chapter: 6 entrepreneurship and small business management
TRANSCRIPT
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Chapter: 6Entrepreneurship and
Small Business Management
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Becoming an Entrepreneur
Essential Questions1. What are characteristics of successful entrepreneurs?2. Recognize the importance of entrepreneurship in the economy.3. Describe opportunities and risks of entrepreneurship.
Key Terms Entrepreneur Entrepreneurship
Venture Capital
Innovation Improvement
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What skills do you think an entrepreneur must have to turn their idea into a business?
DO NOW
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An entrepreneur is someone who takes a risk in starting a business to earn a profit.
What is an Entrepreneur?
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Desire to be your own boss Having special skills and abilities
Coming up with innovative ideas
Characteristics of Entrepreneurs
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Entrepreneurs Are More
Persistent Inquisitive Energetic Goal-oriented Independent
Self-confident Creative Reliable Competitive
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Problem-solving skills Strong Integrity Personal Initiative Ability to secure resources Capability to learn from failure Willingness to work hard
Entrepreneurs Have
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Entrepreneurship is the process of starting, organizing, managing, and assuming the responsibility for a business.
Entrepreneurship
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Entrepreneurs come from all age categories and racial and ethnic groups.
They represent both genders as well as varied amounts of education.
Many entrepreneurs own their first business while in their teens.
What Does It Take?
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Entrepreneurship is a key part of the U.S. economy.
Nearly one in ten of all Americans 18-64 years old is involved in some type of entrepreneurship activities.
More than 670,000 new businesses are created yearly.
Entrepreneurship is also risky.
Entrepreneurship And The Economy
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Small businesses are responsible for most new employment.
Over 60 percent of new jobs are created by businesses with fewer than 500 employees.
Employment
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DO NOW:Assigned seats & complete ½ sheet
LESSON: Finish notes on 6-1 Bigger Business, Better Lives article
EXIT TICKET:*3-2-1
BFM – APRIL 10, 2014
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Most of the money needed to start a new business comes from the entrepreneur and his or her family.
One in five Americans has invested in a business of someone they knew.
More than 50 percent lend financial support to the business of a family member.
Twenty nine percent give money to neighbors and friends.
Financing
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A Venture capital is money provided by large investors to finance new products and new businesses that have a good chance to be profitable.
Venture capital
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In the late 1990s, many venture capital companies were formed.
They supplied more than $100 billion each year to new businesses.
Many of those businesses were e-commerce and high-tech start-ups.
When many of those companies failed, the amount of venture capital declined to less than $22 million in 2005.
Venture capital
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New and small businesses produce a large volume of goods and services for the economy.
Businesses with just a single owner and no staff account for more than $600 billion in sales annually.
Small businesses are responsible for more than half of the U.S. gross domestic product each year.
Productivity
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Before deciding to start a business, you need to think about the opportunities and risks.
Opportunities and Risks
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The American private enterprise economy promotes innovation and new business development.
Individuals are able to take risks to start a new business.
Consumers are always looking for new and better choices to meet their wants and needs.
New Business Opportunities
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An innovation is an invention or creation that is brand new.
Innovation
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An improvement is a design change that increases the usefulness of a product, service, or process.
Improvement
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Inventors often develop innovations. Those innovations may become the basis of a new business.
The inventor may sell them to another company for development and sale.
Examples of well-known innovations: Steve Jobs and Stephen Wozniak (Apple
Computer) Arthur Fray and Spencer Silver (Post-it Notes)
Inventors
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The National Federation of Independent Business reports that of all new businesses, about one-third are profitable, one-third do not make a profit, but continue to operate, and the remaining third lose money.
Recognizing Risks
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Over a 10-year period, more than 50 percent of all new businesses are discontinued.
Recognizing Risks
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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
Reasons why businesses close
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Answer the questions included in your study guide packet.
Check Point
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Small Business Basics
6-2
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Small Business Basics Essential Questions1. Identify important characteristics of small businesses.2. Recognize the competitive advantages of small businesses.3. Identify problems faced by many small businesses.
Key Terms Small business
Small Business Administration (SBA)
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Why might people enjoy owning a business but decide to sell it?
DO NOW
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The greatest percentage of businesses in the United States is small businesses.
Small businesses employ half of all private sector employees.
Small Business Basics
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A small business is an independent business with fewer than 500 employees.
Using that standard, 99.9 percent of the roughly 26 million U.S. businesses are small businesses.
Small Business
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A more precise description of a small business includes the following points.
The owner is usually the manager It operates in one or very few
locations It typically serves a small market It is not dominant in its field
Small Business
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SLIDE 32
Common Types of Small Businesses as Percent of All Small Businesses
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On average, small businesses are responsible for creating 60-80 percent of all new jobs.
It is not surprising that there are a large number of service businesses.
Many small business services are professional and technical.
Small Business Employment
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Women own more than one-fourth of all small businesses.
More than 18 percent of small businesses have African-American, Asian-American, or Hispanic- American ownership.
The majority of small business owners are over 35 years old, but nearly 25 percent are under 35.
Ownership Diversity
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Suppose you need someone to: Mow your lawn Make a gourmet meal in y our home Build a custom display case for a
model train Repair hardware on your home
computer.
You would seek the assistance of a small business.
Small Business Advantages
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Small businesses play a vital role in the economy.
They serve customers where the number of products and service is small or the requirements are too specialized for a large business to make a profit.
Meeting Customer Needs
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DO NOW: Assigned seats
LESSON: Finish notes for 6-2 Finish Teen Entrepreneurship
Project #1 Create a cover page Your name, block, class Picture that represents your
business Teen Entrepreneurship Projects
April 28, 2014
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Small businesses are especially suited to provide unique services for customers.
They may plan a wedding or design a customized sound system for your home.
Providing these services means that business representatives must take special interest in the customer.
Providing Unique Services
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They spend time determining needs and discussing alternatives.
They have the expertise to plan and deliver the services.
Providing Unique Services
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Not all small businesses succeed. In fact, their failure rate is much
higher than large businesses. Many failures result from the
inability to pay expenses.
Common Small Business Problems
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The following are the most 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 of the business Failure to manage credit offered to customers
Reasons for Failure
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The Small Business Administration (SBA) is a government agency that helps small business owners develop business plans and obtain financing and other support for their companies.
Information about the SBA and its services can be obtained by visiting www.sba.gov
Small Business Administration
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The SBA offers information, publications, counseling, and many other forms of support.
The SBA sponsors the Service Corps of Retired Executives (SCORE).
Members of SCORE are retired local businesspeople who volunteer their services to counsel and mentor new business owners.
Small Business Administration
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Answer the questions included in your study guide packet.
Check Point
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DO NOW: Assigned seats with a pencil or
pen; ready to learn Lesson: Bigger Business, Better Lives
article Teen Entrepreneur – Project 1
BFM – April 16, 2014
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DO NOW: Find a computer Read Save Chocolateville article
Lesson: Finish Teen Entrepreneur – Project 1 Create a cover page
Name, block, class Teen Entrepreneurship Projects Picture that represents your service Print in color – GHS-215-3130cn
BFM – April 30, 2014
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DO NOW: Find a computer
Lesson: Create a cover page
Name, block, class Teen Entrepreneurship Projects Picture that represents your service Print – GHS-215-2330dn
TE Project #2 – Naming Your Business Type the Company Description outline
BFM – May 5, 2014
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DO NOW: Pick up your folder, find a computer
Lesson: Create a cover page
Name, block, class Teen Entrepreneurship Projects Picture that represents your service Print – GHS-215-2330dn
TE Project #2 – Naming Your Business Type the Company Description outline –
Page 36CHAPTER 6-1 & 6-2 QUIZ Tuesday
BFM – May 9, 2014
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DO NOW: Pick up your folder, find a
computer Lesson:
Quiz 6-1 & 6-2 TE Project #2 – Naming Your Business
* Type the Company Description outline – Page 36
* TE #3 – Tagline (slogan) and Logo
BFM – May 9, 2014
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DO NOW: Pick up your folder, DO NOW paper,
and find a computer
Lesson: Quiz 6-1 & 6-2 TE Project #2 – Naming Your Business
* Type the Company Description outline – Page 36
* TE #3 – Tagline (slogan) and Logo
BFM – May 12, 2014
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Starting a Small Business
6-3
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Starting a Small Business Essential Questions1. Recognize
important factors to be considered when starting a business.
2. Describe the elements of a business plan.
3. Identify types and sources of financing for a small business.
Key Terms Business plan
Start-up financing
Short-term financing
Long-term financing
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Every business begins with an idea. Business ideas come from many
sources. Hobbies, interests, and business
experiences often give people ideas for new businesses.
Books and magazines suggest new business opportunities.
An Idea Plus Experience
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Putting your business idea into action means the right place to open the business.
Most retail businesses need good customer traffic.
Timing is another key factor in starting a business.
Most successful businesses start during a period when customer demand for certain products or services is high.
Right Place and Time
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A business is not easy to run without the help of others.
Even the smallest businesses need a few full- or part-time employees to grow or cover extended hours.
Choosing the “team” members becomes one of the most important initial business decisions.
Small business owners will need specialized help from bankers, lawyers, and accountants.
Team Approach
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The most important step in starting a business is preparation.
Preparation includes having enough information to make good decisions about the business.
Time spent gathering and studying information before the business is started.
Information is needed about customers, competitors, important operations, government regulations, and many other topics.
Presentation and Research
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A business plan is a written description of the business idea and how it will be carried out, including all major business activities.
Key features of a business plan are a general description of the company, the credentials of the owner(s), a description of the product or service, an analysis of the market, and a financial plan.
What is a Business Plan?
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Description of the Business The business idea Major products and services Ownership structure Strengths/weaknesses Long- and short-term goals
Elements of a Business Plan
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Customer Analysis Description of customers Location, number, and
resources of customers Sales forecasts
Elements of a Business Plan
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Operations Plan Organization of the company Description of major operations Analysis of resources needed Human resource plans
Elements of a Business Plan
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Marketing Plan Description of major marketing
activities Description of resources needed Schedule of marketing activities
Elements of a Business Plan
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Financial Plans Start-up costs Short- and long-term financial
needs Sources of financing Budgets and financial statements
Elements of a Business Plan
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Finding adequate financing is a key step in starting and running a new business.
Financing the Small Business
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Start-up financing is the amount of money needed to open the business.
It includes the costs of buildings, equipment, inventory (products or raw materials on hand), supplies, licenses, and the like.
Start-up financing
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Start-term financing is the money needed to pay for the current operating activities of a business.
Short-term financing is obtained for a period of less than a year and often for one or two months.
Start-term financing
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Long-term financing is money needed for the main resources of a business (such as land, buildings, and equipment) that will last for many years.
These resources usually require large amounts of money and will be paid over many years.
Long-term financing
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Answer the questions included in your study guide packet.
Check Point
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