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II Becoming an entrepreneur

There are a number of reasons people think about owing a business of their own. Personal independence, unlimited profit potential, the opportunity to work at something that they really love, at hours they choose are some of the reasons people have given for trying entrepreneurship. Many business leaders begin their careers as entrepreneurs after four years of undergraduate college training and even additional graduate school training. Others become successful entrepreneurs without special training.

Entrepreneurial programs. Many colleges now offer programs that teach students how to start and operate a business. Basic information is combined with hands-on experience and the advice of successful business consultants. These programs help potential entrepreneurs decide whether their own ideas are good and how to follow through with them. With the high rate of business failure, this approach can prevent personal financial losses.

On-the Job training. A common way to learn about a business and the opportunities for starting similar to it, is to learn while working for someone else. That pattern was used by several of the entrepreneur mentioned earlier. It provides a source of steady income to people while they are planning to start their own business. About 50% of entrepreneurs start their business in industries in which they have some experience.

The family. Evidence shows that people who come from families whose members were in business themselves are more likely to start their own companies. Apparently it doesn’t matter whether the business was successful or not. Relatives operating a business and enjoying the fruits of their labour present a “model” for a possible career.

Starting a small business. There are many aids for people who want to start a small business. Through the Small Business Administration established in 1953 the federal government provides help in the form of literature and counseling through 110 offices in 100 cities throughout the country. Professional small business consultants can also be hired to help potential entrepreneurs make the necessary decisions. The overall message from people who give advice on the subject to get all the information you can before you decide.

III Risks and benefits of starting a new business

Unfortunately two out of three new businesses fail within their first four years. According to a President’s report, The State of Small Business, the share of small business output has been declining. Large companies, in part due to their efficiency, have taken over markets that previously belonged to small businesses. Nevertheless, estimates showed that small businesses, defined by the International Revenue Service as businesses having fewer than 500 employees, accounted for 39% of all the goods and services produced in America.

According to the report, small businesses face many other problems. Bad economic times affect small business more than they do big business. In addition, small business profits tend to fall faster, and small businesses are more likely to fail. According to the President’s report, ‘The larger the firm, the better the chance it has of surviving’. The report also said, ‘A firm with 21-50 employees has 54 % chance of surviving four years. A firm of under 20 employees has 37 % chance of surviving four years.

What are the problems that face small business now? The National Federation of Independent Business reported that the four top problems facing small business at that time were taxes, low sales, the high cost of borrowing money and competition from other businesses. On the bright side, the innovativeness of entrepreneurs in small businesses is likely to enable small business to react quickly and successfully to changing times. The report points out that 80% of new jobs are provided by businesses with 100 or fewer employees. Small businesses produce twice as many innovations per employee as larger firms. Those innovations are the source of new jobs and new opportunities for entrepreneurs.

Where is entrepreneurship most likely to be welcomed? The answer is in small business. In fact the word ‘entrepreneur’ is frequently used to define a small business owner, since the owners in small businesses usually carry out many of the functions of those businesses themselves. In large business the tasks of organizing and operating are done by many hired managers. Large and small businesses are organized in different ways to meet their objectives.