Unit 1

Personal Values and Goals Owning a business is a huge responsibility Consider your personal values and goals Core values – beliefs and principles you choose to live by Values influenced by Family Religious beliefs Teachers Friends Society Personal experiences Identify your priorities and set goals (objectives)

#1 Entering the Family Business The Rewards and Challenges of Family Businesses Only about 1/3 of these businesses survive to the 2 nd generation Dynamics of family can play a huge role in its success or failure Advantage – trust and togetherness—can often achieve more than its individual members can Disadvantage – owners can never get away from the business—may have difficulty viewing the venture and its problems objectively

Entering the Family Business Questions to ask yourself Do I have the ability to work for a member of my family? Do I get along well with the family who are involved? Do we share the same goals for the business? Do we share the same general goals for our personal lives? Can we be clear and specific about our expectations of each other Can I leave the business problems at work when I go home? Can we maintain a positive family realtionship?

# 2 Buying an Existing Business In many aspects, buying a business is less risky that starting a new one Goodwill – a.k.a. consumer loyalty can be a very valuable asset Usually has established procedures There may be substantial inventory The previous owner may offer some expertise during the transition period

Buying a Franchise Is a legal agreement between a new business in the name of a recognized company Franchisee – buyer Rights to a product, process, or service Training and assistance in setting up the business Risks of new start-ups are not an issue Pay a fee and an annual royalty on sales (3 to 8 percent) Franchisor – seller Can restrict how you run the business

Evaluating a Business Opportunity Evaluate whether the business is a good prospect Why is it for sale? Every business has problems—what are theirs? Do not rely on what the seller tells you Talk to customers, employees, and suppliers Have the value of the business’s inventory, accounts receivable, and assets Seek legal advice concerning legal liabilities

Questions to Ask Is the business interesting to me and others? You need to enjoy the business Are there plenty of existing customers? Why is the owner selling? Retirement? Lack of interest? Illness? Need for cash? What is the business’s potential for growth? Is it in the life cycle of growth? Maturity? Or decline?

#3 Starting Your Own Business Types of start-up firms Salary-substitute firms Small firms that yield a level of income for the owner Offer common, easily available products and services Lifestyle firms Provide the owner the opportunity to pursue a particular lifestyle and earn a living Promote a particular sport or hobby Entrepreneurial firms Bring new products and services to market They create and then seize opportunities

The Entrepreneurial Process Step 1 – Deciding to become an entrepreneur Step 2 – Developing successful business ideas Step 3 – Moving from an idea to an entrepreneurial firm Step 4 – Managing and growing the entrepreneurial firm

Where do you start? Recognize Opportunity Generate Ideas Conduct a feasibility analysis Is your idea conducive to the market? Will it work?????