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Introduction to Business© Thomson South-Western
ChapterChapterChapterChapter
Entrepreneurship and Small Business Management
6-16-1 Becoming an Entrepreneur
6-26-2 Small Business Basics
6-36-3 Starting a Small Business
66
Introduction to Business© Thomson South-Western
Chapter 6
Slide 2
LESSON 6-1LESSON 6-1
Becoming an Entrepreneur
Goals Identify characteristics of successful
entrepreneurs. Recognize the importance of
entrepreneurship in the economy. Describe opportunities and risks of
entrepreneurship.
Introduction to Business© Thomson South-Western
Chapter 6
Slide 3
Key Terms
entrepreneur entrepreneurship venture capital innovation improvement
Introduction to Business© Thomson South-Western
Chapter 6
Slide 4
CHARACTERISTICS OF ENTREPRENEURS Desire to be your own boss Special skills and abilities
Introduction to Business© Thomson South-Western
Chapter 6
Slide 5
ENTREPRENEURS IN ACTION Pankaj Arora Rich Stachowski Jeffrey Rodriguez and John Serrano Abbey Fleck
Introduction to Business© Thomson South-Western
Chapter 6
Slide 6
WHAT DOES IT TAKE?
Entrepreneurs are more persistent inquisitive energetic goal oriented independent
self-confident creative reliable competitive
Introduction to Business© Thomson South-Western
Chapter 6
Slide 7
WHAT DOES IT TAKE?Entrepreneurs have problem-solving skills tolerance for ambiguity strong integrity personal initiative ability to secure resources capability to learn from failure willingness to work hard
(continued)
Introduction to Business© Thomson South-Western
Chapter 6
Slide 8
>> C H E C K P O I N T
What personal characteristic are common to most successful entrepreneurs?
Introduction to Business© Thomson South-Western
Chapter 6
Slide 9
ENTREPRENEURSHIP AND THE ECONOMY Employment Financing Productivity
Introduction to Business© Thomson South-Western
Chapter 6
Slide 10
NUMBER OF EMPLOYEESIN NEW BUSINESSES
Introduction to Business© Thomson South-Western
Chapter 6
Slide 11
>> C H E C K P O I N T
What are the sources of financing that entrepreneurs use for their new businesses?
Introduction to Business© Thomson South-Western
Chapter 6
Slide 12
OPPORTUNITIES
Innovation Improvement
Introduction to Business© Thomson South-Western
Chapter 6
Slide 13
RISKS
Recognizing risks Lack of adequate capital Low sales Higher than expected expenses Competitive pressure An owner unprepared to manage a growing
business Operations requiring more time than the owner is
willing to commit
Introduction to Business© Thomson South-Western
Chapter 6
Slide 14
>> C H E C K P O I N T
Where do entrepreneurship opportunities begin?
Introduction to Business© Thomson South-Western
Chapter 6
Slide 15
LESSON 6-2LESSON 6-2
Small Business Basics
Goals Identify important characteristics of
small businesses. Recognize the competitive advantages
of small businesses. Identify problems faced by many small
businesses.
Introduction to Business© Thomson South-Western
Chapter 6
Slide 16
Key Terms
small business Small Business Administration (SBA)
Introduction to Business© Thomson South-Western
Chapter 6
Slide 17
SMALL BUSINESS OWNERSHIP Description of a small business
Owner is usually the manager Operates in one or very few locations Typically serves a small market Not dominant in its field
Small business employment Ownership diversity
Introduction to Business© Thomson South-Western
Chapter 6
Slide 18
COMMON TYPES OF SMALL BUSINESSES
Introduction to Business© Thomson South-Western
Chapter 6
Slide 19
>> C H E C K P O I N T
What percentage of employees in the United States work for small businesses?
Introduction to Business© Thomson South-Western
Chapter 6
Slide 20
SMALL BUSINESS ADVANTAGES Meeting customer needs Providing unique services
Introduction to Business© Thomson South-Western
Chapter 6
Slide 21
>> C H E C K P O I N T
How can small businesses compete successfully with larger businesses?
Introduction to Business© Thomson South-Western
Chapter 6
Slide 22
COMMON REASONS FOR SMALL BUSINESS FAILURE Not keeping adequate records Not having enough start-up money Lack of management experience Lack of experience with the type of business Not controlling operating expenses Poor location for the business Failure to manage credit offered to customers
Introduction to Business© Thomson South-Western
Chapter 6
Slide 23
SMALL BUSINESS ASSISTANCE Faculties of universities and colleges Local groups of business people Small Business Administration (SBA)
Introduction to Business© Thomson South-Western
Chapter 6
Slide 24
>> C H E C K P O I N T
List common reasons for small business failure.
Introduction to Business© Thomson South-Western
Chapter 6
Slide 25
LESSON 6-3LESSON 6-3
Starting a Small Business
Goals Recognize important factors to be
considered when starting a business. Describe the elements of a business
plan. Identify types and sources of financing
for a small business.
Introduction to Business© Thomson South-Western
Chapter 6
Slide 26
Key Terms
business plan start-up financing short-term financing long-term financing
Introduction to Business© Thomson South-Western
Chapter 6
Slide 27
THE BUSINESS DECISION
An idea plus experience Right place and time Team approach Preparation and research
Introduction to Business© Thomson South-Western
Chapter 6
Slide 28
>> C H E C K P O I N T
Why is it important to use a team approach when starting a new business?
Introduction to Business© Thomson South-Western
Chapter 6
Slide 29
WHAT IS A BUSINESS PLAN? A business plan is a written
description of the business idea and how it will be carried out, including all major business activities.
Introduction to Business© Thomson South-Western
Chapter 6
Slide 30
ELEMENTS OF A BUSINESS PLAN Description of the Business
The business idea Major products and services Ownership structure Strengths/weaknesses Long- and short-term goals
Introduction to Business© Thomson South-Western
Chapter 6
Slide 31
ELEMENTS OF A BUSINESS PLAN Description of Competition
Characteristics of the industry Condition of the economy Strengths and weaknesses of major
competitors
(continued)
Introduction to Business© Thomson South-Western
Chapter 6
Slide 32
ELEMENTS OF A BUSINESS PLAN Customer Analysis
Description of customers Location, number, and resources of
customers Sales forecasts
(continued)
Introduction to Business© Thomson South-Western
Chapter 6
Slide 33
ELEMENTS OF A BUSINESS PLAN Operations Plan
Organization of the company Description of major operations Analysis of resources needed Human resource plans
(continued)
Introduction to Business© Thomson South-Western
Chapter 6
Slide 34
ELEMENTS OF A BUSINESS PLAN Marketing Plan
Description of major marketing activities Description of resources needed Schedule of marketing activities
(continued)
Introduction to Business© Thomson South-Western
Chapter 6
Slide 35
ELEMENTS OF A BUSINESS PLAN Financial Plans
Start-up costs Short- and long-term financial needs Sources of financing Budgets and financial statements
(continued)
Introduction to Business© Thomson South-Western
Chapter 6
Slide 36
STEPS IN DEVELOPING THE BUSINESS PLAN Gather and review information Develop the “game plan” Write the plan Ask an expert to review the plan
Introduction to Business© Thomson South-Western
Chapter 6
Slide 37
>> C H E C K P O I N T
What is the “game plan” in a business plan?
Introduction to Business© Thomson South-Western
Chapter 6
Slide 38
FINANCING THE SMALL BUSINESS Types of financing
Start-up financing Short-term financing Long-term financing
Sources of financing Owner-supplied funds Borrowed funds
Introduction to Business© Thomson South-Western
Chapter 6
Slide 39
>> C H E C K P O I N T
In addition to owner-supplied capital, what are several other sources of financing for a small business?
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