Becoming an Entrepreneur 6-2 Small Business Basics 6-3 Starting a Small Business

Goals  Identify characteristics of successful entrepreneurs.  Recognize the importance of entrepreneurship in the economy.  Describe opportunities and risks of entrepreneurship.

Chapter 6

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 Entrepreneur-

someone who takes a risk in starting a business to earn a profit.  Entrepreneurship- the process of starting, organizing, managing, and assuming the responsibility for a business.  venture capital- money provided by large investors to finance new products and new businesses.  Innovation-an invention or creation that is brand new.  Improvement- a designed change that increases the usefulness of a product, service, or process.
Chapter 6

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 Desire

to be your own boss  Special skills and abilities

Chapter 6

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 Pankaj  Rich


 Software/web  Water


 Jeffrey
 art

Rodriguez and John Serrano

 Abbey
 Makin

Bacon trays

Chapter 6

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Entrepreneurs are more persistent self-confident inquisitive creative energetic reliable goal oriented competitive independent

Chapter 6

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Entrepreneurs have  problem-solving skills  tolerance for ambiguity  strong integrity  personal initiative  ability to secure resources  capability to learn from failure  willingness to work hard

Chapter 6

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What personal characteristic are common to most successful entrepreneurs?

Chapter 6

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40% of new business owners run their own businesses with no help Most money comes from the entrepreneur and his family and friends. 1 in 5 people have invested in a business of someone they know well. 50% lend financial support to a relative or family member.

  

 

New and small businesses produce a large volume of goods and services for eth economy. Small business are responsible for nearly half of the US GDP each year.

Chapter 6

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Chapter 6

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What are the sources of financing that entrepreneurs use for their new businesses?

Chapter 6

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 Innovation
 Inventions  Designed

or creation that is brand new

 Improvement

change that increases the usefulness of a product, service or process.

Chapter 6

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 Recognizing
 Lack


of adequate capital  Low sales  Higher than expected expenses  Competitive pressure  An owner unprepared to manage a growing business  Operations requiring more time than the owner is willing to commit

Chapter 6

Slide 13

Where do entrepreneurship opportunities begin?

Chapter 6

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 Pg.131,

1-4  Read pgs. 132-136.

Chapter 6

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Goals  Identify important characteristics of small businesses.  Recognize the competitive advantages of small businesses.  Identify problems faced by many small businesses.

Chapter 6

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 small

business- an independent business with fewer than 500 employees.  Small Business Administration (SBA)- is a government agency that helps small business owners develop business plans and obtain financing and other support for their companies.

Chapter 6

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 Description
 Owner

of a small business

is usually the manager  Operates in one or very few locations  Typically serves a small market  Not dominant in its field
 Small

business employment
nearly 50% of all US workers

 Employ  Women

 Ownership


own over ¼ of all small businesses.

Chapter 6

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Chapter 6

Slide 19

What percentage of employees in the United States work for small businesses?

Chapter 6

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 Meeting
 They

customer needs

can compete by paying attention to their customers, not with price.

 Providing
 Must

unique services

take special interest in the consumer.

Chapter 6

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How can small businesses compete successfully with larger businesses?

Chapter 6

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 Not

keeping adequate records  Not having enough start-up money  Lack of management experience  Lack of experience with the type of business  Not controlling operating expenses  Poor location for the business  Failure to manage credit offered to customers
Chapter 6

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 Faculties
 Support

of universities and colleges

new Entrepreneurs. of Commerce.

 Local  Small

groups of business people Business Administration (SBA)

 Chamber

Chapter 6

Slide 24

List common reasons for small business failure.

Chapter 6

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 Pg.

136, 1-3  Read Pgs. 138-143.

Chapter 6

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Goals  Recognize important factors to be considered when starting a business.  Describe the elements of a business plan.  Identify types and sources of financing for a small business.

Chapter 6

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 business

plan- a written description of the business idea, and how it will be carried out.  start-up financing- the amount of money needed to open the business.  short-term financing- the money needed to pay for the current operating activities of a business.  long-term financing- is money needed for the main resources of a business.

Chapter 6

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 An

idea plus experience  Right place and time  Team approach  Preparation and research

Chapter 6

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Why is it important to use a team approach when starting a new business?

Chapter 6

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business plan is a written description of the business idea and how it will be carried out, including all major business activities.

Chapter 6

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 Description
 The

of the Business

business idea  Major products and services  Ownership structure  Strengths/weaknesses  Long- and short-term goals

Chapter 6

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 Description

of Competition


 Characteristics

of the industry  Condition of the economy  Strengths and weaknesses of major competitors

Chapter 6

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 Customer



 Description

of customers  Location, number, and resources of customers  Sales forecasts

Chapter 6

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 Operations



 Organization

of the company  Description of major operations  Analysis of resources needed  Human resource plans

Chapter 6

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 Marketing



 Description

of major marketing activities  Description of resources needed  Schedule of marketing activities

Chapter 6

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 Financial
 Start-up



costs  Short- and long-term financial needs  Sources of financing  Budgets and financial statements

Chapter 6

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 Gather

and review information  Develop the “game plan”
 Alternative

plans for production, marketing, staffing, and financing.

 Write

the plan  Ask an expert to review the plan

Chapter 6

Slide 38

What is the “game plan” in a business plan?

Chapter 6

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 Types

of financing

 Start-up

financing  Short-term financing  Long-term financing
 Sources

of financing
funds funds

 Owner-supplied  Borrowed

Chapter 6

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In addition to owner-supplied capital, what are several other sources of financing for a small business?

Chapter 6

Slide 41

 Pg.

143, 1-4  Pg. 145, 10-20  Review on Friday.  Test on Monday.

Chapter 6

Slide 42

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