Chapter 7 Understanding Entrepreneurship and Small Business http://www.slideshare.net/Subjectmaterial
Sr. Chapter Chapter HeadingNo.No.1. 3 Understanding the Global context of business (031012)2. 4 Conducting Business Ethically and Responsibly (250212)3. 6 Organizing the Business Enterprise (030312)4. 7 Understanding Entrepreneurship and Small Business (100312)5. 8 Managing Human Resources6. 9 Understanding Employee Motivating, Satisfying and Leadership7. 11 Understanding Marketing Processes and Consumer Behavior8. 16 Managing Quality and Productivity9. 17 Managing Information Systems and Communication Technology10. 19 Understanding Money and Banking11. 20 Intermediate Term and Lease Financing
Next class Quiz Two groups 1. established entrepreneurs What they did Why did they stall How could they improve 2. emerging entrepreneurs story What to do next 3
Marks Distribution50 Terminal Examination20 Mid Term Examination15 Quizzes15 Final Assignment 5
1. WHAT IS SMALL BUSINESS2. ENTREPRENEURSHIP3. SUCCESS AND FAILURE IN SMALL BUSINESS4. STARTING AND OPERATING THE SMALL BUSINESS5. FRANCHISING
1. WHAT IS SMALL BUSINESS • The importance of small business in the economy • Popular forms of small business enterprise2. ENTREPRENEURSHIP • The distinction between entrepreneurship and small business • Entrepreneurial characteristics3. SUCCESS AND FAILURE IN SMALL BUSINESS • Trends in small business start-Ups • Reasons for failures • Reasons for success4. STARTING AND OPERATING THE SMALL BUSINESS • Financing the small business • Sources of management advice5. FRANCHISING • Advantages and Disadvantages of Franchising
What Is “Small Business”? Independently owned and managed business that does not dominate its market
The importance of Small businessin Economy Job Creation Innovation Importance to Big Businesses
Popular Forms of Small-Business Enterprise Services Manufacturing 5% Finance & Retailing Insurance Other Construction 10% 1.7% Financial Wholesale 8% Insurance Wholesaling Transportation Manufacturing Construction Services Retailing 37.6% 10% 22.7% Transportation 5%
2. ENTREPRENEURSHIPEntrepreneurship is the act of being anentrepreneurAn entrepreneur can be defined as abusinessperson who accepts the risks andopportunities of creating, operating andgrowing a new businessSmall Business Owner does not have plansfor growth 11
Entrepreneurial Characteristics Entrepreneurs are … Founders of businesses that become large-scale enterprises. People who: Buy a local franchise outlet Open a small retail shop Operate a self-employed service business People who introduce a new product or operational change in an existing organization 12
Entrepreneurial CharacteristicsSmall Business Founder True EntrepreneurHE: HE:Boss LeaderLone Ranger NetworkerSecretive OpenSelf-reliant InquisitiveSeat-of-the-pants Letter of the business planSnap decisions Consensus decisionMale ownership Mixed OwnershipKnows the Trade Knows the businessAutomation: Technology lets Innovation: Technology lets peoplebusiness automate the work that do things that they’ve never donepeople had always done before 13
Trends in Small Business Start-ups Emergence of E-commerce Entrepreneurs who crossover from Big Business Increased opportunities for Minorities & Women Global Opportunities Increased Survival Rates
Reasons for Success and FailureReasons for Failure Poor management Neglect Weak control systems Reasons for Success Insufficient capital Hard work, drive, dedication Market demand Strong management Luck!!!
Starting the Small BusinessFirst: The entrepreneurs commitment towards businessSecond:Choosing the goods and services, evaluating the chosen industry and marketThird: Assessment of one’s own skills 18
How to start the smallbusiness 1. Buying an existing business 2. Starting from Scratch 19
Financing the Small Business Personal resources Loans Venture capital companies Small-business investment companies Small Business Association (SBA) Financial aid and management advice Advisory boards, management consultatnts, the SBA, and networking
DEFINITIONS: Business plan: document that tells potential lenders why money is needed, how it will be used, and when it will be repaid Venture Capital company: Group of small investors that invest money in companies with rapid growth potential Management consultant: Independent outside specialist hired to help managers to solve business problems Networking: Interconnections among business people for the purpose of discussing mutual problems and opportunities and perhaps pooling resources
5. FRANCHISING Franchise is an arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (Franchiser) 23
FRANCHISING An Ownership Opportunity Advantages Disadvantages Proven business Start-up costs opportunity On-going Access to payments management Management expertise rules and restrictions
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