Starting Your Own it company



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Starting Your Own IT Company

  • Group 9:
  • Jennifer Mertens
  • Marianne Doyle
  • Aaron Johnson
  • Willie McGarry

Overview

  • What is an Entrepreneur?
  • Statistics
  • Entrepreneurial Characteristics
  • Skills an Entrepreneur Should Possess
  • Starting a Business
  • Interviews
    • David Garthe
    • Harry Brumleve
  • Case Study
    • Red Hat
  • Comparison and Conclusion

Questions?

  • How many of you have started your own business or currently own a business?
  • How many of you hope to start your own business someday in the future?

What is an Entrepreneur?

  • Coming from an entrepreneur himself, Bob Reiss says,
  • "Entrepreneurship is the recognition and pursuit of opportunity without regard to the resources you currently control, with confidence that you can succeed, with the flexibility to change course as necessary, and with the will to rebound from setbacks.“
  • http://www.thinkinglike.com/Essays/entrepreneur-definition.html

What is an Entrepreneur?

  • A person who organizes, operates, and assumes the risk for a business venture.
  • http://www.thefreedictionary.com/entrepreneur

Statistics

How many businesses open and close each year?

  • Starts and Closures of Employer Firms from 2000-2004.
  • Category
  • 2000
  • 2001
  • 2002
  • 2003
  • 2004
  • New Firms
  • 574,300
  • 585,140
  • 569,750
  • 553,500e
  • 580,900e
  • Firm Closures
  • 542,831
  • 553,291
  • 586,890
  • 572,300e
  • 576,200e
  • Bankruptcies
  • 35,472
  • 40,099
  • 38,540
  • 35,037
  • 34,317
  • http://www.sba.gov/advo/stats/sbfaq.pdf

What is the survival rate for new firms?

  • “Two-thirds of new employer establishments survive at least 2 years, and 44% survive at least 4 years, according to a new study.”
  • “Major factors in a firm’s remaining open include an ample supply of capital, the fact that a firm is large enough to have employees, the owner’s education level, and the owner’s reason for starting the firm in the first place, such as freedom for family life or wanting to be one’s own boss.”
  • http://www.sba.gov/advo/stats/sbfaq.pdf

What role do women and minority entrepreneurs play?

  • “66% of all home based businesses are owned by women.”
  • “Today, 4.7 million women are self-employed in the United States. This represents a 77% increase since 1983.”
  • http://www.sba.gov/advo/stats/sbfaq.pdf

What role do women and minority entrepreneurs play?

  • “Of the 23 million firms in 2002, 6.9 percent were owned by Hispanic Americans, 5.2 percent by African Americans, 4.8 percent by Asian Americans, 0.9 percent by American Indians and Alaskan Natives, and 0.14 percent by Native Hawaiian and other Pacific Islanders.”
  • “In 2002, minorities owned 4.1 million firms that generated $694.1 billion in revenues and employed 4.8 million workers.”
  • http://www.sba.gov/advo/stats/sbfaq.pdf

Top 10 Cities For Entrepreneurs

  • Minneapolis
  • Norfolk/Virginia Beach/Newport News Va.
  • Washington D.C.
  • Atlanta
  • Miami
  • Fort Lauderdale, Fla.
  • Charlotte/Gastonia/ Rocky Hill, N.C.
  • Salt Lake City
  • West Palm Beach, Fla.
  • Orlando Fla.
  • Journal of Accountancy
  • Source: Entrepreneur and D&B, 2003

Entrepreneurial Characteristics

  • A Good Match
  • Outside the Norm
  • http://www.startupjournal.com "Are You Qualified To Be an Entrepreneur"

Entrepreneurial Characteristics

  • A Good Match
  • Self confident
  • Multi-skilled
  • Innovative
  • Results-Oriented
  • Risk taker
  • Committed
  • http://www.gdrc.org/icm/micro/define-micro.html

Entrepreneurial Characteristics

  • A Good Match
  • Children or grandchildren of immigrants
  • Relationship with key breadwinner in the family is competitive
  • Complete a college degree
  • Get fired from several jobs; Dislike working for others
  • http://www.startupjournal.com "Are You Qualified To Be an Entrepreneur"

Entrepreneurial Characteristics

  • Some of the most often found qualities in successful entrepreneurs are tenacity, leadership skills and the ability to adapt to unexpected developments.
  • Some argue that although personal traits are important, they do not necessarily determine why someone becomes an entrepreneur.
  • "Mastering the Entrepreneurial Life Cycle"

Entrepreneurial Characteristics

  • Outside the Norm
  • Some people think in order to be entrepreneurial, you have to start your own company; but this is not true.
  • Buy Companies
  • Inherit Companies or take over for a founder.
  • Work within large corporations, starting new ventures that spin off.
  • http://www.startupjournal.com "Are You Qualified To Be an Entrepreneur"

Skills an Entrepreneur Should Possess

  • Focused
  • Have a Vision
  • Are Leaders
  • Persistence and Passionate
  • Have Technical Skills
  • Flexible
  • http://ezinearticles.com/?Critical-Entrepreneurial-Skills&id=84877

Skills an Entrepreneur Should Possess

  • Organized
  • Strong Work Ethic
  • Good Decision making ability
  • Trustworthy
  • Determined
  • Healthy
  • http://www.geocities.com/mengle98/Ch1/page2.html

Before You Start

  • How well do you qualify to be an entrepreneur?
    • http://www.liraz.com/webquiz.htm#q10
  • Go through a checklist similar to this one:
    • http://app1.sba.gov/survey/checklist/index.cgi

Before you start

  • You need a strategy
  • Every business strategy needs to have the following elements:
    • Arenas: where will we be active?
    • Vehicles: how will we get there?
    • Differentiators: how will we win in the marketplace?
    • Staging: what will be our speed and sequence of moves?
    • Economic logic: how will we obtain our returns?
  • http://proquest.umi.com/pqdweb?did=105262864&Fmt=4&clientId=45249&RQT=309&VName=PQD

Getting Started

  • 31 Tips to face your fears and get started
  • “Most startup articles focus on the mechanics of launching a business. But the inner journey to starting a business is just as important as writing a business plan and getting financing.”
    • Suzanne Mulvehill
  • http://www.entrepreneur.com/article/0,4621,320394-1,00.html

31 Tips

  • Say yes to your yearning.
  • Start a journal.
  • Write down your goals
  • Visualize your success.
  • Create and read affirmations
  • Evaluate your beliefs
  • Do what you love
  • Do something different every day
  • Act "as if.”
  • Go out and scare yourself.
  • Spend time in nature
  • Accept all your feelings.
  • Finish unfinished business.
  • Get educated.
  • Accept and believe compliments.
  • Acknowledge your gifts.
  • http://www.entrepreneur.com/article/0,4621,320394-1,00.html

31 Tips

  • Give up excuses
  • Eliminate "I can'ts.”
  • Accept confusion
  • Know there is no "right" time
  • Start small
  • Say no when you mean no and yes when you mean yes.
  • Resist self-judgment
  • Stay out of overwhelm.
  • Expect resistance.
  • Answer your "what ifs.”
  • Practice patience.
  • Overcome the "not good enough" syndrome.
  • Ask for help.
  • Trust your instincts.
  • Treat yourself with tlc.
  • http://www.entrepreneur.com/article/0,4621,320394-1,00.html

5 Mistakes Entrepreneurs Make

  • “The best way to succeed is simply to avoid failure.”
  • To avoid making mistakes Entrepreneurs must:
    • Examine the 3 T’s
        • Time
        • Temperament
        • Talent
  • Five Mistakes Entrepreneurs Make Jim Stovall.ハ Accounting Technology:ハCPA Wealth Provider: Best in ShowハBoston:Oct 2005.ハ p.ハ18-19ハ(2ハpp.)

5 Mistakes Entrepreneurs Make

    • Find his/her market niche
      • “I never perfected an invention that I did not think about in terms of the service it might give others… I find out what the world needs, then I proceed to invent.”-Thomas Edison
    • Have ample financing
    • Be ready to do everything by themselves
    • Understand the amount of time and passion it takes to be successful
  • Five Mistakes Entrepreneurs Make Jim Stovall.ハ Accounting Technology:ハCPA Wealth Provider: Best in ShowハBoston:Oct 2005.ハ p.ハ18-19ハ(2ハpp.)

Getting Started

  • This website helps you get started:
  • https://www.sos.mo.gov/

Interviews David Garthe Harry Brumleve

David Garthe

  • Age 33
  • Single
  • From Ballwin, Missouri
  • University of Missouri-St. Louis
    • B.A. in Finance
    • Minor in Partying

David Garthe

  • Watlow Electric, Inc.
    • Started in Accounting, then IT
  • Net Assist Temporaries
    • Providing temporary Network Specialist
  • CareerConnection.com
    • Similar to Monster.com
    • Used by many Fortune 500 Companies

Garthe Corporation

  • Garthe Corporation
    • Incorporated in 2000
  • Initial Business Plan
    • Create websites that provide advertising value to casinos
    • Sell advertisement to Casinos
    • It was easy then (dot com boom)

Garthe Corporation

  • Time Management
    • 15% Sales, 25% Admin, 60% Projects
  • Results of Initial Business Plan
    • Very Profitable until dot com bust
    • Clients changed after bust
    • Sold off sites to fantasy sports group.

Garthe Corporation

  • Refined Business Plan
    • Create websites that provide subscription-based services
    • ConnectMe.com
  • Refined Time Management
    • 50% Marketing, 15% Admin, 35% Projects
  • Results
    • Closed site after legislative issue with State of Missouri
    • Next initiative already on the way

Business Resources

    • CPA
    • Attorney
      • Assist with incorporation

David Garthe

  • 8 Must-have Traits of an Entrepreneur
      • Ability to work, work, work
      • Ability to read people
      • Ability to listen
      • A good business plan
      • Financial Stability
      • Love and belief in offered product
      • Never think you are smarter than customer
      • Accountability

Harry Brumleve

  • Age 32
  • Single
  • From Ballwin, Missouri
  • University of Missouri-Columbia
    • B.A. in German
    • B.S. in Computer Science

Harry Brumleve

  • GA Sullivan (Avanade)
      • Worked as “Jack-of-All-Trades”
      • The perks were small
  • Tellabs
      • Worked on telephone exchange system
      • Worked here for the “big money”
  • Cambridge Business Partners (Novell)
      • Worked on commerce logistics architecture
      • 20% of all Logistics dollars spent

Harry Brumleve

  • Started Jet Engine Consulting in 2003
  • Wanted to get into consulting
  • Was tired of working for the big firm
      • Mergers
      • No direction in accomplishing goals

The Business Plan

  • Two part Business plan:
    • Consulting: A partner and himself
      • Invest time and effort
      • Produce superior customer service
      • Solve people problems
      • Help companies become more efficient
      • Create a name through good PR

The Business Plan

    • Product: Enterprise Service Bus
      • “Incubation period” tied into consulting
      • Work out the bugs
      • Develop a relationship through product
      • Consume product and make money
      • Let mature and take to market

Harry Brumleve

  • What is an Entrepreneur?
    • Career must be Humanistic:
      • Help solve people problems
    • Had two mentors
      • One was in computer science
    • “No such thing as a one time deal”
    • Invest to provide better service
    • Not afraid to turn jobs down

Harry Brumleve

  • How have things worked out:
      • Consulted for Accenture
        • Worked on eDemocracy software
      • Currently Consulting for Botanical Gardens
        • Writing classification software for Botanists
      • Consults 35-40 hours a week
        • Works on product 30 hours a week
      • Travels 4-5 times a year
      • Owns his home
      • Has money invested

Red Hat

The Beginning

  • Marc Ewing
      • Carnegie Mellon University
      • Started company after graduating from college
      • Couldn’t afford $10,000 Unix workstation
      • Decided to use Linux because it was free
  • Bob Young
      • University of Toronto
      • Ran a distribution company for Unix products
  • www.salon.com

The Beginning

  • Marc Ewing created a Linux development business to accomplish a specific task
  • He decided there was more potential in developing Linux and dropped his project
  • Bob Young was enamored with the concepts of open source and free market
  • He saw the potential in Linux and begun distributing it through a catalog company
  • www.salon.com

Coming Together

  • In 1994, Ewing released the first version of Red Hat Linux
  • Young bought 350 of the 500 copies Ewing had planned to print
  • Young decided he wanted to be more than a distributor and Ewing didn’t want to do “all of the business stuff”
  • www.redhat.com

Coming Together

  • In 1995, Bob Young bought Ewing’s business, merges it with his company, and names the company Red Hat Software
  • Red Hat Linux 2.0 is released the same year
  • Red Hat is able to secure the number one brand name in the business
  • www.salon.com

Company Profile

  • Their mission:
      • “To be the defining technology company of the 21rst century”
  • 980 employees
  • Publicly Held Company as of 1999:
      • Eighth biggest first day gain in history
  • Headquarters:
      • Raleigh, North Carolina
  • 27 Worldwide offices
  • www.redhat.com

Company Profile

  • They surpassed Sun Microsystems in share price in 2002
  • In 2003, posted a profit for the first time
  • It is announced that Red Hat ranks among the top ten software companies in gaining share of IT dollars (2004)
  • www.redhat.com

What They Have Done

  • It is estimated that Red Hat holds 70% of the worldwide global Linux market share
  • Amazon.com is able to reduce technology costs by 25% by using Red Hat (from $71 million to $54 million)
  • Acquired AOL’s Netscape software for around $25 million
  • www.redhat.com

What They Have Done

  • Released Red Hat Desktop 3 which is their first dedicated desktop product.
  • Have entered into a partnership with IBM, Sony, and Novell to “take on Microsoft’s dominance of the market” (2005)
  • This partnership is buying up Linux patents to control cost and control market share
  • www.redhat.com

How They Did It

  • Bob Young was never a “computer guy,” but he was fascinated by open source and believes in a free market
  • He saw opportunity with Linux when others just laughed
  • Marc Ewing found something that worked better and focused on it
  • They both took chances
  • www.redhat.com

Overview

  • What is an Entrepreneur?
  • Entrepreneurial Characteristics
  • Statistics
  • Skills an Entrepreneur Should Possess
  • Starting a Business
  • Interviews
    • David Garthe
    • Harry Brumleve
  • Case Study
    • Red Hat
  • Comparison and Conclusion

Overview

  • Comparisons:
  • Clearly defined plan
  • Adapted to continuously changing
  • environment
  • Vigorous implementation
  • Sound technical skills

Questions




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