On March 16, 1991, the Tri-City Herald, Pasco, Wash., published an article by Glynn Lamberson, then-director of the Columbia Basin College Small Business Development Center. This is an abridged version of Lamberson’s article “Entrepreneurs reap gains of success, losses of failure”:
While on vacation this past summer, I had the opportunity to visit my hometown – Wichita, Kan. – and my alma mater, Wichita State University. While touring the campus and attempting to impress my children, we did come upon something that did impress us all – the original Pizza Hut, i.e. the actual building that berthed the now famous national and international business.
The university and local contractors moved the original building and preserved it on the campus. As I snapped pictures and read the plaque on the front of the small brick building, I was reminded of the power of the entrepreneurial spirit operating in a capitalistic-democratic framework. Frank and Dan Carney borrowed $600 to start their operation at 503 S. Bluff in Wichita in 1958 and sold it to PepsiCo in 1977 for $300 million. The Carney brothers and others like them provided the seed bed for a larger entrepreneurial movement that began in the 1980s.
Entrepreneur is a word that has become very much a part of the American vocabulary and mind set within the past decade. Prior to that it was a part of the esoteric lexicon of economics. Economists recognize four factors of production: land, labor, capital (equipment), and entrepreneurship. Entrepreneurship is that factor of production which designates the function performed by those who assemble the other factors of production, raise the necessary capital, organize the management, make the basic business policy decisions, reap the gains of success or the losses of failure The entrepreneur is the catalyst in a capitalistic system.
This catalytic aspect of small business is a well documented fact of the 1980s. During the past decade, small business created 80 percent of all new jobs and trained over one third of the labor force. New business formation and strong entrepreneurial activity played an important role in economic recovery and sustained growth in the 1980s and will again, according to predictions, play the same role in the current recession. Only about 100,000 businesses were being incorporated annually in the 1950s and just over 200,000 during the mid-1970s. By the end of the 1980s the number had climbed to more than 600,000.
That’s a very remarkable statistic considering all the negatives associated with entrepreneurship: extremely long hours; the high risk of financial loss, the strain placed on family relationships; and the lack of many benefits that come from ordinary employment – paid vacations, sick leave, insurance and a regular paycheck. In the minds of these individuals the positives are the motivating factors. The entrepreneur answers only to him/herself. Income is limited only by their abilities and energies.
One of the major contributors to the expansion (of the Tri-Cities region of Washington state) was the entrepreneurial activity that had been occurring during the past decade. Like other communities, the leadership in this community recognizes the value of the entrepreneur and provided the necessary infrastructure to assist fledgling businesses by providing the incubator space, etc.
Access to capital remains the largest problem that small businesses confront, and as the profile of small business ownership and type is changing (i.e. more women and minority ownership, and moving from an industrial to a
service based economy), this problem represents an even larger barrier to entry. Service businesses require a different type of financing –smaller amounts and utilized primarily for working capital, less for real estate and equipment. The Small Business Administration is recognizing this problem and is now engaged in pilot programs that allow for the making of micro loans.
It is this kind of innovative financing that has to be supported by this community in order to keep the entrepreneurial activity going or, as in the ’80s when underlying small business growth contributed to the economy, now unrecognized slowing of this growth will hurt the economy in the long run.
Just as the Pizza Hut building was moved to its present site to “remind young individuals how through hard work and initiative the individual can still rise from modest beginnings to positions of leadership and success,” I would like to remind the communities that in order to continue with diversification the entrepreneurial spirit is still very much needed today.
Entrepreneur is a word that has become very much a part of the American vocabulary and mind set. The entrepreneur is the catalyst in a capitalistic system.
