Ch. 6-2 Small Business Basics

Small Business Ownership Small Business- An independent business with fewer than 500 employees. Small Business- An independent business with fewer than 500 employees. 99.9% of all U.S. businesses are considered small businesses. 99.9% of all U.S. businesses are considered small businesses. Small businesses are responsible for creating percent of all new jobs. Small businesses are responsible for creating percent of all new jobs. The owner is typically the manager. The owner is typically the manager. The business operates in one or very few locations The business operates in one or very few locations It typically serves a small market It typically serves a small market It is not dominant in its field. It is not dominant in its field.

Ownership Diversity Women own more than ¼ of all small businesses Women own more than ¼ of all small businesses 18% of small businesses have African-American, Asian-American, or Hispanic-American ownership 18% of small businesses have African-American, Asian-American, or Hispanic-American ownership The majority of small business owners are over 35 years old The majority of small business owners are over 35 years old

What are some advantages of a small business? Fewer customers Fewer customers Better customer service Better customer service More individual attention to the customer More individual attention to the customer Deal directly with a person, not an answering service Deal directly with a person, not an answering service Provide unique services Provide unique services Able to market to specific niches Able to market to specific niches

What must you do before starting a small business? Prepare and do research! Prepare and do research! Customers Customers Competitors Competitors Government regulations Government regulations Price Price Target market Target market Advertising/marketing Advertising/marketing

Customers Who are your potential customers? Who are your potential customers? How do you plan on reaching your potential customers? How do you plan on reaching your potential customers? Who else is targeting your potential customers? Who else is targeting your potential customers? What kind of income do your potential customers have? What kind of income do your potential customers have?

Competitors Who are your competitors? Who are your competitors? What are they doing that works? What are they doing that works? What are they doing that needs improvement? What are they doing that needs improvement? How you can you learn from their success and failures? How you can you learn from their success and failures?

Government Regulations What kinds of government regulations are you going to be dealing with? What kinds of government regulations are you going to be dealing with? Zoning restrictions Zoning restrictions Environmental Protection Agency Environmental Protection Agency

Price How are you going to price the product or service? How are you going to price the product or service? Can you stay competitive while still making a profit? Can you stay competitive while still making a profit?

Target Market Who is your target market? Who is your target market? How are you going to reach your target market? How are you going to reach your target market? What is the income of your target market? What is the income of your target market?

Advertising/Marketing Where do you plan on advertising? Where do you plan on advertising? How much do you plan on spending on advertising? How much do you plan on spending on advertising? How can you market the product or service in a way to best reach your target market? How can you market the product or service in a way to best reach your target market?

Small Business Failures 50% of small businesses fail in the first year. 50% of small businesses fail in the first year. 95% of small businesses fail within the first 5 years. 95% of small businesses fail within the first 5 years.

Why do small businesses fail?

Not enough start-up money Not enough start-up money Lack of management experience Lack of management experience Not controlling operating expenses Not controlling operating expenses Poor location Poor location Failure to manage credit offered to customers Failure to manage credit offered to customers Overspending Overspending Inadequate business plan Inadequate business plan Ineffective marketing/advertising Ineffective marketing/advertising

Successful Small Businesses What are some small businesses that you know of that have been successful? What are some small businesses that you know of that have been successful?

Successful Small Businesses What makes those small businesses successful? What makes those small businesses successful?

Successful Small Businesses What makes those small businesses successful? What makes those small businesses successful? Great work ethic Great work ethic Good customer service Good customer service Hard-working employees Hard-working employees Good location Good location Well-planned Well-planned

Know where your business is going Mission statement- A short, specific written statement of the reason a business exists and what it wants to achieve. Mission statement- A short, specific written statement of the reason a business exists and what it wants to achieve.

We will be the easiest pharmacy retailer for customers to use. We will be the easiest pharmacy retailer for customers to use.

CVS Pharmacy We will be the easiest pharmacy retailer for customers to use. We will be the easiest pharmacy retailer for customers to use.

______ ______ is a results-oriented oil and gas company that builds value for its shareholders through its employees by creating an atmosphere of optimism, teamwork, creativity, resourcefulness and by dealing with everyone in an open and ethical manner. ______ ______ is a results-oriented oil and gas company that builds value for its shareholders through its employees by creating an atmosphere of optimism, teamwork, creativity, resourcefulness and by dealing with everyone in an open and ethical manner.

Devon Energy Devon Energy is a results-oriented oil and gas company that builds value for its shareholders through its employees by creating an atmosphere of optimism, teamwork, creativity, resourcefulness and by dealing with everyone in an open and ethical manner. Devon Energy is a results-oriented oil and gas company that builds value for its shareholders through its employees by creating an atmosphere of optimism, teamwork, creativity, resourcefulness and by dealing with everyone in an open and ethical manner.

We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.

Ford Motor Company We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.

At _________, we work to help people and businesses throughout the world realize their full potential. This is our mission. Everything we do reflects this mission and the values that make it possible At _________, we work to help people and businesses throughout the world realize their full potential. This is our mission. Everything we do reflects this mission and the values that make it possible

Microsoft At Microsoft, we work to help people and businesses throughout the world realize their full potential. This is our mission. Everything we do reflects this mission and the values that make it possible At Microsoft, we work to help people and businesses throughout the world realize their full potential. This is our mission. Everything we do reflects this mission and the values that make it possible

In order to be successful in business, you must have goals and you must know where you are going. In order to be successful in business, you must have goals and you must know where you are going.

What are some reasons why you would or would not want to become an entrepreneur? What are some reasons why you would or would not want to become an entrepreneur? How is the internet changing the characteristics of small businesses? How is the internet changing the characteristics of small businesses? Do you believe the internet can make small businesses more competitive with large businesses? Why? Do you believe the internet can make small businesses more competitive with large businesses? Why?