Understanding Entrepreneurship and Small Business http://www.slideshare.net/Subjectmaterial

Chapter 7

Sr.Chapter Chapter HeadingNo.No.

1. 3 Understanding the Global context of business (031012)2. 4 Conducting Business Ethically and Responsibly (250212)3. 6 Organizing the Business Enterprise (030312)4. 7 Understanding Entrepreneurship and Small Business

(100312)5. 8 Managing Human Resources6. 9 Understanding Employee Motivating, Satisfying and

Leadership7. 11 Understanding Marketing Processes and Consumer

Behavior8. 16 Managing Quality and Productivity9. 17 Managing Information Systems and Communication

Technology10. 19 Understanding Money and Banking11. 20 Intermediate Term and Lease Financing

Course Outline

3

Next class Quiz

Two groups 1. established entrepreneurs

What they did Why did they stall How could they improve

2. emerging entrepreneurs story What to do next

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FINAL PROJECT

GENERATE REVENUE

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Marks Distribution

50 Terminal Examination20 Mid Term Examination15 Quizzes15 Final Assignment

1. WHAT IS SMALL BUSINESS

2. ENTREPRENEURSHIP

3. SUCCESS AND FAILURE IN SMALL BUSINESS

4. STARTING AND OPERATING THE SMALL BUSINESS

5. FRANCHISING

TOC

1. WHAT IS SMALL BUSINESS• The importance of small business in the economy• Popular forms of small business enterprise

2. ENTREPRENEURSHIP• The distinction between entrepreneurship and small

business• Entrepreneurial characteristics

3. SUCCESS AND FAILURE IN SMALL BUSINESS• Trends in small business start-Ups• Reasons for failures• Reasons for success

4. STARTING AND OPERATING THE SMALL BUSINESS• Financing the small business• Sources of management advice

5. FRANCHISING• Advantages and Disadvantages of Franchising

What Is “Small Business”?

Independently owned and managed business that does not dominate its market

The importance of Small business in Economy

Job Creation

Innovation

Importance to Big Businesses

Popular Forms of Small-Business Enterprise

Services Retailing Construction Financial Insurance Wholesaling Transportati

on Manufacturi

ng Services37.6%Retailing

22.7%

Manufacturing5%

Finance &Insurance

10%

Construction10%

Transportation5%

Other1.7%

Wholesale8%

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2. ENTREPRENEURSHIP

Entrepreneurship is the act of being an entrepreneurAn entrepreneur can be defined as a businessperson who accepts the risks and opportunities of creating, operating and growing a new businessSmall Business Owner does not have plans for growth

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Entrepreneurial Characteristics

Entrepreneurs are … Founders of businesses that become large-

scale enterprises. People who:

Buy a local franchise outlet Open a small retail shop Operate a self-employed service business

People who introduce a new product or operational change in an existing organization

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Small Business Founder True EntrepreneurHE:Boss

HE:Leader

Lone Ranger NetworkerSecretive OpenSelf-reliant InquisitiveSeat-of-the-pants Letter of the business planSnap decisions Consensus decisionMale ownership Mixed OwnershipKnows the Trade Knows the businessAutomation: Technology lets business automate the work that people had always done

Innovation: Technology lets people do things that they’ve never done before

Entrepreneurial Characteristics

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3. SUCCESS AND FAILURE IN SMALL BUSINESS

Trends in Small Business Start-upsEmergence of E-commerce

Entrepreneurs who crossover fromBig Business

Increased opportunities for Minorities & Women

GlobalOpportunities

IncreasedSurvival Rates

Reasons for Success and Failure

Reasons for Failure Poor management Neglect Weak control

systems Insufficient capital

Reasons for Success Hard work, drive,

dedication Market demand Strong

management Luck!!!

Reasons for Success Hard work, drive,

dedication Market demand Strong

management Luck!!!

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4. STARTING AND OPERATING THE SMALL BUSINESS

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Starting the Small Business

First: The entrepreneurs commitment towards business

Second: Choosing the goods and services, evaluating the chosen industry and market

Third: Assessment of one’s own skills

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How to start the small business

1. Buying an existing business2. Starting from Scratch

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Financing the Small Business

Personal resources Loans Venture capital companies Small-business investment

companies Small Business Association (SBA) Financial aid and management

advice Advisory boards, management

consultatnts, the SBA, and networking

DEFINITIONS: Business plan:

document that tells potential lenders why money is needed, how it will be used, and when it will be repaid

Venture Capital company: Group of small investors that invest money in

companies with rapid growth potential Management consultant:

Independent outside specialist hired to help managers to solve business problems

Networking: Interconnections among business people for the

purpose of discussing mutual problems and opportunities and perhaps pooling resources

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5. FRANCHISING

Franchise is an arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (Franchiser)

FRANCHISING

Advantages Proven business

opportunity Access to

management expertise

Advantages Proven business

opportunity Access to

management expertise

Disadvantages Start-up costs On-going

payments Management

rules and restrictions

Disadvantages Start-up costs On-going

payments Management

rules and restrictions

An Ownership Opportunity