Entrepreneurship and small business management
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6. Entrepreneurship and Small Business Management. CHARACTERISTICS OF ENTREPRENEURS. Entrepreneur One who takes a risk in starting a business to earn a profit Desire to be your own boss Special skills and abilities. ENTREPRENEURS IN ACTION. Barbers – Cabin Coffee Creative Graphics

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Entrepreneurship and small business management

6

Entrepreneurship and Small Business Management


Characteristics of entrepreneurs
CHARACTERISTICS OF ENTREPRENEURS

  • Entrepreneur

    • One who takes a risk in starting a business to earn a profit

    • Desire to be your own boss

    • Special skills and abilities

Chapter 6


Entrepreneurs in action
ENTREPRENEURS IN ACTION

  • Barbers – Cabin Coffee

  • Creative Graphics

  • Schroeder Plumbing

Chapter 6


What does it take

Entrepreneurs are more

persistent

inquisitive

energetic

goal oriented

independent

self-confident

creative

reliable

competitive

WHAT DOES IT TAKE?

Chapter 6


What does it take1
WHAT DOES IT TAKE?

(continued)

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

Chapter 6


Entrepreneurship and the economy
ENTREPRENEURSHIP AND THE ECONOMY

  • Employment

    • 1/10 involved in some type of entrepreneurship

    • 60% of these have hired employees

  • Financing

    • Comes from entrepreneurship

    • 50% also get help from family

    • May use Venture Capital

      • Money provided by large investors

Chapter 6


Entrepreneurship and the economy1
ENTREPRENEURSHIP AND THE ECONOMY

  • Productivity

    • Account for over $600 billion in sales

    • Responsible for nearly half of GDP

Chapter 6


Number of employees in new businesses
NUMBER OF EMPLOYEESIN NEW BUSINESSES

Chapter 6


Opportunities
OPPORTUNITIES

  • Innovation

    • Invention or creation that is brand new

      (IPOD, IPAD)

  • Improvement

    • Design change that increase the usefulness of a product

      (Post its – to wall hooks)

Chapter 6


Risks
RISKS

  • Recognizing 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

Chapter 6


Small business ownership
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

    • Employees nearly 50 of all workers

Chapter 6


Small business ownership1
SMALL BUSINESS OWNERSHIP

  • Ownership diversity

    • Women own over ¼ of all small business

    • 16% owned by Ethnic backgrounds

    • Most over 40 years old

    • High School diploma, 30% have college degree

    • Half are operated out of their homes.

Chapter 6


Common types of small businesses
COMMON TYPES OF SMALL BUSINESSES

Chapter 6


Small business advantages
SMALL BUSINESS ADVANTAGES

  • Meeting customer needs

    • Serve those with specific needs

  • Providing unique services

    • Plan a wedding, design a sound system

Chapter 6


Common reasons for small business failure
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


Small business assistance
SMALL BUSINESS ASSISTANCE

  • Faculties of universities and colleges

  • Local groups of business people

  • Small Business Administration (SBA)

Chapter 6


The business decision
THE BUSINESS DECISION

  • An idea plus experience

  • Right place and time

  • Team approach

  • Preparation and research

Chapter 6


What is a business plan
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


Elements of a business plan
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


Elements of a business plan1
ELEMENTS OF A BUSINESS PLAN

(continued)

2. Description of Competition

  • Characteristics of the industry

  • Condition of the economy

  • Strengths and weaknesses of major competitors

Chapter 6


Elements of a business plan2
ELEMENTS OF A BUSINESS PLAN

(continued)

3. Customer Analysis

  • Description of customers

  • Location, number, and resources of customers

  • Sales forecasts

Chapter 6


Elements of a business plan3
ELEMENTS OF A BUSINESS PLAN

(continued)

  • Operations Plan

    • Organization of the company

    • Description of major operations

    • Analysis of resources needed

    • Human resource plans

Chapter 6


Elements of a business plan4
ELEMENTS OF A BUSINESS PLAN

(continued)

  • Marketing Plan

    • Description of major marketing activities

    • Description of resources needed

    • Schedule of marketing activities

Chapter 6


Elements of a business plan5
ELEMENTS OF A BUSINESS PLAN

(continued)

  • Financial Plans

    • Start-up costs

    • Short- and long-term financial needs

    • Sources of financing

    • Budgets and financial statements

Chapter 6


Steps in developing the business plan
STEPS IN DEVELOPING THE BUSINESS PLAN

  • Gather and review information

  • Develop the “game plan”

  • Write the plan

  • Ask an expert to review the plan

Chapter 6


Financing the small business
FINANCING THE SMALL BUSINESS

  • Types of financing

    • Start-up financing - $ to start

    • Short-term financing - $ for current operations

    • Long-term financing - $ for capital resources

  • Sources of financing

    • Owner-supplied funds

    • Borrowed funds

      Banks – Family – Angel Investors

Chapter 6


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