ENTREPRENEURSHIPSteven C Seideman Extension Food Processing Specialist Cooperative Extension Service University of Arkansas.
Download ReportTranscript ENTREPRENEURSHIPSteven C Seideman Extension Food Processing Specialist Cooperative Extension Service University of Arkansas.
Slide 1
ENTREPRENEURSHIP
3117
Steven C Seideman
Extension Food Processing Specialist
Cooperative Extension Service
University of Arkansas
1
Slide 2
Entrepreneurship
• An Entrepreneur is a person who organizes,
operates and assumes the risks for business
ventures or more simply put, a person who owns
an enterprise.
• Entrepreneurship is one of the most important
engines that drives our country’s economy.
• Through entrepreneurship, new ideas are turned
into new business products, new ways are
discovered to provide services to people and
entirely new industries are created.
2
Slide 3
Entrepreneurship
• In recent years, the businesses of successful
entrepreneurs have not only contributed to
economic vitality, but have also created most of
the new jobs that employ the people of this
country.
• Drive down a city street sometime and look at all
the small businesses that exist in a community.
Most people are of the belief that big companies
employ the vast majority of Americans that work,
but the converse is true. Most Americans work for
smaller, locally or regionally owned companies.
3
Slide 4
The Importance of
Entrepreneurship
• In every State of the Union speech, the President
talks about encouraging entrepreneurship.
• The federal government and most states have
numerous organizations to help people start a
business.
• WHY ARE THEY SO INTERESTED IN
HELPING ENTREPRENEURS?
• The answer is plain and simple. Entrepreneurs
create jobs, and people that have jobs pay taxes.
Taxes are what keep our government providing
goods and services such as roads, schools, police,
fire protection, etc.
4
Slide 5
Entrepreneurial Personality
• Everyone encounters problems every day.
Problems tend to frustrate, confuse and annoy
most people, but to an entrepreneur, they view
problems as opportunities and start to look for
solutions. They are truly problem solvers.
• There are always wants and desires in our
advancing society, and resourceful entrepreneurs
will seek solutions for them.
• Entrepreneurs recognize opportunities and take
action.
5
Slide 6
Entrepreneurial Personality
• Not everyone is meant to be an
entrepreneur. It is hard work and takes
courage, but the rewards are usually
commensurate with the effort.
• There are some signs of having an
entrepreneurial spirit that have proven to be
somewhat accurate over time.
6
Slide 7
Signs That You Are An
Entrepreneur
• 1) You come from a line of people (e.g.your
parents) who didn’t like working for someone
else.
• 2) You’re a lousy employee – a lot of people that
start new businesses have been fired from or quit
several jobs.
• 3) You have worked for someone else for years
and have gone about as far up the ladder as you
can go.
• 4) You are bored in most jobs and want to have
some independence and action to your life and
work.
7
Slide 8
WHAT IS NEEDED TO
BECOME AN
ENTREPRENEUR?
• A passion for the business- you will go through
some tough times, and if you are looking for an
easy job, this isn’t for you.
• Some starting capital or money- It takes some
money to get started. Ballpark estimate of at least
$10,000.
• Family support- You are going to have to “give it
your all” to get a new business off the ground, and
without an understanding family, you probably
won’t make it.
8
Slide 9
•
WHAT IS NEEDED TO
BECOME AN
ENTREPRENEUR?
An idea – You have to have some idea of what you
are going to make, sell or provide.
• Some skill sets- You will have to have or develop
some skill sets such as how to sell your product or
service, accounting, hiring and firing – all those
skill sets we call “management. You don’t have to
know them all since you can hire some people to
manage those areas that you are not skilled in.
• Assistance- There are many organizations that
provide expertise or assistance to entrepreneurs.
You have to know where to find them.
9
Slide 10
WHAT IS NEEDED TO
BECOME AN
ENTREPRENEUR?
• Personality traits such as ;
Risk taker
Adventurer
Courageous
Confident
Competitive
Visionary
High energy level
10
Slide 11
Entrepreneurship
• By now, you should know two things;
1)The importance of entrepreneurship to the
economic growth of the United States.
AND
2) Whether you have the personality to
become an entrepreneur.
11
Slide 12
Some of the Big Name
Entrepreneurs
• Entrepreneur
Wally Amos
Mary Kay Ash
Henry Block
Debra Fields
Henry Ford
Bill Gates
Leon Gorman
Ray Kroc
J Willard Marriott
Don Tyson
Sam Walton
• Business they developed
Famous Amos Chocolate Cookies
Mary Kay Cosmetics
H&R Block
Mrs Field Inc
Ford Motor Co
Microsoft Corp
L.L. Bean
McDonalds Corp
Marriott Corp
Tyson’s
Walmart; Sam’s
12
Slide 13
PHILOSOPHY OF
ENTREPRENEURS
• All the previous named ultra-entrepreneurs were
not necessarily brilliant, but they did have a
passion for the business. They found ways of
delivering goods and/or services to people who
wanted those services and were willing to pay for
them.
• The next time you go into a food store, look at all
the new products on the shelves. One hundred
years ago, everything was sold as a commodity.
Now, the word value-added is hot, whereby
entrepreneurs have found ways to make products
13
more convenient to the consumer.
Slide 14
WHERE DO IDEAS COME
FROM?
• Ideas are a dime a dozen. Everyone has ideas on
how to do something cheaper, easier, faster, etc.
than existing companies. The difference is that
entrepreneurs make their ideas become realities.
• For example, take Famous Amos Cookies. Anyone
can make cookies but he took his cookies to the
marketplace where people who don’t have time to
bake can buy them.
14
Slide 15
Where do Ideas Come From?
• Mary Kay Ash simply took regular
cosmetics, promoted parties and built a
loyal sales staff.
• Leon Gorman of L.L. Bean fame took
upscale outdoor clothing and built an
excellent mail-order business.
15
Slide 16
WHERE DO IDEAS COME
FROM?
• By now, you are thinking these were not
technological break-through ideas but simply
doing a concept and doing it well.
• Therefore, the concept or idea you come up with
doesn’t have to be the big, break-through thing the
world has been waiting for.
• We at the Institute of Food Science & Engineering
would be happy to help “brainstorm” your idea
with you, but you have to pick an area that you
have a passion for.
16
Slide 17
UNDERSTAND THE
BUSINESS
• Many would-be food entrepreneurs call me about
a great recipe they have for a product and are
eager to build a facility to start manufacturing it.
This would be a mistake.
• You can get your product co-packed by someone
else who already makes similar products sparing
you the expense of building a facility costing a
minimum of $100,000.
• The emphasis for an entrepreneur should be in the
areas of marketing and selling the product. It is the
hardest thing to do but also the most profitable. 17
Slide 18
UNDERSTAND THE
BUSINESS
• Let me reemphasize this one point. You can
get your food product co-packed relatively
cheap. Your time and energy is best spent on
marketing and selling your product. You
may have a great product, but it will not sell
itself. Somehow, you have to let people
know it is available and where to get it. We
will discuss this in more detail in the
business plan.
18
Slide 19
WORRIED ABOUT THE BIG
GUYS?
• Some entrepreneurs worry that they cannot
compete with the big manufacturers.
• Understand that businesses, over time, will evolve.
The big food companies of 50 years ago have
gone by the wayside and next businesses have
taken over their territory.
• Remember the big food retailers of the 1950s and
1960s- A&P and Kroger? They are not nearly as
large as they once were due to other food retailers
like Albertsons, Ralphs, Wegmans that were
entrepreneurs in the 1950s and 1960s.
19
Slide 20
THE BUSINESS PLAN
20
Slide 21
The Business Plan
• If you plan to become an entrepreneur in the food
business, we suggest that you first work on a
business plan.
• We will now go through a business plan. We
suggest that you struggle through it and try to do
as much on it as possible. Spend some time and
think hard about it. It is the first step on a long
adventure that you could truly enjoy. Force
yourself to write this plan up as best you can. You
might be surprised how much you can learn while
doing it.
21
Slide 22
The Business Plan
• The business plan organizes your business idea on
paper. It helps other people and you to understand
the resources and steps needed to create your
business and its chances for success once it is
started.
• Why have a business plan?
1)The plan will be helpful in securing needed startup
funding.
2)The plan will help you to think through all of the
aspects of the business and develop confidence
that your idea is a good one.
3) The plan will serve as a guide once the business is
22
up and operating.
Slide 23
The Business Plan
• If done correctly, the task of developing a business
plan should be fun and enjoyable.
• It may not appear to be easy because it will require
a great deal of research, thinking and writing but
when it is done, we will think of it as a
masterpiece.
• You will probably end up talking to a lot of people
and going to a lot of places, such as libraries,
government sources and professional associations.
• There are 9 parts to a business plan. We will now
go through each of them.
23
Slide 24
Part 1; The Cover Page
• Write down the company name, address,
phone number, your name and any other
contact information that you have.
• Even if you don’t have all of information,
write done what you know. You can always
come back and fill in later.
24
Slide 25
Part 2; Table of Contents
• List the sections of the business plan to
follow.
• Just label the top of the page for now. You
can come back and fill in the remainder a
little later on.
25
Slide 26
Part 3; Executive Summary
• This is a mini-version of your plan, presenting in
summarized form all of the key information about
the business so that the reader can get a quick
overview of the business plan.
• For now, just label the top of the page. When you
get all the other sections filled in, this will just be
a summary of the rest of the plan.
26
Slide 27
Part 4; Description of the Nature
of Your Business
• Describe the business concept, the product
or service to be sold, the competitive
advantages of the business and anything
more you want to describe your business.
27
Slide 28
Part 5; Description of the
Business Personnel
• Write out who will be running the business.
• Describe all the different functions
(accounting, manufacturing, sales, etc.) and
tasks that will need to be accomplished to
run the business.
• Assign people to the tasks and functions and
describe their previous experience and
skills.
28
Slide 29
Part 6; Description of the Market
and Competition
• Present the results of your market research
comparing your product to other ones in the
marketplace..
• Identify the target market for what your business
will produce (Retail, Food Service, Brokers,
convenience stores, etc.)
• Describe other businesses that will be competing
for customers in the same target market.
29
Slide 30
Part 7: Description of Your
Marketing Plan
• Highlight the most important benefits of the
product or service that the company will produce
(this is the focus of your marketing plan).
• Identify the types of advertising and promotional
appeals and tools that will be used.
• Indicate how advertising and promotion will make
the customer aware of the product or service, help
customers understand how the product or service
differs from that of the competitors and convince
customers to buy your product or service.
30
Slide 31
Part 8; Basic Financial
Information for the Business
• Predict expenses for starting the company,
pricing and break-even analysis.
• Present a cash flow forecast.
• Forecast revenues, expenses and profits.
31
Slide 32
Part 9; Additional Supporting
Information
• Include documents or illustrations that you
think will help the reader understand and
have more confidence in the information
and forecasts of your plans and in the
chances of your business’ success.
32
Slide 33
The Business Plan
• That’s it. Not too complicated.
• The hard part is to get started and take some time
to think it through.
• Take each part one at a time. Write down what you
can and then seek to acquire more knowledge.
• There are lots of places to go for help such as the
Internet, talking to people in the business, talking
to people in state government agencies that have
resource libraries and have good consulting
services, some of which are free.
33
Slide 34
Arkansas Assistance Sources
• The Institute of Food Science and Engineering at
the University of Arkansas (Fayetteville) can help
you with the technical aspects of idea and product
development. Contact Steve Seideman at 479/5754221 or [email protected].
• Other modules are also available in this series to
assist entrepreneurs in areas such as marketing,
Quality Control, etc.
• The Arkansas Small Business Development
Center (501/324-9043; www.asbdc.ualr.edu) has
several locations throughout the state that can help
with business plans, markets, resource libraries,
grants and other forms of financial assistance and
34
consulting.
Slide 35
35
Slide 36
Online Help
*Entrepreneurship Education Training and
Resources; www.itbn.com/edge
*Ewing Marion Kauffman Foundation
www.kauffman.org
*CEL Clearinghouse for Entrepreneurship
Education; www.celcee.edu
*Edward Lowe Foundation Small Business
www.lowe.org
*Small Business Administration
www.sbaonline.gov
36
Slide 37
CONCLUSIONS
• This module should have emphasized the
personality traits of entrepreneurs and the
importance of entrepreneurship to our economy.
• In addition, brief outline of a business plan was
included to show you the highlights in any
business plan.
• There is plenty of expert, free advice available to
help get you started.
37
Slide 38
38
ENTREPRENEURSHIP
3117
Steven C Seideman
Extension Food Processing Specialist
Cooperative Extension Service
University of Arkansas
1
Slide 2
Entrepreneurship
• An Entrepreneur is a person who organizes,
operates and assumes the risks for business
ventures or more simply put, a person who owns
an enterprise.
• Entrepreneurship is one of the most important
engines that drives our country’s economy.
• Through entrepreneurship, new ideas are turned
into new business products, new ways are
discovered to provide services to people and
entirely new industries are created.
2
Slide 3
Entrepreneurship
• In recent years, the businesses of successful
entrepreneurs have not only contributed to
economic vitality, but have also created most of
the new jobs that employ the people of this
country.
• Drive down a city street sometime and look at all
the small businesses that exist in a community.
Most people are of the belief that big companies
employ the vast majority of Americans that work,
but the converse is true. Most Americans work for
smaller, locally or regionally owned companies.
3
Slide 4
The Importance of
Entrepreneurship
• In every State of the Union speech, the President
talks about encouraging entrepreneurship.
• The federal government and most states have
numerous organizations to help people start a
business.
• WHY ARE THEY SO INTERESTED IN
HELPING ENTREPRENEURS?
• The answer is plain and simple. Entrepreneurs
create jobs, and people that have jobs pay taxes.
Taxes are what keep our government providing
goods and services such as roads, schools, police,
fire protection, etc.
4
Slide 5
Entrepreneurial Personality
• Everyone encounters problems every day.
Problems tend to frustrate, confuse and annoy
most people, but to an entrepreneur, they view
problems as opportunities and start to look for
solutions. They are truly problem solvers.
• There are always wants and desires in our
advancing society, and resourceful entrepreneurs
will seek solutions for them.
• Entrepreneurs recognize opportunities and take
action.
5
Slide 6
Entrepreneurial Personality
• Not everyone is meant to be an
entrepreneur. It is hard work and takes
courage, but the rewards are usually
commensurate with the effort.
• There are some signs of having an
entrepreneurial spirit that have proven to be
somewhat accurate over time.
6
Slide 7
Signs That You Are An
Entrepreneur
• 1) You come from a line of people (e.g.your
parents) who didn’t like working for someone
else.
• 2) You’re a lousy employee – a lot of people that
start new businesses have been fired from or quit
several jobs.
• 3) You have worked for someone else for years
and have gone about as far up the ladder as you
can go.
• 4) You are bored in most jobs and want to have
some independence and action to your life and
work.
7
Slide 8
WHAT IS NEEDED TO
BECOME AN
ENTREPRENEUR?
• A passion for the business- you will go through
some tough times, and if you are looking for an
easy job, this isn’t for you.
• Some starting capital or money- It takes some
money to get started. Ballpark estimate of at least
$10,000.
• Family support- You are going to have to “give it
your all” to get a new business off the ground, and
without an understanding family, you probably
won’t make it.
8
Slide 9
•
WHAT IS NEEDED TO
BECOME AN
ENTREPRENEUR?
An idea – You have to have some idea of what you
are going to make, sell or provide.
• Some skill sets- You will have to have or develop
some skill sets such as how to sell your product or
service, accounting, hiring and firing – all those
skill sets we call “management. You don’t have to
know them all since you can hire some people to
manage those areas that you are not skilled in.
• Assistance- There are many organizations that
provide expertise or assistance to entrepreneurs.
You have to know where to find them.
9
Slide 10
WHAT IS NEEDED TO
BECOME AN
ENTREPRENEUR?
• Personality traits such as ;
Risk taker
Adventurer
Courageous
Confident
Competitive
Visionary
High energy level
10
Slide 11
Entrepreneurship
• By now, you should know two things;
1)The importance of entrepreneurship to the
economic growth of the United States.
AND
2) Whether you have the personality to
become an entrepreneur.
11
Slide 12
Some of the Big Name
Entrepreneurs
• Entrepreneur
Wally Amos
Mary Kay Ash
Henry Block
Debra Fields
Henry Ford
Bill Gates
Leon Gorman
Ray Kroc
J Willard Marriott
Don Tyson
Sam Walton
• Business they developed
Famous Amos Chocolate Cookies
Mary Kay Cosmetics
H&R Block
Mrs Field Inc
Ford Motor Co
Microsoft Corp
L.L. Bean
McDonalds Corp
Marriott Corp
Tyson’s
Walmart; Sam’s
12
Slide 13
PHILOSOPHY OF
ENTREPRENEURS
• All the previous named ultra-entrepreneurs were
not necessarily brilliant, but they did have a
passion for the business. They found ways of
delivering goods and/or services to people who
wanted those services and were willing to pay for
them.
• The next time you go into a food store, look at all
the new products on the shelves. One hundred
years ago, everything was sold as a commodity.
Now, the word value-added is hot, whereby
entrepreneurs have found ways to make products
13
more convenient to the consumer.
Slide 14
WHERE DO IDEAS COME
FROM?
• Ideas are a dime a dozen. Everyone has ideas on
how to do something cheaper, easier, faster, etc.
than existing companies. The difference is that
entrepreneurs make their ideas become realities.
• For example, take Famous Amos Cookies. Anyone
can make cookies but he took his cookies to the
marketplace where people who don’t have time to
bake can buy them.
14
Slide 15
Where do Ideas Come From?
• Mary Kay Ash simply took regular
cosmetics, promoted parties and built a
loyal sales staff.
• Leon Gorman of L.L. Bean fame took
upscale outdoor clothing and built an
excellent mail-order business.
15
Slide 16
WHERE DO IDEAS COME
FROM?
• By now, you are thinking these were not
technological break-through ideas but simply
doing a concept and doing it well.
• Therefore, the concept or idea you come up with
doesn’t have to be the big, break-through thing the
world has been waiting for.
• We at the Institute of Food Science & Engineering
would be happy to help “brainstorm” your idea
with you, but you have to pick an area that you
have a passion for.
16
Slide 17
UNDERSTAND THE
BUSINESS
• Many would-be food entrepreneurs call me about
a great recipe they have for a product and are
eager to build a facility to start manufacturing it.
This would be a mistake.
• You can get your product co-packed by someone
else who already makes similar products sparing
you the expense of building a facility costing a
minimum of $100,000.
• The emphasis for an entrepreneur should be in the
areas of marketing and selling the product. It is the
hardest thing to do but also the most profitable. 17
Slide 18
UNDERSTAND THE
BUSINESS
• Let me reemphasize this one point. You can
get your food product co-packed relatively
cheap. Your time and energy is best spent on
marketing and selling your product. You
may have a great product, but it will not sell
itself. Somehow, you have to let people
know it is available and where to get it. We
will discuss this in more detail in the
business plan.
18
Slide 19
WORRIED ABOUT THE BIG
GUYS?
• Some entrepreneurs worry that they cannot
compete with the big manufacturers.
• Understand that businesses, over time, will evolve.
The big food companies of 50 years ago have
gone by the wayside and next businesses have
taken over their territory.
• Remember the big food retailers of the 1950s and
1960s- A&P and Kroger? They are not nearly as
large as they once were due to other food retailers
like Albertsons, Ralphs, Wegmans that were
entrepreneurs in the 1950s and 1960s.
19
Slide 20
THE BUSINESS PLAN
20
Slide 21
The Business Plan
• If you plan to become an entrepreneur in the food
business, we suggest that you first work on a
business plan.
• We will now go through a business plan. We
suggest that you struggle through it and try to do
as much on it as possible. Spend some time and
think hard about it. It is the first step on a long
adventure that you could truly enjoy. Force
yourself to write this plan up as best you can. You
might be surprised how much you can learn while
doing it.
21
Slide 22
The Business Plan
• The business plan organizes your business idea on
paper. It helps other people and you to understand
the resources and steps needed to create your
business and its chances for success once it is
started.
• Why have a business plan?
1)The plan will be helpful in securing needed startup
funding.
2)The plan will help you to think through all of the
aspects of the business and develop confidence
that your idea is a good one.
3) The plan will serve as a guide once the business is
22
up and operating.
Slide 23
The Business Plan
• If done correctly, the task of developing a business
plan should be fun and enjoyable.
• It may not appear to be easy because it will require
a great deal of research, thinking and writing but
when it is done, we will think of it as a
masterpiece.
• You will probably end up talking to a lot of people
and going to a lot of places, such as libraries,
government sources and professional associations.
• There are 9 parts to a business plan. We will now
go through each of them.
23
Slide 24
Part 1; The Cover Page
• Write down the company name, address,
phone number, your name and any other
contact information that you have.
• Even if you don’t have all of information,
write done what you know. You can always
come back and fill in later.
24
Slide 25
Part 2; Table of Contents
• List the sections of the business plan to
follow.
• Just label the top of the page for now. You
can come back and fill in the remainder a
little later on.
25
Slide 26
Part 3; Executive Summary
• This is a mini-version of your plan, presenting in
summarized form all of the key information about
the business so that the reader can get a quick
overview of the business plan.
• For now, just label the top of the page. When you
get all the other sections filled in, this will just be
a summary of the rest of the plan.
26
Slide 27
Part 4; Description of the Nature
of Your Business
• Describe the business concept, the product
or service to be sold, the competitive
advantages of the business and anything
more you want to describe your business.
27
Slide 28
Part 5; Description of the
Business Personnel
• Write out who will be running the business.
• Describe all the different functions
(accounting, manufacturing, sales, etc.) and
tasks that will need to be accomplished to
run the business.
• Assign people to the tasks and functions and
describe their previous experience and
skills.
28
Slide 29
Part 6; Description of the Market
and Competition
• Present the results of your market research
comparing your product to other ones in the
marketplace..
• Identify the target market for what your business
will produce (Retail, Food Service, Brokers,
convenience stores, etc.)
• Describe other businesses that will be competing
for customers in the same target market.
29
Slide 30
Part 7: Description of Your
Marketing Plan
• Highlight the most important benefits of the
product or service that the company will produce
(this is the focus of your marketing plan).
• Identify the types of advertising and promotional
appeals and tools that will be used.
• Indicate how advertising and promotion will make
the customer aware of the product or service, help
customers understand how the product or service
differs from that of the competitors and convince
customers to buy your product or service.
30
Slide 31
Part 8; Basic Financial
Information for the Business
• Predict expenses for starting the company,
pricing and break-even analysis.
• Present a cash flow forecast.
• Forecast revenues, expenses and profits.
31
Slide 32
Part 9; Additional Supporting
Information
• Include documents or illustrations that you
think will help the reader understand and
have more confidence in the information
and forecasts of your plans and in the
chances of your business’ success.
32
Slide 33
The Business Plan
• That’s it. Not too complicated.
• The hard part is to get started and take some time
to think it through.
• Take each part one at a time. Write down what you
can and then seek to acquire more knowledge.
• There are lots of places to go for help such as the
Internet, talking to people in the business, talking
to people in state government agencies that have
resource libraries and have good consulting
services, some of which are free.
33
Slide 34
Arkansas Assistance Sources
• The Institute of Food Science and Engineering at
the University of Arkansas (Fayetteville) can help
you with the technical aspects of idea and product
development. Contact Steve Seideman at 479/5754221 or [email protected].
• Other modules are also available in this series to
assist entrepreneurs in areas such as marketing,
Quality Control, etc.
• The Arkansas Small Business Development
Center (501/324-9043; www.asbdc.ualr.edu) has
several locations throughout the state that can help
with business plans, markets, resource libraries,
grants and other forms of financial assistance and
34
consulting.
Slide 35
35
Slide 36
Online Help
*Entrepreneurship Education Training and
Resources; www.itbn.com/edge
*Ewing Marion Kauffman Foundation
www.kauffman.org
*CEL Clearinghouse for Entrepreneurship
Education; www.celcee.edu
*Edward Lowe Foundation Small Business
www.lowe.org
*Small Business Administration
www.sbaonline.gov
36
Slide 37
CONCLUSIONS
• This module should have emphasized the
personality traits of entrepreneurs and the
importance of entrepreneurship to our economy.
• In addition, brief outline of a business plan was
included to show you the highlights in any
business plan.
• There is plenty of expert, free advice available to
help get you started.
37
Slide 38
38