1. Becoming an Entrepreneur O An entrepreneur is someone who takes a risk in starting a business to earn a profit O Can you think of a current or historical entrepreneur? O What does it take to be an entrepreneur? O Having a desire to be your own boss O Developing a good plan O Having special skills and abilities O Coming up with innovative ideas

2. Becoming an Entrepreneur O Entrepreneurship is the process of starting, organizing, managing, and assuming the responsibility for a business O What personal traits do you think are necessary to a successful entrepreneur? O Figure 6-1, page 126

3. Entrepreneurship & The Economy O Small businesses are responsible for most new employment O Most businesses start on $10,000 or less O What are the sources of that start-up capital? O Owner savings accounts O Bank loans O Credit card debt O Family and friends O Venture capitalist – investors that finance new products and new businesses O Small businesses are responsible for more than half of the U.S. GDP each year

4. Opportunities & Risks O Opportunities begin with the creation of new or improved products and services O Innovation is an invention or creation that is brand new O Improvement is a designed change that increases the usefulness of a product, service, or process O Entrepreneurs need to be aware of the risks they may face O Why do businesses fail? O Lack of capital, low sales, high expenses, competition, inadequate management, too much time

5. Small Business Basics O Small business is an independent business with fewer than 500 employees O Using that definition, 99% of all U.S. businesses are small business O Small businesses employ more than 60% of all private sector employees O Half of all small businesses are home-based businesses O Examples? O Doctor/Dentist, Lawyer, Accountant, Dry Cleaner, Restaurant, etc.

6. Characteristics of Small Business O Owner is usually the manager O It operates in one or very few locations O It serves a small market O It is not dominant in it field

7. Small Business Advantages O Meeting customer needs O Examples? O Providing unique services O Examples? O Personalized products, individual attention, etc.

8. Small Business Problems O The following are the most common reasons for small business failure: O Not having enough start-up money O Lack of management experience O Lack of experience with the type of business O Poor location for the business O Not controlling expenses O Failure to manage credit O How can businesses overcome the causes of failure? O SBA!

9. O SBA

10. Starting a Small Business O Business ideas come from many sources O Hobbies O Interests O Business experiences O Putting your business idea into action means finding the right place or location O Choosing the right “team” is essential to business success O Preparation and research O About customers, competitors, gov’t regulations, operations, etc.

11. Developing a Business Plan O A business plan is a written description of the business idea and how it will be carried out O Key features of a business plan include: O Description of the company O Credentials of the owner(s) O Description of the product or service O Market analysis (demand, competition, customers) O Financial plan O Figure 6.4, page 138

12. Financing the Small Business Types of Financing O Start-up financing is the amount of money needed to open the business O Includes buildings, equipment, inventory, supplies, licenses, etc. O Short-term financing is the money needed to pay for the current operating activities O Usually for a period less than one year O Long-term financing is the money needed for the main resources of a business O Land, buildings, equipment