Dr. Michael H. Morris James W. Walter Eminent Scholar Chair of Entrepreneurship Academic Director, Program in Entrepreneurship University of Florida

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1 Dr. Michael H. Morris James W. Walter Eminent Scholar Chair of Entrepreneurship Academic Director, Program in Entrepreneurship University of Florida

2 Faulty logic Come up with cool idea Attract a bunch of money Make a bunch of money

3 Entrepreneurship The pursuit of opportunity regardless of resources controlled Makes sense---but how do you pursue something when you have nothing?

4 Resource leveraging Accessing resources you don t necessarily own;; acquiring resources without buying them -use someone else s resource -use existing resource in non-conventional way -use alternative resources (see something as resource others do not) -stretching resources -using one resource to obtain another

5 So the key is to change your thinking buying something is the last resort---what are all the other ways to access a resource???

6 RESOURCE TYPE RESOURCE STRATEGIES Purchase Internal (DIY) Give Equity Borrow Share Lease Rent Outsource Contract License Barter Partner with Resource Provider Physical Relational Organizational Financial Intellectual & Human Technological

7 Example: Washington DC Soup Kitchen The social entrepreneur sees that local middle schools have kitchens that are only used a few hours a day He offers to provide a culinary class to the schools for free In exchange, they let him use their kitchens in the off hours and the Summer He is able to provide a lot more meals to the homeless and hungry

8 Three questions to guide your efforts 1. What internal resources do we have that we are not fully utilizing? Are we making full use of our website, packaging, vehicles, sales and service people, or any other assets under our control? 2. How well are we leveraging relationships with people or companies in our network? look at relationships with suppliers, vendors, producers of related products, financiers, distributors, customers 3. What untapped or underutilized resources exist in the marketplace? kids who are opinion leaders, houses on prominent corners, walls in restrooms, table tops, car bumpers, abandoned buildings, school kitchens during summer, stay at home moms or dads

9 Ways of thinking: effectuation vs. causal reasoning -preparing a meal Causal reasoning: you have a cookbook, follow the instructions to a T, and prepare a meal (cookbook is like a business plan) Effectual reasoning: you have no cookbook, but scan the refrigerator and cabinets for what is available and your create a meal

10 Bootstrapping Trying to start something when you have little to nothing in the way of resources So you pull your self up by your bootstraps Tends to refer to bootstrapping financially

11 Sample bootstrapping approaches Use of owner s credit card Loan from relatives/friends Withholding manager s salary Assignments in other businesses Relatives working for non-market salary Cease business relations with late payers Use routines for speeding up invoicing Use interest on overdue payment Offer same conditions to all customers Borrow equipment from others Own equipment in common with others Co-ordinate purchases with others Practice barter instead of buying/selling Lease equipment instead of buying Delay payment to suppliers Delay payment of tax Use routines in order to minimize stock Best conditions possible with suppliers Subsidy from local or state government or agency Offer customers discounts if paying cash Raise capital from a factoring company Choose customer who pay quickly Share premises with others Share employees with others

12 Exercise You have started a non-profit venture where the purpose is build a home in Gainesville where abused spouses and their children can life and escape their violent circumstances---but you have no money. Beyond getting financial donations from the community, identify ten ways in which you could creatively leverage resources to get the job done;;