Partner Training: The Small Business Sector

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A short training presentation on the small business sector for BizCentral & CharityNet USA partners.

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Partner Training: The Small Business Sector

  1. 1. Partner Service & Sales Training<br />The Small Business Sector<br />
  2. 2. Introduction to Small Business <br />Introduction to Small Businesses<br />Why People Start Their Own Businesses<br />Current Small Business Conditions<br />Positioning for Success<br />Wrap Up<br />
  3. 3. What is a Small Business?<br />The Small Business Administration uses standards, such as the number of employees or the average annual receipts when defining a small business:<br />SBA’s size standards are based on the North American Industry Classification Systems (NAICS).<br />A small firm is typically allowed to hire up to 500 workers and still qualifies for various SBA and federal government procurement programs for small businesses.<br />
  4. 4. What is a Small Business?<br />There really is no single, official definition of what constitutes a small business. <br />Overall, a small business is privately owned and operated, with a small number of employees and relatively low volume of sales.<br />
  5. 5. How Important are Small Businesses?<br /><ul><li>Small businesses drive the U.S. economy in a variety of ways:
  6. 6. Small firms represent 99.7% of all employer firms.
  7. 7. They employ about half of all private sector employees.
  8. 8. Pay nearly 45% of total U.S. private payroll
  9. 9. Have generated 60 to 80 percent of net new jobs annually over the last decade.</li></li></ul><li>How Many Small Businesses are There?<br />In 2007, there were 27.2 million businesses in the United States, according to the Office of Advocacy estimates.<br />6.0 million firms had employees<br />20.4 million firms were without employees<br />The latest data also shows that in 2002:<br />Women owned 6,492,795 firms<br />African Americans owned 1,197,988 firms<br />Hispanics owned 1,574,159 firms<br />Asians owned 1,105,329 firms<br />American Indians and Alaskan Natives owned 206,125 firms.<br />
  10. 10. Opening & Closing<br />How many businesses open and close each year?<br />The number of non-employer firms has risen steadily in this decade, from 16.5 million in 2000 to an estimated 21.1 million in 2007.<br />
  11. 11. Small Business Survival Rate<br />According to a recent study:<br />Two-thirds of new employer establishments survive at least two years.<br />44% survive at least four years<br />31% survive at least seven years<br />The study found that businesses that survive four years have a better chance of surviving long-term.<br />After the fourth year, the rate of firms closing declines considerably.<br />Source: “Business Employment Dynamics Data: Survival and Longevity, II,” by Amy E. Knaup and Merissa C. Piazza, Monthly Labor Review, vol. 30, no. 9 (Sept. 2007), pp. 3-10; “Redefining Business Success: Distinguishing Between Closure and Failure” by Brian Headd, Small Business Economics, vol. 21, no. 1 (August 2003), pp. 51-61.<br />
  12. 12. Why People Start their Own Businesses<br />Introduction to Small Businesses<br />Why People Start Their Own Businesses<br />Current Small Business Conditions<br />Positioning for Success<br />Wrap Up<br />
  13. 13. People Start Businesses for a Variety of Reasons<br />They want financial freedom<br />They want to set their own hours<br />They are tired of working for a boss<br />They want to apply their experience and knowledge to a new endeavor <br />They want flexibility<br />They want recognition<br />They want to build or create something<br />They want a change from their everyday routine or current job<br />
  14. 14. People Start Businesses for a Variety of Reasons<br />They want to make a difference<br />They want to leave a legacy<br />They want the challenge and excitement<br />They want to feel intellectually stimulated<br />They want to exercise their entrepreneurial instincts <br />They want to combine their competitive spirit with their creative inclinations <br />They want to be the boss<br />They want to take control of their life<br />
  15. 15. Current Conditions Also Contribute to Business Startup <br />Economic conditions can open the door to entrepreneurship opportunities that one may not have considered before-hand. For Example:<br />Lay-offs have opened the door for new beginnings<br />Recent graduates are coming into the workforce with nowhere to go<br />Veterans are looking to transition back into work life <br />Seniors cannot depend on retirement<br />History has shown that recessions can be the birthing grounds for some of hardest working, most successful and creative entrepreneurs today.<br />
  16. 16. Current Small Business Conditions<br />Introduction to Small Businesses<br />Why People Start Their Own Businesses<br />Current Small Business Conditions<br />Positioning for Success<br />Wrap Up<br />
  17. 17. Small Business & the Economy<br />Like the rest of the economy, small businesses were affected by the depth of the recession in late 2008.<br />If the past is an indicator, small businesses are vital to the economic recovery.<br />
  18. 18. Small Business & the Economy<br />
  19. 19. Current Small Business Hurdles<br />Health Care<br />Costs remain a constant issue for small firms.<br />High Competition with Benefits<br />Results in greater turnover rate.<br />Financing<br />Total business borrowing decreased from $1.228 trillion in 2007 to $507 billion in 2008.<br />Lenders exhibited widening interest rate spreads and tightening terms of lending.<br />Some surveys found small firms expressing less willingness to spend, hire or invest in the near future.<br />
  20. 20. Positioning for Success<br />Introduction to Small Businesses<br />Why People Start Their Own Businesses<br />Current Small Business Conditions<br />Positioning for Success<br />Wrap Up<br />
  21. 21. Factors That Increase a Business’ Chance for Success<br />Business<br />Demographic Research<br />Market Accessibility (product/service)<br />Ability to reach your target market<br />Business plan (with financial projections)<br />Capital / Financial Back-up<br />Goal setting and achievement<br />Planning and preparation<br />Location<br />
  22. 22. Factors The Increase A Business’ Chance for Success<br />Entrepreneur <br />Passion <br />Capitalize on your strengths<br />Patience<br />Perseverance and determination<br />Positive, change-oriented attitude<br />Focused<br />Communication, (especially the vision)<br />
  23. 23. Planning is Critical<br />Planning, research and more planning is critical now more than ever!<br />Loans and financing are becoming harder and harder to come by, therefore:<br />Banks, financers and investors have to see a clearly defined and well-thought business plan that proves your idea is strong and worthy of funding.<br />They must see research that proves the potential for success.<br />No longer can just anyone with an idea walk into a bank and come out a business owner. Plan, Plan, Plan!<br />
  24. 24. Factors That Increase a Business’ Chance for Success<br /><ul><li>Remember, once you get your business operational and you have an established client base, you can expand your business. Loans and financing are becoming harder and harder to come by, therefore:
  25. 25. This will likely increase your financial rewards
  26. 26. There are many more factors that impact a business’ potential and probability of success.</li></li></ul><li>Wrap-Up<br />Starting a business can be a great way to re-enter the workforce, increase flexibility in your schedule, achieve financial freedom and serve your community. <br />There are a variety of options for budget business ideas, so you don’t need to invest your entire savings.<br />Choosing the business opportunity that’s right for you and getting started can be challenging, so you may want to find a mentor or consultant.<br />Starting a business can be done alone, with a partner, or as a contractor for a larger company. <br />Startups are risky; you should minimize your risks as much as possible to give your business the best possible chance. <br />
  27. 27. Where Does BizCentral USA Come In?<br />Startups often have big dreams with small funds.<br />This is where we come in with an advantage:<br />BizCentral USA is a one-stop-shop for all entrepreneur’s needs!<br />Business plan development, startup resources and tools, research tools, loan referrals, incorporation, marketing and more.<br />We offer value pricing for professional quality products and services!<br />Our staff is comprised of experts in a variety of fields and specialty areas, ready to assist entrepreneurs in achieving their goals!<br />

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