Starting Your Small Business

1. Small Business
Management
AN ENTREPRENEUR’S GUIDEBOOK
BUS 616
Tony Fernandez School of Business

2. Part I: Dynamic Role of Small Business
1. Starting Your Small Business
2. Family-Owned Businesses
3. Forms of Ownership of Small Businesses
4. Maintaining Good Government Relations & Business Ethics

3. Learning Objectives
1. Define what is meant by the term business.
2. Name some of the unique contributions of small business.
3. Explain some of the current problems small businesses face.
4. Discuss some of the current trends challenging
entrepreneurs and small business owners.
5. Explain why people start small businesses.
6. Describe the characteristics of successful entrepreneurs.
7. Describe where the opportunities are for small businesses.
8. Identify some of the areas of concern for small business
owners.

4. Why It’s an Interesting Time to Be Studying Small Business
• The Number of Small Businesses Is Growing Rapidly
• The Public Favors Small Business
• Interest Is Increasing at High Schools, Colleges, and
Universities
• Trend Is toward Self‐Employment
• Entrepreneurship Is Attractive to All Ages

5. Define “Small Business”
• It is independently owned and operated and is not dominant in its field of
operation.
• Independent Management
• Capital/Ownership = Few Individuals
• Operations are primarily local but market may have global branches
• Business is small compared to its competitors
Hisham F. Ibrahim/Getty Images

6. Business Classification by size
Under 20 employees Very Small
20 - 99 Small
100 – 499 Medium
500 Or More Large

7. Distinguishing Entrepreneurial Ventures & Small Businesses
• Small business (micro business)
• Small business owner
– Establishes a business to further personal goals, such as
profitability and fame
• Entrepreneur:
– Business owner whose goals include achievement, profit,
growth, achieved through innovation and strategic
management
• Entrepreneurial venture:
– Business owner’s principal objectives are profitability and

8. Some Unique Contributions of Small Business
• Encourage innovation & flexibility
• Maintain close relationship with customers & community
• Keep larger firms competitive
• Provide employees with comprehensive learning experience
• Develop risk takers
• Generate new employment
• Greater employee job satisfaction
Distinguishing Entrepreneurial Ventures & Small Businesses

9. Current Problems Facing Small Businesses
• Inadequate Financing
• Inadequate Management
• Burdensome Government Regulations and paper work

10. Trends Challenging Small Businesses Owners
• Exploring Technology
• Occupational And Industry Shifts
- Reinvention
- Reengineered
- Downsizing/Rightsizing
• Global Challenges

11. Why People Start Small Businesses?
72%
10%
10%
8%
Independence
Control
Satisfaction
Other
Satisfying Personal Objectives:
• Achieve independence
• Obtain additional income.
• Help their families.
• Provide products not available elsewhere.

12. Why People Start Small Businesses?
Achieve Business Objectives:
• Service Objective
• Profit Objective
• Social Objective
• Growth Objective
Mesh Objectives:
• Personal and business
objectives can be
integrated in a small
business.

13. Why To Not Start A Small Business?
12%
23%
22%
17%
17%
Long Hours
Taxes
Risk
Responsibility
Other

14. Characteristics Of Successful Owners
• Desire independence
• Have a strong sense of initiative
• Are motivated by personal & family considerations
• Expect quick and concrete results
• Are able to react quickly
• Are dedicated to their businesses
• Enter business as much by chance as by design

15. What leads to success in Managing Small Business?
• Serving an adequate & well-defined market
for the product.
• Acquiring sufficient capital.
• Recruiting & using human resources
effectively
• Obtaining and using timely information.
• Coping effectively with government
regulations
• Having expertise in the field on the part of
both the owner and the employees.

16. Doing an Introspective Personal Analysis
• Analyze Your Values
• Analyze Your Mental
Abilities
• Analyze Your Attitudes

17. Areas of Concerns for Small Business Owners
 Poorly planned growth
 Threat of failure
–Discontinuance
–Failure
• Formal
• Personal/Informal
• Failure occurs due to
- Lack of managerial experience & financial backing
- Poor location
- Unexpected growth
- Communication skills