1. Intro To Business
Ch. 5
Entrepreneurship

2. Learning Targets
Section 5.1 – Rewards and Challenges of Entrepreneurship
Define entrepreneur and entrepreneurship
List at least five rewards of being an entrepreneur
Identify at least five challenges of being an entrepreneur
Discuss why entrepreneurs are important to the American economy

3. Rewards and Challenges of Entrepreneurship
What is Entrepreneurship?
The process of recognizing an opportunity, testing the market and gathering the resources necessary to go into business.
Entrepreneur
A person who recognizes a business opportunity and organizes, manages and assumes the risks of starting and operating a business
Creating and running a business venture requires a variety of skills

4. Twelve Characteristics of Entrepreneurs
Persistent
Goal-Oriented
Creative
Risk Taking
Action-Oriented
Independent
Self-Confident
Responsible
Inquisitive
Restless
Self-demanding
Enthusiastic

5. Rewards and Challenges of Entrepreneurship
Small Business
Independently owned business that usually has its owner as its manager
Serves a limited geographic area and employs less than 500 people
Internet Business
Also known as a virtual business or dot-com company
Operates on the internet
Shows how an entrepreneur can make a significant improvement to what already exists (shopping online)
Have the potential to attract a huge number of customers

6. Rewards and Challenges of Entrepreneurship
Rewards of Entrepreneurship
Being the Boss
Do not have to consult with others before making a decision
Doing What You Enjoy
An idea usually starts with an activity that you enjoy
Having the Opportunity to be Creative
You make the procedures
Can be daring and creative
Building an Enterprise
Must choose between buying an existing company or starting a new one

7. Rewards and Challenges of Entrepreneurship
Other Reasons
Developing your own schedule
Can work from home (home based business)
Make economic contributions to the community through investments and the creation of jobs
Rewarded for assuming a risk.

8. Rewards and Challenges of Entrepreneurship
Getting Funds to Start the Business
Many must borrow money to start business
Loans – Hard to get because of uncertainty of success
Private investors – must have good idea and business plan
Being Fully Responsible for the Business
Must make sure everything gets done
Cleaning, paying bills, hiring employees and repairs
Other Challenges for Entrepreneurs
Insecurity about making the right decisions
Work long hours
Face uncertain income levels
Risk losing investment
4 out of 5 small businesses fail within the first 5 years due to inadequate financial planning.

9. Learning Targets Section 5.2 – The Business Plan
Discuss initial steps insetting up a business plan
Identify parts of a business plan
Learn how to present a business plan to potential investors

10. The Business Plan Business Plan Checklist for Starting a Venture
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 money
Checklist for Starting a Venture
What will I produce?
Who are my 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?
5-2

11. The Business Plan Parts of a Business Plan:
1. Executive Summary- is a brief account of the key points contained in a business plan. Less than 2 pages.
Introduction
Current Situation
Management Qualifications
Seeking Investors
Closing Statement

12. The Business Plan
2. Management Team Plan - discusses any partners and your teams capabilities.
Key Executives
Key Advisors
Service Providers
3. Company Description- an outline of the business that helps investors understand the size, scope, ad type of business you plan to start.
Motivations
Entrepreneurial Opportunity
Business History
Business Concept

13. The Business Plan
4. Product and Service Plan- describes the products or services you want to offer. Also, spin-offs or growth potential can be mentioned.
Products and Services
Unique Selling Proposition
Competitive Products or Services
Product Development Milestones

14. The Business Plan
5. Vision and Mission Statements- states the guiding principles by which the business functions. * Vision Statement- establishes the scope and purpose of a company and reflects its values and beliefs. Focus on tomorrow. * Mission Statement- expresses the specific aspirations of a company, the major goals it will try to reach. Focus on today.

15. Examples
Pepsi's Vision Statement PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today." Pepsis Mission Statement
"To be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity."

16. The Business Plan
6. Industry Overview- this section presents your research of the industry.
Projected Industry Sales and Profits
Competitive Set
External Environment
Product Life Cycle
Barriers to Entry

17. The Business Plan
7. Market Analysis- this section presents the customer profile which includes your overall marketing and sales strategies.
Demographic Profile
Psychographic Profile
Customer Behaviors
Target Market Opportunity

18. The Business Plan
8. Competitive Analysis- indicates how the proposed business has an advantage over its competitors.
Direct and Indirect Competitors
Value Proposition
Strengths and Weaknesses
Sustainable Competitive Advantage

19. The Business Plan
9. Marketing Plan- discusses how a company makes its customers aware of its products or services.
Total Product Experience
Place Strategy
Promotion Strategy
Promotion Plan
Pricing Plan

20. The Business Plan
10. Operational Plan- includes the business processes that result in production and delivery of the product or service.
Location Criteria
Facilities and Equipment
Product Development Process
Operational Logistics

21. The Business Plan
11. Organizational Plan- discusses the people who will run the firm as well as the management’s philosophy.
Job Description
Human Resources
Legal Structures
Insurance

22. The Business Plan
12. Financial Plan- this section presents forecasts for the business. Data is usually shown in financial statements.
Source and uses of Funds
Cash Flow
Income Statement/Balance Sheet
Revenues/Expenses
Salary/Wages
Financial Analysis

23. The Business Plan
13. Growth Plan- this section looks at how the business will expand in the future.
Investors and lenders appreciate this section.
Growth Strategy
Effects of Growth
14. Contingency Plan- this section looks at the likely risks to the business.
Risks

24. Questions Why is a business plan important?
Why should entrepreneurs carefully study their competitors before starting a business?
Why is a growth plan more important to include in a business plan?