Who are entrepreneurs?
• create and grow enterprises.
• organize and manage a business undertaking, assuming the risk for the sake of the profit.
• develop innovations, create jobs, and contribute to a more vibrant national and global economy.
Why are entrepreneurs important?
Economist David Birch estimates that on average, 7 percent to 8 percent of jobs are lost in a local economy each year due to the natural cycling of firms. Typically, the new jobs that replace those lost are coming from expansion of existing small businesses (55 percent), from new business start-ups (44 percent), and from business relocations (1 percent). Research also strongly correlates the level of entrepreneurship to overall economic growth.
The Small Business Administration’s data indicate that small businesses:
Represent 99.7% of all employer firms.
Employ 50% of all private-sector employees.
Pay more than 45% of the total U.S. private payroll.
Have generated 60-80% of net new jobs annually over the last decade.
Create more than 50% of non-farm private gross domestic product (GDP).
Supplied more than 23% of the total value of federal prime contracts in FY 2005.
Produce 13-14 times more patents per employee than large patenting firms. These patents are twice as likely as large firm patents to be among the 1 percent most cited.
Are employers of 41% of high-tech workers (such as scientists, engineers, and computer workers).
Are 53% home-based and 3% franchises.
Made up 97% of all identified exporters and produced 28.6% of the known export value in FY 2004.
Do you have what it takes to be a successful entrepreneur?
Successful entrepreneurs come from every type of background. While the failure risk is real, two-thirds of new small employers survive at least two years, according to the Small Business Administration. Many “self-tests” are available to guide potential entrepreneurs through an assessment of their experiences and skills as compared to those of the “typical” successful entrepreneur. These self-tests are only tools to provoke thought, not valid predictive instruments. If there are skills or traits in which you assess yourself to be weak, then these are also great opportunities for personal development, not absolute barriers.
Here’s a fun and easy self-test adapted from one developed by USA Today
’s Jim Hopkins:
1. Did you franchise your lemonade stand when you were 8 years old (in other words, have you tried other ventures, perhaps even at an early age)?
2. Do you have “entrepreneurial genes” (did you grow up around a business such as a farm or store that was operated by parents, family, or close mentors)?
3. Are your spouse, children, and family network loyal and supportive?
4. Is wealth a better reason to start a business than riches (is it about something more than just money)?
5. Do you LOVE your business idea and the day-to-day work you’d be doing?
6. Ever doubled down in Vegas (are you a risk taker)?
7. Do you know when to replace passion with pragmatism?
8. Are you honest, trustworthy, and committed to avoiding evil?
9. Do you know a spreadsheet from a bed sheet (do you have an understanding of finances and technology)?
10. Do you have the tenacity of a pit bull (once you start something, do you tend to keep at it until you reach your goal)?
Count your number of “yes” answers.
1 – 3: You may not want to jump into anything without a careful consideration of whether this is for you.
4 – 7: You may want to proceed further with the planning process.
8 – 10: Watch out, Donald Trump!
Sources: Kellogg Foundation; Webster's New World Dictionary; Kauffman Foundation; U.S. Bureau of the Census; Advocacy-funded research by Joel Popkin and Company (Research Summary #211); Federal Procurement Data System; Advocacy-funded research by CHI Research, Inc. (Research Summary #225); Bureau of Labor Statistics, Current Population Survey; U.S. Department of Commerce, International Trade Administration; USA Today, April 7, 2004, print edition