Brittany Killins explains here about Entrepreneurship and its importance for society. It is very useful for us to build a better world for the next generations.
2. Becoming an Entrepreneur
Goals
1. Identify characteristics of successful
entrepreneurs
2. Recognize the importance of
entrepreneurship in the economy
3. Describes opportunities and risks
3. Characteristics of
Entrepreneurs
Entrepreneur – someone who takes a risk in
starting a business to earn a profit
Being your own boss
Developing a good initial plan
Special skills and abilities and coming up with
innovative ideas
Entrepreneurship – the process of starting,
organizing, managing, and assuming the
responsibility for a business
4. What Does it Take?
Not all business owners and managers are
entrepreneurs.
Entrepreneurs have unique skills and personal
characteristics.
6. Entrepreneurs Have:
Problem-solving skills
Tolerance for ambiguity
Strong integrity
Personal initiative
Ability to secure resources
Capability to learn from failure
Willingness to work hard
7. Checkpoint #1
What personal characteristic are common
to most successful entrepreneurs?
persistence, inquisitiveness, self-confidence,
creativity, and so forth.
8. Entrepreneurship and
the Economy
Employment
Small businesses are responsible for most new employment.
Financing
Most new businesses start on $10,000 or less.
75% of startup capital comes from owner savings, bank
loans, credit card debt.
Venture Capital – money provided by large investors to
finance new products and new businesses that have a goods
chance to be very profitable.
9. Entrepreneurship and
the Economy
Productivity
New and small businesses produce a large volume of
goods and services fro the economy.
Businesses with just a single owner and no staff
account for more than $770 billion in sales annually
Responsible for more than half of the U.S. GDP each
year.
10. Employment Growth by Business Size,
1990–2005
24.9%
20.1%
18.7%
36.3%
1-9 employees
20-99 employees
100-499 employees
500 or more employees
11. Checkpoint #2
What are the sources of financing that
entrepreneurs use for their new businesses?
Personal savings
Friends and family
Venture capital
Bank loans
12. Opportunities and Risks
Before deciding to start a business, you need to
think about the opportunities and risks.
New Business Opportunities
Innovation – an invention or creation that is brand new
Improvement – a designed change that increases the
usefulness of a product, service, or process
13. Opportunities and Risks
Recognizing Risks
The primary reasons that businesses started by
entrepreneurs close are:
1. Lack of adequate capital
2. Low sales
3. Higher than expected expenses
4. Competitive pressure
5. An owner unprepared to manage a growing
business
6. Operations requiring more time than the owner is
willing to commit
14. Checkpoint #3
Where do entrepreneurship
opportunities begin?
Opportunities begin with innovations
(ideas about new products and services)
or improvements (ideas for changes to
existing products, services, or processes).
15. Small Business Basics
Goals
1. Identify important characteristics of a
small business
2. Recognize the competitive advantages of
small businesses
3. Identify problems faced by many small
busineses
16. Small Business Ownership
Small Business – an independent business with
fewer than 500 employees.
99.9% of roughly 26 million U.S. Businesses are small
businesses
Description of a Small Business:
1. The owner is usually the manager
2. It operates in one or very few locations
3. It typically serves a small market
4. It is not dominant in its field
17. Small Business Ownership
Small Business Employment
Responsible for 60-80% of all new jobs
Large number of small businesses
Professional and Technical (Construction Companies)
Ownership Diversity
Women own more than 1/4th of all small businesses
More than 17% have African-American, Asian-American, or
Hispanic ownership
14% of owners are under 35 years-old
18. Small Business Ownership
Ownership Diversity
64% have finished some college work
Half are home based businesses
Average $5,000 or less to start up the business (Part-Time)
19.
20. Checkpoint #4
Beyond the formal definition of a small business,
what four points can be used to describe a small
business?
1. The owner is usually the manager
2. It operates in one or very few locations
3. It typically serves a small market
4. It is not dominant in its field
21. Small Business Advantages
Meeting customer needs
Serve customers where the number of products and services
needed is small or the requirements are too specialized for
large businesses
Get direct information from their customers
Providing Unique Services
Spend time determining needs and discussing alternatives
Unique needs, more individual attention, and willing to pay
more.
22. Checkpoint #5
How can small businesses compete successfully
with larger businesses?
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.
23. Common Small
Business Problems
Reasons for failure
1. Not keeping adequate records
2. Not having enough start-up money
3. Lack of management experience
4. Lack of experience with the type of business
5. Not controlling operating expenses
6. Poor location for the business
7. Failure to manage credit offered to customers
24. Common Small
Business Problems
Small Business Assistance
Small businesses can get help from a number of
sources:
1. Universities and colleges
2. Local Group of business people
3. Small Business Administration
A government agency that helps small business owners
develop a business plans and obtain financing and other
support for their companies.
25. Checkpoint #6
List common reasons for small business failure.
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
26. Starting a Small Business
Goals
1. Recognize important factors to be
considered when starting a business
2. Describe elements of a business plan
3. Identify types and sources of financing a
small business
27. The Business Decision
An Idea Plus Experience
Business ideas come from many sources
Hobbies, interests, business experiences, books, Magazines
Several years of training in a range of business operations
will prepare you for the role of owner.
Right place right time
If the business is not easy to find or requires a great deal of
travel time, many potential customers will stay away.
28. The Business Decision
Team Approach
Even small businesses need a few full – or part –time
employees to grow or cover extended hours.
Choosing the team members become one of the most
important initial business decisions.
Preparation and Research
Includes having enough information to make good decisions
about the business.
Information is needed on customers, competitors, important
operations, government regulations, and many more
29. Checkpoint #7
Why is it important to use a team approach when
starting a new business?
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.
30. Developing a Business Plan
What is a business plan?
A written description of the business idea and how it will be
carried out, including all major business activities.
Key Features:
General description of the company
The credentials of the owners
Description of the product or service
Analysis of the market
Financial plan
31. 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
32. Elements of a Business Plan
Description of Competition
Characteristics of the industry
Condition of the economy
Strengths and weaknesses of major competitors
Customer Analysis
Description of customers
Location, number, and resources of customers
Sales forecasts
33. Elements of a Business Plan
Operations Plan
Organization of the company
Description of major operations
Analysis of resources needed
Human resource plans
Marketing Plan
Description of major marketing activities
Description of resources needed
Schedule of marketing activities
34. Elements of a Business Plan
Financial Plans
Start-up costs
Short- and long-term financial needs
Sources of financing
Budgets and financial statements
35. Steps in Developing the
Business Plan
Gather and review information
Develop the strategic alternatives
Write the plan
Ask an expert to review the plan
36. Checkpoint #8
What are the “strategic alternatives” in a
business plan?
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.
37. Financing The Small Business
Types of financing
Start-up financing
Short-term financing
Long-term financing
Sources of financing
Owner-supplied funds
Borrowed funds
38. Checkpoint #9
In addition to owner-supplied capital, what are
several other sources of financing for a small
business?
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.