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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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Copyright 2008 Prentice Hall Publishing
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. .
Chapter 1: Entrepreneurship
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Copyright 2008 Prentice Hall Publishing
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
Chapter 1: Entrepreneurship
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Copyright 2008 Prentice Hall Publishing
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).
Chapter 1: Entrepreneurship
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Copyright 2008 Prentice Hall Publishing
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
Chapter 1: Entrepreneurship
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Copyright 2008 Prentice Hall Publishing
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.
Copyright 2008 Prentice Hall Publishing
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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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.
Copyright 2008 Prentice Hall Publishing
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
Lower quality of life until the business gets establishedLower quality of life until the business gets established
Chapter 1: Entrepreneurship
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High levels of stressHigh levels of stress Complete responsibilityComplete responsibility DiscouragementDiscouragement
Copyright 2008 Prentice Hall Publishing
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
Chapter 1: Entrepreneurship
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Copyright 2008 Prentice Hall Publishing
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
Copyright 2008 Prentice Hall Publishing
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.
Copyright 2008 Prentice Hall Publishing
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
Copyright 2008 Prentice Hall Publishing
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 ???
Copyright 2008 Prentice Hall Publishing
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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Copyright 2008 Prentice Hall Publishing
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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Copyright 2008 Prentice Hall Publishing
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 ???
Copyright 2008 Prentice Hall Publishing
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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