Chapter 06      Entrepreneurship       and Starting a       Small BusinessMcGraw-Hill/Irwin        Copyright © 2013 by The...
Chapter Six                  LEARNING GOALS     1. Explain why people take the risks of        entrepreneurship; list the ...
Chapter Six                  LEARNING GOALS     3. Summarize the ways to learn about how small        businesses operate. ...
Profile                              JAY-Z                             Roc Nation     • Founded Roc-A-Fella Records       ...
Chapter Six               NAME that COMPANY     When this company’s founder had financial       problems in the businesss ...
The Age of theEntrepreneur                 WHAT is ENTREPRENEURSHIP?                         • Entrepreneurship --        ...
The Job-CreatingPower of               NOTABLE ENTREPRENEURSEntrepreneurshipin the U.S.     • French immigrant É lruthè re...
SUCCESS KNOWS NO AGE                    (Spotlight on Small Business)• Derek Johnson – Launched mass-texting  business, Ta...
YOU’RE NEVER TOO YOUNG              to be an ENTREPRENEURFive reasons to start your business right  away:1. You don’t have...
YOU’RE NEVER TOO OLD to be         an ENTREPRENEUR EITHER!• The highest rate of  entrepreneurship activity is  in the 55-6...
Why PeopleTake theEntrepreneurialChallenge                    WHY TAKE the RISK?     LG1         • Opportunity         • P...
Why PeopleTake theEntrepreneurial   WHAT DOES IT TAKE to be anChallenge     LG1              ENTREPRENEUR?      • Self-dir...
Why PeopleTake theEntrepreneurial FIVE STEPS to STARTING YOURChallenge     LG1             BUSINESS in SCHOOL      1. Find...
Turning YourPassion andProblems into        An IDEA is aOpportunities     LG1        GOOD OPPORTUNITY IF…     • It fills c...
EntrepreneurialTeams             ENTREPRENEURIAL TEAMS     LG1     • Entrepreneurial team --           A group of experien...
Micropreneursand Home-BasedBusinesses                  MICROPRENEURS    LG1     • Micropreneurs -- Entrepreneurs willing t...
Micropreneursand Home-BasedBusinesses                 HOME-BASED BUSINESS    LG1                GROWTH     • Computer tech...
Micropreneursand Home-BasedBusinesses                 HOME-BASED BUSINESS    LG1               ISN’T EASY     • Getting ne...
Micropreneursand Home-BasedBusinesses                 BENEFITS of HOME-BASED    LG1               BUSINESSES     •    Abil...
Micropreneursand Home-BasedBusinesses                 DOWNSIDES of HOME-BASED    LG1                BUSINESSES     •    Di...
Micropreneursand Home-BasedBusinesses                                THINK YOU’RE READY    LG1                          to...
Web-BasedBusinesses      ONLINE BUSINESS    LG1    • Online sales reached      $172.9 billion in 2010,      7% of all reta...
Web-BasedBusinesses    AFFILIATE MARKETING    LG1    • Affiliate Marketing -- An Internet-based       marketing strategy i...
Web-BasedBusinesses        BOOSTING YOUR BUSINESS’S    LG1               ONLINE PRESENCE     • Establish an identity.     ...
EntrepreneurshipWithin Firms                   INTRAPRENEURS     LG1     • Intrapreneur -- A creative person who works as ...
EncouragingEntrepreneurship:What Government      GOVERNMENT andCan Do      LG1           ENTREPRENEURSHIP      • Immigrati...
ProgressAssessment   PROGRESS ASSESSMENT    • Why are people willing to take the risks of      entrepreneurship?    • What...
Small VersusBig Business   SMALL BUSINESSES    LG2     • Small Business --       Independently owned and       operated, n...
Small VersusBig Business   SMALL BUSINESS STATISTICS    LG2     • There are 27.8 million small businesses in the       U.S...
Importance of            ADVANTAGES of SMALL OVERSmall Business    LG2           BIG BUSINESS     • More personal customer...
Small BusinessSuccess &Failure           BUSINESS FAILURES are LOWER    LG2    THAN the REPORTS BECAUSE…     • Owner closi...
Small BusinessSuccess &Failure                                   THEY DID WHAT?    LG2                                    ...
Learning AboutSmall BusinessOperations                 LEARNING ABOUT     LG3         SMALL BUSINESS     • Learn from Othe...
GOING DOWN with the SHIP                     (Making Ethical Decisions)Suppose you worked in a company for two years and  ...
Managing a            MAJOR BUSINESS FUNCTIONSSmall Business    LG4     • Planning     • Financing     • Knowing customers...
Begin withPlanning                 BUSINESS PLANS     LG4     • Business Plan -- A detailed written statement       that d...
Writing aBusiness Plan   WRITING a BUSINESS PLAN    LG4     • A good plan takes a long time to prepare.     • A good execu...
Writing aBusiness Plan                                       A FAMILY AFFAIR    LG4               What to Consider Before ...
Getting Moneyto Fund a SmallBusiness                  SOURCES of CAPITAL     LG4     • Personal savings     • Relatives   ...
Getting Moneyto Fund a SmallBusiness                         FUNDING YOUR DREAM                           Getting Cash Whe...
Getting Money              COMMUNITY DEVELOPMENTto Fund a SmallBusiness     LG4               FINANCIAL INSTITUTIONS     •...
SOCIAL LENDING                    (Social Media in Business)•   Kickstarter and    Lending Club connect    loan seekers to...
The SmallBusinessAdministration                 The SMALL BUSINESS     LG4           ADMINISTRATION     • Small Business A...
The SmallBusinessAdministration                  The SMALL BUSINESS     LG4         INVESTMENT COMPANY     • Small Busines...
The SmallBusinessAdministration                    SMALL BUSINESS     LG4         DEVELOPMENT CENTERS     • Small Business...
The SmallBusiness     COMMUNITY ADVANTAGE andAdministration     LG4           SMALL LOAN ADVANTAGE PROGRAM     • Announced...
The SmallBusinessAdministration                                         HELP PLEASE!                        More SBA Resou...
Knowing YourCustomers                      The MARKET    LG4    • Market -- Consumers with unsatisfied wants and          ...
ManagingEmployees      MANAGING EMPLOYEES    LG4    •     Hiring, training and motivating employees is          critical. ...
Keeping Records                  ACCOUNTING ASSISTANCE     LG4     • Computers simplify the process by helping with       ...
Looking for Help                            LEGAL HELP      LG4      • Owners need outside consulting advice early in     ...
Looking for Help                     MARKETING RESEARCH      LG4      • Marketing decisions need to be made long before   ...
Looking for Help                   OTHER FORMS OF HELP      LG4                                         6-53
ProgressAssessment   PROGRESS ASSESSMENT   A business plan is probably the most important   document a small business owne...
GoingInternational:Small BusinessSMALL BUSINESS PROSPECTSProspects    LG5                ABROAD    • Small- and medium-siz...
EMERGING MARKETS,   EMERGING ENTREPRENEURSHIP                 (Reaching Beyond Our Borders)• In emerging markets, entire i...
ProgressAssessment   PROGRESS ASSESSMENT    • Why do many small businesses avoid doing      business globally?    • What a...
Upcoming SlideShare
Loading in...5
×

Chap006

1,425

Published on

Published in: Business, News & Politics
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,425
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
37
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide
  • Company: McDonald ’s
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. This slide will help in starting the chapter discussion. Students enjoy stories about how companies began. Ask the students: Do you know of any interesting stories about how some other businesses got started? (This can also be assigned as a team project to generate a good discussion.)
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. You’re Never Too Young to be an Entrepreneur This slide shows the students that it’s never too early to get started on your business ideas. Ask students: Can you think of other reasons you might want to start a business right after school? What are the potential downsides to starting a business right away?
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. You ’re Never Too Old to be an Entrepreneur Either This slide shows that in spite of popular belief that all older Americans retire at a certain age, many start their own businesses after leaving their careers. Ask students: Can you think of reasons (other than experience and funding) that older entrepreneurs are successful? Why do you think older Americans want to start businesses at this age? What are the downsides of starting a business late?
  • See Learning Goal 1: Explain why people take the risks of entrepreneurship, list the attributes of successful entrepreneurs, and describe entrepreneurial teams, intrapreneurs, home-based and web-based businesses.
  • See Learning Goal 1: Explain why people take the risks of entrepreneurship, list the attributes of successful entrepreneurs, and describe entrepreneurial teams, intrapreneurs, home-based and web-based businesses.
  • See Learning Goal 1: Explain why people take the risks of entrepreneurship, list the attributes of successful entrepreneurs, and describe entrepreneurial teams, intrapreneurs, home-based and web-based businesses. Five Steps to Starting Your Business in School Just because you ’re still in school doesn’t mean that starting a business is beyond grasp. Many students have turned their time in college into business creation. Ask students: Have you had an idea for a business? What triggered it? Why did you or did you not pursue it further?
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. In the United States home-based businesses have experienced growth due to a variety of reasons. One of the most important reasons for the growth in home-based businesses is that technology has made it easier for home-based businesses to compete against their larger competitors.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. Ups of Home-Based Businesses This slide lists some of the benefits of a home-based business. Before showing this slide, have students work alone, then with a partner, then with a group (doing all three will help promote discussion of students ’ ideas) to see if they can come up with a list of benefits of home-based businesses. Then reveal the slide and have students compare their lists to the slide.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. Downs of Home-Based Businesses This slide walks students through some of the drawbacks of a home-based business. Before showing this slide, have students work alone, then with a partner, then with a group (doing all three will help promote discussion of students ’ ideas) to see if they can come up with a list of disadvantages of home-based businesses. Then reveal the slide and have students compare their lists to the slide.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. Think You’re Ready to Work From Home? Running a business from home is hard work. After discussing both the ups and downs of home-based work, discuss this table with students. Ask students: What statements can you say “yes” and “no” to? What do each of these statements have to do with home business success? After looking at this table, do you think you’d be ready or want to work from home?
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. It ’s expected online sales will reach $250 billion by 2014.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. Boosting Your Business ’ Online Presence Activity online, both in retail and marketing, continues to grow each year. It ’s important that businesses (even the small ones!) have an online, user-friendly presence. This slide provides some guidelines to successfully navigate the process of creating an online business identity, Ask students: Do you have any other ideas for important steps to take in creating an online personality for a business? Through Facebook? Twitter? Ads on Pandora or Hulu?
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. In order to develop new ideas, engineers at Google are allowed to work on projects that interest them for up to twenty percent of their time at work. The idea is to support creative people and ideas in an effort to launch new products. This work can be more motivating than working on someone else ’s ideas.
  • Learning Goal 1: Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. Small-business is the economic engine of the United States economy. Due to the economic power of small-businesses the government has used “investor visas,” enterprise zones and business incubators to encourage entrepreneurship. A good website to further explore incubators is http://www.nbia.org/.
  • The primary reasons people are will to take the risk of entrepreneurship are: (a) opportunity to share in the American dream; (b) profit, the potential to become wealthy and successful; (c) independence, becoming you own boss; and (d) challenge, the desire to take a chance. 2) Whereas an entrepreneur has to wear many hats and take huge responsibility, a team allows members to combine creative skills with production and marketing skills right from the start. Having a team can also ensure more cooperation and coordination later among functions in the business. 3) Most entrepreneurs are committed to the quest for growth in their business. Mircorpreneurs know they can be content even if their companies never appear on a list of top-ranked businesses. Many micropreneurs are home-based businesses. 4) The Internet has opened the world of entrepreneurship wider than ever. Online sales have grown six times faster than retail sales and in 2010 topped $172 billion. Today anything that can be offered in a retail environment can be offered online. However, a web-based business is not an automatic ticket to success. It can often be a shortcut to failure. Web-based businesses must remember that they need to offer unique products or services that customers cannot easily purchase at retail locations.
  • See Learning Goal 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure.
  • See Learning Goal 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. The power of small business is immense. Students are often shocked to see how small businesses contribute to the U.S. economy.
  • See Learning Goal 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure.
  • See Learning Goal 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure.
  • See Learning Goal 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. They Did What? Starting a successful new business is never easy and many famous entrepreneurs failed at their first and subsequent attempts. Ask students: How can a business failure actually be a positive experience? (While failure is never a goal, it often gives the entrepreneur an invaluable experience. Old adage: Learn from your mistakes.) Ask the student: If your first business failed, would you try again? Why or why not? How can businesses survive such poor performances? ( Determination and passion of the owners and founders plays a big role.)
  • See Learning Goal 3: Summarize ways to learn about how small businesses operate.
  • See Learning Goal 3: Summarize ways to learn about how small businesses operate.
  • See Learning Goal 4: Analyze what it takes to start and run a small business. Starting a business is when the real work begins. It is important that entrepreneurs understand the major business functions such as planning, financing, understanding your customer, managing employees and keeping good records. Many entrepreneurs create business plans which may in part outline the major business functions.
  • See Learning Goal 4: Analyze what it takes to start and run a small business. The business plan is the entrepreneur ’s road map to success. While a well-designed business plan will not guarantee success, the lack of one may lead to failure. To borrow money or to seek investors a business plan is a must.
  • See Learning Goal 4: Analyze what it takes to start and run a small business.
  • See Learning Goal 4: Analyze what it takes to start and run a small business. A Family Affair This slide illustrates what needs to be considered before starting a business with family members. Communication and the establishment of clear expectations are the keys to making a family business work. Ask students: Why do family businesses need extra care?
  • See Learning Goal 4: Analyze what it takes to start and run a small business. One reason that businesses fail is a lack of capital. Capital can come from internal sources (personal saving, employees, etc.) or from external sources (relatives, banks and angel investors). One source of external funding is venture capital. Venture capitalists are individuals or companies that invest in new businesses in exchange for a stake in ownership. Many well-known businesses, such as Google, Zappos and Apple, received a first round of funding from venture capitalists.
  • See Learning Goal 4: Analyze what it takes to start and run a small business. Funding Your Dream Financing is hard to come by in this economy. This slide outlines Seth Godin ’s advice on how to self-fund start-ups .
  • See Learning Goal 4: Analyze what it takes to start and run a small business.
  • See Learning Goal 4: Analyze what it takes to start and run a small business.
  • See Learning Goal 4: Analyze what it takes to start and run a small business. The importance of small business to the U.S. economy cannot be overstated. The SBA is the government agency that advises and assists small businesses with financial advice and management training. For more information on the SBA visit their website www.sba.gov.
  • See Learning Goal 4: Analyze what it takes to start and run a small business.
  • See Learning Goal 4: Analyze what it takes to start and run a small business.
  • See Learning Goal 4: Analyze what it takes to start and run a small business.
  • See Learning Goal 4: Analyze what it takes to start and run a small business. Help Please! These are other sources for helpful information about starting and running a small business. Encourage students to go to these websites to learn what services each offers.
  • See Learning Goal 4: Analyze what it takes to start and run a small business.
  • See Learning Goal 4: Analyze what it takes to start and run a small business.
  • See Learning Goal 4: Analyze what it takes to start and run a small business. Some of the most important assistance to small business owners is in accounting.
  • See Learning Goal 4: Analyze what it takes to start and run a small business.
  • See Learning Goal 4: Analyze what it takes to start and run a small business. If marketing is about finding and filling customer needs, how can an entrepreneur better understand what customers need? Market research helps determine where to locate customers, whom to target as customers, and how to develop an effective strategy for reaching the market.
  • See Learning Goal 4: Analyze what it takes to start and run a small business. Asking good questions is the key to success in any business. Fortunately for entrepreneurs some of the best advice comes free. Commercial loan officers can help with the creation of a business plan as well as financial advice. Insurance agents can help new entrepreneurs understand and insure against risk. One interesting and free source of information is SCORE, Service Corps of Retired Executives. To start a discussion in class, have students research SCORE (www.score.org) and the programs offered at local SCORE offices.
  • A business plan needs to start with a strong cover letter. The nine key sections are: (a) executive summary, (b) company background, (c) management team, (d) financial plan, (e) capital required, (f) marketing plan, (g) location analysis, (h) manufacturing plan, and (i) appendix.
  • See Learning Goal 5: Outline the advantages and disadvantages small businesses have in entering global markets.
  • See Learning Goal 5: Outline the advantages and disadvantages small businesses have in entering global markets.
  • Key reasons why many small businesses avoid doing business overseas include: (a) financing is often difficult to find, (b) would-be exporters don ’ t know how to get started and do not understand the cultural differences between markets, and (c) the bureaucratic paperwork can threaten to bury a small business. 2) Small businesses have several advantages over large businesses in global markets. These include: (a) global buyers often enjoy dealing with individuals rather than with large corporate bureaucracies, (b) small companies can usually begin shipping much faster, (c) small companies can provide a wide variety of suppliers, and (d) mall companies can give global customers personal service and undivided attention because each overseas account is a major source of business for them.
  • Chap006

    1. 1. Chapter 06 Entrepreneurship and Starting a Small BusinessMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
    2. 2. Chapter Six LEARNING GOALS 1. Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses. 2. Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. 6-2
    3. 3. Chapter Six LEARNING GOALS 3. Summarize the ways to learn about how small businesses operate. 4. Analyze what it takes to start and run a small business. 5. Outline the advantages and disadvantages small businesses have in entering global markets. 6-3
    4. 4. Profile JAY-Z Roc Nation • Founded Roc-A-Fella Records before entering into a joint venture with Def Jam. • Maintains control over the Jay- Z brand - including his clothing line and nightclub chain. • Regarded as a business leader, he has met with Bill Gates, Warren Buffett and former President Bill Clinton. 6-4
    5. 5. Chapter Six NAME that COMPANY When this company’s founder had financial problems in the businesss early days, he asked his suppliers to help him out. They did and they were well rewarded for their risk. Today these suppliers still service this mammoth company that has franchises all over the world. Name that company! 6-5
    6. 6. The Age of theEntrepreneur WHAT is ENTREPRENEURSHIP? • Entrepreneurship -- Accepting the risk of starting and running a business. 6-6
    7. 7. The Job-CreatingPower of NOTABLE ENTREPRENEURSEntrepreneurshipin the U.S. • French immigrant É lruthè re Irè nè e du Pont de Nemours started Du Pont in 1802. • David McConnell borrowed $500 from a friend to start Avon. • George Eastman started Kodak with a $3,000 investment in 1880. • Jeff Bezos started Amazon.com with investments from his family and friends. 6-7
    8. 8. SUCCESS KNOWS NO AGE (Spotlight on Small Business)• Derek Johnson – Launched mass-texting business, Tatango, as an undergrad.• Peter Findley – Started Giant Campus, summer camps for middle- and high school age kids on college campuses.• Sam Hogg – Started GiftZip.com, an electronic gift card aggregator site.• John Goscha – Created IdeaPaint after many nights of brainstorming led to enormous sheets of paper plastered all over his dorm walls. 6-8
    9. 9. YOU’RE NEVER TOO YOUNG to be an ENTREPRENEURFive reasons to start your business right away:1. You don’t have a mortgage or kids to take care of.2. You can survive on little funds and work long hours.3. No disruption to your career path. It hasn’t started yet!4. Use of your alma mater for resources. Source: Entrepreneurship, April 2010. 6-9
    10. 10. YOU’RE NEVER TOO OLD to be an ENTREPRENEUR EITHER!• The highest rate of entrepreneurship activity is in the 55-64 age group!• Since 1996, older Americans have opened businesses at a higher rate than 20-34 year olds.• Older entrepreneurs have greater experience and more financial resources. Source: U.S. News and World Report, October 2010. 6-10
    11. 11. Why PeopleTake theEntrepreneurialChallenge WHY TAKE the RISK? LG1 • Opportunity • Profit • Independence • Challenge 6-11
    12. 12. Why PeopleTake theEntrepreneurial WHAT DOES IT TAKE to be anChallenge LG1 ENTREPRENEUR? • Self-directed • Self-nurturing • Action-oriented • Highly energetic • Tolerant of uncertainty 6-12
    13. 13. Why PeopleTake theEntrepreneurial FIVE STEPS to STARTING YOURChallenge LG1 BUSINESS in SCHOOL 1. Find a problem or need. 2. Zero in on specifics. 3. Do research on campus, test products with students. 4. Move forward with your ideas. Don’t wait! 5. Sacrifice. Source: Entrepreneur, May 2010. 6-13
    14. 14. Turning YourPassion andProblems into An IDEA is aOpportunities LG1 GOOD OPPORTUNITY IF… • It fills customers’ needs. • You have the skills and resources to start a business. • You can sell the product or service at a reasonable price and still profit. • You can get your product or service to customers before the window of opportunity closes. • You can keep the business going. 6-14
    15. 15. EntrepreneurialTeams ENTREPRENEURIAL TEAMS LG1 • Entrepreneurial team -- A group of experienced people from different areas of business who join to form a managerial team with the skills to develop, make and market a new product. • An entrepreneurial team (Steve Jobs, Steve Wozniak and Mike Markkula) was key to Apple’s success. 6-15
    16. 16. Micropreneursand Home-BasedBusinesses MICROPRENEURS LG1 • Micropreneurs -- Entrepreneurs willing to accept the risk of starting and managing a business that remains small, lets them do the work they want to do, and offers a balanced lifestyle. • About half of U.S. micropreneurs are home-based business owners – writers, consultants, video producers, architects, bookkeepers, etc. • Nearly 60% of home-based micropreneurs are men. 6-16
    17. 17. Micropreneursand Home-BasedBusinesses HOME-BASED BUSINESS LG1 GROWTH • Computer technology has leveled the playing field. • Corporate downsizing has led many to venture on their own. • Social attitudes have changed. • New tax laws have loosened restrictions on deducting expenses for home offices. 6-17
    18. 18. Micropreneursand Home-BasedBusinesses HOME-BASED BUSINESS LG1 ISN’T EASY • Getting new customers is difficult. • Managing your time requires self-discipline. • Work and family tasks are sometimes not separated. • Government ordinances may restrict your business. • Homeowner’s insurance may not cover business- related claims. 6-18
    19. 19. Micropreneursand Home-BasedBusinesses BENEFITS of HOME-BASED LG1 BUSINESSES • Ability to start your business immediately • Minimal start-up capital needed • No rent or excessive set-up charges • Comfortable working conditions • Reduced wardrobe expenses • No commuting • Tax benefits • Elimination of office politics • Low risk for trial and error 6-19
    20. 20. Micropreneursand Home-BasedBusinesses DOWNSIDES of HOME-BASED LG1 BUSINESSES • Difficult to establish work habits • Limited support system • Isolation • Work space may be limited • Clients may be uncomfortable coming to your home • Zoning restrictions • Success is based 100% on your efforts 6-20
    21. 21. Micropreneursand Home-BasedBusinesses THINK YOU’RE READY LG1 to WORK from HOME? Source: Entrepreneur, June 2010. 6-21
    22. 22. Web-BasedBusinesses ONLINE BUSINESS LG1 • Online sales reached $172.9 billion in 2010, 7% of all retail sales. • All retail sales were up 2.5% in 2010. However, online retail sales grew 11%. 6-22
    23. 23. Web-BasedBusinesses AFFILIATE MARKETING LG1 • Affiliate Marketing -- An Internet-based marketing strategy in which a business rewards individuals or other businesses for each visitor or customer the affiliate sends to its website. 6-23
    24. 24. Web-BasedBusinesses BOOSTING YOUR BUSINESS’S LG1 ONLINE PRESENCE • Establish an identity. • Be easy to find. • Steal good ideas and make them your own. • Look out for opportunities. Photo Courtesy of: Marc Wathieu • Remember other forms of marketing. • Be friendly! Source: Entrepreneur, May 2010. 6-24
    25. 25. EntrepreneurshipWithin Firms INTRAPRENEURS LG1 • Intrapreneur -- A creative person who works as an entrepreneur within a corporation. • Intrapreneurs use a company’s existing resources to launch new products for the company. • Art Fry of 3M developed Post-Its when he was trying to mark pages of his hymnal without damage. 6-25
    26. 26. EncouragingEntrepreneurship:What Government GOVERNMENT andCan Do LG1 ENTREPRENEURSHIP • Immigration Act passed in 1990 created a category of “investor visas” that encourage entrepreneurs to come to the U.S. • Enterprise Zones -- Specific geographic areas to which governments attract private business investment by offering lower taxes and other government support. • Incubators -- Offer new businesses low-cost offices with basic services. 6-26
    27. 27. ProgressAssessment PROGRESS ASSESSMENT • Why are people willing to take the risks of entrepreneurship? • What are the advantages of entrepreneurial teams? • How do micropreneurs differ from other entrepreneurs? • What are some opportunities and risks of web- based businesses? 6-27
    28. 28. Small VersusBig Business SMALL BUSINESSES LG2 • Small Business -- Independently owned and operated, not dominant in its field of operation and meets certain standards of size. • Businesses are “small” in relation to other businesses in their industries. 6-28
    29. 29. Small VersusBig Business SMALL BUSINESS STATISTICS LG2 • There are 27.8 million small businesses in the U.S. • Of all nonfarm businesses in the U.S., almost 97% are considered small. • Small businesses account for over 50% of the GDP. • Small businesses generate 60-80% of new jobs. • About 80% of U.S. workers’ first jobs were in small business. 6-29
    30. 30. Importance of ADVANTAGES of SMALL OVERSmall Business LG2 BIG BUSINESS • More personal customer service. • The ability to respond quickly to opportunities. Photo Courtesy of: Elliot Brown 6-30
    31. 31. Small BusinessSuccess &Failure BUSINESS FAILURES are LOWER LG2 THAN the REPORTS BECAUSE… • Owner closing a business to start another is reported as a “failure.” • Changing forms of ownership is reported as a “failure.” • Retirement is reported as a “failure.” 6-31
    32. 32. Small BusinessSuccess &Failure THEY DID WHAT? LG2 Famous Business Failures • Tommy Hilfiger – First store went bankrupt • Milton Hershey – First confectionery failed • H.J. Heinz – Company went bankrupt six years after start • Walt Disney – First film company went bankrupt • Henry Ford – First two car companies failed • L.L. Bean – Almost went bankrupt in first year Source: World Features Syndicate. 6-32
    33. 33. Learning AboutSmall BusinessOperations LEARNING ABOUT LG3 SMALL BUSINESS • Learn from Others – Investigate your local colleges for classes on small business and entrepreneurship; talk to and work for successful local entrepreneurs. • Get Some Experience – Gain three years experience in the field; then start a part-time small business. • Take Over a Successful Firm – Serve as an apprentice and eventually take over once the owner steps down. 6-33
    34. 34. GOING DOWN with the SHIP (Making Ethical Decisions)Suppose you worked in a company for two years and you see signs of it faltering. You and a coworker have ideas about how to succeed and are considering quitting to start your own company.• Should you approach other coworkers about working for your new venture?• Will you try to lure your old boss’s customers?• What are the alternatives?• What are the consequences?• What is the most ethical choice? 6-34
    35. 35. Managing a MAJOR BUSINESS FUNCTIONSSmall Business LG4 • Planning • Financing • Knowing customers • Managing employees • Keeping records 6-35
    36. 36. Begin withPlanning BUSINESS PLANS LG4 • Business Plan -- A detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and owners’ qualifications. • A business plan forces potential owners to be specific about what they will offer. • A business plan is mandatory for talking with bankers or investors. 6-36
    37. 37. Writing aBusiness Plan WRITING a BUSINESS PLAN LG4 • A good plan takes a long time to prepare. • A good executive summary catches interest and tempts potential investors to read on. • Getting the plan into the right hands is almost as important as getting the right information in it. 6-37
    38. 38. Writing aBusiness Plan A FAMILY AFFAIR LG4 What to Consider Before Starting a Family Business • Clarify Expectations – What will each person contribute? • Discuss Work/Family Boundaries – What is the line that separates work from personal relationships? • Develop Good Communication – Agree about types of decisions you’ll make jointly and on your own. • Clarify Long-Term Intentions – Discuss how long everyone will work full time and goals for the business. Source: Bloomberg Businessweek, www.businessweek.com, accessed June 2011. • Have an Escape Hatch – Have a Plan B. 6-38
    39. 39. Getting Moneyto Fund a SmallBusiness SOURCES of CAPITAL LG4 • Personal savings • Relatives • Former employers • Banks & finance companies • Government agencies • Angel investors • Venture capitalists -- Individuals or companies that invest in new businesses in exchange for partial ownership. 6-39
    40. 40. Getting Moneyto Fund a SmallBusiness FUNDING YOUR DREAM Getting Cash When Financing Isn’t an Option LG4 1. Get close to your customers. 2. Make clients pay upfront. 3. Outsource tasks on the cheap. 4. Get in front of customers quickly. 5. Become an expert. 6. Ask for help. 7. Be patient. Source: Inc., October 2010. 6-40
    41. 41. Getting Money COMMUNITY DEVELOPMENTto Fund a SmallBusiness LG4 FINANCIAL INSTITUTIONS • CDFIs are playing a big role in the economic recovery. • First formed in the early 1980s; by 2009, over $1 billion flowed into CDFIs from investment companies. • Only 1% of loans were not paid back in the last 30 years! 6-41
    42. 42. SOCIAL LENDING (Social Media in Business)• Kickstarter and Lending Club connect loan seekers to potential lenders.• Administrators assign interest rates between 6.78% and 24.95% based on their credit history, how much money is needed, and what the person is using it for. 6-42
    43. 43. The SmallBusinessAdministration The SMALL BUSINESS LG4 ADMINISTRATION • Small Business Administration (SBA) -- A U.S. government agency that advises and assists small businesses by providing management training and financial advice. • SBA started a microloan program in 1991 that provides very small loans to small business owners. • Program judges worthiness based on the borrowers’ integrity and soundness of their business ideas. 6-43
    44. 44. The SmallBusinessAdministration The SMALL BUSINESS LG4 INVESTMENT COMPANY • Small Business Investment Company (SBIC) -- A program through which private investment companies licensed by the SBA lend money to small businesses. • A SBIC must have a minimum of $5 million in capital and can borrow up to $2 from the SBA for each $1 of capital it has. • SBICs are able to identify a business’s trouble spots early, giving entrepreneurs advice, and in some cases rescheduling loan payments. 6-44
    45. 45. The SmallBusinessAdministration SMALL BUSINESS LG4 DEVELOPMENT CENTERS • Small Business Development Centers (SBDC) are funded jointly by the federal government and individual states. • SBDCs are able to evaluate the feasibility of your idea, develop your business plan and complete your funding application – for no charge. 6-45
    46. 46. The SmallBusiness COMMUNITY ADVANTAGE andAdministration LG4 SMALL LOAN ADVANTAGE PROGRAM • Announced by the SBA in February 2011, this program’s aim was to provide a simpler and easier way for lenders to make smaller loans in underserved areas. • In March 2011, the House Small Business Committee recommended the SBA budget be cut and the program couldn’t be funded. 6-46
    47. 47. The SmallBusinessAdministration HELP PLEASE! More SBA Resources and Other Helpful Groups LG4 • Small Business Investment Companies • The Office of Innovation & Entrepreneurship • SCORE • Entrepreneurship.org Source: Inc., October 2010. 6-47
    48. 48. Knowing YourCustomers The MARKET LG4 • Market -- Consumers with unsatisfied wants and needs who have both resources and willingness to buy. • Set out to fill the market’s needs by offering top quality and great service at a fair price. • One of the great advantages of small businesses is the ability to know the market and quickly adapt to market needs. 6-48
    49. 49. ManagingEmployees MANAGING EMPLOYEES LG4 • Hiring, training and motivating employees is critical. • Employees of small companies are often more satisfied with their jobs – they feel challenged and respected. • Entrepreneurs best serve themselves and the business if they recruit and groom employees for management positions. 6-49
    50. 50. Keeping Records ACCOUNTING ASSISTANCE LG4 • Computers simplify the process by helping with inventory control, customer records and payroll. • A good accountant can help in: - Deciding whether to buy or lease equipment. - Deciding whether to own or rent a building. - Tax planning. - Financial forecasting. - Choosing sources of financing. - Writing requests for funds. 6-50
    51. 51. Looking for Help LEGAL HELP LG4 • Owners need outside consulting advice early in the process. • Small and medium-sized firms cannot afford to hire experts as employees. • A competent lawyer can help with: - Leases - Contracts - Partnership agreements - Protection against liabilities 6-51
    52. 52. Looking for Help MARKETING RESEARCH LG4 • Marketing decisions need to be made long before introducing a product or opening a store. • A marketing research study can help you: - Determine where to locate. - Whom to select as your target market. - What is an effective strategy for reaching the market. 6-52
    53. 53. Looking for Help OTHER FORMS OF HELP LG4 6-53
    54. 54. ProgressAssessment PROGRESS ASSESSMENT A business plan is probably the most important document a small business owner will ever create. There are nine sections in the business plan outline on pp. 165-166. • Can you describe at least five sections of a business plan? 6-54
    55. 55. GoingInternational:Small BusinessSMALL BUSINESS PROSPECTSProspects LG5 ABROAD • Small- and medium-sized businesses accounted for 99% of recent export growth. • Advantages of global trade for small businesses: - Overseas buyers enjoy dealing with individuals. - Small companies can usually begin shipping much faster. - They provide a wide variety of suppliers. - They can give more personal service and attention. 6-55
    56. 56. EMERGING MARKETS, EMERGING ENTREPRENEURSHIP (Reaching Beyond Our Borders)• In emerging markets, entire industries and services are wide open for innovation.• Many entrepreneurs in the developing world hold degrees and have worked at high-level companies.• Entrepreneurs must often expand into different areas of business in order for their venture to grow. 6-56
    57. 57. ProgressAssessment PROGRESS ASSESSMENT • Why do many small businesses avoid doing business globally? • What are some of the advantages small businesses have over large businesses in selling in global markets? 6-57
    1. A particular slide catching your eye?

      Clipping is a handy way to collect important slides you want to go back to later.

    ×