Have you ever baby-sat neighborhood kids? Mowed a lawn or two in the summer? Run a lemonade stand? Then you already know something about being an entrepreneur. You’ve set your own hours, named your prices, and earned money. The entrepreneurial spirit has long been strong in kids and teens; this is evident in the number of junior achievement organizations, such as Future Business Leaders of America, devoted to the interests of young entrepreneurs. A Gallup poll found that 70 percent of high school seniors want to own their own businesses someday.
Entrepreneurs Job Description
Entrepreneurship covers a huge range of business endeavors from the homemaker who makes, packages, and sells her special jams and jellies from her home to the plastics manufacturer who employs more than 500 workers in three factories.
Many people who own small businesses start small, often part time, from a home office and expand as the demand grows. They perform all the functions normally found in any business, including those of president, manager, manufacturer or service provider, secretary, accountant, investor, benefits administrator, salesperson, and maintenance engineer.
Owners of home-based businesses might be involved in making and selling products, such as food items, jewelry, furniture, ceramics, or clothing. Or they might provide services, either performed in the home office or at other locations outside the home, such as writing and editing, telemarketing, housekeeping, computer programming, pet sitting, or catering. Owners of these types of businesses can be quite successful for a long time, working completely on their own. They enjoy answering only to themselves and having control over every part of their work. They take all the responsibilities, suffer all the hardships, and reap all the rewards.
Consultants usually work independently out of their own homes or offices, although some work on a part- or full-time basis for consulting firms. Traditionally, consultants have provided professional expertise in such areas as marketing, public and media relations, business plan development, finances, productivity, automation, computer programming, and downsizing. Today, the field of consulting has expanded to include almost every possible aspect of modern life. You can find consultants who will charge you a fee to help you plan your wedding, design and build your home, coordinate your wardrobe, purchase the right car, manage your finances, find an affordable college for your children, and place your parents in the right nursing home. Small, start-up businesses, midsized companies, large corporations, and governmental agencies frequently contract with consultants who have a specific area of business expertise.
Successful home-based businesses often grow and expand, and the owner must decide how to handle the expansion. If the owner, for example, has started a ceramics business out of love for working with clay, he or she may decide to hire another person to handle business affairs, such as accounting, taxes, licenses, and bill payment. Another business owner may decide to purchase updated, more efficient equipment or technology, hire one or two staff, and rent office or studio space outside of the home to better serve a growing clientele. The larger a business becomes, the more complicated its structure also becomes. In addition to managing the business, the owner has to manage people, and instead of providing a service or manufacturing a product personally, the owner must find workers, train them, monitor their work, provide a safe and productive work environment, and pay salaries and benefits.
A small business doesn’t necessarily have to start as a home-based business. An entrepreneur with a somewhat larger investment capacity can start a business, such as a small restaurant, a public relations firm, a travel agency, or a secondhand clothing store, for example. These types of small businesses require a detailed plan and enough money to purchase startup equipment and materials, rent space, pay utilities, purchase insurance, fund advertising, and pay salaries and benefits for at least a year. The owner may get loans from a bank, the Small Business Administration (SBA), or a commercial finance company. In addition to the complicated financial arrangements, the plan for a small business includes such things as finding a market, establishing a presence in the community, creating a demand for the product or service, hiring capable staff, and monitoring quality control.
Another choice for entrepreneurs is to purchase a franchise, such as a Baskin-Robbins, a RadioShack, or a Mail Boxes Etc. The franchiser lends its trademark or trade name and a business system to franchisees, who pay a royalty and often an initial fee for the right to do business under the franchiser’s name and system. Entrepreneurs who choose this option have the security and support of the established name, a ready market, and a business system already in place. Some of the most popular franchise industries include fast food, retail, service, automotive, restaurants, maintenance, building and construction, retail food, business services, and lodging. An estimated 1,500 franchise companies operate in the United States, doing business through more than 320,000 retail units. The average initial investment level for nearly eight out of 10 franchises, excluding real estate, is less than $250,000, and the average length of a franchise contract is 10 years, according to the International Franchise Association.
A person can become an entrepreneur by taking over an already existing business. A son or daughter may take over from a parent who is retiring, a long-time employee may purchase a business from a boss, or someone could purchase a business without having previous ties. As with a franchise, the location is already established and outfitted with equipment and materials. A business system is in place, and suppliers and clientele are established. Unlike a franchise, however, the new owner can change the business system or any other aspect of the business as desired. (An exception might be if the new owner keeps the same business name and the sales contract stipulates certain business practices based on the use of that name.)
The Internet has opened a wide variety of opportunities, although dot-coms experienced hard times in the early 2000s. Creative entrepreneurs have found ways to use the new technology, not just to market and sell products and services, but as the basis of a business. For example, online researchers use Internet databases, libraries, and catalogues to find information for their clients. Design and management of Web sites can be done by one person from a home computer or by a few people cooperating in a small business venture.
According to the SBA, there are approximately 25.8 million small businesses in the United States. They employ 50 percent of the private workforce, generate more than half of the nation’s gross domestic product, and are the principal source of new jobs in the U.S. economy.
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