© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 5 | Slide 1 Chapter 5: Small Business, Entrepreneurship, and Franchises

© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 5 | Slide 2 Learning Objectives 1. Define what a small business is and recognize the fields in which small businesses are concentrated. 2. Identify the people who start small businesses and the reasons why some succeed and many fail. 3. Assess the contributions of small businesses to our economy. 4. Judge the advantages and disadvantages of operating a small business. 5. Explain how the Small Business Administration helps small businesses. 6. Appraise the concept and types of franchising. 7. Analyze the growth of franchising and franchising’s advantages and disadvantages.

© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 5 | Slide 3  The Small-Business Sector  Industries That Attract Small Businesses 1. Distribution Industries 2. Service Industries 3. Production Industries Small Business: A Profile

© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 5 | Slide 4  Characteristics of Entrepreneurs  Other Personal Factors  Motivation  Women as Small-Business Owners  Teenagers as Small-Business Owners  Why Some Entrepreneurs and Small Businesses Fail The People in Small Businesses: The Entrepreneurs

© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 5 | Slide 5  Providing Technical Innovation  Providing Employment  Providing Competition  Filling Needs of Society and Other Businesses The Importance of Small Businesses in Our Economy

© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 5 | Slide 6  Advantages of Small Business 1. Personal Relationships with Customers and Employees 2. Ability to Adapt to Change 3. Simplified Record Keeping 4. Independence 5. Other Advantages The Pros and Cons of Smallness

© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 5 | Slide 7  Disadvantages of Small Business 1. Risk of Failure 2. Limited Potential 3. Limited Ability to Raise Capital  Developing a Business Plan  Components of a Business Plan The Pros and Cons of Smallness (cont.)

© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 5 | Slide 8  SBA Management Assistance 1. Management Courses and Workshops 2. SCORE  Help for Minority-Owned Small Businesses 1. Small-Business Institutes 2. Small-Business Development Centers 3. SBA Publications  SBA Financial Assistance 1. Regular Business Loans 2. Small-Business Investment Companies  State of Small Business During the Recession The Small Business Administration

© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 5 | Slide 9  What Is Franchising?  Types of Franchising Franchising

© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 5 | Slide 10  Are Franchises Successful?  Advantages of Franchising 1. To the Franchisor 2. To the Franchisee  Disadvantages of Franchising  Global Perspectives in Small Business The Growth of Franchising