Entrepreneurship and Small Business Management.ppt

Intro to Business, 7e
© 2009 South-Western, Cengage Learning SLIDE 1
CHAPTER 6
6-1 Becoming an Entrepreneur
6-2 Small Business Basics
6-3 Starting a Small Business
Entrepreneurship and
Small Business Management

Becoming an
Entrepreneur
Goals
 Identify characteristics of successful
entrepreneurs.
 Recognize the importance of entrepreneurship
in the economy.
 Describe opportunities and risks of
entrepreneurship.
6-1

© 2009 South-Western, Cengage Learning SLIDE
Chapter 6
3
Key Terms
entrepreneur
entrepreneurship
venture capital
innovation
improvement

Chapter 6
4
CHARACTERISTICS OF
ENTREPRENEURS
Desire to be your own boss
Special skills and abilities

Chapter 6
5
ENTREPRENEURS
IN ACTION
Pankaj Arora
Rich Stachowski
Jeffrey Rodriguez and John Serrano
Abbey Fleck

Chapter 6
6
WHAT DOES IT TAKE?
persistent
inquisitive
energetic
goal oriented
independent
self-confident
creative
reliable
competitive
Entrepreneurs are more

Chapter 6
7
WHAT DOES IT TAKE?
problem-solving skills
tolerance for ambiguity
strong integrity
personal initiative
ability to secure resources
capability to learn from failure
willingness to work hard
(continued)
Entrepreneurs have

Chapter 6
8
Checkpoint >>
What personal characteristic are common to most
successful entrepreneurs?
Answer
 Any characteristics listed in Figure 6-1 are acceptable, such
as persistence, inquisitiveness, self-confidence, creativity, and
so forth.

Chapter 6
9
ENTREPRENEURSHIP
AND THE ECONOMY
Employment
Financing
Productivity

Chapter 6
10
Employment Growth by Business Size
Source: U.S. Bureau of Labor Statistics

Chapter 6
11
What are the sources of financing that entrepreneurs
use for their new businesses?
Answer
 personal savings
 friends and family
 venture capital
 bank loans
Checkpoint >>

Chapter 6
12
OPPORTUNITIES
Innovation
Improvement

Chapter 6
13
RISKS
 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
Recognizing risks

Chapter 6
14
Where do entrepreneurship opportunities begin?
Answer
 Opportunities begin with innovations (ideas about new
products and services) or improvements (ideas for changes to
existing products, services, or processes).
Checkpoint >>

Small Business Basics
Goals
 Identify important characteristics of small
businesses.
 Recognize the competitive advantages of
small businesses.
 Identify problems faced by many small
businesses.
6-2

Chapter 6
16
Key Terms
small business
Small Business Administration (SBA)

Chapter 6
17
SMALL BUSINESS
OWNERSHIP
Description of a small business
 Owner is usually the manager
 Operates in one or very few locations
 Typically serves a small market
 Not dominant in its field
Small business employment
Ownership diversity

Chapter 6
18
COMMON TYPES OF
SMALL BUSINESSES
Source: Small Business Administration
and U.S. Census Bureau
Common
Types of
Small
Businesses

Chapter 6
19
What percentage of employees in the United States
work for small businesses?
Answer
 Nearly 50 percent of the American workforce is employed by
small businesses.
 Small businesses are also responsible for 60–80 percent of all
new jobs.
Checkpoint >>

Chapter 6
20
SMALL BUSINESS
ADVANTAGES
Meeting customer needs
Providing unique services

Chapter 6
21
How can small businesses compete successfully with
larger businesses?
Answer
 Smaller businesses are able to provide more personalized
products and services to their customers.
 They are able to provide products and services where smaller
orders and projects are required and tend to fill unique
customer needs, which larger companies do not provide.
Checkpoint >>

Chapter 6
22
COMMON REASONS FOR
SMALL BUSINESS FAILURE
 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
23
SMALL BUSINESS
ASSISTANCE
Faculties of universities and colleges
Local groups of business people
Small Business Administration (SBA)

Chapter 6
24
List common reasons for small business failure.
Answer
 not keeping adequate records
 insufficient start-up money
 lack of management experience
 lack of experience with the type of business
 not controlling operating expenses
 poor location
 failure to manage credit
Checkpoint >>

Starting a Small Business
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.
6-3

Chapter 6
26
Key Terms
business plan
start-up financing
short-term financing
long-term financing

Chapter 6
27
THE BUSINESS DECISION
An idea plus experience
Right place and time
Team approach
Preparation and research

Chapter 6
28
Why is it important to use a team approach when
starting a new business?
Answer
 A team approach allows employees to feel valued and
motivated to take personal responsibility for the benefit of the
business.
 Owners cannot expect to be able to do everything alone.
Building a team will allow the business to increase
productivity and, ultimately, profits.
Checkpoint >>

Chapter 6
29
WHAT IS A
BUSINESS PLAN?
A business plan is a written description
of the business idea and how it will be
carried out, including all major business
activities.

Chapter 6
30
ELEMENTS OF A
BUSINESS PLAN
Description of the Business
 The business idea
 Major products and services
 Ownership structure
 Strengths/weaknesses
 Long- and short-term goals

Chapter 6
31
ELEMENTS OF A
BUSINESS PLAN
Description of Competition
 Characteristics of the industry
 Condition of the economy
 Strengths and weaknesses of major
competitors
(continued)

Chapter 6
32
ELEMENTS OF A
BUSINESS PLAN
Customer Analysis
 Description of customers
 Location, number, and resources of
customers
 Sales forecasts
(continued)

Chapter 6
33
ELEMENTS OF A
BUSINESS PLAN
Operations Plan
 Organization of the company
 Description of major operations
 Analysis of resources needed
 Human resource plans
(continued)

Chapter 6
34
ELEMENTS OF A
BUSINESS PLAN
Marketing Plan
 Description of major marketing activities
 Description of resources needed
 Schedule of marketing activities
(continued)

Chapter 6
35
ELEMENTS OF A
BUSINESS PLAN
Financial Plans
 Start-up costs
 Short- and long-term financial needs
 Sources of financing
 Budgets and financial statements
(continued)

Chapter 6
36
STEPS IN DEVELOPING
THE BUSINESS PLAN
Gather and review information
Develop the strategic alternatives
Write the plan
Ask an expert to review the plan

Chapter 6
37
What is the “strategic alternatives” in a business plan?
Answer
 Strategic alternatives are alternative plans for production,
staffing, financing, and so on.
 Even the best business plan cannot predict every possible
circumstance.
 An alternate plan allows a business to be prepared for the
unforeseeable.
Checkpoint >>

Chapter 6
38
FINANCING
THE SMALL BUSINESS
Types of financing
 Start-up financing
 Short-term financing
 Long-term financing
Sources of financing
 Owner-supplied funds
 Borrowed funds

Chapter 6
39
Checkpoint >>
In addition to owner-supplied capital, what are several
other sources of financing for a small business?
Answer
 Borrowed money may come from banks, finance companies,
or other individuals, such as friends and family.
 Some suppliers may also be willing to extend credit.

Entrepreneurship and Small Business Management.ppt

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Entrepreneurship and Small Business Management.ppt

Similar to Entrepreneurship and Small Business Management.ppt (20)

Recently uploaded

Recently uploaded (20)

Entrepreneurship and Small Business Management.ppt