Small Business and the Entrepreneur

Video Transcription

Hello, and welcome to this tutorial on small business and the entrepreneur. Now, as always with these tutorials, please feel free to fast forward, pause, or rewind as many times as you need in order to make the most out of the time that you spend here. So you've heard me talk before about small businesses. Now, how are entrepreneurs different?

Well, in this lesson, we're going to be covering the value that's provided by small business. We're also going to be looking at small business versus the entrepreneur, which one is which. The key terms for this lesson are going to be small business, entrepreneur.

Let's start off with small business. Small business is defined as an organization with less than 500 employees that attempts to earn a profit with the sale of goods or services. So small business facts. Small businesses, as we learned in the definition, are defined by companies with 500 or fewer employees. And these are independently owned businesses. They're not owned by another larger conglomeration.

They don't dominate the market in any one category. Instead, they're very small competitors with each other. And they can be found in practically every business sector that's out there-- construction, food, retail, service-- you name it, there are small businesses doing business in that sector. Well, what are the values of a small business? If it's so small, why is it so important?

Well, over 50% of all sales in the United States are attributable directly to small businesses. So that makes up quite a big chunk of our overall economy. And according to the SBA, or Small Business Administration, 2/3 of these businesses will only survive two years. So there's a very high turnover. So having an entrepreneurial spirit and getting into small business is pretty important in order to keep up the revenue numbers for the US.

So who is the Small Business Administration anyway? Well, you can find them at sba.gov, and they provide financial and organizational help to small businesses from around the country. They've helped provide long-term loans for start up costs and expansion costs and operating costs, and they also provide organizational help in the form of how do I want to set my business up, what's the most advantageous, in order to decrease the chances of my business becoming one of the statistics where I only last less than two years.

They also provide advice and help on getting, bidding and winning government contracts as a separate avenue of revenue for the small business. And they provide advocacy to Congress. They are the government's advocacy group for small business. They understand the value of it, and they want to make sure that small business survives.

So small business and the entrepreneur. Well, the entrepreneur is defined as a person who pursues a business venture with growth and expansion as a primary goal. As you can imagine, being a small business person and being an entrepreneur are similar in various ways, and they're also pretty different. For instance, both are going to be profit oriented. The reason they got in the business in the first place is to help generate profit for that business. But that's not the same ultimate goal as with an entrepreneur, where one of your primary goals besides making a profit is going to be expansion and growth of your business. In order to have expansion and growth, it's important not only to have vision-- where I want to be-- but also a strategy on how it is I want to get there.

So let's take a look at two examples of entrepreneurs. One is Mark Zuckerberg. He started a thing called Facebook that you might have heard of. In order to take Facebook from a small computer program in his Harvard dorm to a multinational, publicly owned and publicly traded company took a lot of vision. And he had to have a specific plan in mind in order to get there. That's a very, very large step.

Sam Walton is another great example of an entrepreneur. Sam Walton started a Five and Dime store in Bentonville, Arkansas. When he closed that Five and Dime store and opened what we now know as Walmart in 1963, his goal was to provide retail access to underserved communities, those communities between the big cities. His goal was to open as many of these Walmarts as possible. What happened from 1963 when Walmart was opened to the early 1970s when the company went public is they grew dramatically, and today, they're one of the largest retailers in the world.

So let's recap. We looked at the value that's provided by small business. 50% of the sales generated in the US are generated by small businesses. We also looked at small business and the entrepreneur. While every small business is going to be motivated by profit, being an entrepreneur requires strategy and a vision of where you want to go and how you want to get there.

I want to thank you for spending some time with me today, and have a great day.