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Determining Entrepreneurial Potential
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Some Definitions of an Entrepreneur
someone who seeks to capitalize on new and
profitable endeavors or business usually with
considerable initiative and risk . . . Wikipedia
one who organizes, manages, and assumes the
risks of a business or enterprise . . .
Merriam-Webster Online an individual engaged in
the process of starting and growing one's own
business or idea . . . The Public Forum Institute
those who perceive and pursue opportunities
that enhance the regional and global economy . .
. LA Tech University Center for Entrepreneurship
and Information Technology (CEnIT)

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More Descriptions of Entrepreneurs
6 7 of U.S. population is in the process of
starting a business at any given time 53 of new
small businesses begin in the home with less than
10,000 entrepreneurial activity for men has
declined activity for women remained the
same immigrants outpace native-born
Americans older individuals (55-64) increasingly
engaged in new business starts

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Indicators of Entrepreneurial Aptitude
Persistence Desire for immediate
feedback Inquisitiveness Strong drive to
achieve High energy level Goal oriented
behavior Independent Demanding Self-confident Ca
lculated risk taker Creative Innovative Vision
Commitment Problem solving skills Tolerance for
ambiguity Strong integrity Highly
reliable Personal initiative Ability to
consolidate resources Competitive Change
agent Tolerance for failure Desire to work
hard Strong management Organizational skills Luck

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Common Reasons for Business Startup
Seize an opportunity (17) Personal
accomplishment (13) Dream to run own business
(9) Use experience or skills (9) Be own boss
(80 Economic necessity to make living (7) Had
previous experience (7) Supplement income from
other employment (5) Create job for self
(4) Frustrated in previous job (3) Make lots of
money (3) Other reasons (15)

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Lifestyles of Entrepreneurial Individuals
Risk and Insecurity Initiative and
Motivation Social and Networking Skills Decision
Making and Analysis Organization and
Planning Physical and Emotional Stamina Passion
and Commitment Discipline and Vision

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Considerations Prior to Business Startup
Personal Goals and Business Objectives Family
Support Credit History and Credit Score Amount
that You can Invest Credibility with Other
Sources of Funds Current Debt Loads

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Sobering Statistics
About 50 of small businesses fail/close within
the first five years Of the 50 closing, only
about one-third closed under circumstances that
owners considered unsuccessful Within a 10 year
period, about 64.2 of businesses fail/close, but
only 5.3 actually filed for bankruptcy during a
decade NFIB estimates that over the lifetime of
a business, 39 are profitable, 30 break even,
and 30 lose money, with 1 falling in the
"unable to determine" category

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Striving to Survive
More likely to close Relatively young
owners Services or retail trade Insufficient
start-up capital Being in an urban/suburban
area Greater chance of survival Starting with
some resources and size Having
employees Sufficient starting capital Educated
owner Previously owning another business Having
multiple owners Home-based at startup Being an
employer main factor leading to survival

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Reasons for Business Failure
Lack of experience Insufficient capital Poor
location Poor inventory management Over-investment
fixed assets Poor credit arrangements Personal
use of business funds Unexpected
growth Competition Low sales

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Characteristics of Successful Entrepreneurs
Like to compete Self-starter Determine risk
take risk, but not a gambler Independent/self
confident, yet know when to get help Able to do
many things at once Likes a challenge Is
creative, has dreams and goals Likes to work for
self and be in control Hardworking and willing to
stick with a project Not easily discouraged Good
health, lots of energy and handles stress
well Strong sense of self worth Strong desire to
achieve and attain financial success Positive
thinker, does not dwell on setbacks Focused on
success rather than chances of failure Often has
close friend or relative who owns a
business Recent immigrant to N America (within
two generations)

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Importance of Entrepreneurship

• about 50 of private sector employment
• youngest and smallest firms are the biggest job
  producers
• firms with fewer than 20 employees generate
  majority of net new jobs in the U.S
• fast-growth companies responsible for about
  two-thirds of new jobs created between 1993 and
  1996
• since 1980, Fortune 500 companies have lost five
  million jobs, while the United States as a whole
  has added 34 million new jobs

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Importance of Entrepreneurship

• American small business is the worlds third
  largest economy, trailing only the U.S. as a
  whole and Japan
• small businesses generate about half of nonfarm
  private gross domestic product
• Economic models show that firm births are
  positively correlated with innovation and
  regional growth (employment, wage and
  productivity)
• In 2004, the median net worth for self employed
  households was 335,600 compared to 67,200 for
  those that worked for others
• most large businesses were small, entrepreneurial
  firms at one time

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Importance of Entrepreneurship

• Small businesses developed significant number of
  this nations most important inventions and
  innovations
• Entrepreneurs responsible for 67 percent of
  inventions and 95 percent of radical innovations
  since World War II
• Small firms produce more highly cited patents
  than large firms
• Small patenting firms produce 13-14 times more
  patents per employee
• Small companies represent 65 of new companies in
  the list of most highly innovative companies in
  2002

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Entrepreneurial Evaluation
Self Evaluation http//www.goventure.net/site/netw
ork/tools/selfEvaluation/ SBA Business Readiness
Assessment Tool http//app1.sba.gov/sbat/index.cfm
?Tool4 Business Owners Toolkit Evaluating Your
Chance for Success http//www.toolkit.com/small_bu
siness_guide/sbg.aspx?nidP01_2000

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Resource Analysis

• Hobbies, interests, skills, talents
• Education, experience, training
• Equipment, material, supplies, land, building
• Money, assets, equity, investment
• Associations, networks, connections, friends,
  family
• Unique product, service
• Intellectual property, protection, barriers

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Research Exploration

• Suitable Ideas/Opportunities
• Magazines, business journals, newspaper,
  television, Internet
• Local, National, Global Demographics
• General characteristics, trends, growth
  patterns, future predictions
• Individuals, businesses, population segments,
  governments
• Industrial and Business Environment
• Trade/industry journals, hobby magazines,
  reference books, websites, associations
• ALL (Ask, Look Listen) for opinions,
  complaints, changes, ideas
• Similar cities/areas, large metros for trends,
  friends, neighbors, customers, employees

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Some General Research Sources
You Are Where You Live http//www.claritas.com/MyB
estSegments/Default.jsp?ID20 U.S. Census
Bureau http//www.census.gov/ American Fact
Finder, Economic Census, Statistical Abstract of
the United States U.S. Department of Labor
Bureau of Labor Statistics http//www.bls.gov/ Bu
siness Benchmarking Statistics and Financial
Ratios http//www.bizstats.com/ Federal
Governments Gateway to Information and Resources
for Business http//www.business.gov/ CIA The
World Factbook https//www.cia.gov/library/publica
tions/the-world-factbook/index.html

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Evaluate Alternatives

• Gauge feasibility
• Prioritize among multiple options
• Use objective measures
• Resist asking friends and family
• Seek unbiased, but informed opinions

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Evaluation Tools
Idea Wrestler http//www.goventure.net/site/networ
k/tools/ideaWrestler/ Business Owners Toolkit
Business Selection Checklist http//www.toolkit.co
m/tools/downloads/buslchek.rtf

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Consider Entry Strategies

• Start a New Business
• Buy an Existing Business
• Purchase a Franchise

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Assistance and Support for New Ventures

• Technology Business Development Center (TBDC)
• Kathy Wyatt, Director kwyatt_at_latech.edu
• Center for Entrepreneurship Information
  Technology (CEnIT)
• Jon Pratt, Director jpratt_at_latech.edu
• Association of Business, Engineering, Science
  Entrepreneurs
• Dr. Mark Barker and Mrs. Debbie Inman, Advisors
  abese_at_latech.edu
• LSU-S Small Business Development Center
• Cooper Cochran, Director ccochran_at_lsbdc.org
• LA SBDC State Office https//www.lsbdc.org

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Reports Studies on Entrepreneurship
Kauffman Index of Entrepreneurial Activity,
1996-2005 http//www.kauffman.org/items.cfm?itemID
704 National Dialogue on Entrepreneurship http/
/www.publicforuminstitute.org/nde/entre/index.htm
SBA Office of Advocacy http//www.sba.gov/advo/in
dex.html National Federation of Independent
Business http//www.nfib.com/page/home Kauffman
eVenturing http//www.eventuring.com/eShip/appman
ager/eVenturing/eVenturingDesktop

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LA Tech TBDC
Louisiana Tech University Technology Business
Development Center P.O. Box 3145, Ruston, LA
71272 Phone [phone] Fax (318)
257-4442 Email tbdc_at_latech.edu Website
http//enterprise.latech.edu/about_TBDC Contact
Kathy Wyatt, Director