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Ch. 6-2

Ch. 6-2. Small Business Basics. Small Business Ownership. Small Business- An independent business with fewer than 500 employees. 99.9% of all U.S. businesses are considered small businesses. Small businesses are responsible for creating 60-80 percent of all new jobs.

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Ch. 6-2

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  1. Ch. 6-2 Small Business Basics

  2. Small Business Ownership • Small Business- An independent business with fewer than 500 employees. • 99.9% of all U.S. businesses are considered small businesses. • Small businesses are responsible for creating 60-80 percent of all new jobs. • The owner is typically the manager. • The business operates in one or very few locations • It typically serves a small market • It is not dominant in its field.

  3. Ownership Diversity • Women own more than ¼ of all small businesses • 18% of small businesses have African-American, Asian-American, or Hispanic-American ownership • The majority of small business owners are over 35 years old

  4. What are some advantages of a small business? • Fewer customers • Better customer service • More individual attention to the customer • Deal directly with a person, not an answering service • Provide unique services • Able to market to specific niches

  5. What must you do before starting a small business? • Prepare and do research! • Customers • Competitors • Government regulations • Price • Target market • Advertising/marketing

  6. Customers • Who are your potential customers? • How do you plan on reaching your potential customers? • Who else is targeting your potential customers? • What kind of income do your potential customers have?

  7. Competitors • Who are your competitors? • What are they doing that works? • What are they doing that needs improvement? • How you can you learn from their success and failures?

  8. Government Regulations • What kinds of government regulations are you going to be dealing with? • Zoning restrictions • Environmental Protection Agency

  9. Price • How are you going to price the product or service? • Can you stay competitive while still making a profit?

  10. Target Market • Who is your target market? • How are you going to reach your target market? • What is the income of your target market?

  11. Advertising/Marketing • Where do you plan on advertising? • How much do you plan on spending on advertising? • How can you market the product or service in a way to best reach your target market?

  12. Small Business Failures • 50% of small businesses fail in the first year. • 95% of small businesses fail within the first 5 years.

  13. Why do small businesses fail?

  14. Why do small businesses fail? • Not enough start-up money • Lack of management experience • Not controlling operating expenses • Poor location • Failure to manage credit offered to customers • Overspending • Inadequate business plan • Ineffective marketing/advertising

  15. Successful Small Businesses • What are some small businesses that you know of that have been successful?

  16. Successful Small Businesses • What makes those small businesses successful?

  17. Successful Small Businesses • What makes those small businesses successful? • Great work ethic • Good customer service • Hard-working employees • Good location • Well-planned

  18. Know where your business is going • Mission statement- A short, specific written statement of the reason a business exists and what it wants to achieve.

  19. We will be the easiest pharmacy retailer for customers to use.

  20. CVS Pharmacy • We will be the easiest pharmacy retailer for customers to use.

  21. ______ ______ is a results-oriented oil and gas company that builds value for its shareholders through its employees by creating an atmosphere of optimism, teamwork, creativity, resourcefulness and by dealing with everyone in an open and ethical manner.

  22. Devon Energy • Devon Energy is a results-oriented oil and gas company that builds value for its shareholders through its employees by creating an atmosphere of optimism, teamwork, creativity, resourcefulness and by dealing with everyone in an open and ethical manner.

  23. We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.

  24. Ford Motor Company • We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.

  25. At _________, we work to help people and businesses throughout the world realize their full potential. This is our mission. Everything we do reflects this mission and the values that make it possible

  26. Microsoft • At Microsoft, we work to help people and businesses throughout the world realize their full potential. This is our mission. Everything we do reflects this mission and the values that make it possible

  27. In order to be successful in business, you must have goals and you must know where you are going.

  28. What are some reasons why you would or would not want to become an entrepreneur? • How is the internet changing the characteristics of small businesses? • Do you believe the internet can make small businesses more competitive with large businesses? Why?

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