Welcome to Unit 5 Seminar If you can see this screen, share with your classmates the following……The best meal I ever ate was…… Audio will start promptly at 9 pm. If for any reason there is technical difficulty….stay online. AB209 Small Business Management

Agenda - Classroom Reminders - Review of Chapter 18 - Looking Ahead: Review of Unit 6 Assignment

Class Success Reminders: Initial Posts, Participation Posts Saving work according to standards Missed Seminar – Alternative Work Assignment

Unit 5 Outcomes Identify the basic forces driving global business Describe the potential for global collaboration and cooperation within small businesses. Understand and compare strategy options for global businesses. Recognize available assistance for small businesses engaged in international business.

Chapter 18 Review Global Opportunities for Small Business

18–6 Small Businesses as Global Enterprises Globalization The expansion of international business: Converging market preferences Falling trade barriers Integration of national economies. Born-Global Firms Small companies launched with cross-border business activities in mind Size does not necessarily limit a firm’s international activity— small companies can build upon their unique resources to become global competitors.

Questions Before Going Global What are management’s objectives? – Reasons, commitment, expected payoff How prepared is management to go global? – Expertise, responsibility for and time allocated to international operations, organizational structure Is there sufficient production capacity? – Present capacity, effect of international operations on local production Is there enough financial capacity? – Capital available for marketing, expansion, payback © 2010 South-Western, Cengage Learning, Inc. All rights reserved. 18–7

Why Would a Small Business Engage in Global Trade? 1.To gain access to additional markets with more customers 2.To reduce costs (labor, transportation, etc.) 3.To gain access to resources (raw materials) 4.To capitalize on the special features of a location (Italian designer goods, Swiss chocolate, French wine, etc.)

Two Ways Small Businesses Can Use Global Trade: 1.Competitively: Traditional methods involving exporting, importing, countertrade, licensing, franchising. Expanding markets Lower costs  What examples of competing globally can you list?

Two Ways Small Businesses Can Use Global Trade: (Continued) 2. Collaboratively: Innovative ways to use the specific expertise, special location features or market knowledge and experience of foreign firms (International strategic alliances, outsourcing, Greenfield ventures, etc.).  What examples of collaborating globally can you list?

Challenges to Global Business! ). Political Risk: The possibility that a country’s political circumstances will negatively impact the performance of the business.  Can you cite an example of political risk?

Challenges to Global Business! (Continued) ). Economic Risk: The possibility that a country’s political leadership will mismanage the nation’s economy such that it negatively impacts the performance of the business.  Can you cite an example of economic risk?

Challenges to Global Business! (Continued) ). Managerial Risk (Limitation): The possibility that a business’ management may not possess skills sufficient to deal with the complexities of a foreign country’s markets.  Can you cite an example of managerial risk?

Global Resources for Small Businesses ). 1.Trade Leads – Many Web-based trade leads sites. 2.Trade Missions – Prearranged visits to foreign countries to promote trade. 3.Trade Intermediaries – Contract agencies that assist a foreign firm in doing business in that country. 4.Private Banks – Larger banks usually have representatives skilled in foreign trade. 5.The Small Business Administration – Government agency offers a host of resources to facilitate trade by small US businesses.

Any questions?

Looking Ahead! Unit 6 Assignment

Unit 6 Assignment Using the AB209 Project Template and AB209 Project Instructions, complete the Operational Plan section in the Descriptive Business Plan. This should include the following elements (where applicable): 1. Information about your products or services including how and where your products or services are produced, production techniques, quality control, customer service, inventory control, and product development; 2. Information about your proposed business location including any location requirements such as space, type of building, zoning, power, and other utilities, access, parking, etc., estimated total location expenses, business hours, any major required building alteration; 3. Information about your proposed venture’s legal and regulatory environment including any licenses required, any health, workplace, or environmental regulations affecting the business, any special professional requirements, zoning or building code requirements, insurance coverage, and any trademarks, patents, or copyrights held or required; 4. Information about proposed personnel including the number of employees (excluding management), type of labor, source of this labor, pay structure, required training, and any possible use of contract workers;

Unit 6 Assignment (Continued) 5. If Applicable, information about the inventory including the type of inventory (raw or finished goods), any seasonable impacts, and ordering lead times; 6. Information about key suppliers including a listing and discussion of key suppliers, their credit policies, history of reliability, need for backup suppliers, any expected delivery problems, and any anticipated increases in supply costs; and 7. Information about your proposed venture’s credit policies including any plans to sell on credit, needs to sell on credit, credit policies, credit limits, credit terms, any discounts, and cost estimates of the use of credit.

Any questions?

Thank you for joining me today! I look forward to joining you next week!