MANAGING A SMALL BUSINESS Describe the characteristics of small-business owners. Identify key steps small-business owners follow to start their businesses. Explain the importance of a written business plan. Detail various types of financing for a new business. Unit 6, Part 1
Small Business Advantages Independence Control (make all decisions) Setting your own schedule
Small Business Disadvantages Long hours Customer complaints Meeting a payroll Responsibility
IDENTIFYING THE SMALL-BUSINESS OWNER What it takes Personality traits Self-motivation Risk-taking persistence Business traits Knowledge about business Management, finance & marketing skills effort
STARTING THE SMALL BUSINESS An idea – from hobbies, interests or business experience Experience – working for a period of time in that field will prepare someone for the role of business owner
Team Approach Employees good employees can be key to success Professional assistance Bankers Lawyers Accountants people with specialized knowledge
Right Place Right Time Location Retailer – good customer traffic Wholesaler – easy access to manufacturers Manufacturers – access to raw materials Timing start when there is a demand for the product or service
Preparation The most important step in starting a business - PREPARATION Things to research Customers Competitors Operations & activities Government regulations (laws)
DEVELOPING A BUSINESS PLAN What is a business plan? Written description of the business idea and how it will be carried out A guide to keep the business on track
BUSINESS PLAN ELEMENTS Description of the business Description of the competition Customer analysis Operations plan Marketing plan Financial plans
FINANCING THE SMALL BUSINESS Types of financing Start-up financing – until business becomes profitable Short-term financing – current operating activities, payable in less than one year Long-term financing – land, buildings & equipment, repaid over many years
Sources of financing Owner-supplied funds Borrowed funds