Caron St. John, Ph.D.

Dean, College of Business Administration

US economy:
18,500 firms with 500 employees or more 28 million with fewer than 500 employees
21 million have no employees sole proprietors 7 million have employees

Small business are:

99.7 % of US employer firms (those who have employees) 64 % of net new private sector jobs 49 % of private sector payroll 46 % of private sector output 43 % of high tech employment 98 % of exporting firms 33 % of the value of exports

Home-based business Franchise Sole Proprietor Corporations Employer businesses No employees

52% 2% 73% 19% 22% 78%

The data show -- during a downturn in the economy, a significant number of sole proprietors were unemployed in the previous year.

Small firms are shrinking: Of the small firms who employ others.the average number of employees per firm has been going down steadily for a decade.
The poor economy played a role --- but there is a longer, more persistent trend. Technology.
Free Agent Nation Movement online for services and retail.

So. Small business not generating the job growth in the economy that it did in previous decades.

Still have a lot of new firms startingand failing: The rate of new firm formation declined during the recession but is back to the normal level.
About 10-12% of firms with employees are new each year and about 10-12% close down. Churn rate is even higher among sole proprietors.

Survival rates have not changed:

Half of new firms survive five years; One-third survive 10 years

Immigrants are almost twice as likely as the native-born to start new businesses. Latinos and Asians are more likely to start businesses than whites or African-Americans. Men are more likely to start businesses than women. The share of businesses created by veterans declined over the last 17 years as the working-age veteran population declined. The states experiencing the largest increases in entrepreneurial activity over the past 10 years were Nevada, Georgia, Vermont, California, Louisiana, and Massachusetts. The MSA experiencing the highest entrepreneurial activity is Miami, lowest is Detroit.

Survey of 652 US born CEOs from 502 engineering and technology companies formed from 1995-2005. Mean and median age 39. Twice as many older than 50 than younger than 25. 92% held bachelors degrees 31% held masters, 10% held PhDs. Half in STEM, 1/3 in business Tech entrepreneurs who held MBAs established companies more quickly

1/3 of young firms use only personal start-up funds owners savings. This is the most common source of start-up capital. Of the 2/3 of firms that do receive financing, Personal loan, business loan, family loans; lines of credit, credit cards 6% comes from outside equity such as venture capital firms or angel investors. Only a small fraction of Inc. 500 fastest growing companies receive venture capital! Most businesses over 50% -- are not growth business, so no expansion funds are needed.

81% of Alabama small businesses have no employees (compared to 78% nationwide); most of the remaining firms have fewer than 20 employees In Alabama, fewer very small business loans are made (less than $100,000) compared to 10 years ago but the average size of the loan is higher.

What we do.

Disciplines & Majors

-Accounting -Economics - Finance - Information Systems -Organization Behavior/HRM - Mgt Science/ Operations - Marketing - Organization Theory/Strategy

Distinctive Competencies

Centers, Labs, Offices

Center for Management of Science &Technology (CMOST) ICE Lab (Innovation, Commercialization,
Entrepreneurship)

-New Product Development -Technology Commercialization -Entrepreneurship - Technology & Innovation Management -Decision-Making & Risk Management

Small Business Development Center (SBDC)

Procurement Technical Assistance Center

-Information Assurance & Security -Supply Chain Management -Enterprise Resource Systems - Computational Economics -Contracts & Acquisitions Management/Accounting - Human Resource Mgt

Integrated Enterprise Studies Lab Center for Management and Economic Research (CMER)
Alabama Technology Network Office of Supply Chain Management Office of Freight Logistics and Transportation Office of Strategic Management Services

High school entrepreneurship summer camp Undergraduate concentration in entrepreneurship for business majors, courses and minors for non-business majors, E-Club with e-Launch, $10,000 Boeing new business plan competition, Graduate concentration in entrepreneurship, increased funded grad assistantships for working with BizTech, Hudson-Alpha.
Disproportionate number of MBA grads join entrepreneurial ventures International recruitment targeting student entrepreneurs who want to come to the US.

ICE Lab Visiting professor John Whitman is leading.

Teams of students, special projects

SBDC Business plans, financing, government contracting. Advanced Technology Defense Cluster Led by VCSI, training, networking, collaboration.
Tech Connect Summit - tomorrow commercializing technology from AMRDEC and NASA

Proposal Center of Excellence in Dual-Use Technology Commercialization; Partnerships for Innovation.

Celebrate Entrepreneurship Koch Foundation Distinguished Speaker Series on Entrepreneurship and Economic Development Entrepreneurs Roundtable each semester (October) Entrepreneurs tell their story if they can do it, you can do it.
Thursday, April 17th: IT Entrepreneurship

Participate actively in community efforts to build entrepreneurship infrastructure incubators, new venture planning, etc.

Encourage kids to
Take on a paper route Start the lemonade stand Mow lawns Sell Girl Scout cookies

Celebrate the stories of successful entrepreneurship. Entrepreneurship as a lifestyle not just a job. Focus on the customer. Love what you do. Independence.

caron.stjohn @ Uah.edu 256-824-4424 SBDC and ICELab