Kristen Farberman
Michelle Hoffmann
Jeff Laughlin
Xin Liu
April 29, 2004
Presentation Outline
Traits of a typical entrepreneur How to start a business The business plan Case studies
Grant Willer, Note Knowledge, LLC
Richard Laughlin, Midwest Testing, Inc.
Charles Wang, Computer Associates, Inc. Reasons for failure Conclusion
Definition
An entrepreneur is described as one who organizes, manages, and assumes the risks of a business or enterprise
Miriam Webster Online, www.m-w.com, March 17, 2004
Characteristics of Successful Business Owners
Vision Need for achievement Desire to work for self Willingness to listen Opportunistic Creativity and innovativeness Awareness of risk
Johnson, David & Ma, Rosa Suet Fan, “A Method for Selecting and Training Entrants on New Business Start-up Programmers”, International Small Business Journal; Apr-Jun 1995; 13, 3; pg. 80~84
Benefits to Owning a Business
Self-management Financial independence Creative freedom Full use of personal skills and
knowledgeGreater opportunities
“Start up Basics.” www.sbaonline.sba.gov, March 17, 2004 <http://www.sbaonline.sba.gov/starting_business/startup/basics.html>
Determine an Entrepreneurial Passion
What do I like to do with my time?What technical skills do I possess?What do others say are my strengths?Could this endeavor become a profitable
business?
"Are You Ready?." www.sbaonline.sba.gov, March 17, 2004 http://www.sbaonline.sba.gov/starting_business/startup/areyouready.html
What services or products will be sold?
Is the idea practical?
Who are the competitors?
What are the competitive advantages?
Can better quality service be provided?
Can a demand be created?
Identify a Business Niche
“Start up Basics.” www.sbaonline.sba.gov, March 17, 2004 <http://www.sbaonline.sba.gov/starting_business/startup/basics.html>
The Business Plan
Defines the business Identifies goals Includes a current and projected balance
sheet, income statement, and cash flow analysis
Allows all stakeholders to better understand the company
Identifies the potential customers for the product of service
"Busines Plan Basics.” www.sbaonline.sba.gov, March 17, 2004 http://www.sbaonline.sba.gov/starting_business/planning/basic.html
The Business Plan Establishes marketing strategies to reach
customers Projects all necessary financial needs Displays technical competency and business
efficiency
"Busines Plan Basics.” www.sbaonline.sba.gov, March17, 2004 http://www.sbaonline.sba.gov/starting_business/planning/basic.html
Hire a management team Follow a budget to control costs Determine accounting procedures Build key relationships
Next Steps
Pentilla, Chris. “Souped Up.” www.entrepreneur.com, October 2002. March 16, 2004 <http://www.entrpreneur.com/article/0,4621,303085-1,00.html>
The Ultimate Goal
Locate customers Satisfy customers Retain customers
Grant Willer
President of Note Knowledge, LLC
Personal Interview with Grant Willer, President of Note Knowledge, LLC, Feb. 28, 2004
Background
Born in 1980 in Saint LouisOldest of four boysGraduated from UMSL in 2003
with degrees in marketing and management
Family history of entrepreneurship
Personality Traits
Creative
Inventive
Constructive
Rational
Outgoing
Friendly
Down-to-earth
Assertive
Motivations for Starting a Company
EscapeFreedomThe challengeSuccessDesire to lead
Note Knowledge Objectives
Website will initially target beginnersThe business purpose is to teach guitar playing at a lower cost by means of the internetThe short term goal is to have the website active within two months
Current Development of Note Knowledge
Wrote a business planUsed strategic management principlesSurveyed potential customersSpoke with an accountantMet with a lawyerTalked with a web designerCreate lessonsBegin advertising
Major Challenges
Designing the service to create maximum value for customers
Encouraging efficient learning through an entertaining website
Developing the step-by-step detailed lessons
Words of Wisdom
“Don’t be discouraged. Write a solid business plan and seek advice from those who have been through the process.” “We planned for over a month before we even incorporated.” “Planning is key.”
- Grant Willer
Comparison to Successful Entrepreneurs
Vision Strong & Intense
Need for Achievement Essential
Desire to work for self Great Aspiration
Willingness to listen Listening gives an opening to greater ideas
Opportunistic Pioneer for new methods
Creativity & Innovativeness
Always flourishing
Awareness of Risk Planning is key
Midwest Testing, Inc.
Personal Interview with Richard Laughlin, President of MTI, Feb. 25, 2004
Company History
Founded in 1985 by Richard LaughlinFinanced with $30k loan from a friendStarted with 3 employees, currently 40 total personnelA highly mobile construction firm based in the St. Louis metro area
Richard Laughlin’s Bio
Born March 27, 1953Older of two boysGraduated UMR Civil Engineering in 1975 with Masters in GeotechnicalBrief experiences as an employee
Childhood Experiences
Always took charge and thrived as a leaderLearned business principles for independence (Ex. pulling weeds)Constantly brainstorming different ways to earn money
Entrepreneurial History
Mowing lawnsHouse painting Laughlin BrothersBroetke-Laughlin partnershipMidwest Testing, Inc
Major Challenges
Learning to be a businessmanFinding work during difficult times such as a recessionMaking the tough decisions, especially in regards to costs
His Vision
“ Our clients talk. We listen. We deliver creative solutions. Let Midwest Testing apply innovation and technology to make a positive impression on the construction industry.”
- Richard Laughlin
"Midwest Testing." www.mwtesting.com 23 Mar. 2004
Closing Thoughts
Customers, customers, customersSimplify how to run a businessHonesty, hard work, persistence, and the desire to listenFind and maintain long term relationshipsHire great people and make them part of the team
Comparison to Successful Entrepreneurs
Vision Customer focus
Need for Achievement High
Desire to work for self Strong desire
Willingness to listen Moderate
Opportunistic Very
Creativity & Innovativeness
Always
Awareness of Risk Conservative
Charles B. Wang
Chairman of the Board at Computer Associates International, Inc. (CA) from April 1980 to November 2002
CEO of the company from 1976 to July 2000.
Co-founded the company with three associates in 1976
Inglesby, Tom. “An Interview with Charles Wang”, MSI; Jul 1991; 9, 7; pg. 28~34
Player Behind the Scene
“In 1999, CA sold $5.6 billion worth of software, trailing only Microsoft Corp. and IBM, but did not take in a dollar from the consumer market. CA makes a vast array of programs for managing large, diverse computer systems. ‘We are all the plumbing behind the scenes, as opposed to all the pretty faucets,’ says Wang”
Anthony Bianco, Steve Hamm, Manjeet Kripalani, Software's Tough Guy:Charles Wang muscled his way to the top. Now he wants respect, Business Week, New York: March, 6, 2000, Iss. 3671; pg. 132
Company Profile CA delivers software and services that enable
organizations to manage their IT environments.
“About CA”, Computer Associates. 15 Apr. 2004. <http://www.ca.com/about/timeline.htm>
Investor RelationsRevenue: Over 3 billion in fiscal year 2003Number of employees: ~ 16000Stock symbol and price: NYSE: CA
“MSN Money”, MSN, 20 Apr. 2004, <http://moneycentral.msn.com/scripts/webquote.dll?ipage=qd&Symbol=CA>
Merger ManiaFive Largest Deals in the History of Software Industry
by 2000
Acquired Company Price (in billions)
Year
Sterling Software, Inc $4.0 2000
Platinum Technology International, Inc
$3.5 1999
Legent Corp $1.8 1995
Cheyenne Software, Inc $1.2 1996
Uccel Corp $0.8 1987
Anthony Bianco, Steve Hamm, Manjeet Kripalani, Software's Tough Guy:Charles Wang muscled his way to the top. Now he wants respect, Business Week, New York: March, 6, 2000, Iss. 3671; pg. 132
Charles B. Wang
“We may be reluctant to commit to something, but when we commit to it, its our word on the line”
“So I told my mother, I thought that I was going to be a programmer. She said, ‘What’s that?’ I said, ‘I don’t know, Mom, but boy, they need them”
Nahm, H.Y., GoldSea Asian American, 1991. 12 Mar. 2004, <http://goldsea.com/Money/Wangcharles/wangcharles.html>
Biography
Born in Shanghai, China in August 1944The second of three sonsGrandfather was a landowner involved in business and politicsFather studied law at Harvard. He served for a time as a justice of the Shanghai Supreme CourtMoved to the United States with his family in 1952 Raised in Queens Village, New YorkAttended Brooklyn Technical High School
Nahm, H.Y., GoldSea Asian American, 1991. 12 Mar. 2004, <http://goldsea.com/Money/Wangcharles/wangcharles.html>
Biography
Earned B.S. in Mathematics from Queens CollegeBecame a programmer trainee at the Electronics Research Laboratory of Columbia University in 1967Joined the software division of Standard Data Corporation in 1971Spun off SDC in 1976, founded CA, CEOBecame the Chairman of the Board in 1980Retired in 2002
Nahm, H.Y., GoldSea Asian American, 1991. 12 Mar. 2004, <http://goldsea.com/Money/Wangcharles/wangcharles.html>
Personality
Sense of adventureIntegrity of man’s wordIndependentPractical approach to lifeFearlessConfidentHard-workingMake work fun
Starting CA
Conceived the idea for the businessSpun off SDCSold the first product CA-SORTUtilized product-for-equity swap strategy Initial public offering on December 10, 1981First acquisition: Capex Corp.
Anthony Bianco, Steve Hamm, Manjeet Kripalani, Software's Tough Guy:Charles Wang muscled his way to the top. Now he wants respect, Business Week, New York: March, 6, 2000, Iss. 3671; pg. 132
Major Challenges
Giving up a quality job to start a companyPreparing the payroll initiallyEstablishing market driven ideasSurviving a fast-changing technological industryMaintaining cultural stability during acquisitions Understanding the marketObtaining sufficient resources
Comparison to Successful Entrepreneurs
Vision Customer focus
Need for Achievement Essential
Desire to work for self Strong
Willingness to listen Moderate
Opportunistic Very
Creativity & Innovativeness
Always
Awareness of Risk Very
10 Common Mistakes
Miscalculating potential market share, market size, timing, and ease of entry
Underestimating financial requirements and timing
Hiring too many people and spending too much money on offices and other facilities
Lacking a contingency plan for unexpected shortfalls in the expectations
Henricks, Mark. “What not to do.” Entrepreneur Magazine, February 2004
10 Common Mistakes
Making cost projections that are too low Lacking simplicity in your vision Lacking a long-term plan and business
purpose Hiring for convenience rather than skill Neglecting to manage the entire company
as a whole Lacking an exit strategy
Henricks, Mark. “What not to do.” Entrepreneur Magazine, February 2004
Comparison of Three Entrepreneurs
Grant Willer Richard Laughlin Charles Wang
Vision Strong & Intense Customer focus Strong & Clear
Need for achievement Essential High Essential
Desire to work for self
Great Aspiration Strong desire Strong
Willingness to listen Listening gives an opening to greater ideas
Moderate Moderate
Opportunistic Pioneer for new methods
Very High
Creative & Innovative Always flourishing Always Always
Risk taker Planning is key Conservative High
Questions?