Presentation on theme: "Global Entrepreneurship and Small Business Management"— Presentation transcript:
1 Global Entrepreneurship and Small Business Management CHAPTER 94/6/2017CHAPTER9Global Entrepreneurship and Small Business Management9-1 Entrepreneurial Enterprises9-2 The Business Plan and Self-Employment9-3 Operating an Entrepreneurial EnterpriseINTERNATIONAL BUSINESS
2 LESSON 9-1 Entrepreneurial Enterprises GOALSExplain the importance of entrepreneurs in the development of an economy.Differentiate between the types of entrepreneurial businesses.Describe telecommuting and the effect of technology on home-based businesses.
3 The Economic Importance of Entrepreneurs 9The Economic Importance of EntrepreneursInnovation and the entrepreneurial spiritEconomic and social benefits of small businessMajor creators of new productsMajor source of jobsOften provide personal serviceEntrepreneurs and exporting
4 Types of Entrepreneurial Businesses 9Types of Entrepreneurial BusinessesAgricultural, mining, and extracting companiesManufacturing companiesWholesalersRetailersService companies
5 Future Growth for Small Business 9Future Growth for Small BusinessHealth-care servicesRetailing and food service companiesEnvironmental businessesTraining and education enterprisesPersonal servicesCommercial services
7 LESSON 9-2 The Business Plan and Self-Employment GOALSEvaluate self-employment as a career option.Describe the first three sections of a business plan.
8 Self-Employment as a Career 9Self-Employment as a CareerAdvantages of self-employmentDisadvantages of self-employmentQualities of successful entrepreneurs
9 Creating a Business Plan 9Creating a Business PlanA business plan is a guide used to start and operate a business.Two main uses:Attract new investors or convince a bank to lend money to the company.Provide a blueprint for company activities.
10 Parts of a Business Plan 9Business PlanParts of a Business PlanPart 1: Business descriptionPart 2: Organizational structurePart 3: Marketing activitiesPart 4: Financial planningPart 5: Production activitiesPart 6: Human resource activitiesPart 7: Information needsThe first three sections are all related to setting up a business.
11 BUSINESS PLAN Part 1: Business Description 9BUSINESS PLAN Part 1: Business DescriptionLegal name and locationBackground and experience of owners and main employeesOverview of product or service, potential customers, and competition
12 BUSINESS PLAN Part 2: Organizational Structure 9BUSINESS PLAN Part 2: Organizational StructureForm of ownershipForeign business partnersExplanation of any of the following:Joint venturesLicensing agreementsDistributor contractsSupplier relationships
13 BUSINESS PLAN Part 3: Marketing Activities 9BUSINESS PLAN Part 3: Marketing ActivitiesMarketing includes the business activities necessary to move goods and services from the producer to the consumer.A marketing plan is a document that details the marketing activities of an organization.
14 LESSON 9-3 Operating an Entrepreneurial Enterprise GOALSOutline the process of financing a small business.Identify the major business activities of a small business manager.
15 Parts of a Business Plan 9Business PlanParts of a Business PlanPart 1: Business descriptionPart 2: Organizational structurePart 3: Marketing activitiesPart 4: Financial planningPart 5: Production activitiesPart 6: Human resource activitiesPart 7: Information needsThe fourth section of the business plan focuses on financial planning.
16 Financing a Small Business 9Financing a Small BusinessMoney is needed for many purposes when starting and running a business.A budget is a financial tool that estimates a company’s funds and its plan for spending those funds.The process of financing a business starts with calculating operating costs and determining how to acquire the funds to pay those costs.
17 Analyzing Costs 9 Start-up costs Continuing expenses Variable costs are business expenses that change in proportion to the level of production.Fixed costs are expenses that do not change as the level of production changes.
18 9Breakeven PointThe breakeven point is the number of units a business must sell to make a profit of zero.Sales below the breakeven point will result in a loss for a business.Sales above the breakeven point will result in a profit for a business.
19 Calculating Breakeven Point 9Calculating Breakeven PointFind the gross profitThe gross profit, or gross margin, is the difference between the cost of an item for a business and the price for which the business can sell that item.Cost − Selling price = Gross profit per unitCalculate breakevenTotal fixed costs ÷ Profit per unit = Breakeven units
20 9Sources of FundsEquity funds are business funds obtained from the owners of the business.Debt funds are business funds obtained by borrowing.
21 Financial Records of Small Businesses 9Financial Records of Small BusinessesBalance sheetIncome statementCash flow statement
22 Assets – Liabilities = Owner’s equity 9Balance SheetA balance sheet is the document that reports a company’s assets (items of value), liabilities (amounts owed to others), and owner’s equity (net worth).The relationship among the items on a balance sheet can be expressed as an equation.Assets – Liabilities = Owner’s equity
23 9Income StatementAn income statement is a document that summarizes a company’s revenue from sales and its expenses over a period of time, usually one year.On the income statement, a business will total all of the revenues it brings in as well as all of its expenses.It will then subtract the expenses from the revenues to find its profit or loss.
24 Cash Flow Statement 9 Cash flow is the inflow and outflow of cash. The major sources of cash inflows are cash sales and money collected from customers that is owed on account.The main cash outflows of a business are for current operating expenses, new equipment, debt payments, and taxes.A cash flow statement reports the current sources and amounts of cash inflows and outflows.
25 Parts of a Business Plan 9Business PlanParts of a Business PlanPart 1: Business descriptionPart 2: Organizational structurePart 3: Marketing activitiesPart 4: Financial planningPart 5: Production activitiesPart 6: Human resource activitiesPart 7: Information needsThe final sections of a business plan relate to managing a business.
26 Managing the Small Business 9Managing the Small BusinessProduction managementHuman resources managementInformation management