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Small Business Management, 11th
edition
Longenecker, Moore,
and Petty
© 2000
South-Western College
Publishing

Chapter 1
Entrepreneurship in the
New Millennium
Small Business Statistics
Approx. 25 million S.B.’s in the U.S.
Represent 99%(+) of all employers
Provide 67% of workers w/first job
Approx. 75% of new jobs
46% of all sales in the U.S.
Represent 96% of all exporters of goods
Provide55% of innovations
Small Business


• “No” official certification process. SBA
uses Standard Industrial Classification
(SIC) codes in determining size standards.
• However, it is usually a firm with fewer
than 500 employees.
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Small Business Management, 11th
edition
Longenecker, Moore,
and Petty
© 2000
South-Western College
Publishing

Criteria for Defining
Smallness in Business
Number of employees
Value of assets
Volume of deposits
Insurance
in force
Sales
volume
Entrepreneur
• Traditional: a person who starts and/or
operates a business

• Broader Definition: includes owner-
managers; second generation family
owners; and those who buy out existing
firms
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Small Business Management, 11th
edition
Longenecker, Moore,
and Petty
© 2000
South-Western College
Publishing

Entrepreneurial Incentives
Rewards of Entrepreneurship
Profit
Freedom from
the limits of
standardized pay
for standardized
work
Independence
Freedom from
supervision and
rules of
bureaucratic
organizations
Satisfying Way
of Life
Freedom from
routine, boring,
and
unchallenging jobs
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Small Business Management, 11th
edition
Longenecker, Moore,
and Petty
© 2000
South-Western College
Publishing

Drawbacks of Entrepreneurship
• Hard Work
• Long Hours
• Stress
• Risk
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Small Business Management, 11th
edition
Longenecker, Moore,
and Petty
© 2000
South-Western College
Publishing

Entrepreneurial Characteristics
1. Need for achievement
2. Risk tolerance
3. Self-confidence
4. Enthusiasm
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Small Business Management, 11th
edition
Longenecker, Moore,
and Petty
© 2000
South-Western College
Publishing

Three Types of Entrepreneurs
1. Founders
2. General Managers
3. Franchisees
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Small Business Management, 11th
edition
Longenecker, Moore,
and Petty
© 2000
South-Western College
Publishing

Characteristics of Artisan and
Opportunistic Entrepreneurs
Opportunistic Entrepreneur
1. Broad education
2. Rational approach
3. Willing to delegate
4. Broad view of strategy
5. Diversified marketing
approach
6. Longer planning
horizon
7. Sophisticated
accounting and
financial control
Artisan Entrepreneur
1. Technical training
2. Paternalistic approach
3. Reluctance to delegate
4. Narrow view of strategy
5. Personal sales effort
6. Short planning horizon
7. Simple record keeping
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Small Business Management, 11th
edition
Longenecker, Moore,
and Petty
© 2000
South-Western College
Publishing

Entrepreneurial Refugees
• Foreign refugee
• Corporate refugee
• Parental refugee
• Feminist refugee
• Housewife refugee
• Society refugee
• Educational refugee
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Small Business Management, 11th
edition
Longenecker, Moore,
and Petty
© 2000
South-Western College
Publishing

Age Concerns in Starting a Business



Late Career Concerns
1. Fulfilling family responsibility
2. Attaining seniority in employment
3. Earning investment in a retirement
program

Age
20
30
40
50
Early Career Concerns
1. Getting an education
2. Gaining work experience
3. Acquiring financial resources
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Small Business Management, 11th
edition
Longenecker, Moore,
and Petty
© 2000
South-Western College
Publishing

Three Challenges to Small Businesses
1. Growth of superstores
2. Expansion of information technology
and the Internet
3. Emergence of a global economy