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Back to Subjects - Marketing

entrepeneurship

entrepeneurship It can be argued that entrepreneurship is the backbone of our technological society, and keeps reinventing the way business is done. Each new company provides a different perspective as to how business should be handled. They also provide a very large portion of the new products that change the way we live our day-to-day lives. However, due to the risks involved in starting a new company it takes a certain “entrepreneurial spirit” to successfully launch a new business. This paper will step through the entrepreneurial process by examining two separate entrepreneurs and their reason for becoming entrepreneurs, why they chose their industry, how they obtained funding, their first customers, and the pros and cons of becoming an entrepreneur. People don’t always just up and decide to become an entrepreneur, there are often many different factors that contribute to them deciding to start their own business. In both of the cases presented here the entrepreneurs were over thirty, married, and had been holding previous jobs. Brenda Cantley had been working in the background for her husband for fifteen years. Her husband was a salesman and would sell anything he could get his hands on (steaks, ice cream trucks, printers, etc.) and was able to be very profitable. Brenda stayed on the sidelines never doing any sales but keeping records and doing paperwork. In 1994 Mr. Cantley became too sick to work and remained that way for months. The Cantley’s entire income depended on him making sales, so Brenda had to find a way to make money. She had only a high school education and no real work experience, even though she had helped her parents when they started their own business selling trailers and helped her husband with his business. Since the only thing she had known was entrepreneurship that was what she decided to do. Guy Lawson’s reason for becoming an entrepreneur was the fact that the whole marketing communications department at Texas Instruments, in which Guy worked, was laid off because the company decided to outsource it. Having a wife and two daughters to support Guy had to find money somewhere and decided to start his own business. It is true that in most cases there is a triggering event that gives birth to an entrepreneurial venture, the same applies to the cases here. While both of the events seemed detrimental to Guy Lawson and Brenda Cantley’s lives, their “entrepreneurial spirit” allowed them to pick up the pieces and start two successful ventures. So how does one decide what kind of business to start after they have already decided to become an entrepreneur? For the cases of Guy Lawson and Brenda Cantley the choice was clear. Brenda was always volunteering to help raise money; first, for her oldest daughter’s cheerleading squad, then for her son’s soccer team. In fact, she volunteered so much through the years she acquired the nickname: “the fund-raising queen”. She was a born saleswoman, and staying true to her nickname all of her fund-raising efforts were extremely successful. When her husband got sick she saw an ad in the paper to make money by fund-raising for schools and different organizations. She worked for a man who lived in Dallas for about a month before she saw how inefficient he was and quit to start her own business (taking her customer base with her). Her business started out with only one employee: her. She suggests ways to raise money to schools, then supplies the products from suppliers, furnishes the catalogs, processes the orders, then delivers the merchandise to the schools. Guy Lawson had worked in marketing communications for eight years and during that time had come up with numerous ideas for starting a business in that field. After he was laid off, the choice for what kind of venture to start was almost a no-brainer. When Guy Lawson was laid off, he was not by himself; his whole department was laid off also. He saw this as an opportunity to grab employees for his new business. He started what is called a virtual agency, which is a small company made up of freelance employees. They create brochures, corporate catalogs, packaging, websites, tradeshow graphics, and do tradeshow consulting to mostly technology-based firms. Current estimates suggest that nearly ninety percent of new high-potential businesses are created in industries the entrepreneur has previous experience in. That estimate holds true for the cases presented here because both Lawson and Cantley stayed in industries they had previous experience in. The number one reason new businesses don’t get off the ground is lack of capital. The two main types of startup capital are: debt and equity. Guy Lawson considers himself both lucky and unlucky to have received an interest-free loan of 20,000 dollars from his mother. On one hand, he was able to raise enough money to buy all the equipment he needed and since he started a virtual agency he did not have to worry about salaries. He would pay his employees after they finished a job with the money received from the job. On the other hand, there was a lot of extra stress placed on his shoulders because his mother was not rich, and that was most of her savings. In Brenda Cantley’s case, she was able to use money she had saved because her startup costs were so low. She had no employees to worry about (besides herself), and had to guarantee the suppliers that she would pay for the product even if she did not receive the money for it. That added quite a bit of risk to the business but it never became a problem. Any entrepreneur will tell you that the first customer is always the hardest one to get. Brenda Cantley was able to start from the customer base that she had acquired from working with the man in Dallas. She also had contacts through her volunteer work with her son and daughter’s organizations in high school. Guy Lawson, however, had no customer base; his only contacts were his employees who had worked with him at Texas Instruments. He was able to get his first customers through cold calls, and slowly build a customer base from there. After the first three years, he had a number of customers but seventy-five percent of his business came from one corporation: Bijitsu Cellular. They were a Japanese company who were not making profits in America but were in Japan. The Clinton Administration eventually forced them out of doing business in the U.S. because they had not shown profits in five years. When they went under Lawson almost filed for bankruptcy, but was able to go back to making cold calls and rebuild his customer base. So, why did these two people decide to be entrepreneurs instead of working for larger companies? For them the positive aspects of entrepreneurship outweighed the negative ones. Brenda loves the fact that her morning commute is walking downstairs and Guy just recently moved his company to an office, but misses working out of his own house. Guy Lawson is also comforted by the fact that he can never be laid off from his own company. The rewards to owning a business are immeasurable both financially and personally. There are also numerous pitfalls and hardships to be endured when being an entrepreneur. Brenda ran into trouble because of the lack of health benefits normally received when working for a major corporation. She decided to pick up a part time job working for Continental Airlines because of the health benefits and the discounted traveling costs. In Brenda’s case if she were to get very ill or have something happen to her, her business would go down the drain. She is the total value of the company and without her working everyday it would go under. That is quite a big risk to take for a forty-plus year old woman with a family to support. Lawson feels that being an entrepreneur requires overall more work than most “regular jobs” because, unlike an office job, the work never leaves you. In conclusion, it takes a certain breed of people to become entrepreneurs. One must be thick-skinned and determined and maybe a little lucky to start and operate a successful business. Both Guy Lawson and Brenda Cantley were able to do it but not without their share of hardships. Both of them, however, strongly feel that the rewards and satisfaction received are well worth the overall stressful occupation of entrepreneurship. Bibliography:

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