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Chapter 7: SMALL BUSINESS AND ENTREPRENEURSHIP

Chapter 7: SMALL BUSINESS AND ENTREPRENEURSHIP. Economic Rocket Fuel. LAUNCHING NEW VENTURES: WHAT’S IN IT FOR ME?. Greater Financial Success Independence Flexibility Challenge Survival.

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Chapter 7: SMALL BUSINESS AND ENTREPRENEURSHIP

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  1. Chapter 7: SMALL BUSINESS AND ENTREPRENEURSHIP Economic Rocket Fuel

  2. LAUNCHING NEW VENTURES: WHAT’S IN IT FOR ME? • Greater Financial Success • Independence • Flexibility • Challenge • Survival On any given day in the United States, more people are trying to start a new business than are getting married or having children.

  3. THE ENTREPRENEUR: A DISTINCTIVE PROFILE Self-Reliance Vision Entrepreneurs – People who risk their time, money, and other resources to start and manage a business. Confidence Energy Tolerance of Failure Tolerance of Uncertainty

  4. OPPORTUNITIES AND THREATS FOR SMALL BUSINESS: A TWO-SIDED COIN • Threats: • Higher Risk of Failure • Lack of Knowledge and Experience • Too Little Money • Bigger Regulatory Burden • Higher Health Insurance Costs • Opportunities: • Market Niches • Personal Customer Service • Lower Overhead Cost • Technology

  5. SMALL BUSINESS FAILURE

  6. DOT-COM DEBACLES Webvan: the value of this early online grocer peaked at $1.2 billion, but Webvan left 2,000 people out of work when it closed its doors in the middle of 2001. Arrangeonline.com, Funeral.com, Heavenly-Door.com and Plan4ever.com marketed funeral arrangements and related services Pets.com: Shutting down only nine months after its $82.5 million IPO, Pets.com hawked pet care products from doggie treats to kitty litter, but lacked a workable plan for high shipping costs. Petstore.com offered a fish delivery service. They were bought out by Pets.com for $13 million in stock

  7. LAUNCH OPTIONS • Starting from scratch • Buying an established business • Buying a franchise

  8. BUYING AN ESTABLISHED BUSINESS

  9. STARTING A BUSINESS FROM SCRATCH

  10. BUYING A FRANCHISE

  11. ENTERING INTO A FRANCHISE AGREEMENT • Know all the facts before signing the dotted line: • Terms and Conditions • Fees and Other Payments • Training and Support • Specific Operational Requirements • Conflict Resolution • Assigned Territory • Franchisors must provide a Franchise Disclosure Document (FDD) • The Federal Trace Commission (FTC) require: • The FDD must be written in plain English • The franchisor must be given 14 days to review the FDD • The Franchisee should have a lawyer review the document

  12. TOOLS FOR BUSINESS SUCCESS • Small Business Administration • Gain Experience • Learn from Others • Educate Yourself • Write a Business Plan

  13. The Business Plan • Executive Summary • Description of Business • Competitive and Industry Research • Marketing Strategies • Operating Procedures • Personnel • Financial Projections

  14. FINDING THE MONEY: FUNDING OPTIONS • Personal Resources • Loans • Angel Investors • Venture Capital

  15. SMALL BUSINESS AND THE ECONOMY: AN OUTSIZED IMPACT • Creating New Jobs • Fueling Innovation • Vitalizing Inner Cities

  16. ECONOMIC IMPACT • Just 9.8% of the world’s entrepreneurs expect to create almost 75% of the jobs generated by new business ventures in the next five years. • 1 out of 10 adults worldwide start businesses every year • Three key factors drive entrepreneurship globally: • Per Capita Income • Opportunity Cost • Cultural/Political Environment

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