower overhead costs
 New opportunities fueled by new technologies and the Internet

THREAT
 High risk of failure…half fail in the first 5 years
 Lack of knowledge and experience
 Less funds
 High regulations
 Higher health insurance costs

*A market niche is a small segment of a market with fewer competitors

than the market as a whole – a desirable space for a small business