1. Unit 7 Seminar AB209, Small Business Management

2. Unit 7 Seminar Game Plan Course Check-In Course Website Check-In Course Activities & Assignments Check-In Review Unit 5 & 6 Content Content Review Assignment Review Unit 7 Check-In Look Ahead to the Unit 9 Seminar

3. Review of Financial Management from Unit 5

4. Understanding Financial Statements © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 10–4 Financial Statements (Accounting Statements) Reports of a firm’s financial performance and resources Helps determine a startup’s financial requirements Assesses the financial implications of a business plan Basic Financial Statements Income statement Balance sheet Cash flow statement

5. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 10–5 Exhibit 10.3 The Balance Sheet: An Overview

6. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 10–6 Exhibit 10.5 The Fit of the Income Statement and Balance Sheet

7. The Cash Flow Statement © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 10–7 Cash Flow Statement A financial report showing a firm’s income (cash) when it is received and expenses when they are paid. Cash flows from normal operations (operating activities) Cash flows related to the investment in or sale of assets (investment activities) Cash flows related to financing the firm (financing activities)

8. Determining Financing Requirements © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 11–8 Basic Principles for Financing of Firms The more assets a firm needs, the greater the firm’s financial requirements. A firm should finance its growth in such a way as to maintain proper liquidity. The amount of total debt used in financing a business is limited by the funds provided by the owners. Some types of short-term debt maintain a relatively constant relationship with sales. Equity ownership comes the investments of owners, and retained earnings (profits).

9. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 12–9 Exhibit 12.3 Sources of Financing Funds

10. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 12–10 Exhibit 12.4 Startup Financing for Inc. 500 Companies in 2003 Source: Mike Hofman, “The Big Picture,” Inc. Magazine, Vol. 25, No. 12 (October 2003), p. 87. Copyright 2003 by Mansueto Ventures LLC. Reproduced with permission of Mansueto Ventures LLC in the format Textbook via Copyright Clearance Center.

11. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 12–11 Exhibit 12.5 Sources of Personal Capital for Small Firms Source: Republished with permission of Dow Jones Inc. from Staff, “Entrepreneurship Monitor 2002,” Wall Street Journal, August 26, 2003, p. B8; permission conveyed through Copyright Clearance Center, Inc.

12. The Government © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 12–12 Small Business Administration (SBA) loans The 7 (a) Guaranty Loan Program SBA guarantees repayment of loan to lender The Certified Development Company (CDC) 504 Loan Program The 7(m) Microloan Program Small Business Investment Companies (SBICs) Small Business Innovative Research (SBIR)

13. Unit 6 Review Information Unit 6: Building Customer Relationships & Pricing and Supply Chain Management Reading Discussion Assignment Final Project – Marketing and Sales Review Discussion Posts Video Case Study questions Review Multiple Choice

14. What is Customer Relationship Management? © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 14–14 Customer Relationship Management (CRM) A company-wide business strategy designed to optimize profitability and customer satisfaction by focusing on highly defined and precise customer groups. Focus of CRM: Customers rather than products Changes in processes, systems, and culture All channels and media involved in the marketing effort, from the Internet to field sales.

15. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 14–15 Exhibit 14.1Sources of the Next Sale

16. Importance of CRM to the Small Firm © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 14–16 Economic benefits of maintaining relationships with current customers: 1. Acquisition costs for new customers are high. 2. Long-time customers spend more money than new ones. 3. Happy customers refer their friends and colleagues. 4. Order-processing costs are lower for established customers. 5. Current customers are willing to pay more for products.

17. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 14–17 Extraordinary Service Do Business on First-name Basis Address Problems Promptly Keep in Touch Ways to Provide Extraordinary Service Find Ways to Help Provide Custom Service

18. Final Project Activity: Marketing Definition of the Market & Products/Services This portion of your mini-business plan should contain information on the market you plan to serve. Include summary information on the size and composition of your target market and your business competitors. Briefly describe your products/services, including their unique features. Marketing & Sales Strategy This portion of your mini-business plan should contain information on how you will market, sell, and distribute your products/services. Please remember: As a guide to help you develop your mini- business plan, please refer to the content of the Atayne, LLC business plan on pages 675 to 695 of our textbook.

19. Unit 7 Information Unit 7: Pricing and Credit Decisions, Promotional Planning and Global Marketing Reading Discussion Final Project: Finish Marketing and Sales Strategies Review Seminar Discussion Posts Review – 20 questions

20. Innovation: A Path to Growth © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 15–20 Competitive Advantage and Innovation Innovation and entrepreneurship often go hand-in-hand. Coming up with and perfecting new products or services is often not easy. The risk of failure increases when innovation is the goal. Innovation is a means by which a firm can sustain its competitive advantage.

21. Sustainability and Innovation © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 15–21 Sustainable Competitive Advantage A value-creating position likely to endure over time Is difficult to imitate Creates high barriers to market entry Can be patented or copyrighted Is renewable at higher performance capabilities Stages in the Competitive Advantage Life Cycle Develop: invest resources Deploy: boost performance Decline: competitors overcome advantage

22. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 15–22 Exhibit 15.1The Competitive Advantage Life Cycle

23. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 15–23 Exhibit 15.2Sustaining Competitive Advantages

24. The Product Life Cycle and New Product Development © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 15–24 Product Life Cycle A detailed picture of what happens to a specific product’s sales and profits over time Promotion, pricing, and distribution policies must be adjusted to the product’s position on the curve. It is important to rejuvenate product lines before they die. The life cycle of a product follows the classic sigmoid curve— innovation is necessary for a firm’s survival.

25. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 15–25 Exhibit 15.3The Product Life Cycle

26. Supply Chain Management © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 15–26 Supply Chain Management Integrates and coordinates the means by which a firm creates or develops a product or service and delivers it to customers. Distribution Physically moving products and establishing intermediary relationships to support such movement. Physical Distribution (Logistics) The activities of distribution involved in the physical relocation of products. Channel of Distribution The system of relationships established to guide the movement of a product.

27. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 15–27 Exhibit 15.8Alternative Channels of Distribution

28. Scope of Physical Distribution © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 15–28 Storage Lack of storage space is a common problem. Materials Handling Protecting the firm’s output during warehousing. Specifying Responsibility for Delivery Terms Paying freight costs—F.O.B. origin, freight collect. Selecting the carriers. Bearing the risk of damage. Selecting the modes of transport.

29. Scope of Physical Distribution (cont’d) © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 15–29 Logistics Companies Firms which specialize in providing cost-effective transportation, storage, and distribution services to small companies. Trucking Packaging Warehousing

30. Look Ahead

31. Unit 8 Information Unit 8: Professional Management & Managing Human Resources Reading Discussion Assignment Project: Finish Org./Mgmt. Discussion Posts Video Case Study questions

32. Unit 7 Seminar Wrap-Up If you need assistance: o Contact instructor at their KU email address o Post message to “Instructor’s Office” o Meet with instructor during Virtual Office Hours o KU Tech Support: 1-866-522-7747 o Academic Advisor: If you have any challenges that prevent you from succeeding this term or at KU in general o Other KU Resources: Writing Center, etc. Our next “live” seminar: Unit 9 Questions? o Course Website or Content? o Assignments? o Other issues?