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Transcript of Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business...
Introduction to Business© Thomson South-Western
ChapterChapterChapterChapter
Entrepreneurship and Small Business Management
6-16-1 Becoming an Entrepreneur
6-26-2 Small Business Basics
6-36-3 Starting a Small Business
66
Chapter 6
Slide 2Introduction to Business
© Thomson South-Western
LESSON 6-1LESSON 6-1
Becoming an Entrepreneur
Goals Identify characteristics of successful
entrepreneurs. Recognize the importance of
entrepreneurship in the economy. Describe opportunities and risks of
entrepreneurship.
Chapter 6
Slide 3Introduction to Business
© Thomson South-Western
Key Terms
entrepreneur entrepreneurship venture capital innovation improvement
Chapter 6
Slide 4Introduction to Business
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CHARACTERISTICS OF ENTREPRENEURS Desire to be your own boss Special skills and abilities
Chapter 6
Slide 5Introduction to Business
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ENTREPRENEURS IN ACTION Pankaj Arora Rich Stachowski Jeffrey Rodriguez and John Serrano Abbey Fleck
Chapter 6
Slide 6Introduction to Business
© Thomson South-Western
WHAT DOES IT TAKE?
Entrepreneurs are more persistent inquisitive energetic goal oriented independent
self-confident creative reliable competitive
Chapter 6
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WHAT DOES IT TAKE?Entrepreneurs have problem-solving skills tolerance for ambiguity strong integrity personal initiative ability to secure resources capability to learn from failure willingness to work hard
(continued)
Chapter 6
Slide 8Introduction to Business
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>> C H E C K P O I N T
What personal characteristic are common to most successful entrepreneurs?
Chapter 6
Slide 9Introduction to Business
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ENTREPRENEURSHIP AND THE ECONOMY Employment Financing Productivity
Chapter 6
Slide 10Introduction to Business
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NUMBER OF EMPLOYEESIN NEW BUSINESSES
Chapter 6
Slide 11Introduction to Business
© Thomson South-Western
>> C H E C K P O I N T
What are the sources of financing that entrepreneurs use for their new businesses?
Chapter 6
Slide 12Introduction to Business
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OPPORTUNITIES
Innovation Improvement
Chapter 6
Slide 13Introduction to Business
© Thomson South-Western
RISKS
Recognizing risks Lack of adequate capital Low sales Higher than expected expenses Competitive pressure An owner unprepared to manage a growing
business Operations requiring more time than the owner is
willing to commit
Chapter 6
Slide 14Introduction to Business
© Thomson South-Western
>> C H E C K P O I N T
Where do entrepreneurship opportunities begin?
Chapter 6
Slide 15Introduction to Business
© Thomson South-Western
LESSON 6-2LESSON 6-2
Small Business Basics
Goals Identify important characteristics of
small businesses. Recognize the competitive advantages
of small businesses. Identify problems faced by many small
businesses.
Chapter 6
Slide 16Introduction to Business
© Thomson South-Western
Key Terms
small business Small Business Administration (SBA)
Chapter 6
Slide 17Introduction to Business
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SMALL BUSINESS OWNERSHIP Description of a small business
Owner is usually the manager Operates in one or very few locations Typically serves a small market Not dominant in its field
Small business employment Ownership diversity
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Slide 18Introduction to Business
© Thomson South-Western
COMMON TYPES OF SMALL BUSINESSES
Chapter 6
Slide 19Introduction to Business
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>> C H E C K P O I N T
What percentage of employees in the United States work for small businesses?
Chapter 6
Slide 20Introduction to Business
© Thomson South-Western
SMALL BUSINESS ADVANTAGES Meeting customer needs Providing unique services
Chapter 6
Slide 21Introduction to Business
© Thomson South-Western
>> C H E C K P O I N T
How can small businesses compete successfully with larger businesses?
Chapter 6
Slide 22Introduction to Business
© Thomson South-Western
COMMON REASONS FOR SMALL BUSINESS FAILURE Not keeping adequate records Not having enough start-up money Lack of management experience Lack of experience with the type of business Not controlling operating expenses Poor location for the business Failure to manage credit offered to customers
Chapter 6
Slide 23Introduction to Business
© Thomson South-Western
SMALL BUSINESS ASSISTANCE Faculties of universities and colleges Local groups of business people Small Business Administration (SBA)
Chapter 6
Slide 24Introduction to Business
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>> C H E C K P O I N T
List common reasons for small business failure.
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Slide 25Introduction to Business
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LESSON 6-3LESSON 6-3
Starting a Small Business
Goals Recognize important factors to be
considered when starting a business. Describe the elements of a business
plan. Identify types and sources of financing
for a small business.
Chapter 6
Slide 26Introduction to Business
© Thomson South-Western
Key Terms
business plan start-up financing short-term financing long-term financing
Chapter 6
Slide 27Introduction to Business
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THE BUSINESS DECISION
An idea plus experience Right place and time Team approach Preparation and research
Chapter 6
Slide 28Introduction to Business
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>> C H E C K P O I N T
Why is it important to use a team approach when starting a new business?
Chapter 6
Slide 29Introduction to Business
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WHAT IS A BUSINESS PLAN? A business plan is a written
description of the business idea and how it will be carried out, including all major business activities.
Chapter 6
Slide 30Introduction to Business
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ELEMENTS OF A BUSINESS PLAN Description of the Business
The business idea Major products and services Ownership structure Strengths/weaknesses Long- and short-term goals
Chapter 6
Slide 31Introduction to Business
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ELEMENTS OF A BUSINESS PLAN Description of Competition
Characteristics of the industry Condition of the economy Strengths and weaknesses of major
competitors
(continued)
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ELEMENTS OF A BUSINESS PLAN Customer Analysis
Description of customers Location, number, and resources of
customers Sales forecasts
(continued)
Chapter 6
Slide 33Introduction to Business
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ELEMENTS OF A BUSINESS PLAN Operations Plan
Organization of the company Description of major operations Analysis of resources needed Human resource plans
(continued)
Chapter 6
Slide 34Introduction to Business
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ELEMENTS OF A BUSINESS PLAN Marketing Plan
Description of major marketing activities Description of resources needed Schedule of marketing activities
(continued)
Chapter 6
Slide 35Introduction to Business
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ELEMENTS OF A BUSINESS PLAN Financial Plans
Start-up costs Short- and long-term financial needs Sources of financing Budgets and financial statements
(continued)
Chapter 6
Slide 36Introduction to Business
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STEPS IN DEVELOPING THE BUSINESS PLAN Gather and review information Develop the “game plan” Write the plan Ask an expert to review the plan
Chapter 6
Slide 37Introduction to Business
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>> C H E C K P O I N T
What is the “game plan” in a business plan?
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FINANCING THE SMALL BUSINESS Types of financing
Start-up financing Short-term financing Long-term financing
Sources of financing Owner-supplied funds Borrowed funds
Chapter 6
Slide 39Introduction to Business
© Thomson South-Western
>> C H E C K P O I N T
In addition to owner-supplied capital, what are several other sources of financing for a small business?