Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Part 1: The Decision to Start a Business Chapter 2 The Small Business Decision

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. The Small Business Decision Personal Evaluation Personal Evaluation

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Advantages of Small Business Ownership More personal contacts with people More personal contacts with people Independence Independence Skill Development Skill Development Potential Financial Rewards Potential Financial Rewards Challenge Challenge Enjoyment Enjoyment

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Disadvantages of Small Business Ownership Risk Risk Stress Stress Need for Many Abilities Need for Many Abilities Limited Financial Rewards Limited Financial Rewards People Conflicts People Conflicts Time Demands Time Demands

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Demographic Characteristics of Entrepreneurs Parents owned business Parents owned business Foreign parents Foreign parents High school degree or less High school degree or less College or more College or more Age 31 and under Age 31 and under Age 40 or more Age 40 or more

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Personality Characteristics Required by Successful Entrepreneurs Achievement Orientation Achievement Orientation Risk Taking Risk Taking Independence, Self Confidence, Self Assurance Independence, Self Confidence, Self Assurance Innovativeness Innovativeness Strong Verbal and Numerical Skills Strong Verbal and Numerical Skills Selling Skills Selling Skills

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Personality Characteristics Required by Successful Entrepreneurs (cont) Problem Solving Abilities Problem Solving Abilities Strategic Planning Strategic Planning Perseverance Perseverance

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. The Small Business Decision Organizational Evaluation Organizational Evaluation

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Small Business Successes Alertness to Change Alertness to Change Ability to Attract and Hold Competent Employees Ability to Attract and Hold Competent Employees Staying Close to the Consumer Staying Close to the Consumer

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Small Business Successes Thoroughness with Operating Details Thoroughness with Operating Details Ability to Obtain Needed Capital Ability to Obtain Needed Capital Effective Handling of Laws, Rules, and Regulations Effective Handling of Laws, Rules, and Regulations

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Small Business Successes Entrepreneurial Success in a Large Business Entrepreneurial Success in a Large Business – Ten Commandments for Intrapreneur Success

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Small Business Failures Bankruptcies Bankruptcies

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Entrepreneurialship and Small Business Management Entrepreneurial Skills Entrepreneurial Skills – Characteristics  creativity, innovativeness, independence, risk- taking, idea oriented – Situations  generating ideas and solutions to problems, starting a new business, expanding or opening new products

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Entrepreneurialship and Small Business Management Managerial Skills Managerial Skills – Characteristics  develops strategy and goal setting, prefers to know outcomes of actions or activities, team player, works through others, skills in finance, marketing, personnel, operations – Situations  reaching performance objectives, maintaining control of operations

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Concept Checks 1. List the advantages of owning a small business. 1. List the advantages of owning a small business. 2. List the disadvantages of owning a small business. 2. List the disadvantages of owning a small business. 3. What are the characteristics of successful small business owners? 3. What are the characteristics of successful small business owners?

Balderson 7e Copyright © 2008 by McGraw-Hill Ryerson. All rights reserved. Concept Checks 4. What are the major cases of business failure? 4. What are the major cases of business failure? 5. What is the difference between an entrepreneur and a manager? 5. What is the difference between an entrepreneur and a manager?