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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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Presentation Transcript
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

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

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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