Managing a Small BusinessIntro to Business 2015

What it takes Fewer than half of all new businesses will survive for five years or

more.

A successful business owner is knowledgeable in: Management Finance Marketing And other business activities

The small business owner is responsible for most if not all of the decisions needed to operate the business

A successful business owner is: Self motivated Risk-taker Persistent Knowledgeable in business and related skills

Who owns small businesses Today, small business owners are more educated,

younger, and are more likely to be female or minorities.

Women are 3X more likely than men to go into small business ownership

Women make up 30% of all small business owners Minority business ownership has doubled since 1980 Largest minority owners: Asian-Americans,

Hispanics, and African-Americans

Starting a Small Business Many people think about starting a small business,

but few follow through

Starting a business begins with an idea and concludes with a careful study of information to determine whether the idea can be successful.

An idea plus experienceBusiness ideas come from many

sources:HobbiesInterestsBusiness experiences

Right Place and Time Location, location, location!

Retail businesses require good customer traffic If location is hard to find or difficult to get to, many customers will

stay away

Wholesalers need easy access to manufacturers to obtain products for resale

Manufacturers must be located in an area with access to raw materials

Timing – to be most successful, small businesses start up at a time when demand is highest for certain products or services.

Preparation and Research The most important step in starting a small

business is preparation Having adequate information to make good decisions about

the business

Information is needed about: Customers Competitors Important operations and activities Government regulations And many others

Developing a business plan Successful businesses develop and follow a plan

A business plan is a written description of the business idea and how it will be carried out, including all major business activities

Business planKey components of business plan

include:General description of companyQualifications of owner(s)Description of product or serviceAnalysis of the market (demand,

customers, competition)And a financial plan

Financing the small business A new business with a good product or

service idea may run out of money before it can become profitable.

SEVERAL years of operation are usually required before a new business earns a profit.

Therefore, obtaining financing is an important step in starting and operating a new business

Types of financing There are three types of financing to

consider: Start-up financing

Money needed to open the business. Includes the cost of buildings, equipment, inventory, supplies, licenses, etc.

Short-term financing Money needed to pay for the current operating activities

Long-term financing Money needed for important resources (land, buildings,

and equipment) that will last for many years. Usually require large amounts of money paid over a number of years.

Business Plan ProjectWhat type of business could you start

using the skills you have now?

Brainstorm ideas for your projectWrite them down