©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7 7

7 7 Small Business and Entrepreneurship: Economic Rocket Fuel 2 LO1Why do entrepreneurs launch small businesses? LO2What is the typical entrepreneurial mindset and characteristics? LO3What are funding options for small business? LO4What are the opportunities and threats facing small businesses? LO5What are ways to become a business owner and facilitate success? LO6What is the size, scope and economic contribution of small business?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Launching a New Venture: What’s in It For Me? 3 Greater Financial Success Independence Flexibility Challenge Survival Opportunity Lost – there are trade-offs

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Entrepreneur: A Distinctive Profile 4

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Finding the Money: Funding Options for Small Business 5 Personal Resources Loans Angel Investors Venture Capital

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Peer-to-Peer Lending A new and unique funding source for start-ups Websites bring together borrowers and investors Both parties benefit financially Entrepreneurs find this an easier source for funding with more favorable terms 6

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Small Business Sustainability Sustainable business practices can save money Many large corporations assess suppliers based on environmental benchmarks Sustainable planning: 1. Establish a benchmark 2. Identify best opportunities 3. Develop implementation plans 4. Set deadlines 5. Keep the plan active 7 Source: Sustainability Planning for Business Owner by Kelly Spors, May 9, 2010, Small Business Trends website, accessed April 3, 2011

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Opportunities and Threats for Small Business: A Two-Sided Coin 8 Threats: Higher Risk of Failure Lack of Knowledge and Experience Too Little Money Bigger Regulatory Burden Higher Health Insurance Costs Opportunities: Market Niches Personal Customer Service Lower Overhead Cost Technology

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Launching Options: Reviewing the Pros and Cons 9 Source: Five Reasons Why Franchises Flop by Steve Strauss, February 28, 2005, USA Today Money website,

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Making it Happen: Tools for Success 10 Use the Small Business Administration Gain Experience Learn from Others Educate Yourself Write a Business Plan Source: Focus on Success, Not Failure by Rhonda Abrams, May 7, 2004, USA Today website money section,

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Business Plan 11 Executive Summary Description of Business Competitive and Industry Research Marketing Strategies Operating Procedures Personnel Financial Projections Source: Business Plan Basics, U.S. SBA, accessed February 15, 2009.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Small Business and the Economy: An Outsized Impact 12 Creating New Jobs Fueling Innovation Vitalizing Inner Cities

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Entrepreneurship Rates Around the World 13 Source: Global Entrepreneurship Monitor 2010 Report by Donna J. Kelley, Niels Bosma, José Ernesto Amorós, College and London School of Economics, file:///C:/Users/Marce/AppData/Local/Temp/GEM%20GLOBAL%20REPORT%202010rev.pdf, published March 2011, accessed March 21, 2011 Global Entrepreneurship Monitor, 2008 Executive Report by Niels Bosma, Zoltan J. Acs, Erkko Autio, Alicia Coduras, and Jonathan Levie, Babson College and London School of Economics, published January 15, 2009, accessed February 17, 2009.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7 7 Looking Back Why do entrepreneurs launch small businesses? What is the typical entrepreneurial mindset and characteristics? What are funding options for small business? What are the opportunities and threats facing small businesses? What are ways to become a business owner and facilitate success? What is the size, scope and economic contribution of small business? 14