International Survey of Entrepreneurs: 2001 Executive Report
Larry W. Cox
Pepperdine University - Graziadio School of Business and Management
affiliation not provided to SSRN
The International Survey of Entrepreneurs was commissioned by Ernst & Young, the Entrepreneur of the Year Institute, and the Kauffman Center for Entrepreneurial Leadership. This research surveyed 1,045 of the Entrepreneur of the Year finalists in 17 countries. The results provide insights into what makes a successful entrepreneur and the unique and innovative practices of the world's finest entrepreneurial firms.
The survey analysis addresses the conundrum of how to pursue growth and profit simultaneously. Three types of entrepreneurs are identified: "harvesters" focus on profitability, "builders" focus on growth, and "leaders" are above average in both profits and growth.
The survey demonstrated the following: builders are extremely entrepreneurial but leaders are more moderate in their growth and obtain better returns; harvesters gain as much as 67 percent of sales from existing products to existing customers, whereas leaders obtain 37 percent of sales from existing customers and make more use of acquisitions and mergers to access new products and markets; only 21 percent of sales come from foreign sources; the incentive-to-base salary ratio is a good indicator of firm vitality; and e-commerce is usually a very small proportion of sales.
The implications are that harvesters and builders should both modify their strategies in pursuit of the leader position in markets; builders should increase incentive for top management; and private firms should redistribute stock ownership and wealth to increase growth.
Keywords: Firm growth, Earnings, Growth strategies, Sales, Firm performance
Date posted: September 5, 2008