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Introduction to Busines © Thomson South-Western Chapter Chapter Entrepreneurship and Small Business Management 6-1 6-1 Becoming an Entrepreneur 6-2 6-2 Small Business Basics 6-3 6-3 Starting a Small Business 6 6

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Page 1: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

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

Page 2: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

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.

Page 3: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 3Introduction to Business

© Thomson South-Western

Key Terms

entrepreneur entrepreneurship venture capital innovation improvement

Page 4: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 4Introduction to Business

© Thomson South-Western

CHARACTERISTICS OF ENTREPRENEURS Desire to be your own boss Special skills and abilities

Page 5: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 5Introduction to Business

© Thomson South-Western

ENTREPRENEURS IN ACTION Pankaj Arora Rich Stachowski Jeffrey Rodriguez and John Serrano Abbey Fleck

Page 6: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

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

Page 7: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 7Introduction to Business

© Thomson South-Western

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)

Page 8: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 8Introduction to Business

© Thomson South-Western

>> C H E C K P O I N T

What personal characteristic are common to most successful entrepreneurs?

Page 9: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 9Introduction to Business

© Thomson South-Western

ENTREPRENEURSHIP AND THE ECONOMY Employment Financing Productivity

Page 10: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 10Introduction to Business

© Thomson South-Western

NUMBER OF EMPLOYEESIN NEW BUSINESSES

Page 11: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

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?

Page 12: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 12Introduction to Business

© Thomson South-Western

OPPORTUNITIES

Innovation Improvement

Page 13: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

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

Page 14: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 14Introduction to Business

© Thomson South-Western

>> C H E C K P O I N T

Where do entrepreneurship opportunities begin?

Page 15: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

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.

Page 16: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 16Introduction to Business

© Thomson South-Western

Key Terms

small business Small Business Administration (SBA)

Page 17: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 17Introduction to Business

© Thomson South-Western

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

Page 18: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 18Introduction to Business

© Thomson South-Western

COMMON TYPES OF SMALL BUSINESSES

Page 19: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 19Introduction to Business

© Thomson South-Western

>> C H E C K P O I N T

What percentage of employees in the United States work for small businesses?

Page 20: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 20Introduction to Business

© Thomson South-Western

SMALL BUSINESS ADVANTAGES Meeting customer needs Providing unique services

Page 21: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

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?

Page 22: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

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

Page 23: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

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)

Page 24: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 24Introduction to Business

© Thomson South-Western

>> C H E C K P O I N T

List common reasons for small business failure.

Page 25: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 25Introduction to Business

© Thomson South-Western

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.

Page 26: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 26Introduction to Business

© Thomson South-Western

Key Terms

business plan start-up financing short-term financing long-term financing

Page 27: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 27Introduction to Business

© Thomson South-Western

THE BUSINESS DECISION

An idea plus experience Right place and time Team approach Preparation and research

Page 28: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 28Introduction to Business

© Thomson South-Western

>> C H E C K P O I N T

Why is it important to use a team approach when starting a new business?

Page 29: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 29Introduction to Business

© Thomson South-Western

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.

Page 30: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 30Introduction to Business

© Thomson South-Western

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

Page 31: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 31Introduction to Business

© Thomson South-Western

ELEMENTS OF A BUSINESS PLAN Description of Competition

Characteristics of the industry Condition of the economy Strengths and weaknesses of major

competitors

(continued)

Page 32: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 32Introduction to Business

© Thomson South-Western

ELEMENTS OF A BUSINESS PLAN Customer Analysis

Description of customers Location, number, and resources of

customers Sales forecasts

(continued)

Page 33: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 33Introduction to Business

© Thomson South-Western

ELEMENTS OF A BUSINESS PLAN Operations Plan

Organization of the company Description of major operations Analysis of resources needed Human resource plans

(continued)

Page 34: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 34Introduction to Business

© Thomson South-Western

ELEMENTS OF A BUSINESS PLAN Marketing Plan

Description of major marketing activities Description of resources needed Schedule of marketing activities

(continued)

Page 35: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 35Introduction to Business

© Thomson South-Western

ELEMENTS OF A BUSINESS PLAN Financial Plans

Start-up costs Short- and long-term financial needs Sources of financing Budgets and financial statements

(continued)

Page 36: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 36Introduction to Business

© Thomson South-Western

STEPS IN DEVELOPING THE BUSINESS PLAN Gather and review information Develop the “game plan” Write the plan Ask an expert to review the plan

Page 37: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 37Introduction to Business

© Thomson South-Western

>> C H E C K P O I N T

What is the “game plan” in a business plan?

Page 38: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

Chapter 6

Slide 38Introduction to Business

© Thomson South-Western

FINANCING THE SMALL BUSINESS Types of financing

Start-up financing Short-term financing Long-term financing

Sources of financing Owner-supplied funds Borrowed funds

Page 39: Introduction to Business © Thomson South-Western ChapterChapter Entrepreneurship and Small Business Management 6-1 6-1Becoming an Entrepreneur 6-2 6-2Small

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?