6

6-1

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.

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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.
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 Desire

to be your own boss Special skills and abilities

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 Pankaj Rich

Arora
page

Software/web Water

Stachowski
Talkies

Jeffrey
art

Rodriguez and John Serrano

Abbey
Makin

Fleck
Bacon trays

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

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(continued)

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

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What personal characteristic are common to most successful entrepreneurs?

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Employment

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.

Financing

Productivity

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.

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Chapter 6

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

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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.

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 Recognizing
Lack

risks

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

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Where do entrepreneurship opportunities begin?

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 Pg.131,

1-4 Read pgs. 132-136.

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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.

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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.

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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

diversity

own over of all small businesses.

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Chapter 6

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

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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.

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How can small businesses compete successfully with larger businesses?

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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
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 Faculties
Support

of universities and colleges

new Entrepreneurs. of Commerce.

Local Small

groups of business people Business Administration (SBA)

Chamber

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List common reasons for small business failure.

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 Pg.

136, 1-3 Read Pgs. 138-143.

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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.

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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.

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 An

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

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

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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.

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 Description
The

of the Business

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

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 Description

of Competition

(continued)

Characteristics

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

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 Customer

Analysis

(continued)

Description

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

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 Operations

Plan

(continued)

Organization

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

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 Marketing

Plan

(continued)

Description

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

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 Financial
Start-up

Plans

(continued)

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

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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

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What is the game plan in a business plan?

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 Types

of financing

Start-up

financing Short-term financing Long-term financing

Sources

of financing
funds funds

Owner-supplied Borrowed

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

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 Pg.

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

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