Small Business Management

1. Small Business Management

3. How to Obtain the Right Financing for Your Business

4. Capital Requirements • Fixed Assets Building, machines, and equipment • Working Capital

5. Types Of Financing • Debt Lender’s Income Does Not Vary With Business Success • Equity Stockholder’s Income Does Vary With Business Success

6. Cash Budgets • EstimateWorking Capital Needs • Reflects When • Revenue Collected • Expenses Paid • Considers Seasonal Revenue Fluctuations For Obtaining Working Capital (Line Of Credit) Loans

7. Equity Financing • Equity is the Owner’s Share Of the Firm’s Assets • Proprietorship/Partnership Equals Owner’s Personal Assets • Corporation = Stock, 1 Share = 1 Vote • Common • Preferred • Investment Liquidity Depends On Market

8. Common Stockholders • Real Owners Of Corporation • Financial Claim Is After All Others • Right To Vote • Control Management Royalty-Free/CORBIS

9. Small BusinessShare Of Stock

10. Preferred Stockholders • Claim To Profits • Before Common Stock Dividends • Not Legally Enforceable • No Voting Rights • Fixed Par Value & Dividend • Cumulative Dividend

11. Sources ofEquity Financing • Self • Small Business Investment Companies (SBICs) • Venture Capitalists • Angel Capitalists • Other • Business Incubators • Employee Stock Ownership • Customers

12. Debt Financing • Comes From Lenders • Must Be Repaid • At Specified Interest Rate • Within Agreed-Upon Time Span • Legal Claim On Assets Before Stockholders • Equity = Safety Net For Lenders

13. Debt Securities • Bond • Publicly Issued • Large Companies • Loan • Commercial Banks • Insurance Companies • Finance Companies

14. Bonds • Standard Denomination • Method Of Interest Payment • Method Of Principal Payment

15. Suppliers OfSmall Firm Credit

16. Lenders Want To Know • Startup • Can You Live Without Income From Business? • Loan Repayment? • Collateral? • Existing • Track Record • Future Difference?

17. DevelopingMarket Strategies

18. Superior Marketing • Moves Quickly • Pricing Differential • Attention to Packaging • Build Customer Loyalty • Samples/Demonstrations • Educate Customers

19. Marketing Concept “…Giving Special Consideration To The Needs, Desires, And Wishes Of Present And Prospective Customers.”

20. E-Commerce “…Technology-Mediated Exchanges Between Parties As Well As The Electronically Based Intra- Or Interorganizational Activities That Facilitate Such Exchanges.”

21. MarketingResearch Areas • Identify Customers • Determine Needs • Evaluate Sales Potential • Select Appropriate Channel Of Distribution • Evaluate Advertising & Promotion • Sources of Information

22. Marketing Mix (4 Ps) Product Place Promotion Price

23. Packaging • Product • Promotes • Protects • Identification • Improves Product Convenience • Promotes Brand Recognition • Influences Buying Decision

24. Pricing (4 Cs) Customer Company Competition Constraints

25. SmallBusiness Price Setting • Service Firms • Retailers • Customary Price • Unit Price • Loss Leader • Wholesalers • Producers • Building Contractors = Cost-Plus

26. Promoting and Distributing

27. Advertising “…informs customers of the availability, desirability, and uses of products.”

28. DevelopingAdvertising Program • Budget • Media • What/How To Say It • Agency • Expected Results

29. Advertising Budget • Percentage Of Sales/Profits • Units Of Sales • Objective- Immediate Response • Executive Decision

30. Media Selection • Newspaper • Signage • Direct Mail • Circulars/Handbills • Yellow Pages • Radio • Television • Online

31. Why PeopleDon’t Shop Online • Isn’t secure • Jeopardize Privacy • Must Pay Shipping Charges • Not Enough Selection • Can’t Touch/Try First • No Satisfaction Guarantee • Returns A Hassle • Won’t Arrive On Time • Hard To Find Things • Enjoy Shopping Out Of House

32. Infomercial “…long, usually half-hour TV ads hosted by a hyper ‘sellevangelist’ selling a relatively new product or service.”

33. Distribution “…involves the effective movement of a product from the production line to the final consumer.”

34. DistributionChannels: Consumer Goods

35. DistributionChannels: Industrial Goods

36. Intermediaries • Brokers • Agents • Wholesalers • Retailers

37. Quality Control

38. Quality “…product characteristics and/or the probability of meeting established standards.” Standards = Customer Expectations

39. Quality Involves Total Quality Management • Strength • Color • Taste • Smell • Content • Weight • Tone • Look • Capacity • Accomplishment • Creativity • Reliability • Etc.

40. Improving &Controlling Quality • Quality Circles • Design • Good Process

41. Quality Circle Operation

42. Quality Control Steps • Set Standards • Measure Performance • Compare Performance • Make Corrections

43. Risk Management, Insurance,And Crime Prevention

44. Types Of Risk • Pure- Unpredictable • Speculative- Voluntary

45. Coping With Risk • Avoidance • Prevention/Control • Transfer • Assumption- Self-Insurance

46. Determine Insurance Need What Will Happen If: • I Die • Fire • Theft/Embezzlement • Robbery • Settlement • Unauthorized Information

47. Types Of Insurance • Fire • Business Interruption • Casualty • Product/Service Liability • Workers’ Compensation • Group Health/Life • Business Owner • Fidelity/Surety Bonds

48. Actions To Improve Safety • Involve Employees • Establish Communications • Companywide Participation • Safety Awards • Exciting Program • Be Watchful

49. Criteria ForInsurer Comparison • Financial Stability & Safety • Specialization • Tailor Policy • Cost Of Protection

50. CrimePrevention For Protection • Zero-Tolerance Policy • Screen • Train • Defuse Disputes • Check Security • Terminate With Care