1. Entrepreneurship and Small Business Management
CHAPTER 6
4/21/2017 6
Entrepreneurship and Small Business Management
6-1 Becoming an Entrepreneur
6-2 Small Business Basics
6-3 Starting a Small Business
ITB

2. LESSON 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

3. Key Terms entrepreneur entrepreneurship venture capital innovation
improvement
Chapter 6

4. CHARACTERISTICS OF ENTREPRENEURS
Desire to be your own boss
Special skills and abilities
Chapter 6

5. ENTREPRENEURS IN ACTION
Pankaj Arora
Rich Stachowski
Jeffrey Rodriguez and John Serrano
Abbey Fleck
Chapter 6

6. WHAT DOES IT TAKE? Entrepreneurs are more persistent inquisitive
energetic
goal oriented
independent
self-confident
creative
reliable
competitive
Chapter 6

7. WHAT DOES IT TAKE? Entrepreneurs have problem-solving skills
(continued)
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
Chapter 6

8. >> C H E C K P O I N T
What personal characteristic are common to most successful entrepreneurs?
Chapter 6

9. ENTREPRENEURSHIP AND THE ECONOMY
Employment
Financing
Productivity
Chapter 6

10. NUMBER OF EMPLOYEES IN NEW BUSINESSES
Chapter 6

11. >> 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

12. OPPORTUNITIES
Innovation
Improvement
Chapter 6

13. 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

14. >> C H E C K P O I N T
Where do entrepreneurship opportunities begin?
Chapter 6

15. LESSON 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

16. Key Terms
small business
Small Business Administration (SBA)
Chapter 6

17. 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
Chapter 6

18. COMMON TYPES OF SMALL BUSINESSES
Chapter 6

19. >> C H E C K P O I N T
What percentage of employees in the United States work for small businesses?
Chapter 6

20. SMALL BUSINESS ADVANTAGES
Meeting customer needs
Providing unique services
Chapter 6

21. >> C H E C K P O I N T
How can small businesses compete successfully with larger businesses?
Chapter 6

22. 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

23. SMALL BUSINESS ASSISTANCE
Faculties of universities and colleges
Local groups of business people
Small Business Administration (SBA)
Chapter 6

24. >> C H E C K P O I N T
List common reasons for small business failure.
Chapter 6

25. LESSON 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

26. Key Terms business plan start-up financing short-term financing
long-term financing
Chapter 6

27. THE BUSINESS DECISION An idea plus experience Right place and time
Team approach
Preparation and research
Chapter 6

28. >> 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

29. 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

30. 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

31. ELEMENTS OF A BUSINESS PLAN
(continued)
Description of Competition
Characteristics of the industry
Condition of the economy
Strengths and weaknesses of major competitors
Chapter 6

32. ELEMENTS OF A BUSINESS PLAN
(continued)
Customer Analysis
Description of customers
Location, number, and resources of customers
Sales forecasts
Chapter 6

33. ELEMENTS OF A BUSINESS PLAN
(continued)
Operations Plan
Organization of the company
Description of major operations
Analysis of resources needed
Human resource plans
Chapter 6

34. ELEMENTS OF A BUSINESS PLAN
(continued)
Marketing Plan
Description of major marketing activities
Description of resources needed
Schedule of marketing activities
Chapter 6

35. ELEMENTS OF A BUSINESS PLAN
(continued)
Financial Plans
Start-up costs
Short- and long-term financial needs
Sources of financing
Budgets and financial statements
Chapter 6

36. 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

37. >> C H E C K P O I N T
What is the “game plan” in a business plan?
Chapter 6

38. 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

39. >> 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?
Chapter 6