Transcript PowerPoint - Oswego 308

Bell Ringer 1
CAREER OPPORTUNITIES
IN…CONSULTING
Use the internet to learn
more about careers in
consulting. Choose one of
the job titles listed and
answer the following
questions.
1. Identify the minimum
educational
requirements for the
job. Explain other
training or education
that might be needed
for advancement.
2. Does this career
interest you?
 Business analyst
 Management consultant
 Performance consultant
 Quality control consultant
 Security consultant
 Training consultant
 Use the Occup ation al Outlook
Handb ook at www.bls.gov
ENTREPRENEURSHIP &
SMALL BUSINESS
MANAGEMENT
Chapter 6
BECOMING AN
ENTREPRENEUR
6-1
TODAY’S GOALS
 Identify characteristics of successful
entrepreneurs
 Recognize the importance of entrepreneurship
in the economy
 Describe opportunities and risks of
entrepreneurship
ENTREPRENEUR
Someone who takes a risk in starting a business
to earn a profit
 Characteristics:
 Desire to be own boss
 Develop good initial plan
 Special skills and abilities
 Innovative ideas
ENTREPRENEURSHIP
the process of starting, organizing, managing,
and assuming the responsibility for a business
WHAT ARE SOME
ADVANTAGES AND
DISADVANTAGES OF
TURNING A HOBBY
INTO A BUSINESS?
A:KNOWLEDGE AND EXPERTISE
D: MIGHT NOT BE ENJOYABLE IF IT
BECOMES YOUR JOB
SUCCESSFUL ENTREPRENEURS
ARE…
Entrepreneurs Are
They Have
• Persistent
• Problem-solving skills
• Inquisitive
• Tolerance for
ambiguity
• Energetic
• Strong integrity
• Goal oriented
• Personal initiative
• Independent
• Ability to secure
resources
• Self-confident
• Capability to learn
from failure
• Creative
• Willingness to work
hard
• Reliable
• Ability to partner
• Competitive
• Ability to spot
opportunity
CHARACTERISTICS OF SUCCESSFUL
ENTREPRENEURS
Which characteristics of successful
entrepreneurs do you possess?
Which ones would you like to develop?
Using Microsoft Publisher, create an advertisement
or brochure that showcases four characteristics of
effective entrepreneurs. Also, include ways that
people can develop those characteristics if they
don't currently possess them. Use the internet to
research ways to develop characteristics.
*Print and turn in with rubric when finished!*
ENTREPRENEURSHIP & THE
ECONOMY
1 in 10 of all Americans 18-64 years old is
involved in entrepreneurship
Over 625,000 new businesses are created
every year
The same number of small businesses
close as begin each year
EMPLOYMENT
Employment Growth by Business Size 1990-2005
24.9
1-19 Employees
36.3
20-99 Employees
100-499 Employees
20.1
18.7
500 or more
employees
ENTREPRENEURSHIP & THE
ECONOMY
 Over 60% of new jobs were created by businesses with
fewer than 500 employees
 Financing
 friends, family, work colleagues, loans, credit
 Venture capital-money provided by large
investors to finance new products and new
businesses that have a good chance to be very
profitable
 Productivity
 Small businesses account for > half of the U.S. GDP
OPPORTUNITIES OF
ENTREPRENEURSHIP
Innovation – invention or
creation that is brand new
 may sell to another
company
 Ex:
 Apple computer – Steve
Jobs & Stephen Wozniak
 Post-It Notes – Arthur Fry &
Spencer Silver
OPPORTUNITIES OF
ENTREPRENEURSHIP
Improvement – design
change that increases the
usefulness of a product,
service, or process
 Can be…
 Improved design
 More effective procedures
 Greater attention to quality
RISKS OF ENTREPRENEURSHIP
New Businesses
33%
34%
33%
Profitable
Do Not Make A Profit But Continue To Operate
Lose Money
RISKS OF ENTREPRENEURSHIP
Reasons Businesses Started By Entrepreneurs
Close
• 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
• Over a 10-year- period, more than 50 percent of all new
businesses are discontinued
GOAL 3
Where do entrepreneurship opportunities
begin?
Innovations (ideas about new products and services)
Improvements (ideas for changes to existing products,
services, or processes)
Page 131 #5
BELL RINGER 2
If you could start your own
business what would it be and
why?
SMALL BUSINESS
BASICS
6-2
TODAY’S GOALS
 Identify important characteristics of small businesses
 Recognize the competitive advantages of small
businesses
 Identify problems faced by many small businesses
SMALL BUSINESSES
An independent business with fewer than 500 employees
 Details…




Owner = manager
One or fewer locations
Serves a small market
Not dominant in its field
 99.9% of the 26 million
U.S. businesses are small
businesses
SMALL BUSINESS EMPLOYMENT
 Create 60-80% of all new
jobs
 Largest number in
services and retailing
 Pg133 Fig. 6-3
COMMON TYPES OF SMALL BUSINESSES
AS A PERCENT OF ALL SMALL
BUSINESSES
Retail trade
Professional and technical services
Construction
Health care and social assistance
Accomodation and food services
Finance and Insurance
Wholesale trade
Waste management
Real estate and rental and leasing
Manufacturing
Transportation and warehousing
Information
Arts, entertainment, and recreation
Educational services
14.6%
11.3%
10.6%
10.2%
8.2%
6.6%
5.6%
5.0%
4.9%
4.3%
2.8%
1.9%
1.6%
1.1%
WHY ARE SO MANY
SMALL BUSINESSES IN
SERVICES AND
RETAILING?
Services and retailing are 2 categories in
which small businesses can get a start and
provide customer service and value that large
businesses may not be able to match.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Ownership Diversity 95%
86%
64%
50%
25%
17%
14%
INITIAL CAPITAL
Part-time or service
businesses=$5000 or less
Full-time with buildings, equipment,
and employees=$100,000 or more
SMALL BUSINESS ADVANTAGES
Meet unique needs of customers…
Have more customer contact
Located close to customers
Get direct information from customers on
likes and dislikes
SMALL BUSINESS ADVANTAGES
 Provide unique services…
 Take a special interest in
the customer
 Spend time determining
needs and alternatives
COMMON PROBLEMS
Most Common Reasons for Small Business Failure
1. Not keeping adequate records
2. Not having enough start-up money
3. Lack of management experience
4. Lack of experience with the type of business
5. Not controlling operating expenses
6. Poor location for the business
7. Failure to manage credit offered to customers
WHAT DO YOU
THINK WOULD BE
THE HARDEST PART
OF MANAGING A
SMALL BUSINESS?
SMALL BUSINESS ASSISTANCE
 Universities & Colleges
 Chambers of Commerce
 Small Business
Administration (SBA)
 Service Corps of Retired
Executives (SCORE)
Page 136 # 4
eBay has become the home of many small businesses.
Thousands of small business owners earn an excellent
income by selling their products using the online
auction services provided by eBay. Visit the eBay
website and identify three ways a small business can
use the website to support its operations.
*Turn in when finished!*
BELL RINGER 3
How do small businesses
provide unique services that
large businesses cannot?
STARTING A SMALL
BUSINESS
6-3
TODAY’S GOALS
 Recognize important factors to be considered
when starting a business
THE BUSINESS DECISION
 Hobbies
 Interests
 Business Experiences
LOCATION, LOCATION, LOCATION!!!
High Customer Traffic
Easily Accessible
 Customers
 Manufacturers
 Distributers
TIMING
 Start when demand is high
TEAM APPROACH
Team work!!
 Employees
 Bankers
 Lawyers
 Accountants
Many entrepreneurs are
independent and not
always good team
players.
How can this result in
problems for the business?
THE MOST IMPORTANT STEP IS
PREPARATION!
Information
 Customers
 Competitors
 Operations
 Government
Regulations
Resources
 Libraries
 Colleges
 Universities
 Small Business
Assistance Centers
Pretend your best friend is thinking about starting
a small business. Write a letter to him/her offering
advice on the things they should consider carefully
before making a final decision. Be sure to include
the key elements from pages 138-139 of your book,
along with the video we watched in class. The
letter should be typed, double spaced and 12pt.
font.
*Turn in when finished!*
BELL RINGER 4
Where can small businesses
find assistance?
TODAY’S GOALS
 Describe the elements of a business plan
 Identify types and sources of financing for small
business
MUST HAVE A PLAN!!
 Business plan – written description of the business idea
and how it will be carried out, including all major
business activities
 Elements:





Company description
Owner credentials
Product or service description
Market analysis (demand, customers, competition)
Financial plan
 See pg. 140 Figure 6 -4
BUSINESS PLAN
 Helps the owner for see…
 Important activities
 Problems
 Time they will take
 Cost
 Persuade lenders and investors
STEPS TO A BP
 1. Gather and review information
 Other BPs
 Activities and financial performance of competitors
 2. Develop strategic alternatives




Production
Marketing
Staffing
Financing
 3. Write it!







Legal form
Products or services
Competition
Customers
Operations
Marketing
Finances
BP
SHOW ME THE MONEY!!!
 Financing is a key step in starting and running a new
business!!!
TYPES OF FINANCING
 Start-up financing – money needed to open the
business
 Includes costs of…





Buildings
Equipment
Inventory (products or raw materials on hand)
Supplies
Licenses
TYPES OF FINANCING
 Short-term financing – money needed to pay for the
current operating activities of a business
 Obtained for a period of less than a year and often for one or
two months
TYPES OF FINANCING
 Long-term financing – money needed for the main
resources of a business that will last for many years




Land
Buildings
Equipment
Large amounts of money paid over many years
SOURCES OF $$$
 Owner-Supplied Money
 Proprietorship
 One person
 Partnership
 Each partner contributes
 Corporation
 Shareholders
 Borrowed funds
 Bank loans
 Family or friends
 Credit
WHAT ARE 3 TYPES OF FINANCING?
Start-Up
Short-Term
Long-Term
WHAT ARE 2 SOURCES OF
FINANCING?
Owner-Supplied
Money
Borrowed Money
Parts of your presentation…
 Location
 Picture
 Rent/Lease Amount
 Positives
 Negatives
 Final Choice
 Why
Test Thursday!!!