BUILDING YOUR BRAND

INTRODUCTION
Personal branding is the process of developing a “mark” that is created around your name or
your career. You use this “mark” to express and communicate your skills, personality, and
values. Personal brands should be important to everyone. Personal brands are not only for
the entrepreneur that owns their own business. It is the secret sauce that can make you
stand out of a stack of resumes.

If you do not develop your own personal brand others will do it for you. Developing your
personal brand is the proactive way of controlling your career development and how you are
perceived in the marketplace. A strong personal brand will impact your ability to get the right
jobs, promotions, and increase your ability to attract talent and capital.

LEARNING OBJECTIVES
After reading and analyzing the unit, you should be able to:
1. Understand basics of branding
2. Discuss about creating a brand
3. Explain how to manage the brand
4. Promote your brand
5. Discuss about extending the brand
6. Analyze budgeting for a brand

We all have the ability to be a brand and cultivate our power to stand out and be
unique. This uniqueness draws people to our product, our services, or even just our
message. Your personal brand should be about who you are and what you have to offer.
Some of the world’s biggest companies spend billions of pounds on creating and
projecting their brands. But now individuals have the same power to build and maintain
their profile by using social networks and websites.
In this day in age, you need to build your own brand. Long gone are the days of
individuals staying at a job 15 to 20 years. You have got to be an expert on something. The
most important job that you have today is to be the President of your own brand.
The great news is that using today’s technology anyone can create their own brand. It
takes dedication, consistency, and work, but it can be done. Personal branding is important
when it comes down to marketing yourself to others.

You can use personal branding in several ways:

► To build your own company as an entrepreneur or consultant ► To market yourself to a
company and increase your value as a potential employee
► To build your own credibility for future ventures. As a brand you increase your value to
others, but only if you build your brand strategically so that others are able to see that value.
BASICS OF BRANDING
Brands can be defined in two ways. Firstly, a brand can be an identification or a mark
that differentiates one business from another (through a name or a logo, for example).
Secondly, a brand symbolizes how people think about your business. Building a brand helps
customers in their decision-making, creating a perceived knowledge of what they are going
to buy — before they buy it. Brands are based on three related criteria.
Confidence in a business, product or service doing exactly what the customer already
believes it will do. For example, a 24-hour convenience store brand can be based on
customers’ confidence that it will be open, whatever the time of day or night.
The emotional response of the customer to purchasing a product or service. For
example, a clothing retailer can create a brand based around making its customers feel good
about what they wear, how they look, how good they feel about buying clothes from that shop
and what it says about them to their peers. A brand builds a unique personality for a
business, and therefore attracts a defined type of customer.
Most importantly, branding is based on consistently rewarding the confidence and delivering
the expected emotional response. For example, a domestic cleaning company can build its
brand successfully if customers’ homes are always thoroughly cleaned, the owners believe
that they are using the best cleaning company and feel good about returning to their newly
cleaned homes. Your brand can cover your business as a whole or separate products and
services.

Need of Brand
Every business has already got a brand, even if it does not treat it as one. Your
customers (and potential customers) already have a perception of what your business means
to them. Building a brand just means communicating your message to them more effectively
so they immediately associate your business with their requirements. Brands can help
increase turnover by encouraging customer loyalty and are particularly useful if you are in a
fast-moving sector. If your business’s environment changes rapidly, a brand provides
reassurance to customers and encourages their loyalty.

If you operate in a crowded marketplace a brand can help you stand out. For example,
there are many kinds of adhesive tape, but there is only one Sellotape. If you have no other
points of difference and when customers are confronted with a wide choice of comparable
suppliers, they will always choose the brand they feel will suit them best. Your suitability for
a customer is portrayed through your brand. Moreover, if you want to add value to your
business a successful brand can make businesses more attractive to potential buyers or
franchisees.

Characteristics of Successful Brands

With the volume of competition that businesses face in most industries, it is never
been more important to stand out and develop a unique identity and value proposition
through strategic branding. While it is obviously important to offer a quality product or
service, effective branding is often at the heart of the companies that thrive.
Brand is the perception someone holds in their head about you, a product, a service,
an organization, a cause, or an idea. Brand building is the deliberate and skillful application
of effort to create a desired perception in someone else’s mind.
Let’s explore the common characteristics of successful brands, so you can build your
brand accordingly.

Audience Knowledge
The best brands have a thorough understanding of the demographics of their target
market, what their interests are, and how they communicate. Unless it is a mega chain like
Wal-Mart, most businesses have a specific target audience they are pursuing. Understanding
the target market is critical because it provides direction for the tone and reach of a
marketing campaign, along with the overall identity of a brand, while helping to create an
organic, human connection between a business and its audience.

Trying to appeal to everyone (i.e., ignoring the concept of a target market) can be
counterproductive, causing a company’s brand to become diluted. Finding the right branding
approach requires first understanding the target market.

Uniqueness
 Establishing a brand identity requires something distinctive. For instance, Apple has
become known worldwide for their innovative products and minimalistic, aesthetic appeal.
When it comes to service companies, Domino’s Pizza used to guarantee that their pizza would
arrive in 30 minutes or it would be free. In terms of a selling point, TOMS shoes donates a
free pair of shoes to a child in need for every pair of shoes that are bought.

Creating an identity within a niche does not demand a revolutionary idea. It simply
needs to have one special thing that separates it from the competition. In reality, it is
possible to be “a one trick pony” as long as that trick is really good. Once a company figures
out what that is, it can concentrate on it and should gain recognition in time.
Do you know what your unique product, service, or selling point is within your niche? If not,
start there when building your branding strategy.

Passion
While it is certainly possible to build a brand in the short-term without passion, it is
almost impossible to sustain it in the long run. When you examine massively successful
people like Steve Jobs, they all have a serious passion that keeps propelling them to work
hard and continually deliver greatness. That passion leads to enthusiasm and genuine joy,
which is infectious.

Consumers often become just as enthusiastic about a product or service, leading to

word of mouth advertising and referrals. Passion also helps businesses persevere through
inevitable setbacks.

Consistency
When consumers come back to a business for repeat sales, they usually expect to
receive the same level of quality as they did the first time. Restaurants and their food and
service quality are a great example of this.
No one wants to deal with a company they cannot rely on for consistency. With so
many industries being saturated with competitors, inconsistency is often enough of a reason
for consumers to take their business elsewhere.
That is why it is so important to adhere to a certain quality standard with a product or
service. An example of a brand who offers amazing consistency is McDonald’s. This
powerhouse of the fast food world provides patrons with a menu that is consistent across the
world. Whether someone orders in Florida or China, they know that a Big Mac is going to
taste the same.

Competitiveness
Gaining an edge in today’s business world is not easy. For a brand to make a name for
itself, team members should thrive on competition and constantly strive to improve.
B

When it comes to the major players in any industry, none simply sit back and hope
that their consumers will do the work for them. Instead, they tend to be the movers and
shakers who work tirelessly toward building and optimizing their brand, going above and
beyond consumer expectations. The end result tends to be a brand that is continually on the
cutting edge of its industry.

Exposure
Another big part of being recognized as a distinctive, successful brand is the ability to
reach consumers through multiple channels. Obviously, larger companies have an advantage
gaining exposure because they usually have a bigger marketing budget and more existing
connections. They can pay for television commercials, be featured in globally-recognized
magazines, and rank highly in search engine results pages.
However, the Internet and social media have narrowed the gap between small companies
and large ones. There are more tools than ever before which offer any company a chance at
establishing their brand. By developing a presence on networks like Facebook, Twitter,
LinkedIn and Google+, anyone is able to reach almost any consumer.

Leadership
Just like any thriving community or sports team, there is typically an influential
leader behind every successful brand. For large companies, this may be the CEO. For smaller
ones, it is usually the owner.
 To coordinate the efforts of team members and guide a strategic vision for a brand,
someone has to step up and steer the ship. The leader resolves complications and acts as a
liaison between different departments to keep everyone on the same page. They are also
expert motivators and know how to maximize the strengths of different team members.
Successful brands share these seven common characteristics.

Brand Consistency
Brand consistency across all communication channels of your small business is
critical. This will enable your customers to instantly distinguish your products or services
from those of a competitor. But first, you have to determine what sets you apart from your
competition. Think about how certain benefits or features of your offerings make your
business stand out — why should a customer buy from you? If you are struggling to find
your company’s unique identity, consider consulting with a local small business development
center to help you. Once you determine your company’s image, making sure it is consistently
reflected across all facets of your business will ensure your brand is instantly recognizable,
gaining you loyal customers and setting you apart from your competitors.

To make certain that your brand is consistent across all media, focusing on these five
basic elements can help you increase the amount of cohesion:

Memorable Tagline and Logo

Develop a logo and a tagline that distinguishes your company from your competition
— and make sure it is used across all facets of your business. Your logo does not need to be
fancy, but it should enable a customer to automatically recognize your products and
services, and identify them with a certain expectation of quality.
Because you already have limited time and a small workforce (which might solely be
you), you can partner with local colleges, graphic artists and marketers to get help with
designs. It is important to make sure that the design reflects you and your unique business,
and is simple enough to be translated across different forms of media such as websites,
social media networks and customer service components.

Recognizable Logo Variations

Make sure your logo variations maintain your single brand identity, while allowing for
different sizing and uses across various media. While a logo might feature a company name
or even a tagline, do not include anything so detailed that it does not work in smaller formats
that tend to be used on social media.

Familiar Colors, Fonts and Imagery

Make sure your colors, fonts and imagery are consistent and easily identifiable. For
example, Coca-Cola’s red and Starbucks’ green are well known and easily identified. It is
important to keep your brand’s color scheme in mind when using filters on Instagram photos
and for your logo’s appearance across media. Also consider how specific colors can reflect
your business values. For example, the color green would work well for a landscaping
company, while using brown or gray would likely convey the wrong message.

Consistent Tone and Messaging

Consider how you want to communicate with your customers. As a friend (i.e., hair
stylist or beauty consultant)? A partner (i.e., a parts supplier)? An authority (i.e., tax
services)? Or as something else? Whatever you decide your messaging to be, make sure it is
consistent across all brand platforms.

As a solopreneur, you might be managing all of your company’s communications and

social media profiles yourself, or you might be outsourcing some of the work. Develop specific
brand guidelines so that everyone managing the different components of your business
always communicate with customers in the same tone and voice.

Ongoing Commitment
Do not just rush out with the first branding idea that comes to mind. It is imperative
to make sure the branding works across all media and for all communications. You can
experiment, and can even leverage social media to inexpensively try small branding
experiments until you find something that works. But make sure that you do not invest too
much of your hard-earned revenues into a branding effort that does not produce the expected
benefits or is not consistent. Taking the time to find the right brand can make all the
difference.
CREATING A BRAND
Successful branding is the key to outdoing competitors and creating customer loyalty.
It requires careful consideration of your mission, creative thinking and a strong desire to
connect with the people who will ultimately make your company successful. Start by deciding
what’s special about your company, what makes your product worth someone’s time. From
there, develop a logo and slogan that represent your company’s unique spirit, and promote
your brand with all your might.

Your small business does not need to be a world-famous household name in order to
have a strong brand. There is more to your “brand essence” than just your logo and a
snappy slogan. Your brand is the entire sum of what your company does, what you excel at
and the experience your customers have with you. It determines whether customers join your
loyalty club and refer you to friends — or don’t bother with you again.

Here are some guidelines for building a strong brand that positions your small
business clearly and effectively in the marketplace, and helps attract repeat business and
referrals.

Know Specifically Why you are in Business

In today’s competitive marketplace, you do not want to be a “jack of all trades, master
of none.” While it may be tempting to offer clients a wide menu of products and services, it is
important to keep your brand focused.

Specializing in one thing allows your small business to stand out in the market. Being
an expert in what you do, and doing it better than anyone else, helps the marketplace see
you as the #1 source.

Your customers have specific needs, wants, values and characteristics. Ensure your
brand lets them know you understand them, and can serve and satisfy them.

Clearly Define Your Brand Promise

D

N Your brand promise is powerful. It is the statement you make to your customers and
targe audience that lets them know what to expect every time they interact with you and your
employees, products and services.
U

A brand promise is based in reality, and it is something you can prove. It is grounded
in your company’s culture, philosophy and atmosphere. It reflects how you serve your
customers and deliver value to them; how you make a problem they have go away; how you
make their lives better. Your brand promise is why they cannot do without you and would
never go anywhere else.
H

If you were to try to think about what these famous brands promise, you might
come up with something like this:
► McDonald’s: fast food with a consistency of taste and service, whether you walk into
one in Timbuktu or Toledo
► Starbucks: quality coffee in an inviting, casual atmosphere — your living room away
from home
► Volvo: cars that offer both safety and luxury
► Zappos.com: any shoe you could want, backed by amazing customer service
Everything you do to market your small business should reflect your brand promise.

Target Whom You Want to Serve

As discussed above, your small business cannot do everything; likewise, it probably
cannot serve everyone. Day cares, for example, serve parents and families. Guitar stores
serve certain musicians. Obstetricians serve expectant mothers. You need to know who your
customers are in order to offer what they need.
Your customers may skew toward certain demographic or socioeconomic groups. They
may share a particular problem, interest or need. Your brand needs to connect with these
people. They are your target audience, the consumers you specifically aim to serve.
If you do not know who your target audience is, use your existing customers to define
some parameters. While you may know the “80/20 rule” (i.e., 80 percent of your business
comes from 20 percent of your clientele), this may provide too wide a sample.

Be Honest and Authentic About Who You Are

Your brand has to talk the talk and walk the walk. Otherwise, you will present yourself
inconsistently and confuse the marketplace.

If you have clearly defined your audience and what sets you apart, authenticity should come
easily. Do not be hip and casual if that is not who you are, or if that is improper for the
service you provide (e.g., a funeral home).
Differentiate Yourself from the Competition
Knowing what you do best and being able to convey that to your target audience
means knowing what you are up against.

With that in mind, you must be aware of your strengths and your weaknesses. Learn
how to accentuate the former and how to address the latter — or, even turn those
weaknesses into positives. For example, if you are a restaurant far away from Main Street,
can you position yourself as a beloved “neighborhood place” for foodies in the know (and with
easier parking)?
Your brand also needs to have some glimmer of personality. For example, consider
what happened to the search engine formerly known as AskJeeves.com. When it launched in
1996, the brand was represented by a logo depicting a proper English butler. In the pursuit
of concision, the company name later was shortened to Ask.com. Jeeves was fired from logo
duties in 2005.
Four years later AskJeeves still had a brand awareness of 83 percent, compared to
Ask.com’s 72 percent, and the butler was brought back into service. The lesson? Celebrate
rather than suppress what makes your brand different.

Keep Your Messaging and Visual Identity Professional and

Consistent
From business cards and logo to email newsletters and brick-and-mortar signage, all of your
printed communications and sales materials should look, feel and sound like they come from
the same source.
E

PIn terms of messaging, reuse key phrases that are your unique selling points, whether
they are used in your brochure, on your website or in ads. Put your company slogan or
tagline on everything — it is your brand promise boiled down to a catchy, memorable phrase.
Ideally, your brand’s visual appearance and messaging:
► Reflect your brand’s personality and voice.
► Set you apart from the competition.
► Appeal to your target audience.
► Command attention.

Create a Dialogue with Your Customers

Sure, you talk to customers when they come in, call or email. That is a conversation. But
conversations end. Dialogues are ongoing.
How can you be interacting with customers even when they’re not doing business with you?
Here are some ways to stay top-of-mind:
► Post video demos of your products or services to your Web site, Facebook page or
YouTube.
► Put a poll on Facebook. It does not need to be related to your business (e.g., ask them
what movie they are going to see this weekend).
► Solicit product reviews on your Web site and on Web sites where your products are sold.
► Hold customer appreciation events so they see you in a new context; people love to know
they matter.
► Share useful information; do not just send advertisements. ► Send email newsletters
targeted to your customers’ interests or purchase histories.
► Share testimonials of satisfied customers.
► Use customer satisfaction surveys.

Give Customers a Great Experience at Every Point of Contact

In our digital age, it is both easier and harder than ever to reach your customers. They are
only a click away, but they may never meet you face to face. Make customer service a core
value at all levels of your business, and become known as a brand that delivers a terrific
experience. Your customers will reward you.
The first thing car-sharing company Zipcar does when its customers report they have been in
an accident? Ask them if they are safe and in a warm place. Think of everything you do in
terms of customer service, even if you are not directly dealing with customers. Consider the
impressions they get when they:
► See your ad, mailing, Facebook page, newsletter or Web site for the first time.
► Walk into your place of business.
► Call you.
► Place an order over the phone or Web.
► Send you an email inquiry.
► Sign up for your mailing list.
► Return to make another purchase.

It is Easier than You Think

These tips may seem to take a lot of effort. At the outset of establishing and building your
brand, you might have to do a little homework. Once you get going, though, it gets easier,
more routine and more instinctive — as long as you know your market, trust your intuition,
maintain consistency and be yourself.
MANAGING THE BRAND
A brand will not work instantly — it will develop strength over time as long as your business
consistently communicates and delivers your brand values to customers.
Whether you like it or not, we all have a personal brand we must manage. Whether it is
owning your own company, interviewing for a job or acting as a public figure, how you see
yourself and how others view you is important to your success.

Managing and leveraging your personal capital takes constant effort and great awareness.
These five tips are going to help you focus in on what you should be tweaking and perfecting
to gain the confidence you need to build a strong image and stay relevant.

Ditch the Elevator Pitch

An elevator pitch is a 30-second summation of something, usually a business, product,
service, new venture—or you. Having been on the receiving end of many a personal elevator
pitch, it usually comes off as robotic and socially ungraceful. Instead of an elevator pitch, tell
a story. People hate being doused with fact sheets, but they love stories. Who are you? What
are you passionate about? The key is building a narrative around your career journey that
draws people in.

Looks Matter, But Not How You Think They Do

Ask yourself, “When people look at me, what do they see?” This includes communication
style, attire, and grooming. You would be surprised by how many careers have been
sidetracked by body odor or bad breath. Like it or not, your looks will be judged by others,
including things as small as chipped nail polish. Consider all the things that are an
extension of you and assess whether they are “on brand.” Build your personal brand and
image in a way that reflects the best business version of you.

Be Social Media Wise

The evolving digital landscape has opened up countless meaningful opportunities to develop
and capitalize on your personal brand. Social media, once considered important only for
personal reasons, now has broad professional applications. Be smart about what you are
choosing to post and where; for example, maybe hold back on posting that vacation Speedo
pic to Instagram unless you are an up-and-coming model. This means you also have to be
vigilant about what people post about you. A well-meaning friend might put up a picture of a
raucous Halloween party you attended in a skimpy catsuit. The power and risk of the
Internet lies in how many people you can reach without having to interact with them directly.

Build Trust
A key aspect of managing a successful personal brand is building trust with your audience,
the public or your colleagues. If you are selling a product then it is crucial you achieve this
step. One way to build trust is to deliver on your promise. If you say you are going to do
something, then do it. If you say you are going to follow up with someone, then do it. If you
say you are going to give someone a refund because they had a bad experience with your
product, then do it. You get the point. The only way to build trust is through action and
consistency.

Engage
Building a brand is about creating a relationship, not a one-way communication vehicle. The
worst thing you can do is to engage intermittently on social media or your blog, if your
intention is to have an active digital brand. Establish your digital presence with a strong plan
and be committed to maintaining what you start. Make sure your messaging is consistent
across all channels, and that the story you tell in your real life matches what you live online.
Whether in person or online, it is not enough to consider the message and image you are
putting out to the world; you must engage in two-way dialogue to build a relationship in
person or to create an online following.
Monitor Your Reputation
You are feeling good about what you have accomplished so far and so you start to relax and
get a bit too comfortable. This is exactly when surprises emerge and reputations are
challenged. You need to be constantly managing, listening and perfecting your personal
brand so you remain in the driver’s seat. Do not just sit around and wait for stuff to happen.

Get out there and network like Swap does and show the world what you have got to offer. It
does not matter who you are or where you are in your career, we all need to be aware of our
reputation and take notice of how we are perceived by others.

Putting It All Together

A well-considered personal brand is pivotal to growing your career. Authenticity and
consistency are the keystones on which your brand will be built. Figure out what makes
people want to follow you or listen to you, and use that as a guiding point for your personal
brand. Inspire others by the story you are telling.
Managing your personal brand is a practice that will help you succeed in your personal and
professional life. By following these tips you will be on your way to a brighter and better you.
PROMOTING YOUR BRAND
Whether you are self-employed or work for someone else, one of the most important aspects
of business is personal branding. If you want to be successful, it is essential to
understand how to effectively and accurately promote yourself and your ‘brand.’

Here are some tips to promote your brand so that when you open your business, rebuild your
business you have a plan and a process in place. I

Promote Your Brand Everywhere

Visiting my favorite local market was an eye-opener. The person behind the counter was
wearing a T-shirt promoting another store. Wow. Here was a branding opportunity handed
over to the competition on a silver platter. N

The shirt had a compelling design and tagline which tells all about someone else’s business.
This does not mean that you should print T-shirts. This means you should focus on your
company.

If it is Easy Everyone Would Do It

Creating a memorable brand is not easy and it should be a lot of work. Your brand is your
company, product or service. It needs a Unique Selling Point (USP) that is yours and yours
alone that you can deliver, own and provide better than anyone. You need to focus on this
and fine tune it. Do not pick five things. Pick one and own it.
What you do best should not be offered by everyone. How you sell yourself has to be unique.
It will be hard and frustrating. You will want to give up and throw anything out there. But if
it was easy, everyone would do it. Take the time, commit the funds and do it right.

Make Your Brand Memorable

Research your competition. Learn about the colors that will resonate with your target
audience. Research by paying someone to test your final logo and design. Find out what is
out there and test for trademarks, copyrights, taglines that many, many, many business
owners never bother to check. They think they are the only clever people out there and create
something that is going to get them sued because it is already in use. Be original. Hire
experts. Skip the DIY. Test it. Retest it. Copyright it. Trademark it. Own it. Pay for a designer
and do not be cheap or you will look cheap.

Take Your Brand Everywhere

We always tell clients to create a memorable brand, take it everywhere. Put it on everything
and take it everywhere. It should be visible on your daily person whether in a uniform, a pin,
pen, notebook, computer case, hat, T-shirt, pants, phone cover, folders, car or vehicle wrap,
bags, giveaways, etc. Carry your briefcase through the airport with your logo on it and see
how many people ask you about it. See it. Hand out pens etc. and you have taken your brand
somewhere it will sit for a while.
Do not be ridiculous and always be tasteful. If you are spending thousands on premium
items instead of advertising and marketing you have more problems than we can fix here.

If you have your brand with you there is no reason why you cannot promote it everywhere
you go. If you sell zippers, carry them with you so that they are always available. If you sell a
service then your brand logo should be on your person or carried with you every time you
leave the office. You are a walking billboard for yourself and your brand.

Protect Your Brand

Protect what your brand looks like by using the same logo, font, colors, message, visuals,
content, story and use it everywhere. Do not recreate your brand and have 10 versions of a
logo or a print ad, or a poster or a palm card.

Use the same everything that is on your website and take it to your business card, your
uniform, your advertising, delivery vehicles, notebooks, office window decal, client binders, T-
shirts, hats and other premium items.
If your colors are red and black, your other company items should be red and black. You
have to brand yourself to the point where people get sick of seeing you in the same colors all
the time. Who cares if they tire of it? They know you by your colors and your uniformity.
Brand it in their minds so that it’s recognizable.

Study Iconic Brands

If you doubt these branding methods, then take a look at the iconic brands: Tide, Coke,
Campbell’s, Apple, Sony. They keep the short, simple, consistent look everywhere their brand
is seen. They do not change. They have survived and there is no question what brand means
what.
Sure they do special editions, holiday themes but when you are a billion dollar brand as they
are, you can pick and choose your special editions and people will make collector’s items out
of them. Stick with the brand plan in the meantime.

Do not Get Stuck on Stupid

Do not get tunnel vision on any one aspect of your brand. Do not get obsessed with the logo
or stuck on one stupid thing. Have vision. Look ahead and have a 10,000 foot view for your
brand.
If you cannot come up with a tagline and it is holding up your business, turn it over to an
expert and hire them to create one. If you keep redoing your logo because you want it to be
cool and hip, stop it. Stop it now. You are obsessing over minutia.
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If you are focused only on your logo, you have real problems because you are not looking at
D

the bigger picture. Stay focused on the overall brand and how you want your target audience
to remember and recognize it. Yes, make the logo a priority. Do not spend all your time
creating it. Ditto for business cards or a T-shirt or a pen or a color on your website header.
They are all a part of your marketing plan and need equal amounts of attention!

You Are Not Your Target

On the whole logo issue…it does not matter if you like it. You are not your target. Want to
turn your target off, then create something that you like.

If you sell video games to 16-year-old teenage boys who play five hours of video games daily,
but you are a 40-year-old male with two children, married and play one hour of video games
daily, you cannot think like or react like your target audience.

Promote Your Brand

Let’s use one of the favorite brand Coca-Cola, as an example of successful promoter.
Over one billion people drink Coke every day. Coca-Cola can teach you how to promote a
brand correctly.

Start with an advertising budget which was Coca-Cola’s key to success. Coke has a
compelling story but not about its originator John Pemberton, but about the Asa Candler
who eventually owned the brand and turned it around with advertising. The actual creator of
Coke could not move the brand. The businessman who took the time to build the brand
became successful. He took it out of the soda shops and put into bottles which made a
formerly non-portable product, portable.

Think about promoting your brand the way that Coke did. Find that unique selling
point and market the hell out of it. Do the thing you think cannot be done and sell that. The
brand visual makes you thirsty when you see it because you have seen it for so long in
conjunction with the beverage. Your mind tells you are thirsty when you see the Coca-Cola
logo because you have been conditioned through advertising to experience the beverage.

They use a mnemonic (bottle popping open, Coke fizzing, beverage being poured into a
glass full of ice) in TV, radio, print, online that is so intrinsically tied to the brand that your
senses are triggered.

You can experience it through the memories of it. You smell it, taste it, thirst for it.
That is not a mistake. Coke spent millions developing and delivering its brand where you
drink it, where you buy it, and by controlling how it is sold. The logo alone now has the
ability to recall the actual senses you use in its enjoyment. I

This promotion is done in food advertising, for example, a pizza company. Pizza is not
for breakfast. It is for lunch. But it is most known for dinner. That is why the pizza
companies run commercials during the times of day when they know you will call and order
it. You will see, hear and actually crave pizza as they show hot, sizzling pizza covered with
gooey cheese, thick spicy-looking pepperoni. Your mouth waters for it.
That is what’s called a see and say: Say it as you show it. You see the food as they D

say its qualities in carefully crafted food descriptors.

You, the viewer, see the brand as they say the brand and you are drooling for that brand of
pizza. You want it.

It is sensory overload and it is a science. Read about it and learn it so that when
people think, say and see your brand they will want it just as much. You may not be selling a
world-renown beverage or a hot and now pizza. But the brand deliverables and your
marketing plan should be the same. If you position your brand correctly in front of your
target audience when they are most receptive to it and maintain a market that actually
craves the product in some way so much so that it is included in a part of its lifestyle, your
brand will be successful.

FYI: For those who don’t have advertising and marketing budgets today, here’s a little
known fact: Coca-Cola was spending $500,000 annually on advertising in 1906. The
marketing square has provided proven web results for clients whose websites are built using
advertising-based marketing plans. We fine tune client strategy to sell products or services
everywhere.

Online Brand Promotion

Online brand promotion is easy. Getting people to pay attention is difficult, and getting
people to share and care is even harder. Promote your brand in a way so that users willingly
share your content. People seem to think that having a little social media success is a sign
they are good at brand promotion, and yet they cannot understand why their products/
services are not selling and why their online traffic is not converting. Small business and
startups in particular have financial limitations for promotions, so they need to get creative.
There are several online brand promotion options, here are nine tips to help you promote
your brand online.

Social Sharing Of Your Web Content

Online brand promotion is not just sharing your content on the web. It is not enough
for people to see your brand on social networks. Everyone is doing that nowadays. What you
need to do is to target networks your target market frequents and engages in, and get them
to share your web content. You need to establish your brand as an authority in that niche.
For example, if your business is in arts and crafts, you can get quite a following on Pinterest
and YouTube. If you are a travel agency, you can create a significant presence in Facebook
and Twitter. The key is to provide targeted and shareable content regularly on all the relevant
networks. You can try using a social management tool to schedule posts. Social networks are
a great way to drum up interest, but it is so fluid and widespread that it can be hard to keep
up with it. You may be making the mistake of focusing all your energies on making a hit on
social networks that you neglect other important aspects of your business, such as your
website, and your actual business! You need to make sure that you also keep up with quality
content on your website. Choose what aspects of social media and which platforms can give
you the best results in terms of brand marketing. This way, you will have time for other
things.

Affiliate Advertising in All Shapes and Forms

It is easy to get into an affiliate network, and the best thing about it is that you only
pay when you get results. There are no upfront costs, which can be very enticing for a small
business or startup. This can work very well if your purpose is to sell quickly. However, if you
are trying to build your brand, you may be better off with a more direct form of affiliate
marketing, such as paid searches using a service such as Google AdWords. The benefit of
this is that you can test the market to find out how to drive target audience to your website.
You can start small, as little as $5 a day, until you find the right combination of keywords
that drive traffic most effectively.
0
Online Brand Promotion Using Word-Of- Mouth Marketing
Influencers and bloggers are a great way to get the word out on your brand if you can
get them to pay attention to you. You can offer them freebies or discounts as an incentive to
give you a little of their time. For example, you can send out product samples to influencers
for them to try, and invite them to post honest reviews and feedback on social networks and
your website. You can do the same for bloggers, and get them to post reviews on their blogs.
Most people check online review before they buy anything, and if an influencer or reputable
blogger gives you a thumbs up, that is great. You also create credible links back to your
website, and you might even get a video you can embed on your website. That would be the
best possible scenario. Easy, right? Well… Remember that these are big fish in what may be
a small pond, so you are not the only one trying to get them to what amounts to endorsing
your brand.

You have to give them a reason to give you the time of day. There are good ways and
bad ways to do this, and you obviously want to know the good ways. You can check out these
tips for your blogger outreach strategy, or study these case studies for influencer marketing.
Yeah, it’s a bit of work, but the potential rewards are huge if you do it right. On the other
hand, free product samples and discounts may be enough to get you some good word-of-
mouth action going, so you can start with that. If it doesn’t work, then you know you have to
do a little more strategizing.

Useful, Engaging, Interesting and Inclusive Content

Of course, content is still king when it comes to your own website. You should make
sure that you have a good blog on your site where you can post top-quality content regularly.
If writing is not your strong suit, you can always outsource some of that to professional
writers from a service such as Scholaradvisor, or invite people to contribute content. Search
engines, particularly Google, puts a premium on organic and relevant content, so this helps
your site rank higher in the keywords you are targeting. In addition, if you prioritize
providing high-quality content, your readers will be more than happy to help make your site
more authoritative by sharing them on social media, maybe even their own blogs!
Remember that content is not just about text. Infographics, videos, and awesome
images are just as valuable and searchable in brand marketing. Focus on creating something
interesting, unique, and fresh that reflects and refers to your brand without making it a hard
sell. You should also make sure that you can make it easy for your readers to share your
content by including share buttons above the fold, on the image or video, and provide embed
codes. Make it easy for them and they will share it.

Off-Domain Content: Educates People about Your Brand

Granted that you have made your website content relevant and shareable, you are still
limited in reach. It is like gaining popularity in high school, but getting no traction at all in
the larger world of college. You need a strategy that also creates off-domain content in
microblogs to put your brand message and story out there. Microblogging uses short
snippets, images, or short videos to tell a story, which distinguishes it from traditional
blogging. Twitter is a good platform for this type of posts, and so is Snapchat. It all depends
on the persona of your target audience. It is not the same as social network sharing, because
what you trying to do with off-domain content is to update your readers about what is
happening with your brand, and keep it in front of your audience.

Promote Your Brand on Their Websites

Referrals are always good. You can give your brand a jump-start by asking family,
friends, and co-workers to share a link to your site on their social networks, blogs, or
microblogs. You can incentivize them to do this by offering discounts or freebies for each
referral. You can offer the same thing for referrals that also refer to others.

Engage With the Online Community

Your brand is bound to appeal or be relevant to a particular niche, and each niche is
bound to be involved with some online communities. You can jumpstart your brand
marketing by getting involved in one or more of these communities. Make sure that you do
more that promote your brand or business, however, or you might get blackballed, or at least
get a negative reputation which can reflect on your brand. Make your presence felt in a
positive way by answering questions, contributing expert or at least practical advice, and
generally making yourself a useful member of the community. This will establish you as an
authority in the field, and create a relationship with other members. Brand marketing is not
just for the big players. A small business or startup can make great inroads into brand
marketing at minimal cost with a little creativity and a lot of elbow grease. However, there are
no shortcuts in this business. You have to be willing to play the long game for appreciable
results.
EXTENDING THE BRAND
A successful brand can offer opportunities for a business to grow. However, if you are
introducing new products or services, you must make sure they are consistent with your
existing brand values.
Stretching a brand too far reduces its strength and can damage it. If you are
introducing new products or services, consider carefully if they fit with your core
competencies and brand values. If they do, brand them in the same way as your existing
products and services so they benefit from your existing branding. If they don’t, you should
consider branding them separately. DIf your new products or services remain within your
core competencies but not your brand values, you can consider a diffusion brand. A diffusion
brand is a different message with its own identity tied to your existing brand. For example,
an insurance company’s core competence is getting things put right after they go wrong. If it
introduces a new service that repairs items rather than pays for their replacement, it should
be a diffusion brand: the Fixit Service from XYZ Insurance.
Remember that any problems with a diffusion brand will also damage your main brand, so
treat the diffusion brand with similar care. If your new products or services fit neither your
core competencies nor your brand values, you must brand them separately.

The Golden Rules

Creating and running a brand is not a black art. Once it has been created, following
some simple rules should ensure its continued effectiveness. Always think about what your
business achieves for your customers and structure your business to achieve it. Be focused
on your customers’ needs, but never let your customers dictate to you. It is your brand, not
your customers’. If you change your brand values just for one customer, you will damage
your brand. Do everything you can to make sure that the brand message is delivered
consistently.
From company letterhead to the way the phone is answered, your customers should
always feel that you are providing them with exactly what your brand promises. Keep your
staff involved with your brand. More than anything else, your employees will be responsible
for making the brand work. Make sure that everyone believes in it and encourage and take
notice of any suggestions they may make to improve the delivery of the brand message.
Meet and exceed what your brand promises to customers. Failing to deliver a brand promise
just once will damage your brand. Delivering your brand promise — and doing it better than
your customer expects — will strengthen your brand.
BUDGETING FOR A BRAND
As you are building and managing your brand, it is also a good idea to set a budget. This will
help you to avoid spending unnecessarily and to prioritize your branding spend.
Your brand should encompass most areas of your business, from stationery to how you
deliver your product or service to customers, so defining a budget can be difficult.
The key areas you could budget for are:
► design needs, such as a logo, signage, business stationery or product packaging
► changes to your premises
► your advertising
► time you will need to spend training employees ► any resources you will have to provide
for employees to enable them to carry out what the brand promises, e.g. customer service
costs
► keeping your company website updated

You do not need to do everything at once. As long as employees understand and deliver what
your brand promises, it stands a good chance of success.
You can create stationery, logos, packaging and advertising quite cheaply if the budget is
tight. However, it is a good idea to think about your future growth when devising your image,
as changing it later can prove costly. You may also find that customers and employees will
have already built up a relationship with your brand, which can then make it more
problematic to later change.

Financial Planning

Making money goes beyond earning or having a source of income. It involves effective finance
management, saving and investing in suitable financial assets in order for you to be able to
become more profitable.

You need to be able to make money through investments. Financial planning U

constitutes managing the income that you earn, setting financial goals and distributing
assets across a range of investments while you consider the requirements and limitations.

Forming a Plan

Financial planning can be a challenging task in terms of considering numerous past,

current and future aspects of your life to be able to come up with a practical financial plan.
In order for a plan to work effectively, it needs to be comprehensive, thoughtful and feasible
for the future. When individuals plan their finances, they should keep the stages in their
lives and needs in mind.
Everyone requires financial planning as long as they have money and seek to use it in
the best ways possible. Investment and financial planning are crucial for maintaining
optimum financial health. Financial planning is for people who have wealth as well as those
who are aiming to create or amass wealth.

Components of Financial Plans

Financial plans differ among people because they are tailored according to the needs
and wants of individuals. However, there are a number of components that should be covered
in every plan. These include setting goals, which makes it possible for you to plan your
financial journey when you know where you want to go.

Setting and Prioritizing Goals

► A goal should be a key step in financial planning. Goal setting serves as the foundation of
the rest of the planning process. It is important to ensure that the goals you set are
achievable and realistic.
► People usually have multiple things that they want to achieve. While you plan your
finances, you need to think about all your goals whether they are as major as allocating
retirement funds or as small as merchandise that you have had your eye on for some time.
This is why it is important to prioritize goals because they are not all equally important and
you have to determine what you want to achieve first.
► Prioritizing your goals efficiently is essential for proper planning.

Current Situation Assessment

Dreaming about financial success and visualizing a prosperous future is great but you still
have to face reality. Everyone should be aware of their present circumstances in life when
they want to plan for their future. A financial plan helps you create a connection between
your current and future life. The platform for your plan will be your goals and the
assessment of your current situation. Assessing your present situation will enable you to
start preparing for the future.
Read Information Sheet very well then find out how much you can remember and how much
you learned by doing self-check.

INFORMATION SHEET
Rebranding
Rebranding is the process of changing the corporate image of an organization. It is a market
strategy of giving a new name, symbol, or change in design for an already-established brand.
The idea behind rebranding is to create a different identity for a brand, from its competitors,
in the market.
There are several reasons for a company to go for rebranding. One prominent factor is to
connect with customers. Rebranding is good for the business, but at the same time it may be
risky. There is always a possibility that the consumers do not like the new brand.
There are two types of rebranding: one is Proactive rebranding and the other is Reactive
rebranding. Proactive rebranding is done when a company recognizes that there is an
opportunity to grow, innovate, tap into new businesses or customers, and to reconnect with
its users.
Let’s understand with the help of an example - Titan Industries rebranded itself in 2013 and
changed the logo as well as the name to Titan Company. The new logo highlighted the
company’s commitment to “create value, innovate, and maintain highest global standards”.
Reactive rebranding is done in a situation when the existing brand has be discontinued or
changed. Possible reasons for such an action could be mergers & acquisitions, legal issues,
negative publicity such as fraud, aiming to beat the competition, or create your own niche.
For example: If your company has recently been bought out by another company or when it
has merged with another company, the existing brands of both companies will have to be
merged into one brand.
Other examples of where reactive rebranding needs to occur are where a company’s brand is
losing traction as a result of increasing competitive elements in the market place. It is
important to consider the option of rebranding your products or services when your
competitor has rendered your brand useless.

Progress Check Test 4

D

I Directions: On a separate piece of paper, write down the meaning of the terms given below:
E

Terms Meaning

Brand

Budget

Rebranding

Brand values

Advertising

Marketing

Brand consistency
 Activities
M3.1 Fill in the Blanks. Below are words that belong to the statements below. Choose the
best answer that fits each of the statements.

Enthusiasm Decision-making Authenticity Brand building Social media

Copyright Elevator pitch Brand Target market Logo

1.________________ is regarded as the cognitive process resulting in the selection of a belief or

a course of action among several alternative possibilities.
2. ________________ is the perception someone holds in their head about you, a product, a
service, an organization, a cause, or an idea.
3. ________________ is the deliberate and skillful application of effort to create a desired
perception in someone else’s mind.
4.________________ is a group of customers within a business’s serviceable available market
that the business has decided to aim its marketing efforts towards.
5.________________ is intense enjoyment, interest, or approval.
6. ________________are computer-mediated technologies that facilitate the creation and
sharing of information, ideas, career interests and other forms of expression via virtual
communities and networks.
7. ________________ is a graphic mark, emblem, or symbol used to aid and promote public
recognition.
8. An ________________ is a 30-second summation of something, usually a business, product,
service, new venture—or you.
9. ________________ s the degree to which one is true to one’s own personality, spirit, or
character, despite external pressures.
10.________________ is a legal right created by the law of a country that grants the creator of
an original work exclusive rights for its use and distribution.

M3.2. Multiple Choice. Carefully read and understand the statements below. Choose the
letter of the correct answer.
1. Word "brand" is frequently used as a
a. Customers b. Marketing c. advertising d. metonym
2. Mainly, chief resource of authority throughout allocation channel is
a. Company b. Brand c. distributor d. customer
3. Firm buy either wholesale from other firms or directly from manufacturer on agreement or
is
a. c 2 c b. a 2 a c. both a and b d. b 2
b
4. Clearness regarding proportions of brands is clarity in
a. functions of brand b. aspects of differentiation
c. both of given options d. none of given options
5. Careful brand management looks to build products or services related to the
_______________.
a. target audience b. Cost c. profit d. all of
answers are correct
6. Visual trade name that recognized brand is
a. Logo b. Customer c. sounds d. slogan
7. Recognize additional cash flow in a branded firm when evaluated to an unbranded, and
equivalent, firm is a technique of
a. income split method b. multi-period excess earnings method
c. both a and b d. incremental cash flow method
8. In estimates messages for publicity, telling how good is best than challenging brands
aspires at creating ad is
 a. Meaningful b. Distinctive c. believable d. remembered
9. Observation of consumers that several brands are equal to
a. brand extension b. brand parity c. symbols d. brand trust
10. Identification and observation of a brand is extremely influenced by its
a. Marketing b. Loyalty c. visual presentation d. Both a and b
11. Firm uses any existing brand to introduce in market as a new product, brand is classified
as
a. brand extension b. Sub-brand c. parent brand d. product
extension
12. Branding strategy is also called
a. brand architecture b. branding rate
c. brand earnings d. brand responsiveness
13. When companies combine existing brand with new brands, brands are called
a. parent brand b. product extension c. brand extension d. sub-brand
14. Parent brand if it is associated with multiple products in brand extension is called
a. family brand b. product extension c. sub-product d.
parent company
15. Brand which is result of extension in brand or sub-brand is classified as
a. brand extension b. Sub-brand c. parent brand d. product
extension
16. Strategy of using individual family brand names is referred as
a. house of brands b. strategy house c. house of products d. extended
strategy
17. Branding strategies alternatively use by marketer's does not include
a. individual brand names b. company brand name
c. sub-brand name d. variant brands
18. Offering of all brands and brand lines by a particular Company is considered as
a. Company portfolio b. brand portfolio
c. brand line portfolio d. corporate portfolio
19. In designing brand portfolio, focus is always on
a. maximum market coverage
b. minimum market coverage
c. categorize market coverage
d. brand house coverage
20. When bands are introduced to compete with competitor
a. Flankers b. Competitive c. variant brand d. sub
variant brands
21. Brand equity related to worth of a
a. Consumer b. Franchise c. brand d. none of these
 ENTREPRENEURSHIP AND
COMMUNITY DEVELOPMENT
INTRODUCTION
Communities across the nation are struggling to find viable economic development opportunities and
have long relied on industrial recruitment to create businesses and jobs. This traditional community economic
development strategy is becoming an increasingly difficult approach, given the exodus of manufacturing
companies from the United States. Business retention and expansion is another strategy which fosters
businesses and industries that are already located within a community to encourage them to stay and expand.
Another promising approach is developing local entrepreneurs. Entrepreneurial facilitation, the focus of this
unit, is a community based method of addressing the needs and barriers facings local entrepreneurs. The
objective of entrepreneurial facilitation is to encourage and retain a diverse and robust local entrepreneurial
economy that leads to more opportunities for local residents. The purpose of this unit is, first, to introduce
readers to the concept of entrepreneurial facilitation, and second, to provide some guidelines on the
advantages and disadvantages of different forms of entrepreneurial facilitation, namely Enterprise Facilitation
and Entrepreneurial Coaching. Entrepreneurial facilitation is the process of providing direct, customized one
on-one assistance to an aspiring or active entrepreneur.

LEARNING OBJECTIVES
After reading and analyzing the unit, you should be able to:
1. Focus on creating an entrepreneurial environment
2. Describe the online communities for entrepreneurs
3. Explain the micro entrepreneurs: creating enterprising communities
4. Explain the entrepreneurship as a community development strategy
5. Focus on creating an entrepreneurial ecosystem
AN ENTREPRENEURIAL ENVIRONMENT
What We Learned
When economic developers talk about a positive environment for economic development, they are often talking
about the business climate in the traditional sense – are there sites in the industrial park, is the community
“business friendly,” are there roads and sewers for new factories? When we talk about an entrepreneurial
environment, we’re talking about much more.
There are three components of this environment that community leaders need to address:
► Culture – Awareness of the importance of entrepreneurs to the local economy, celebration of the value that
entrepreneurs bring, openness to entrepreneurs who often march to the beat of a different drummer,
acceptance that failure is part of the entrepreneurial process and a willingness to encourage and support
entrepreneurs when their first (or even second) venture doesn’t pan out
► Infrastructure – Moving beyond the typical notion of infrastructure to include traditional and non-
traditional leadership, educational institutions like community colleges and regional universities, cultural and
recreational resources, quality schools, social organizations that are diverse and emphasize creativity
► Entrepreneurial support elements – Specific programs and initiatives designed to provide a range of support
to entrepreneurs of all types when and how they need it, including service providers like the Chamber and
Small Business Development Centers, networking organizations and opportunities, financing programs,
business incubation services, mentoring and coaching, and youth entrepreneurship education in and outside
the schools. To explore these concepts in more depth, we suggest

Energizing an Entrepreneurial Economy – A Guide for County Leaders. T

Understanding the components of an entrepreneurial environment is jus the first step in helping
your community become more entrepreneurial. You also have to consider your readiness for
entrepreneurship. As part of the Energizing Entrepreneurship institute, we explored a Readiness
Assessment tool that provides a useful way for you to think about whether your community is
ready to embrace entrepreneurship as a development strategy. P

This tool identifies six readiness factors to consider: N

► Openness to entrepreneurship as a development strategy

► Commitment to balancing business attraction and support for entrepreneurs M

► Availability of entrepreneurship programs and support services I

► Willingness to invest in entrepreneurship development strategies

► A leadership team committed to entrepreneurship
► Willingness to work beyond town borders to tap resources and achieve success
 Entrepreneurs Can Enhance Local Communities
Your entrepreneurial venture can’t be successful in a vacuum. Whether you are a web based company without
local ties, a small business rooted in one neighborhood or a real estate company in the thick of many regions,
you can take the lead on contributing to local communities in a number of ways.

Doing so will increase your visibility among potential customers and will also promote social good to enhance
the community you are involved in. Investing some of your time and resources into improving the local quality
of life can have a ripple effect and be a valuable part of your business mission as your company evolves.

Here are some of the most impactful ways to stay engaged with the local community and enhance the
community as a whole.

1. Sponsor non-profit organizations in the community.

Whether you are affiliated with a non-profit organization through your own personal efforts as an
entrepreneur, or are simply looking for new ways to give back, consider sponsoring a worthy organization as a
company. You could join events, like Startups Give Back, to connect with businesses that need your
company’s help.

Many local organizations are looking for company sponsors to cover the costs of major events and some
administrative expenses. They will do their part to promote your generosity through their marketing efforts,
which can help you get more visibility in the community. You can also promote the organization in your own
marketing collateral as a major sponsor.

2. Incorporate volunteering in the company mission.

Make a passion for social good part of your company’s mission so you and your employees can give back to the
community together. Whether you are organizing food drives, volunteering at a soup kitchen or building
houses, volunteering can create a sense of kinship and also serve as a team-building activity.
Consider organizing group volunteer sessions with your employees and encouraging team members to share
their volunteer contributions with the rest of the staff. Encouraging a spirit of volunteerism and giving back
within your mission statement - and through ways you operate as a company -- can be beneficial to both team
members and the community at large.

3. Design a business model that gives back.

If you are in retail or any other type of product sales business, consider donating a portion of the profits of
each sale automatically. If you are in the service business, you could design a business model that gives a
portion of the proceeds to a charity or other non-profit organization. The goal is to automate the donation to a
non-profit so that all customers and clients are aware that a portion of their purchase ends up with a good
cause.
If your business can organically incorporate community enhancement into its ethos, that’s even better. The
real estate industry is a natural candidate for such efforts, as developers have hands-on experience with
neighborhood development projects and can take input from community representatives.

4. Contribute to the local economy.

Make a commitment to buy supplies and raw materials from local vendors and partner with local businesses
for any services and other business-related purchases.
Your purchases and investments will contribute to the local economy and may prompt business owners you
work with to recommend you to other contacts or customers. Establish strong relationships with these vendors
and partners as you develop and build your company to develop a solid reputation. Opening new businesses or
building new properties or even green spaces, like parks, can enhance a community by drawing in foot traffic
and tourism. New visitors will patronize local businesses, stimulating the economy.
5. Promote local businesses.
In addition to being an active participant of the local economy’s ecosystem, you can take the lead on promoting
other local businesses through co-marketing efforts or simply through referrals.
Encourage your customers to patronize local businesses that complement yours, and they may even do the
same in kind. The goal is to create a sense of community and camaraderie among other business owners since
you are all invested in selling and marketing to the same customers.
Whether you work in technology, real estate or food service, there are various ways you can connect with the
local community through your entrepreneurial venture. Showing your support for non profits and community
organizations can help you build value, both within the organization as you encourage a spirit of volunteerism
and philanthropy, and with your customers as you show you are invested in your local community’s quality of
life and future.

ONLINE COMMUNITIES FOR ENTREPRENEURS

The internet is an infinite resource of knowledge, with billions of pages about every subject imaginable. But its
greatest strength is connecting people to that information—and to each other.

Think of your favorite site—the URL that you reflexively check whenever you’re bored. Odds are, it’s a
community packed with constantly updated content: top new stories, photos from friends, and viral videos that
you’ll smirk at now and forget five minutes later.

These networks make the internet feel alive. Yeah, they can be distracting. But they also act as communities
where you can trade advice, talk to likeminded people, sharpen your skills, and make new friends.

Whether you’re a designer, maker, coder, or just a curious reader, here are the very best places to connect with
and learn from your peers online.

What is Entrepreneurial Facilitation?

Entrepreneurial facilitation recognizes that the person, rather than the business idea, is of first and foremost
importance. Thus, a facilitator focuses on the goals and dreams of the interested person, and not simply on the
details of developing the business plan. They engage clients in a peer relationship, rather than an expert one,
as they attempt to assist a person in starting and running a business. James Flaherty, a well-known coaching
consultant, emphasizes the importance of the relationship between a facilitator and the client. It must be
based upon mutual respect and trust, and both the facilitator and the client should feel comfortable
expressing themselves.
E

Assessing Enterprise Facilitation

The primary advantage of the Sirolli approach is that it works on a local level and insists on treating
entrepreneurs as partners and people first rather than dealing with the business details only. Another
strength of the system is that it has been tested in several different countries (Australia, New Zealand,
Canada, and the United States) and has a successful track record in many communities. For example, Lincoln
County Enterprise Development Corporation (LCEDC) in Minnesota started in 1999, claims that approximately
250 new or improved businesses to-date are prospering in the county, employing 500 residents, which is
almost 17 % of the county’s workforce as a result of the Sirolli approach.
Under the Adams County model, the entrepreneurial facilitator’s work is accomplished in coordination with a
local network of sponsors and supporters. These supporters range from accountants and lawyers to local
government officials, retirees and other community members who willingly give their time by sharing both
information and advice with aspiring entrepreneurs. Each network member is expected to provide services to
clients, which include pro bono legal and accounting work, marketing and graphic arts assistance, business
plan development, or financial planning.

Entrepreneurial Coaching
Entrepreneurial coaching is an emerging approach to entrepreneurial facilitation. Coaching, or ‘mentoring, has
been around for ages, whereby a client is ‘coached’ on the necessary skills by an expert. Entrepreneurial
coaches provide (1) assistance and support to local entrepreneurs and (2) stimulate the entrepreneurial
culture of local communities. The entrepreneurial coaching model was developed in response to some of the
disadvantages of the Enterprise Facilitation© method; specifically, the very large upfront cost that each
community must incur and the potential lack of resources or demand to support a professional, full-time
position.
Since an entrepreneurial coach comes into contact with many different people and businesses, they can serve
as a hub for connecting business owners who may benefit from knowing each other. Therefore, coaches play
an important role in building networks for aspiring entrepreneurs with existing business service providers,
financial resource providers, business suppliers and potential customers. While networking is always an
important asset for businesses, this is especially true for new businesses that often struggle through their first
few years.

Which Type of Entrepreneurial Facilitation is Right for Your Community?

Community economic developers must ask not only whether a community should have a facilitator, but if so,
which type of facilitator is best for their situation. Each form of entrepreneurial facilitation discussed above,
Enterprise Facilitation, the modified Sirolli approach, and entrepreneurial coaching, has advantages and
disadvantages. Some important considerations to keep in mind when deciding which entrepreneurial approach
is right for your community are:

Size and Location of Your Community

Where is your community located? Urban, suburban, or larger rural communities may have sufficient volume
of entrepreneurial activity and financial resources to adopt either the original or modified version of Enterprise
Facilitation. Small rural communities may simply not have enough volume to justify more than a part-time
facilitator. It is more apt for a community of this size to train several volunteer entrepreneurial coaches.

Available Monetary Budget for Project

How much is your community able to contribute for an entrepreneurial facilitator? If your community has the
funding, Enterprise Facilitation is an attractive option. However, if your community does not have the
resources to support Enterprise Facilitation©, a volunteer approach is more easily adopted, at least initially.
Also, a community may consider partnering with nearby communities in order to pool scarce resources.

Existing Entrepreneurship Support System

What is the state of entrepreneurship support in the community? It is necessary to review the existing
entrepreneurial support mechanisms within your community. Is there a SBDC or community college that
provides technical assistance to entrepreneurs? Perhaps, a staff member could be dedicated, at least half-time,
to enterprise facilitation. The coaching volunteer approach might complement existing resource providers.
Local Culture
Does your community have a history of innovation, local entrepreneurship, and risk taking? If so, the
community may be able to convince an existing or retired entrepreneur to serve as a facilitator. However, if the
community does not have a history of entrepreneurship or it has depended upon one large industry,
individuals from the local community may need to be trained as entrepreneurial facilitators or a full-time
facilitator may need to be hired from outside the community. What is the supply of potential volunteer coaches
in the community? If the community has an active volunteer component, the coaching approach is likely to
work well. If not, a community may need to pursue the full-time facilitator approach.

MICRO-ENTREPRENEURS: CREATING ENTERPRISING

COMMUNITIES
We suggest that the local authorities and Small Business Service work with the Local Strategic Partnerships
(LSPs) to find ways of catalyzing local partnerships and initiatives that can specifically address the agendas set
out in this book and that these should fit with sub regional and regional strategies aimed at economic and
social development. We are concerned that the proposed model for the LSPs does not incorporate this model of
community-led economic development since they are more focused on the most appropriate delivery of local
services. The real need is to create and support innovative activities which focus much more on self-help
initiatives by business and by the community.

Ways of further creating community-led strategies might involve:

► Greater community involvement and control of business support services. Local business providers
should see themselves as social enterprises (organizations that trade in order to achieve social aims)
serving their local communities, and therefore seek much closer ties within their areas than most providers
have shown in the past, including in their governance structure. The SBS should support such
developments.
► Increased community ownership of assets, including property which can provide, for example, managed
workspaces or diverse retail outlets. Such ownership can be structured in diverse ways from Development
Trusts through to co-operatives and commercial but community controlled businesses.
► Greater community engagement in developing strategies and implementing them. We have seen how
initiatives that build on business networks or that facilitate self-help (such as Sorelli’s enterprise
facilitation model) are effective in harnessing people’s energies and promoting development of new markets
and opportunities.

Raising the profile of micro enterprises

There is a need to develop a forum which brings together all organizations involved in supporting micro-
enterprises in disadvantaged areas in order to increase understanding and exchange best practice. There
could also be an award along the lines of the US Presidential Award for Excellence in Micro-enterprise
Development to support and raise awareness of the most innovative programmers and initiatives.

Promoting an entrepreneurial culture in disadvantaged areas

Because of the wide benefits of promoting micro-enterprise activity, we support the conclusion of the PAT 3
report on Enterprise and Social Exclusion that specific attention should be paid to enterprise in
disadvantaged areas by the National Campaign for Enterprise Awareness, perhaps along the lines of a
similar to Enterprise Insight. It could be called Raising Sights and should incorporate a relevant set of
partner organizations who could engage with the worst disadvantaged areas, undertake research,
implement approaches and spread best practice. M

Linking enterprise and citizenship in schools

We recommend that the Department for Employment and Education (DfEE) and the Department for Trade and
E

Industry (DTI) address the ways in which the promotion of the enterprise agenda within the school curriculum
and outside can be understood in broader terms. We know that enterprise programmes promote life skills as
well as interest in potential enterprise activity but such initiatives should also include the role of enterprise
within the community, for example with respect to social enterprises which create local solutions to local
problems. In this way the citizenship and enterprise agendas come together. For children in disadvantaged
areas there is enough evidence to show the beneficial impact of enterprise skills to warrant perhaps more
targeted resources to create extra-curricular activities and local projects.

Creating a fact base

The SBS in England, the Learning and Enterprise Councils (LECs) in Scotland and their equivalents in
Wales and Northern Ireland, should have responsibility for purchasing licenses to business data bases
from appropriate private sector providers such as Dunn and Bradstreet. This data can be used in
conjunction with local business surveys and Geographical Information Systems (GIS) techniques to
create comprehensive maps of regional, subregional and local enterprise activity. More in depth surveys
can be justified in disadvantaged areas in order to determine what strategies might be best implemented at
that level. It is also critically important that community organizations and local businesses are involved in
the data collection and have access to it since there is a need to increase local understanding of micro-
enterprises and motivate people to either start their own businesses or create business networks which
can further enhance their contributions to employment and to growth.

Relevant information could include

► Data on turnover and employment of local businesses. It would be useful to have information from a sample
of employers to determine who is employed and where they live in order to better ascertain local employment
content.
► Occasional surveys of people’s attitudes to starting a business in order to track changes in culture and also
to investigate further the barriers which people face.

Information on local money flows

► The diversity of micro-enterprise activity, and how it relates to personal circumstances (is it part-time, in
addition to employment income or the sole activity).
► Other missing areas of knowledge relate to different forms of self-employment activity such as home-based
work, the extent of different kinds of activities and their support needs.
► Information on the skills and employment of the local community. Where are local people employed and by
who? What are the skills of the unemployed?
► Data on suppliers, markets and products of local businesses in order to analyses the potential for
encouraging clusters and networks, supply chains and local purchasing.
► Data on financial services provided to the local business community particularly by banks and insurance
companies. This data is normally made anonymous so that individual businesses cannot be identified. The
banks should also be encouraged to make more use of their available data to undertake periodic analyses of
money flows within disadvantaged areas and continue to make information available on their lending
portfolios.
► Information on community assets and relevant community organizations and business networks.
► Data on housing, and their status as owner-occupied, private or public rented, and on commercial property,
as well as on transport and other infrastructure.

Embedding the gains from job creation and growth

There should be a specific focus on creating coherent economic development strategies which include an
analysis of how best to develop the market potential of microenterprises. The SBS should be involved in this
agenda as catalysts for business networks that create new market opportunities and work together to access
markets.
Much of the motivation and impetus for this development should come from groups of businesses
themselves alongside appropriate support. There should also be more effort devoted towards designing
innovative ways to encourage more local employment and to demonstrate the benefits of doing so. A great
deal more attention needs to be paid to outreach work by support providers in disadvantaged communities
in conjunction with local trusted organizations. Indeed, all initiatives need to have community engagement
and control if they are to succeed. It is not enough to promote the formation of incubator units. There is a
need for more flexible premises which can accommodate growing businesses and hence help business to
stay within the locality. Such managed workspaces could be social enterprises run as community assets
and offering a range of services to the clients.

Meeting demand for appropriate finance

For Government, there are a number of key actions that will help develop finance for micro-enterprises:
► Implement the recommendations of the Social Investment Task Force for a major new programme of
community development financial institutions.
► Detailed research on the demand, needs and constraints of finance for microenterprises in
disadvantaged areas based on bank services to business (both through business and personal banking),
on-going review by the Bank of England, and detailed surveys of the finance needs of micro-enterprises
(and potential micro entrepreneurs) conducted by business networks and community organizations.
► Consider the creation of a national micro-guarantee fund to work alongside the Small Firm Loan
Guarantee Scheme.
► Explore how to develop more consistent provision of micro-loans for business across the country.
► Support Regional Community

Investment Partnerships along the lines of those working in Scotland, London and the East Midlands. E

► Examine how credit scoring and other methodologies that determine access to microloans by unemployed
and other excluded people might be adapted and develop innovative ways to enable people to develop a credit
history. M

Understanding women’s enterprise

Business support agencies will need to tailor the delivery of their services to better reflect the backgrounds and
O

motivations of women in disadvantaged areas. The SBS should ring fence some of the Phoenix Fund money for
supporting initiatives designed to support women’s micro-enterprise in disadvantaged areas. Strategies could
involve:

► More outreach work for stimulating entrepreneurial attitudes amongst women in disadvantaged areas.
► Greater flexibility in the delivery of training that reflects women’s caring responsibilities and transport
constraints.
► Ensuring that support is available to people who work from home
► More partnerships with community organizations in the delivery of locally based enterprise training.
► Creation of peer group women’s networks.
► In some areas and cases the provision of ‘women’s only’ business support may be appropriate to the
personal circumstances and cultures of some women.
In order to mainstream gender concerns, business support agencies will need more information about
women’s micro-enterprise in different disadvantaged areas so that they know where to target their limited
resources. More data collection is needed on the nature and extent of women’s participation as owner
managers, their motivations and constraints. This focus on women also highlights and underpins the
need for support services inAdisadvantaged areas to be sensitive to the needs of different groups and to
work through community organizations and involve local people actively in design and implementation of
strategies.

To raise awareness and understanding about women’s micro enterprise amongst mainstream banks and share
best practice, the Bank of England could produce a special report on the ‘financing of women’s micro-
enterprise in the UK’ Banks should explore the potential of using peer lending groups to reach out effectively to
women micro-entrepreneurs, probably through intermediary organizations. Both the peer lending group and
the intermediary can effectively reduce the transaction costs and the risk faced by the banks. There is a need
to look carefully at how the benefits system supports the move into enterprise.

The following recommendations suggest some ways in which that transition might be made easier and hence
become more of an encouragement to people to consider enterprise:
► Greater flexibility in the provision of ‘in work’ benefits for people who want to combine some kind of
enterprise activity with their caring and domestic responsibilities.
► Developing an income bridge to help people to move off welfare and into enterprise.
► A period of at least 52 weeks of protected benefits would enable more people to successfully start and
maintain viable businesses and reduce the numbers of people returning to benefits. However, it must be
recognized that for many women (and clearly for some men too) a more realistic period for support would be up
to 2 years given the evidence presented here from existing women’s support programmes.
► Extending the four-week period of protected housing benefits would help to smooth the transition from
benefits to enterprise.
► The minimum of 18 months for entry onto the Self employment option of the New Deal for over 25s should
be shortened to enable more people to make use of this potential bridge into enterprise from unemployment.

Corporate Engagement
In addition to the obvious roles for successful businesses in providing mentoring and/or infrastructure for
micro-enterprises, or encouraging more local purchasing, there should also be a much more strategic and
market-oriented approach. Local intermediaries such as the SBS should be used to help link micro-
enterprises with corporates for mutually beneficial relationships in order to create new market opportunities.
Lessons can be drawn from innovative work in the US. There should also be consideration of the possibility of
creating community-owned property assets which would allow the development of a mixed ecology of
corporate, local retail and social enterprise outlets by cross-subsidizing the rents of local providers through the
rents of commercial brand names.
 ENTREPRENEURSHIP AS A COMMUNITY DEVELOPMENT
STRATEGY
A profound change in community economic development strategy over the past decade has been the emergence
of entrepreneurship. Now, as never before, community developers recognize that entrepreneurship is critical to
the vitality of the local economy. This change in strategy is due to several factors. A primary reason is the
impact of globalization in driving many manufacturing jobs to overseas locations and, thus, reducing the
effectiveness of using industrial recruitment as a strategy. Another factor leading to the rise of an
entrepreneurship strategy is the evidence that entrepreneurs are driving economic growth and job creation
throughout the world. For example, the National Commission on Entrepreneurship reports that small
entrepreneurs are responsible for 67% of inventions and 95 % of radical innovations since World War II. On
the international level, studies demonstrate the close connection between entrepreneurship and economic
development. According to the Global Entrepreneurship Monitor Project, there is not a single country with a
high level of entrepreneurship that is coping with low economic growth. We use the term “ecosystem” because,
just as in a biological system, entrepreneurs operate best when they have access to the resources that they
need and operate in an environment that is supportive. Furthermore, to develop sustainable entrepreneurship
in a community, it is rarely sufficient to change just one element in the ecosystem. Instead, community
developers and local leaders must change several elements simultaneously. This is reinforced by the examples
of communities such as Fairfield, Boulder (Colorado), Silicon Valley, and Iceland where a number of ecosystem
elements are strong and have evolved more or less simultaneously.

Who is an Entrepreneur Anyway?

We begin by considering the word “entrepreneur” which brings to mind different images for different people.
Some people think of high-tech wizards like Steve Jobs of Apple Computer or Bill Gates of Microsoft. Others
may think of a local quilt maker running a home-based business or a “mom and pop” store struggling to
survive downtown. A useful definition of an entrepreneur is a person “who perceives new opportunities and
creates and grows ventures around such opportunities”. This definition reminds us to focus on the person, not
the venture itself. Only about one in 10 American adults is currently an entrepreneur; that is, actively engaged
in the process of starting an enterprise (Markley, Macke and Luther). Bill Koch’s story in the sidebar provides
an example of how a successful entrepreneur can have an enormous benefit to a community. It is a common
notion that any and all business owners are entrepreneurs. But this is not the case. The characteristics of an
entrepreneurial business are innovation, growth, and a high degree of risk. Not all businesses have these
characteristics. For example, business owners who are focused on managing their current enterprise and are
not seeking new opportunities or growth are better categorized as business managers, rather than
entrepreneurs. The same applies to a person who decides to buy an existing franchise or retail store. While
managing an existing business requires business skills and willingness to take some risk, it is not necessarily
concerned with innovation and growth. Thus, it is not very entrepreneurial. However, a business owner, either
new or existing, can become more entrepreneurial by seeing an opportunity, implementing a new idea, and
taking on more risk in an on-going effort to grow the business.

The Entrepreneurial Talent Pool

Rather than debate who is and isn’t an entrepreneur, it is more useful to consider a community as having a
pool of entrepreneurial talent. This idea of entrepreneurial talent recognizes that not all entrepreneurs are the
same. It also recognizes that there are many people who are interested or active in starting businesses or
launching new markets for their current business. Entrepreneurial talent ranges from the stay-at-home mom
who is researching a new home business idea to the high-growth entrepreneur who is considering an offer from
a venture capitalist to a current business owner who would like to expand into a web-based store. Table.1
shows the different types of entrepreneurial talent. The four main categories of entrepreneurial talent are
potential (those who may become entrepreneurs), existing business owners (some of whom may be innovating
into new services, products, or markets), business entrepreneurs (including those with growth and even high
growth potential), and social entrepreneurs (those creating enterprises for social betterment). Entrepreneurs in
all these categories are people who community leaders want to identify and nurture. It is important to
recognize that the needs of entrepreneurs are not all the same. For example, aspiring and start-up
entrepreneurs need someone who can help them move from ideas to a solid game plan. They need help making
sure all the pieces are in place. Is the management team strong? Is there capital to start the venture? Are
markets clearly identified and strategies for tapping them tested? These needs can be met with moral support,
networking and mentoring, business counseling, and entrepreneurship training.

Lifestyle business owners might include a small retail store or a family medical practice. They may not desire
to grow the business at this time. Often the motivations of lifestyle entrepreneurs can change unexpectedly –
when a son or daughter returns to town and wants to be involved in the business or when the business owner
is faced with an opportunity such as the potential to expand into an adjacent storefront on Main Street or to
take the business “online.” Business owners who are motivated to grow their businesses need many of the
same support services as start-up entrepreneurs – networking opportunities, training to build their skill sets,
one-on-one assistance with specific business issues, such as creating a new website, developing e-commerce
tools or tapping new markets. E

Since growth-oriented entrepreneurs are often interested in developing a new product or cultivating a new
market, they may need knowledge of capital sources, assistance with marketing or expanding production. They
may need to expand the management team to encompass new skills. As their success has grown, their support
needs have changed from broad forms of general assistance to very specific, targeted business information
needs. To effectively support these growth-oriented entrepreneurs, support services should focus on
customized assistance, often of a technical and specialized nature. As part of the discussion about
entrepreneurial talent, let us look at social entrepreneurs. Social entrepreneurs create programs and resources
that benefit our communities and our lives. Often, this work is done through a non-profit organization or
informal community or neighborhood association. Social entrepreneurs need skills in planning their
enterprise, marketing their product or service, earning revenues or obtaining funding to keep the organization
financially solvent, and creating value. As with business entrepreneurs, they perceive and act upon
opportunities.
D

V
Table. 1 The Entrepreneurial Talent Pool O

T
CREATING AN ENTREPRENEURIAL ECOSYSTEM
The entrepreneurial talent in a community does not exist in isolation, but instead is connected to many people
and organizations in the community, from the local banker
to the Internet provider to the local business counselor. This external environment has a major impact on the
prospects for the entrepreneurs. We use the term “entrepreneurial eco-system” to describe an environment
that is nurturing for emerging businesses. A biological ecosystem is a system of elements such as air, water,
soil, nitrogen, light, and other organisms that are interconnected and interact together. Some ecosystems in
nature are healthier than others. In a similar way, elements and actors in human communities can interact to
provide the growth that entrepreneurs need. Creating the necessary ecosystem is a huge challenge, but the
payoff can also be huge: an economically viable oasis community in a desert of industrial hollowing out. In
Entrepreneur Magazine’s list of the top ten entrepreneurial ecosystems, four are outside the U.S. Tel Aviv is
second behind only Silicon Valley. Also included are London (seven), Toronto (eight), and Vancouver (nine),
suggesting the world-wide importance of entrepreneurship. The entrepreneurial ecosystem requires many
things, but can be understood through four categories of elements: Culture (sunlight), Human Capital (fertile
soil), Support Systems (rain), and Momentum (surrounding plants that are sprouting and growing). Eleven
important conditions are described here as part of the four ecosystem elements, offered with the caveat that
even though not all conditions can be changed by community developers, awareness of the conditions is
crucial to an entrepreneurship development initiative.

Human Capital is represented by fertile soil

Human capital refers to the skills, abilities, education, and experience of those living in the community.
► Entrepreneurial skills one vital skill set is the ability of individuals to start ventures and to marshal others
in the community in the bricolage process. Bricolage refers to the entrepreneur’s ability to create something
out of resources
on hand. True entrepreneurs don’t complain or give up when they don’t have available resources. They use
the available means and build something out of those means. Conversely, a community that has vast
resources for entrepreneurs but no entrepreneurial people to take advantage of those resources, or skills to
assemble them into a new enterprise, will not succeed.
► Presence of skilled workers once people muster up enough courage to start innovative companies, they
must be able to hire workers to code the software, operate the machines, generate press publicity, train
other employees, and produce more ideas for future improvement. Potential entrepreneurs usually consider
worker availability before deciding if a community would suit their potential business. A region with an
aggressive workforce development policy will make entrepreneurs feel more positive about their likelihood of
success.

Culture is represented by sunlight

Culture is “a set of attitudes, beliefs, customs, mores, values and practices which are common to or shared
by any group”. It applies not just to a nation, but also to communities. Each community has its own set of
norms, attitudes, and practices regarding entrepreneurship. Building an entrepreneurial culture in the
region should accompany efforts such as expanding technical and consulting assistance to entrepreneurs
► Perceived desirability of being an entrepreneur Social norms can encourage entrepreneurial motivation.
In your community, is entrepreneurship thought of as a “cool” career? This perception affects all age
groups, but could be more critical to startup rates among younger people. Thus altering this perception is
particularly useful for encouraging youth entrepreneurship. E

► Community support Just as a company’s workers need to feel they have support from management in order
to try new things, entrepreneurs need to feel their communities will support them. Do community leaders have
their backs? Ambitious entrepreneurs require less support than most people, but if the goal is to increase the
percentage of people trying out business ideas, encouraging the perception of support is beneficial.

Communities can communicate their support for entrepreneurs and potential entrepreneurs and encourage
openness and generosity with time and advice, through mentoring and networking initiatives. In successful
communities, there is a widespread belief that cooperation and building synergy will help everyone.

► Risk and failure tolerance

Conventional thinking says that entrepreneurs are people who love to take risks, but contrary to this
common conception, entrepreneurs may in fact be more risk averse than non-entrepreneurs. Because fear
of the consequences of failure discourages action, communities that encourage a little risk are more likely
to increase the number of participants in the ecosystem. Communicating toleration of failure could help,
but training people to ignore failure intolerance might be just as important. Venkataraman and
Sarasvathy offer a solution: a community should be “empathetic towards the entrepreneurial process and
evolve from treating setbacks as ‘failures’ to one that considers them to be ‘options’ ‘experiments’ and
‘learning opportunities’ and move away from a language of ‘failure’, ‘biases’, and ‘risk.’”. Of course, this is
a major shift in mental models for many communities and requires a long, sustained effort. One step
maybe for community leaders themselves to talk about their initiatives in entrepreneurship-building as
experiments, not guaranteed to succeed. However, even if the initiatives do not immediately succeed, the
leaders should reassure residents that the community will learn from them and continue on the path
toward a strong ecosystem.

Support System is represented by the nourishing rains

An effective support system for entrepreneurs has many players, including investors, local governments,
universities, and service providers. The players have different roles within the system, for example, banks and
investors supply financial capital, universities create new technologies that might be commercialized, service
providers provide business counseling, and schools offer entrepreneurial training. Each community must
develop its own set of program offerings based on the needs of its entrepreneurial talent pool. Among the key
offerings to consider are entrepreneurial education, access to capital, and access to networks.
► Networking support Fogel asserts that new entrepreneurs spend almost half of their time networking as they
seek support and motivation, counseling, access to opportunities, resources, and other needed information.
Research finds that “the diversity of individuals’ relationships is strongly correlated with the economic
development of communities”. Providing opportunities for creative people to network is critical, but the
networking programs need to be substantive, not just chats with the same people that already know each
other. Feld cites some good examples of efforts: “hackathons, new tech meetups, open coffee clubs, startup
weekends, and accelerators,” and open office hours from successful entrepreneurs and financiers.
► Positive regulatory environment Of course balance is important, as protection of creditors and enforcing of
contracts is necessary. Moreover, governments can compensate for lack of necessary institutions in transition
economies and turbulent environments. But too many rules and procedures can de-motivate entrepreneurs.
Entrepreneurs often find it difficult to navigate through the various regulations and requirements. Also they
can become overwhelmed in trying to determine which agency to contact for technical assistance on a specific
issue. Communities can help with a one-stop shop that provides assistance with complying with regulations,
as well as a directory of various service providers, such as the local small business development center.
► Access to customers
If a person opens a retail store, will that store have enough potential customers to enter and browse?
Likewise, manufacturers will need access to freight transportation,
web-commerce startups will need reliable internet access, and public relation firms will need proximity to
companies requiring their services. Access to transportation and other infrastructure can bolster both the
courage to start and the likelihood of success. Smart entrepreneurs consider this issue in their plans. They
might also consider the economic health of the region in deciding if enough customers will be able to afford
their offerings. Some communities that cannot provide sufficient customer access bring in broadband and
ecommerce infrastructure and training.

Momentum is represented by surrounding plants that are healthy and

vibrant
Momentum creates the feeling that “people can succeed around here.” Once a community has some
entrepreneurial movement, energy will pull other potential entrepreneurs into startup mode. Just as organisms
in an ecosystem encourage other organisms, successful companies help buoy up potential entrepreneurs.
► Perception of employer enterprise birth rates Startups that make the leap into hiring staff are different from
“solopreneur” efforts. Potential entrepreneurs are encouraged by seeing the presence of companies growing
large enough to create employment. An obvious action by communities is to publicize the growth of companies
and their hiring of staff.
► Business churn: calculation of birth and death rates. How fast are new companies being created and
shuttered? Is the net calculation positive or negative? The answer is also based on perception, but perception
is what encourages or hinders entrepreneurial motivation. Promoting positive stories and data on business
churn might have an impact on that perception.
► Positive role models. Some communities have more entrepreneurs than others, and that “proximity effect”
has an impact. Entrepreneurial motivation is benefited by the presence of other entrepreneurs. This is a huge
challenge because it requires momentum, as someone needs to succeed first in order to act as a role model for
others. Shining a light on those who do exist might be a place to start: communities can publicize the
successes they do have. Just one shining example can trigger momentum, such as Erik Hersman in Kenya.
Hersman is a pioneer in technology, technology, and humanitarianism who developed iHub, an Innovation
Hub in Nairobi, an open space for technologists, investors, and tech companies.
In summary, an entrepreneurial ecosystem requires four elements, human capital, culture, support system,
and momentum to function optimally. Community developers should recognize that in a dynamic economy,
churn will occur. Choosing to support only the most promising ideas and enterprises is never a successful
strategy. Leaders should encourage everyone to participate in the ecosystem. The more participants, the more
winners, and the better off everyone will be. Communities such as Fairfield, Iowa, a small town of only 10,000
people which is profiled in the sidebar, show that it is possible to develop a vibrant ecosystem and that the
results in economic growth and quality of life can be staggering. To create an entrepreneurial ecosystem,
communities must demonstrate their own willingness to experiment to find the best approaches that work
locally. R

Community Options to Improve the Ecosystem

N

There is no magic bullet, no single set of actions that a community should adopt to improve its entrepreneurial
ecosystem. As we have emphasized, much depends on the entrepreneurial talent and the current support
system and culture within the community. However, We provide some ideas to spur action. Since communities
are at different stages in developing their ecosystem, we provide two sets of options. The first set consists of
actions for communities in the starting phase. The actions are, generally speaking, not very expensive, yet can
have an immediate impact.

Actions for Getting Started

► Create Legitimacy through Conversation and Storytelling. A good first step is to start a
conversation with the community before you begin any intervention. Build a vision for an
entrepreneurial ecosystem. Warn people that discovering the initiatives that fit your particular
community will require experimentation, and that means some initiatives will probably fail. Some
individual ventures may also fail, but “now we allow failure here, so go ahead and try.” Also, seek
support for the belief that hitting chuckholes won’t stop the gradual growth of the ecosystem. This
will start the culture in the right direction, and preempt the naysayers. The content of the
conversation can also eventually become a message for evangelizing the community to the outside.
► Form an Entrepreneurship team. If there is little current support for entrepreneurs in your
community, you can start the ball rolling by forming a team of leaders and interested citizens to
lead the entrepreneurial effort. It may be that an existing organization, such as the local economic
development group, has an interest in entrepreneurship and could be the umbrella organization
for the new team. Once the team has come together, one of its first actions would be to examine
what the community is currently doing to foster entrepreneurship.
► Talk to Entrepreneurs. Yes, this is an obvious one, but it is critical to build your initiative on the needs
and wants of entrepreneurs. Conversations with entrepreneurs may reveal common needs and concerns
and clarify specific actions for the community team to take.
► Create Awareness of Entrepreneurs. Create a focus on entrepreneurs. This might include raising the
awareness level of community residents and leaders about the role of entrepreneurship within the
community. Going a bit further, a community might identify entrepreneurs and provide periodic
recognition for their contributions to the community. An Entrepreneur of the Year award presented at the
Chamber of Commerce banquet would be a specific example. This recognition is important because it
helps residents to see the importance of entrepreneurs. Gradually the culture can shift to one that is
supportive of people who start new businesses.
► Connect to Business Services. Take stock of your current access to appropriate business services (e.g.,
legal, marketing, production, financial, accounting). Access to the right services is important. Remember,
if these services are not available within the local community, as is sometimes the case in rural areas,
they can be accessed over long distances using today’s technology.
► Networking and Mentoring. Entrepreneurs at all levels of venture formation benefit from a network of
peers. Entrepreneurial networks can be formal or informal. An example of a formal network would be
monthly forums sponsored by the chamber of commerce that offer an opportunity for entrepreneurs to
meet their peers and share information about service providers, markets, or frustrations about doing
business. A network is a great place for an aspiring entrepreneur to get moral support as he speaks with
others who have already traveled the path to a successful business. E
However, networking does not have to be formal. Entrepreneurs will network whenever they come together in
one place. An informal breakfast meeting for young entrepreneurs, a friendly Friday happy hour for
entrepreneurs on Main Street can provide opportunities for entrepreneurs to develop connections and identify
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the resources and support they need from their peers. In many cases, simply providing a venue for
entrepreneurs to come together is all the work the community needs to do – the entrepreneurs often take it
from there. Mentoring programs can be effective in strategically linking an experienced entrepreneur with an
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aspiring or start-up entrepreneur. Mentoring can happen organically. For example, experienced Hispanic
restaurant owners in Hendersonville, North Carolina “adopted” new immigrants who were interested in
starting restaurants or catering businesses to help them learn the ins and outs of the sector. Mentoring
programs can also be established by creating a pool of experienced entrepreneurs who are willing to work with
new entrepreneurs in sectors where they have expertise (Markley, Macke and Luther). Low-population regions
without breadth of potential mentors might be able to establish virtual mentoring by recruiting mentors from
outside the region who can use internet and telephone to communicate with local potential entrepreneurs.

More Advanced Options to Improve the Ecosystem of Your Community

Once the basic elements of an entrepreneurial ecosystem are in place, a community can consider a
number of advanced activities to further energize entrepreneurs. Remember, more advanced support
doesn’t mean that things should become more complicated for the entrepreneur. Massive directories and
complicated pathways for entrepreneurs to access support can be counterproductive. We urge
communities at this level to create some kind of simple organization (probably using existing
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organizations) to ensure that entrepreneurial support efforts are understandable, easy to access and
seamless.
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1 Entrepreneurship Training and Business Counseling Programs
Aspiring and start-up entrepreneurs can often benefit from participation in training and counseling programs,
either one-on one or with other entrepreneurs. Small Business Development Centers (SBDC) are an important
resource in providing both training and counseling opportunities to aspiring and start-up entrepreneurs.
Furthermore, a number of well-tested “how to” training programs take entrepreneurs through the process of
starting their own businesses. FastTrac (http://fasttrac.org/) and NxLeveL (http://www. nxlevel.org/) are
examples of programs that provide an excellent curriculum for entrepreneurs who are in the early stage of
building their ventures. Community developers and leaders need to be closely linked with the Small Business
Development Center and other regional providers of training and counseling. Counseling programs may be
more appropriate for entrepreneurs who have already developed a business plan but need assistance with
specific aspects of the business. For example, an entrepreneur might need assistance in accessing export
markets or in understanding the licensing requirements for operating a commercial kitchen. These types of
questions are best addressed through the services of a business counselor who works one-on-one with the
entrepreneur. Community developers need to know enough about an entrepreneur and her skills so that you
can steer her toward the training program or business counselor that can best meet her needs.

2 Youth Entrepreneurship
How can young people even learn about business opportunities? Networking with entrepreneurs and business
owners is an excellent way to open the door to entrepreneurship. A mentoring or apprenticeship program
which matches a business owner to a young person in a one-on one mentoring relationship gives the potential
entrepreneur the chance to see how business is created in the real world. This, at least in part, may provide
the young person with the insight and encouragement for choosing the entrepreneurial path. A first step in
getting a mentoring program going in your community might be to invite community entrepreneurs into the
classroom. Entrepreneurs who tell their stories in the schools are providing the role models these young people
need to envision an entrepreneurial future for themselves. How can youth acquire the skills that they need to
become successful business entrepreneurs? Traditionally, K-12 education has focused on preparing students
to be good workers, rather than successful entrepreneurs. However, this is beginning to change as more
schools are offering activities, such as Junior Achievement, that provide youth with the knowledge and practice
of business. Some schools have gone even further by incorporating notable entrepreneurship training
programs in the curriculum. A successful example is the Rural Entrepreneurship through Action Learning
(REAL) program which is now being used in 43 states and foreign countries. In the REAL program, youth
create viable businesses that generate on average 2.2 jobs and sometimes move out to a permanent site in the
community (Corporation for Enterprise Development.) Another excellent youth training example is the CEO
program, (Creating Entrepreneurial Opportunities, http://www.effinghamceo.com/) in Effingham, Illinois. CEO
was developed by business leaders in the community to train the next generation of business leaders. They
funded the program for three years and hired a dynamic individual to design and deliver the training in the
local school. The effort was designed to be a “stretch” for the community. The program conformed to school
regulations for curriculum but was designed by entrepreneurs. Inclusion by juniors and seniors is by
application, and has become quite competitive. The program soon spread to neighboring counties, and CEO is
now partnering with schools in other regions to help them create similar systems. Youth entrepreneurship
camps are another approach to bring youth together with experienced businesspeople for intensive training
and guidance in starting a new business. Participants also learn how to successfully negotiate for business
materials, set goals, and recognize real business opportunities.

3 Provide Customized Assistance (to the full range of local entrepreneurs)

This might involve entrepreneurial coaches to work one-on-one with aspiring or start up entrepreneurs. It
might involve the city and library providing extensive and specialized market information to growth oriented
entrepreneurs, as the City of Littleton, Colorado does. This customized help may require significant
investment by local community organizations.

4 Create “Angel” Investment Networks

Communities can build on current financing resources by creating area-based “angel” investment networks
and pathways to more traditional venture capital resources (which may be external to the community).
Sooner or later, growing ventures need more sophisticated forms of capital including access to equity
capital. As entrepreneurial deals emerge and grow, the ability to help these ventures meet their capital
needs is critical to keeping these businesses within the community.

5 Design a High-Capacity Organization Dedicated to Supporting Entrepreneurs

These entrepreneurial support organizations, such as the Fairfield Entrepreneurial Association, are rooted
in communities and provide a comprehensive and sophisticated package of support that energizes start-up
entrepreneurs and develops entrepreneurial growth companies.

6 Start an Accelerator
An accelerator is very different from an incubator (smaller communities with fewer
mentors might be better off starting an incubator). An accelerator raises a small fund,then brings together
three groups: mentors (executives from established firms, etc.), high-potential entrepreneurs, and investors. U

The program is of limited duration, such as 90 days. The three groups work together to create knock-out
companies. The accelerator invests seed money, then venture capitalists invest larger sums. For communities
short on resources, an accelerator can be sponsored by a university, using the school facilities and resources.
Often people will borrow large sums of money to realize their dreams of owning a business, but face
bankruptcy when they learn the business is not needed by the market. Accelerators help potential
entrepreneurs to test ideas before funding and launching.

Keep in mind that entrepreneurs need better networks, not simply more programs. It is vital to establish
relationships with entrepreneurs and to be responsive to their needs. Adding more complexity and more
layers of service is not going to lead to success. Instead, having a clear pathway to available services and
helping to establish networks will bring your community closer to having a vibrant entrepreneurial
ecosystem.

Benefits of Entrepreneurship as a Development Strategy

In contrast to the industrial recruitment model, whereby communities try to attract firms from outside the
area to locate in their communities, entrepreneurship relies on local resources for job creation and
economic activity. Jobs created under this development method, although usually fewer in number, are
typically more skilled than employment opportunities in large firms found that local communities are
enhanced by small, locally owned businesses. Because they are embedded within the community, small
businesses and community institutions improve socioeconomic well-being (higher income levels, and
lower levels of income inequality, poverty and unemployment). Thus, an entrepreneurial strategy has
greater potential to build civil society and community sustainability. Entrepreneurship is particularly
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gaining popularity in rural America, as the loss of both traditional manufacturing and farming jobs is
forcing many rural residents to either commute long distances for employment opportunities or to
relocate to (sub) urban areas.

Supporting Entrepreneurs and Entrepreneurship

Traditional entrepreneurship support, including technical and management assistance, is driven by top-down
programs, primarily through the U.S. Small Business Administration, including Service Corps of Retired
Executives (SCORE), Small Business Development Centers (SBDC), and Small Business Institutes (SBI). These
programs were initiated over three decades ago due to the recognized lack of, and need for, technical
assistance services for small business owners. Counselors work with clients, guiding them through the process
of developing a business plan with the focus being on the business idea or concept. While these programs
involve local residents, they are restricted and driven by the nature of the federal funding. It is increasingly
recognized, particularly in rural communities, that there is a gap in support services to entrepreneurs that is
not filled by technical assistance providers. Typically, because SBDCs must serve a large number of
communities, they are unable to provide long term customized assistance to any individual entrepreneur or
business owner. The long distances associated with traveling to SBDC offices and unfamiliarity with their
procedures has limited their use by many entrepreneurs, particularly those in rural areas.

Benefits of Community for Entrepreneurs

When you are running a business your business inspiration can come from almost anywhere. However, a few
small business owners forget to use one of the most important tools laying at their fingertips. One of the most
important tools that you
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can use is community. In any city there will always be a community to connect with, and as an entrepreneur,
you need this. There is the community of small business owners, already established, and full of knowledge,
right there in your city. There is a community of entrepreneurs and entrepreneurs in your industry or niche,
again, right there in your city. You can usually find them at any tech spot, online, or at the university. (Ask the
local Chamber of Commerce for some suggestions if you are new to the area.) Watch for events where you can
hook up with like-minded individuals. Often these communities become your inspiration, your friends, your
partners, and your emotional support community. Even if they are not a close friend, your community will
listen, because they all need and want to know what you have to say. Your community will help you figure out
what went wrong or what went right so that they can use this knowledge to their mutual benefit. Here are 5
benefits of having or joining a professional community for entrepreneurs:

Learning from each other›s mistakes

It is an important function of your community of entrepreneurs to be aware of what is going on with each
other’s businesses and really understand the complete story of what is happening in the business. If you are
paying attention you will be able to see some actions that others in the group are using that may or may not
work for you. It is a great way to avoid some major pit falls in the business world by giving you the direction to
take, and the possibility of being able to use their adaptations for some great success maneuver in your own
business. Most entrepreneurs I know like talking openly, truthfully, and want direct discussions. Each
entrepreneur “gets,” to take their turn at success and at failure. Listen and learn and you’ll save yourself a lot
of headaches.

Exchanging tips of the trade

For any entrepreneur, just starting out is so exciting, but this time of beginnings
can also be confusing. Having other people that have had some experience be there to give you tips and
secrets that you can use helps tremendously. You will be able to start off smoothly and keep going strong
when the times are tougher. While you can and should read about many tips online, it helps to hear
experiences from the pros, understanding that the only real way to find out for sure what works for you is
to try the new ideas and information you find out from your community and apply the suggestions in your
own life and business. These exchanges about the tips of the trade will help you have a greater depth in
your connections with these people. You will in turn give your tips to the group, and reciprocate the help
that you have received. It›s great.

Passing on knowledge
One of the biggest functions of a community of entrepreneurs is to pass on the knowledge that has been
gathered from experienced professionals to the less experienced entrepreneurs. But this is also a place
where you can find a mentor, and/or become a mentor for someone else. In a tight, trusted group of
entrepreneurs you become a long standing business partnership and establish yourself with each other as
a safe place to garner advice when you have a heavy decision to make. You each become a needed person
for the other entrepreneurs that are there.
Making connections
Networking is a skill that you will always need in business and in your personal life. If you don’t know how
to do this naturally, learn about it. Making these connections within your community is the greatest reason
the community is there. In your network of entrepreneurs you will find that, in time, you will know each
other well enough that you can give them a reference if they need one and they will do the same for you.
You can do favors for each other and help your entire community grow their businesses and get ahead.
This network builds trust and confidence in each person of the group. Willingly displaying positive actions
for each other raises your whole group to a place of success and accomplishment. T

Learning new businessskills

A great action that can yield some forward thinking achievement in your community D

group is to learn new business skills together. One way to do this is to highlight the accomplishments of one or
more members at your meetings. Sort of like a mini summit.
Your community of B2B entrepreneurs can offer services and skill sets to make the lives of entrepreneurs
easier! You can always start your own entrepreneurial group, online or otherwise.
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There are no rules here, but the benefits will outweigh any hassle it may take to get your community
started.

Innovation and Entrepreneurship in Rural Communities

The chronic depopulation ofrural communities has led to a growth gap between urban and rural
communities throughout the country which in turn challenges academics to undertake research on
innovation and entrepreneurship in rural communities. The plight of rural economic development and
entrepreneurship has been at the forefront of concern from the Kauffman Foundation, National
Commission on Entrepreneurship, and the Corporation for Enterprise Development. In addition,
Drabenstott, Novack, and Abraham (2003) summarized a number of presentations at a conference on
rural entrepreneurship. Participants concluded that globalization was making rural incentive policies for
job and economic growth less effective. Policies and programs dedicated towards rural economic
development may need to be overhauled, and the ability of rural entrepreneurs to acquire sufficient equity
capital and other forms of financing provides a considerable gap relative to urban centered entrepreneurs.
Nonetheless there was a consensus among participants that ‘rural policies built around entrepreneurship
offer the greatest chance of helping rural regions” (page 74) perhaps within the contextof an
‘entrepreneurial ecosystem’ in which policies towards rural economic development were based on four
pillars.
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1) Entrepreneurship education and training are critical in economic development strategies

2) Policy needs to foster the creation of business networks that link entrepreneurs to suppliers and capital
resources
3) Policy needs to ensure access to capital, and
4) Infrastructure and institutional support are critical in programs based on entrepreneurship.

The global economic trends that have led to the disincentives in rural America have transformed some of the
world’s advanced economies into enterprise economies (Ibrahim and Goodwin). Factors such as rapid
technological change, innovation, and globalization have created a new economic imperative in these
economies: a shift in demand from standardized too highly differentiated products and the agricultural and
food system is no exception. As discussed above, reliance on entrepreneurship is becoming a matter of public
policy to rejuvenate rural economies, but what is not well known and what is desperately understudied is the
role that the entrepreneur and innovation will play in this revival. Outside of this rural setting, Burns has
analyzed the small firms’ competitive advantage over the larger firms under this economic environment. It is
argued that the less bureaucratic, more flexible operating structures of small businesses allow them to quickly
adapt and respond to innovative advances in production, marketing and other areas of operations. Moreover,
larger firms ignore investment areas for highly specialized products whose limited market potential poses a
constraint to the attainment of optimal production scale and profits.

A Hypothetical Entrepreneurial Strategy Model

A prototype of small business start-up cases is developed here by putting together early business survival
barriers, along with a hypothetical set of strategies, commonly cited in the literature. The ideas and concepts
compiled in this analysis were derived from a wide geographical range of entrepreneurial experiences from
Canadian, American, and European sources.

Management Barriers
Survival efforts of small businesses can be impeded by the entrepreneur’s execution and skill deficiencies. A
study conducted by the Advisory Council for Applied Research and Development(ACARD)in the United
Kingdom (UK) explains the execution deficiency barrier as the entrepreneur’s shield against potential threats to
their personal control and prestige (Bosworth and Jacobs). Kets de Vries views this issue from a psychological
perspective whereby the entrepreneur’s overwhelming desire for recognition is transformed into an obsession
with control. Empirical evidence from Canadian (Litvak and Maule) and U.S. (Alpander, Carter, and Forgren)
businesses suggests that entrepreneurs in general are indeed reluctant to delegate tasks within their firms.
Managerial incompetence can also arise from skill deficiencies. Knight developed a hierarchy of entrepreneurial
management styles which progressed from the craftsperson level, to the promoter, and ultimately, the general
manager level, at which the entrepreneur possesses all qualities of the lower two levels. Incompetence arises
when the entrepreneur’s skills conform only to either of the two lower skills levels in his hierarchy.

Management Strategies
A study by Hoad and Rosko on Michigan firms suggests that execution and skills deficiencies can be remedied
by the formation of management teams within the business. Stevens justify such strategy by emphasizing
linkages between increased revenues (and profits) and decisions to adopt job delegation and collegial
management strategies se of external advisors and the small firms’ successful operations.

Marketing Barriers
Start-up firms often have to deal with market competitors that are relatively larger in size and have already
established some reputation in the industry. These large competitors’ dominant market presence allows them
to enjoy captive markets for their products. Hoad and Rosko, however, clarify that it is not right to claim that
a business fails because it was run out by competition. They contend that failure could instead be attributed
to the owners’ lack of aggressiveness, poor marketing abilities, and substandard workmanship. The following
marketing strategies are usually prescribed for owners of new firms that are trying to gain entry into a new
market.

Marketing Strategies
Specialist or niche marketing strategies, which could be either market- or product-based, are commonly
prescribed to address marketing concerns. A market-based specialist marketing
strategy requires a market segmentation approach which entails the division of a market into homogenous
consumer groups and tailoring the marketing mix for specific target markets. McGee, in the UK ACARD study,
describes market segmentation as the conventional recommendation to small firms, although he warns that
conditions within an industry must allow the existence of segmented and protectable markets. A product-
based niche marketing strategy requires product differentiation, a strategy where a product is modified and
enhanced to differentiate it from the competitors’ products to produce a more attractive and unique appeal to
potential customers. Among small firms, product differentiation can be usually achieved through good product
engineering and development or by emphasizing the “non price elements of the marketing mix” (McGee; Burns)
such as more personalized services that could be customized to suit each individual customers’ needs and
preferences. However, certain market niches could sometimes offer limited revenue potentials for a start-up
firm. In this case, small firms could consider employing product or service diversification
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strategies to mitigate the market’s revenue D

limitation (Burns; Knight).

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Production Barriers
An entrepreneur usually has to deal with a myriad of production issues related to human and physical
resource supply andendowments in the early years of business operations. These concerns often require
serious considerations of tradeoffs between what the start-up firm can afford given its financial capability and
what the envisioned production plan requires in order to offer high quality, competitive products in the market.

Production Strategies
In response to labor quality and turnover concerns, Barber, Metcalfe, and Porteous recommend the latent
labor shortage strategy. The strategy entails downgrading of production technology to coincide with the
workforce’s skills level in order to avoid problems of overcoming actual shortages of skilled labor. Bosworth
also recommends the implementation of formal in-house training programs with higher “firm-specific content”
as a way of locking the employees within the small firm for a certain period of time

Financial Constraints
The entrepreneur’s reluctance to share ownership and the firm’s limited access to credit create financial
constraints for the new small firm that, in turn, cause operational difficulties. Business control issues preclude
equity investors as possible sources of additional funds for the firm. Inadequate credit histories and collateral
properties are translated to poor credit risk ratings for the new small firm that influence lenders’ decisions to
deny most of these entrepreneurs’ loan applications. Meanwhile, liquidity conditions during the start-up years
could deteriorate due to, among other factors, low initial revenue levels (during the market introduction phase
of the firm’s new product), slow collection of receivables (since longer collection period could be used as a
marketing ploy to generate customer interest in the product), and difficulty in obtaining credit from input
suppliers (again for the same reasons that new firms are unable to obtain credit from institutional lenders). As
a result, the funding requirements within the start up firm could increase due to these cash flow-related
problems and the firm ends up undercapitalized where funding available from owners’ equity investments and
limited external debt sources fall short of the actual funding requirements.

Financial Strategies
Given all these considerations, it seems that the problem of undercapitalization in the early years of business
operations could only be resolved if the entrepreneur would consider giving up some business control and
allow equity investments into the firm. Moreover, the small firm might want to consider starting at a
reasonable size/scale and ensure that prudent financial controls (for inventory, receivable, and payable
management) are in place to manage cash position at all times

Agribusiness versus Non Agribusiness Entrepreneurs

The incidence and relevance of these start up barriers and business survival strategies, which have been
derived from empirical models with general business applications, are expected to vary among entrepreneurs
from agribusiness and non-agricultural sectors. Agricultural businesses often are more challenged to deal with
highly risky business situations than businesses in other industries.
Business risks in agriculture, due to, among others, weather and pest infestations, could cause wide swings in
farm production. Moreover, farm producers deal with additional risks caused by fluctuating resource and
commodity prices. Lenders are cognizant of the risky nature of farm operations and, hence, are known to be
more cautious about lending to farmers.
Among the production issues discussed with the respondents, labor-related problems were not prevalent
among both sets of
entrepreneurs.A more common concern for both groups was the inadequacy of business start-up facilities. In
general, these firms initially operated relatively small businesses and later felt the pressure to expand as new
target markets were identified. The pressure to expand was apparently more significant among non
agribusiness firms that had to deal with larger market competitors.
In the area of finance, mostly non-agribusiness firms had concerns about undercapitalization and liquidity.
This trend isa result of the structure of the industries they operated under. Again, larger market competitors
created the pressure for these start-up firms to consider immediate expansion plans that entailed larger
investment cost outlays. Moreover, illiquid conditions arose from more aggressive marketing plans they
implemented that involved more sale discounts and favorable collection terms to be able to compete effectively
in the market. N
Understand how much you already know about using appropriate knowledge offood organic
consumption on food security E

Role Of An Entrepreneour
► Mobilization and allocation of resources e.g raw material, equipment and facilities, funds.
► Managing employees and of operating the business.
► Ensure business objectives are achieved.
► Ensure the needs of the customers are satisfied.
► Ensure laws and regulations of the Country are followed.
► To ensure high rate of return, goodwill and reputation of the organization.
► Redress of grievances concerning the business and environment generally.
► Providing marketing efficiency.
► Accepting risks (uncertainties).
► Processing marketing information that is make it available and utilized take advantage of business
opportunities.

Read Information Sheet very well then find out how much you can remember and how much you learned by
doing self-check.

INFORMATION SHEET
Importance of Entrepreneurship in Developing Country
The entrepreneur who isa business leader looks for ideas and puts them into effect in fostering economic
growth and development. Entrepreneurship is one of the most important input in the economic development of
a country.

The nature ofa developing economy is quite different froma developed economy. The developing economy can
be an agricultural country moving towards industrialization or it may be the one where the industry may be in
its infancy lacking advance technology.

The modern era is an era of changes. The whole world is becominga village due to the industrial revolution and
fast developing communication technology. The globalization of industry and commerce is bringinga vast
change in various aspects of life.

Economic development ofa country is the outcome of purposeful human activity. The modern era is an era of
changes. The whole world is becominga village due to the industrial revolution and fast developing
communication technology. The globalization of industry and commerce is bringinga vast change in various
aspects of life.

Economic development ofa country is the outcome of purposeful human activity. Economic development isa
highly dynamic process characterized by the pattern of demand shifts, new products are needed, appear for
the production of goods withina country.
A developing country needs entrepreneurs who are competent to perceive new opportunities and are willing to
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incur the necessary risk in exploiting them. A developing economy is required to be brought out of the vicious
circle of low income and poverty.
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Entrepreneur can break this vicious circle. Entrepreneurs and helping government can change a
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developing economy in a developed economy.

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Progress Check Test 5

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Directions: On a separate piece of paper, classify the different kinds of words according to their meaning in
entrepreneurship and community development
 Words Meaning

Economic growth

Entrepreneurial

Financial planning

Enterprise facilitation

Local strategic partnerships

Micro-enterprises

Social Investment
 Activities

M3.3 Fill in the Blanks. Below are words that belong to the statements below. Choose the best answer that fits each of
the statements.
Networking Entrepreneurial facilitation Human capital
Entrepreneurial coaching Microenterprise

1._______________ recognizes that the person, rather than the business idea, is of first
and foremost importance.
2._______________ is an emerging approach to entrepreneurial facilitation.
3. A_______________ is generally defined as a small business employing nine people
or fewer, and having a balance sheet or turnover less than a certain amount.
4._______________ refers to the skills, abilities, education, and experience of those
living in the community.
5._______________ is a skill that you will always need in business and in your
personal life.

M3.4 Multiple Choices /True-False. Carefully read and understand the statements below. Choose the letter of the
correct answer.

1. An entrepreneur into the hosiery business found out the reason his hosiery was not selling was due to its color.
What could be the best source of this
Information?
a. Supplier
b. Retailer
c. Competition
d. Government
2. In some countries, points of purchase displays are not allowed in retail stores.
Such differences are studied by international entrepreneurs under _______________
environment.
a. Economic
b. Political
c. Cultural
d. Technological
3. Having more than 50% ownership position that provides the entrepreneur
with managerial control is called_______________
a. Joint venture
b. Majority interest
c. Horizontal merger
d. Diversified activity merge
4. The development of a new venture based on an inventor's work often
Requires _______________
a. Expertise of an entrepreneur
b. Heavy investment from financers
c. Skilled human resources
d. Highly educated staff
5. A business where an individual is both the owner and conductor of the
business affairs is called_______________
a. Sole Proprietorship
b. Partnership
c. Corporation
d. None of the above
6. In ……………, the entrepreneur has the right to sell any assets.
a. Proprietorship
b. Partnership
c. Limited Liability Company
d. None of the given option