2Rewards and Challenges of Entrepreneurship An entrepreneur is a person who recognizes a business opportunity and organizes, manages, and assumes the risks of starting and operating a business. Entrepreneurship is the process of recognizing an opportunity, testing it in the market, and gathering the resources necessary to go into business.A venture is a new business undertaking that involves risks.
312 Characteristics of Entrepreneurs PersistentRisk-takingSelf-confidentRestlessGoal-orientedAction-orientedResponsibleSelf-demandingCreativeIndependentInquisitiveEnthusiastic
4Small BusinessesSmall business is an independently owned business that usually has the owner as its manager.A small business serves a limited geographic area and employs fewer than 500 people.
5Internet Businesses Virtual Business Dot-com company is a business that operates on the internet.According to American City Business Journals, small businesses that use the internet have grown more than 45 percent faster than those that do not.
6Rewards of Entrepreneurship Being the BossAbility to be in charge (Main Reason)Entrepreneurs do not have to consult with others before making a decision.Doing what you EnjoyHaving the opportunity to be CreativeEntrepreneurs make the procedure that everyone else follows. Daring or creative ideas.Building an EnterpriseMany successful entrepreneurs work in a related business before starting their own business.They must research before starting.Other ReasonsMake their own schedule.
7Sole proprietorship vs. Partnership vs. Corporation Sole proprietorships are owned and operated by one person.Do not share their company’s income and expenses, profits or loses.All responsibilities and profits and benefits.Partnerships are owned and ran by two or more people.Corporations are run by a chief executive officer, who answers to a board.
8Challenges of Entrepreneurship Getting Funds to Start the BusinessMost people must borrow money or finance the money to get started. (Go in debt).Difficult to get loans-fear of business succeeding or not, and ability to repay the loan.Being Fully Responsible for the BusinessMust make sure that:Floors swept, bills paid, employees hired, make repairs, handle financial records, train employees, etc.Other ChallengesFeeling aloneMaking right decisionsWork long hoursUncertain level of income4 out of 5 small businesses fail in the first five years of existence. Mostly due to poor financial planning and management, and not being able to adapt to change.
9Small Businesses Facts More than 99% of the US firms are small businesses.Small businesses employ more than 50% of the workforce in the US.Majority are one person operations.Estimate: 2/3 of all new jobs are generated by small businesses.Virtual businesses continues to increase.
105.2 The Business PlanBusiness Plan is a written description of a new business venture that describes ALL aspects of the business. It is used by potential investors and financing agencies that new entrepreneurs go to for start-up funds.
11Checklist for Starting a Business What will I produce?Who are my main competitors?Why is my product or service needed?How much will my product or service cost to produce?How many people will I need to run the business?What physical facilities will I need?What licenses, permits, or other legal documents do I need?How much money will I need to get started?
1216 Essential Parts of a Business Plan Executive SummaryManagement Team PlanCompany DescriptionProduct and Service PlanVision and Mission StatementsIndustry OverviewMarket AnalysisCompetitive AnalysisMarketing PlanOperational PlanOrganizational PlanFinancial PlanGrowth PlanContingency PlanCover Page, Title Page, Table of Contents, and Supporting Documents
13Executive Summary Brief account of key points. Not more than 2 pages. Most important information from each section.Should persuade the reader that the business will succeed.Evidence gathered through market research.
14Management Team Plan Your qualifications. Description of team capabilities.How you will fill gaps in expertise.Hire consultantsForm partnershipsAdvisory Boards
15Company Description Outline of the business. Size, scope, and type of business.Why the business will succeed??
16Product and Service Plan Description of the product or service you want to offer.Nature of the business should be clear.Unique features of the product.Spin-offs are additional products that may be offered when the business gets established.
17Vision and Mission Statements Guiding principles by which a business functions.Vision Statement-the scope and purpose of a company, and it beliefs and values.Mission Statement-specific aspirations of a company, the major goals.
18Industry Overview Present your research. Discuss trends and growth within the industry.(Industry is the companies that provide similar, complimentary, or different products)
19Market Analysis Research about your customer profile. Overall marketing and sales strategies.Analyze your customers and the competition.Target market information-geographics, economics, and demographics.
20Competitive AnalysisHow the business has an advantage over its competitors.
21Marketing PlanHow a company makes its customers aware of it products or services.Market niche, pricing, company image, marketing tactics, media plan, and marketing budget.
22Operational PlanProduction and delivery of the product or service.
23Organizational PlanPeople who will run the firm as well as management’s philosophy.Form of business organization-proprietorship or corporation, etc.
24Financial Plan Forecast for the business. Data Proof that the business will be financially healthy.
25Growth PlanHow the business will expand in the future.
26Contingency Plan Likely risks to the business. Lower than expected sales.Emergencies.Ways to minimize risks.
27Cover Page, Title Page, Table of Contents, and Supporting Documents Company’s NameAddressPhone NumberWebsiteLogoThe date the plan was submittedName of the preparer