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Entrepreneurship: A business of your own

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Presentation on theme: "Entrepreneurship: A business of your own"— Presentation transcript:

1 Entrepreneurship: A business of your own

2 Vocabulary Entrepreneur: a person who organizes and manages a business
Entrepreneurship: the organization and management of a business Franchise: the right to market another company’s product or service Small Business Administration (SBA): the prime source of information for would-be entrepreneurs

3 Vocabulary Fraud: the act of deceiving or tricking
Commission: a percentage of sales paid to a salesperson Zoning laws: regulate what types of business activities can be performed in certain areas License: a certificate showing that you have permission to practice your occupation

4 Vocabulary Fixed expenses: Bills that must be paid regularly in set amounts Flexible expenses: vary from month to month Assets: items you own Liabilities: debts you owe

5 Vocabulary Bookkeeping: Recording of income and expenses
Accounting: Analysis of the data you’ve recorded Receipts: record of all money collected Profit ratio: percentage of receipts that are profit Break-even point: when income equals expenses

6 Entrepreneurship Advantages You are your own boss
Freedom to make your own decisions You get to keep all profits your company earns Disadvantages As a business owner, you take on all responsibilities Many extra hours of work (at least 60 hrs per week) Emotional strain

7 Franchise Purchasing a franchise has several advantages. It allows the entrepreneur to buy a business with a proven track record of success. As a franchise owner, you would also receive support from the franchiser

8 Franchise Buying a franchise also has some disadvantages.
You need a lot of money for the initial investment. You also may have to pay ongoing fees to retain the right to use the company’s name You may be required to follow company guidelines instead of your own.

9 Franchise Some popular franchises are: Subway McDonalds Taco Bell KFC
Jackson-Hewitt Tax Service TCBY treats Wendy’s

10 Buying an existing business
Another opportunity open to some entrepreneurs is buying a business that is already existing Buying an established business can eliminate much of the work and expense of starting a business.

11 US Small Business Administration (SBA)
Established 1953 Provides financial, technical, and management assistance to help start, run, and enlarge a business

12 Planning your own business
What does it take to succeed? Optimism – you must believe in yourself & your business. Self-starter – you must have initiative

13 Planning your business
Choosing a business – what is the best business for you? Choosing a location – the importance fo location depends on the kind of business you have Pricing your product or service – are you charging enough for your products or services?

14 Legal and Financial Issues
A number of legal and financial issues will affect you if you become an entrepreneur. Zoning and licensing requirements must be met Choose your business structure

15 Business Structure The three basic business structures-
Proprietorships Partnerships Corporations

16 Proprietorship Simplest type & most costly ($$$$)
You will be the sole owner Gives you total freedom Gives you total responsibility

17 Partnership Share the business responsibility
You can borrow more money with two people It can be difficult if you don’t get along with partner The business could be jeopardized

18 Corporation Easier time raising money
Have less risk to your personal assets Costs more to set up Higher taxes

19 Obtaining Financing Use saved money (seed $) to finance your business
Apply for a loan Use outside investors

20 Applying for a loan Business plan
Record of fixed and flexible expenses Record of assets and liabilities

21 Comparing Annual Profits
Year 1 Income - $100,000 Expense - $80,000 Profit $20,000 Profit ratio = 20,000/100,000 = 20% Year 2 Income - $120,000 Expense - $98,000 Profit $22,000 Profit ratio = 22,000/120,000 = 22%

22 Professional Assistance
A lawyer can be one of your most valuable resources when starting a business An accountant can help analyze his books and give advice about increasing profits An insurance agent is another professional whose advice you should seek, protect your business against theft, fire, etc.

23 Working from home Advantages Disadvantages Don’t have to pay rent
Can handle home responsibilities during the day Certain tax advantages Family concerns may disrupt your business Neighbors may object about a business next to their home Clients may feel its unprofessional Loneliness & isolation can be a possible hazard

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