Entrepreneurship and Small Business

Chapter 5pp. 68-83

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Introduction to Business, Entrepreneurship and Small Business Slide 2 of 56

Preparing for Your Own Preparing for Your Own BusinessBusiness

A business plan is a written description of a new business venture that describes all aspects of the business.

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Introduction to Business, Entrepreneurship and Small Business Slide 3 of 56

Checklist for Starting a VentureChecklist for Starting a VentureSome questions to consider before starting your own business are:

• What will I produce?• Who are my main competitors?• Why is my product needed?

continued

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Introduction to Business, Entrepreneurship and Small Business Slide 4 of 56

Checklist for Starting a VentureChecklist for Starting a Venture

• How much will my product cost to produce?

• How many people will I need to run the business?

• What physical facilities will I need?

continued

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Introduction to Business, Entrepreneurship and Small Business Slide 5 of 56

Checklist for Starting a VentureChecklist for Starting a Venture

• What licenses, permits, or other legal documents do I need?

• How much money will I need to get started?

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Introduction to Business, Entrepreneurship and Small Business Slide 6 of 56

Elements of a Business Plan

1. The summary is a one- to three-page overview of the plan.

2. The company description explains the type of company.

continued

Business Building BlocksBusiness Building Blocks

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Introduction to Business, Entrepreneurship and Small Business Slide 7 of 56

3. Describe products or services in the products and services section.

4. The marketing plan describes your customers and your competition.

5. A legal plan points out how you will organize your company. continued

Elements of a Business PlanBusiness Building BlocksBusiness Building Blocks

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Introduction to Business, Entrepreneurship and Small Business Slide 8 of 56

6. The management plan and operating plan detail the company’s key personnel.

7. Complete a financial plan.

continued

Elements of a Business PlanBusiness Building BlocksBusiness Building Blocks

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Introduction to Business, Entrepreneurship and Small Business Slide 9 of 56

• Be brief and relevant.• Don’t inflate the importance or

possible success of your business.• “Write short and be honest,” is a good

rule of thumb.

Tips for Writing an Effective Business Plan

Business Building BlocksBusiness Building Blocks

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Introduction to Business, Entrepreneurship and Small Business Slide 10 of 56

The 4 P’s of Marketing• Product • Promotion• Place• Price

The Marketing Mix

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Introduction to Business, Entrepreneurship and Small Business Slide 11 of 56

Marketing Mix (cont.)• Product Strategies

– What product

– How to package

– What brand name

– What image to project

• Example

– Coolpix• Nikon Brand

– Trendy, celebrity endorsed, portable

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Introduction to Business, Entrepreneurship and Small Business Slide 12 of 56

Marketing Mix (cont.)• Place Strategies

– How/where a product will be distributed

– Mass marketing vs. specialty stores

• Example– Mass marketed

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Introduction to Business, Entrepreneurship and Small Business Slide 13 of 56

Marketing Mix (cont.)

• Price Strategies– What customers are

willing to pay

– Consider cost

– Consider competition

• Example– $99.99 cost– $20.00 for case– $18.00 for strap

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Introduction to Business, Entrepreneurship and Small Business Slide 14 of 56

Marketing Mix (cont.)• Promotion Strategies

– How customers will be told about product

– What the message will be– Where and when it’s delivered– Incentives to buy

• Example– Commercials– Magazine ads– Website offerings

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Introduction to Business, Entrepreneurship and Small Business Slide 15 of 56

Key WordsKey Words

entrepreneurshipvirtual business or dot-com companysmall businessentrepreneurrisk takerprofit

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Introduction to Business, Entrepreneurship and Small Business Slide 16 of 56

The Ins and Outs of The Ins and Outs of EntrepreneurshipEntrepreneurship

Entrepreneurships and small businesses are the majority of business firms.

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Introduction to Business, Entrepreneurship and Small Business Slide 17 of 56

• An entrepreneurship is a business started by someone who notices a need for a product or service.

• An entrepreneur is a person who Recognizes a business opportunity assumes the risks of a business enterprise Intent of increasing the market value of the

business

The Ins and Outs of The Ins and Outs of EntrepreneurshipEntrepreneurship

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Introduction to Business, Entrepreneurship and Small Business Slide 18 of 56

A virtual business or a dot-com company is a business that operates on the Internet.

The Ins and Outs of The Ins and Outs of EntrepreneurshipEntrepreneurship

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Introduction to Business, Entrepreneurship and Small Business Slide 19 of 56

Want tocontroldestiny

Want tocontroldestiny

Desire toearn profitDesire to

earn profit

Areenthusiastic

Areenthusiastic Have self-

confidenceHave self-confidence

Aredetermined

Aredetermined

Recognizeopportunities Recognize

opportunities Desire

achievementDesire

achievement

TakerisksTakerisks

Have highenergy

Have highenergy

SuccessfulSuccessful EntrepreneursEntrepreneurs

SuccessfulSuccessful EntrepreneursEntrepreneurs

Successful EntrepreneursSuccessful Entrepreneurs

Graphic OrganizerGraphic Organizer

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Introduction to Business, Entrepreneurship and Small Business Slide 20 of 56

There are many advantages to being an entrepreneur, including:

Advantages of EntrepreneurshipAdvantages of Entrepreneurship

• Satisfaction from taking a risk and becoming a success

• Working from home• Gaining profit

continued

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Introduction to Business, Entrepreneurship and Small Business Slide 21 of 56

DisadvantagesDisadvantagesof Entrepreneurshipof Entrepreneurship

The disadvantages to being an entrepreneur are:

• Long hours• Total responsibility for the business• Financial risks

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Introduction to Business, Entrepreneurship and Small Business Slide 22 of 56

DisadvantagesDisadvantagesof Entrepreneurshipof Entrepreneurship

The main reason why entrepreneurships fail is that they run out of money. •Starting with little money,•Spending carelessly,•Borrowing money without planning, •forgetting about taxes and insurance costs

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Introduction to Business, Entrepreneurship and Small Business Slide 23 of 56

Fast Review

1. What are some characteristics of entrepreneurs?

2. What are three advantages of an entrepreneurship?

continued

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Introduction to Business, Entrepreneurship and Small Business Slide 24 of 56

Fast Review

3. What are some disadvantages of an entrepreneurship?

4. What is the main reason that entrepreneurships fail?

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Introduction to Business, Entrepreneurship and Small Business Slide 25 of 56

Small Business:Small Business:What You Need to KnowWhat You Need to Know

The Small Business Administration (SBA) defines a small business as•an independently owned business that usually has the owner as its manager• Serves a limited geographic area• Employs fewer than 500 people, • Not dominant in its industry.

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Introduction to Business, Entrepreneurship and Small Business Slide 26 of 56

Small Business:Small Business:What You Need to KnowWhat You Need to Know

• Small businesses employ more than 50 percent of the total workforce in the United States.

• Small businesses generate more than half the nation’s income.

• They are the principal source of new jobs

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Introduction to Business, Entrepreneurship and Small Business Slide 27 of 56

Fast Review

1. How does the Small Business Administration (SBA) define a small business?

continued

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Introduction to Business, Entrepreneurship and Small Business Slide 28 of 56

Fast Review

1. What is a business plan?

2. Name the essential elements of a business plan.

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Introduction to Business, Entrepreneurship and Small Business Slide 29 of 56

Identify some reasons why a small business might be hard to manage.

What are some benefits of selling online?