Copyright by Paradigm Publishing, Inc. INTRODUCTION TO BUSINESS CHAPTER 6 Entrepreneurship and...
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Transcript of Copyright by Paradigm Publishing, Inc. INTRODUCTION TO BUSINESS CHAPTER 6 Entrepreneurship and...
Copyright by Paradigm Publishing, Inc.
INTRODUCTION TO BUSINESS
CHAPTER 6
Entrepreneurship and Business Planning
Copyright by Paradigm Publishing, Inc.
Copyright by Paradigm Publishing, Inc.
Creating a New Business
Online Resources for Creating a Business Yahoo!’s Small Business site (http://
smallbusiness.yahoo.com) American Express (http://americanexpress.
com/smallbusiness) Small Business Administration (http://
www.sbaonline.sba.gov) Quicken Small Business (http://www.quicken.
com/small_business)
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Creating a New Business
Pros and Cons of Being an Entrepreneur Pros
May possibly earn large profits. Be your own boss. No fear of being mistreated or fired. Work in a business you created and will be directly
rewarded for. Cons
Possibly large losses and may lose entire investment. Income is tied to how well business is run. Lose source of income if business fails.
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Assessing Market Conditions Demand Competition
Market share: a firm’s sales as a proportion of the total market
Competition within segments Segments: subsets of a market that reflect a specific
type of business and the perceived quality
Labor conditions Regulatory conditions
Assessing Market Conditions
New business ideas are commonly created in response to shifts in consumer preferences. When gas prices increased substantially, consumers shifted their demand away from gas guzzlers and toward fuel-efficient cars. Manufacturers of fuel- efficient hybrid cars capitalized on anticipating the shift in consumer demands.
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Assessing Market ConditionsEffects of Market Conditions on a Firm’s Performance
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Developing a Competitive Advantage
Produce Products Efficiently Produce Higher-Quality Products
Using the Internet to Create a Competitive Advantage Advantages of a Web-Based Business
Expenses of a Web-Based Business Using SWOT Analysis to Develop a
Competitive Advantage
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Developing the Business Plan
Business Plan: detailed description of the proposed business.
Competitive Advantage??? Assessment of the Business Environment
Economic Environment Industry Environment Global Environment
Developing the Business Plan
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Developing the Business Plan
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When developing a plan for a new business or the restructuring of an existing business, an entrepreneur commonly asks for input from employees or other business associates.
IT IS A TEAM EFFORT
Developing the Business Plan
Once a business plan is created, the entrepreneur may present the idea to investors who may be willing to invest equity in the business. Alternatively, the entrepreneurs may present the business plan to commercial banks in an attempt to obtain business loans to finance the business.
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Developing the Business PlanImpact on a Firm’s Earnings
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Risk Management by Entrepreneurs
One of the most common entrepreneurial ideas is to open a retail clothing store that sells clothes produced by other entrepreneurs. While many clothing stores have become very successful, others have failed. Perhaps the primary reasons for failure are poor planning and unrealistic expectations.
Copyright by Paradigm Publishing, Inc.
Copyright by Paradigm Publishing, Inc.
Risk Management by Entrepreneurs
Reliance on One Customer Reliance on One Supplier Reliance on a Key Employee
Hedging against Losses Resulting from a Key Employee’s Death
Hedging against the Illness or Loss of a Key Employee
Exposure to E-risk
Insurance Required for Business Project Research health care cost for full-time
workers. Over 50% of start ups will offer medical
insurance benefits. It is an expensive addition to personnel
costs. Liability, Key Man, and other insurance is
also needed, but for purposes of this plan we will only require medical.
