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Chapter: 6 Entrepreneurship and Small Business Management.

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Presentation on theme: "Chapter: 6 Entrepreneurship and Small Business Management."— Presentation transcript:

1 Chapter: 6 Entrepreneurship and Small Business Management

2 Becoming an Entrepreneur  Essential Questions 1. What are characteristics of successful entrepreneurs? 2. Recognize the importance of entrepreneurship in the economy. 3. Describe opportunities and risks of entrepreneurship.  Key Terms  Entrepreneur  Entrepreneurship  Venture Capital  Innovation  Improvement

3  What skills do you think an entrepreneur must have to turn their idea into a business? DO NOW

4  An entrepreneur is someone who takes a risk in starting a business to earn a profit. What is an Entrepreneur?

5  Desire to be your own boss  Having special skills and abilities  Coming up with innovative ideas Characteristics of Entrepreneurs

6 Entrepreneurs Are More  Persistent  Inquisitive  Energetic  Goal-oriented  Independent  Self-confident  Creative  Reliable  Competitive

7  Problem-solving skills  Strong Integrity  Personal Initiative  Ability to secure resources  Capability to learn from failure  Willingness to work hard Entrepreneurs Have

8  Entrepreneurship is the process of starting, organizing, managing, and assuming the responsibility for a business. Entrepreneurship

9  Entrepreneurs come from all age categories and racial and ethnic groups.  They represent both genders as well as varied amounts of education.  Many entrepreneurs own their first business while in their teens. What Does It Take?

10  Entrepreneurship is a key part of the U.S. economy.  Nearly one in ten of all Americans 18-64 years old is involved in some type of entrepreneurship activities.  More than 670,000 new businesses are created yearly.  Entrepreneurship is also risky. Entrepreneurship And The Economy

11  Small businesses are responsible for most new employment.  Over 60 percent of new jobs are created by businesses with fewer than 500 employees. Employment

12  DO NOW:  Assigned seats & complete ½ sheet  LESSON:  Finish notes on 6-1  Bigger Business, Better Lives article  EXIT TICKET:  3-2-1 BFM – APRIL 10, 2014

13  Most of the money needed to start a new business comes from the entrepreneur and his or her family.  One in five Americans has invested in a business of someone they knew.  More than 50 percent lend financial support to the business of a family member.  Twenty nine percent give money to neighbors and friends. Financing

14  A Venture capital is money provided by large investors to finance new products and new businesses that have a good chance to be profitable. Venture capital

15  In the late 1990s, many venture capital companies were formed.  They supplied more than $100 billion each year to new businesses.  Many of those businesses were e-commerce and high-tech start-ups.  When many of those companies failed, the amount of venture capital declined to less than $22 million in 2005. Venture capital

16  New and small businesses produce a large volume of goods and services for the economy.  Businesses with just a single owner and no staff account for more than $600 billion in sales annually.  Small businesses are responsible for more than half of the U.S. gross domestic product each year. Productivity

17  Before deciding to start a business, you need to think about the opportunities and risks. Opportunities and Risks

18  The American private enterprise economy promotes innovation and new business development.  Individuals are able to take risks to start a new business.  Consumers are always looking for new and better choices to meet their wants and needs. New Business Opportunities

19  An innovation is an invention or creation that is brand new. Innovation

20  An improvement is a design change that increases the usefulness of a product, service, or process. Improvement

21  Inventors often develop innovations. Those innovations may become the basis of a new business.  The inventor may sell them to another company for development and sale.  Examples of well-known innovations:  Steve Jobs and Stephen Wozniak (Apple Computer)  Arthur Fray and Spencer Silver (Post-it Notes) Inventors

22  The National Federation of Independent Business reports that of all new businesses, about one-third are profitable, one-third do not make a profit, but continue to operate, and the remaining third lose money. Recognizing Risks

23  Over a 10-year period, more than 50 percent of all new businesses are discontinued. Recognizing Risks

24  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 Reasons why businesses close

25  Answer the questions included in your study guide packet. Check Point

26  Small Business Basics 6-2

27 Small Business Basics  Essential Questions 1. Identify important characteristics of small businesses. 2. Recognize the competitive advantages of small businesses. 3. Identify problems faced by many small businesses.  Key Terms  Small business  Small Business Administration (SBA)

28  Why might people enjoy owning a business but decide to sell it? DO NOW

29  The greatest percentage of businesses in the United States is small businesses.  Small businesses employ half of all private sector employees. Small Business Basics

30  A small business is an independent business with fewer than 500 employees.  Using that standard, 99.9 percent of the roughly 26 million U.S. businesses are small businesses. Small Business

31  A more precise description of a small business includes the following points.  The owner is usually the manager  It operates in one or very few locations  It typically serves a small market  It is not dominant in its field Small Business

32 SLIDE 32 Common Types of Small Businesses as Percent of All Small Businesses

33  On average, small businesses are responsible for creating 60-80 percent of all new jobs.  It is not surprising that there are a large number of service businesses.  Many small business services are professional and technical. Small Business Employment

34  Women own more than one-fourth of all small businesses.  More than 18 percent of small businesses have African-American, Asian-American, or Hispanic- American ownership.  The majority of small business owners are over 35 years old, but nearly 25 percent are under 35. Ownership Diversity

35  Suppose you need someone to:  Mow your lawn  Make a gourmet meal in y our home  Build a custom display case for a model train  Repair hardware on your home computer.  You would seek the assistance of a small business. Small Business Advantages

36  Small businesses play a vital role in the economy.  They serve customers where the number of products and service is small or the requirements are too specialized for a large business to make a profit. Meeting Customer Needs

37  DO NOW:  Assigned seats  LESSON:  Finish notes for 6-2  Finish Teen Entrepreneurship Project #1  Create a cover page  Your name, block, class  Picture that represents your business  Teen Entrepreneurship Projects April 28, 2014

38  Small businesses are especially suited to provide unique services for customers.  They may plan a wedding or design a customized sound system for your home.  Providing these services means that business representatives must take special interest in the customer. Providing Unique Services

39  They spend time determining needs and discussing alternatives.  They have the expertise to plan and deliver the services. Providing Unique Services

40  Not all small businesses succeed.  In fact, their failure rate is much higher than large businesses.  Many failures result from the inability to pay expenses. Common Small Business Problems

41  The following are the most 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 of the business  Failure to manage credit offered to customers Reasons for Failure

42  The Small Business Administration (SBA) is a government agency that helps small business owners develop business plans and obtain financing and other support for their companies.  Information about the SBA and its services can be obtained by visiting Small Business Administration

43  The SBA offers information, publications, counseling, and many other forms of support.  The SBA sponsors the Service Corps of Retired Executives (SCORE).  Members of SCORE are retired local businesspeople who volunteer their services to counsel and mentor new business owners. Small Business Administration

44  Answer the questions included in your study guide packet. Check Point

45  DO NOW:  Assigned seats with a pencil or pen; ready to learn  Lesson:  Bigger Business, Better Lives article  Teen Entrepreneur – Project 1 BFM – April 16, 2014

46  DO NOW:  Find a computer  Read Save Chocolateville article  Lesson:  Finish Teen Entrepreneur – Project 1  Create a cover page  Name, block, class  Teen Entrepreneurship Projects  Picture that represents your service  Print in color – GHS-215-3130cn BFM – April 30, 2014

47  DO NOW:  Find a computer  Lesson:  Create a cover page  Name, block, class  Teen Entrepreneurship Projects  Picture that represents your service  Print – GHS-215-2330dn  TE Project #2 – Naming Your Business  Type the Company Description outline BFM – May 5, 2014

48  DO NOW:  Pick up your folder, find a computer  Lesson:  Create a cover page  Name, block, class  Teen Entrepreneurship Projects  Picture that represents your service  Print – GHS-215-2330dn  TE Project #2 – Naming Your Business  Type the Company Description outline – Page 36 CHAPTER 6-1 & 6-2 QUIZ Tuesday BFM – May 9, 2014

49  DO NOW:  Pick up your folder, find a computer  Lesson:  Quiz 6-1 & 6-2  TE Project #2 – Naming Your Business  Type the Company Description outline – Page 36  TE #3 – Tagline (slogan) and Logo BFM – May 9, 2014

50  DO NOW:  Pick up your folder, DO NOW paper, and find a computer  Lesson:  Quiz 6-1 & 6-2  TE Project #2 – Naming Your Business  Type the Company Description outline – Page 36  TE #3 – Tagline (slogan) and Logo BFM – May 12, 2014

51  Starting a Small Business 6-3

52 Starting a Small Business  Essential Questions 1.Recognize important factors to be considered when starting a business. 2.Describe the elements of a business plan. 3.Identify types and sources of financing for a small business.  Key Terms  Business plan  Start-up financing  Short-term financing  Long-term financing

53  Every business begins with an idea.  Business ideas come from many sources.  Hobbies, interests, and business experiences often give people ideas for new businesses.  Books and magazines suggest new business opportunities. An Idea Plus Experience

54  Putting your business idea into action means the right place to open the business.  Most retail businesses need good customer traffic.  Timing is another key factor in starting a business.  Most successful businesses start during a period when customer demand for certain products or services is high. Right Place and Time

55  A business is not easy to run without the help of others.  Even the smallest businesses need a few full- or part-time employees to grow or cover extended hours.  Choosing the “team” members becomes one of the most important initial business decisions.  Small business owners will need specialized help from bankers, lawyers, and accountants. Team Approach

56  The most important step in starting a business is preparation.  Preparation includes having enough information to make good decisions about the business.  Time spent gathering and studying information before the business is started.  Information is needed about customers, competitors, important operations, government regulations, and many other topics. Presentation and Research

57  A business plan is a written description of the business idea and how it will be carried out, including all major business activities.  Key features of a business plan are a general description of the company, the credentials of the owner(s), a description of the product or service, an analysis of the market, and a financial plan. What is a Business Plan?

58  Description of the Business  The business idea  Major products and services  Ownership structure  Strengths/weaknesses  Long- and short-term goals Elements of a Business Plan

59  Customer Analysis  Description of customers  Location, number, and resources of customers  Sales forecasts Elements of a Business Plan

60  Operations Plan  Organization of the company  Description of major operations  Analysis of resources needed  Human resource plans Elements of a Business Plan

61  Marketing Plan  Description of major marketing activities  Description of resources needed  Schedule of marketing activities Elements of a Business Plan

62  Financial Plans  Start-up costs  Short- and long-term financial needs  Sources of financing  Budgets and financial statements Elements of a Business Plan

63  Finding adequate financing is a key step in starting and running a new business. Financing the Small Business

64  Start-up financing is the amount of money needed to open the business.  It includes the costs of buildings, equipment, inventory (products or raw materials on hand), supplies, licenses, and the like. Start-up financing

65  Start-term financing is the money needed to pay for the current operating activities of a business.  Short-term financing is obtained for a period of less than a year and often for one or two months. Start-term financing

66  Long-term financing is money needed for the main resources of a business (such as land, buildings, and equipment) that will last for many years.  These resources usually require large amounts of money and will be paid over many years. Long-term financing

67  Answer the questions included in your study guide packet. Check Point

68  Open Firefox browser  Go to  Login with username and password

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