Transcript Becoming an Entrepreneur

Becoming an Entrepreneur
O An entrepreneur is someone who takes a
risk in starting a business to earn a profit
O Can you think of a current or historical
entrepreneur?
O What does it take to be an entrepreneur?
O Having a desire to be your own boss
O Developing a good plan
O Having special skills and abilities
O Coming up with innovative ideas
Becoming an Entrepreneur
O Entrepreneurship is the process of starting,
organizing, managing, and assuming the
responsibility for a business
O What personal traits do you think are
necessary to a successful entrepreneur?
O Figure 6-1, page 126
Entrepreneurship & The
Economy
O Small businesses are responsible for most new employment
O Most businesses start on $10,000 or less
O What are the sources of that start-up capital?
O Owner savings accounts
O Bank loans
O Credit card debt
O Family and friends
O Venture capitalist – investors that finance new products and new
businesses
O Small businesses are responsible for more than half of the
U.S. GDP each year
Opportunities & Risks
O Opportunities begin with the creation of new or improved
products and services
O Innovation is an invention or creation that is brand new
O Improvement is a designed change that increases the
usefulness of a product, service, or process
O Entrepreneurs need to be aware of the risks they may face
O Why do businesses fail?
O Lack of capital, low sales, high expenses, competition,
inadequate management, too much time
Small Business Basics
O Small business is an independent business
with fewer than 500 employees
O Using that definition, 99% of all U.S.
businesses are small business
O Small businesses employ more than 60% of
all private sector employees
O Half of all small businesses are home-based
businesses
O Examples?
O Doctor/Dentist, Lawyer, Accountant, Dry
Cleaner, Restaurant, etc.
Characteristics of
Small Business
O Owner is usually the
manager
O It operates in one or
very few locations
O It serves a small
market
O It is not dominant in
it field
Small Business Advantages
O Meeting customer
needs
O Examples?
O Providing unique
services
O Examples?
O Personalized
products, individual
attention, etc.
Small Business Problems
O The following are the most common reasons
for small business failure:
O Not having enough start-up money
O Lack of management experience
O Lack of experience with the type of business
O Poor location for the business
O Not controlling expenses
O Failure to manage credit
O How can businesses overcome the causes
of failure?
O SBA!
O SBA
Starting a Small Business
O Business ideas come from many sources
O Hobbies
O Interests
O Business experiences
O Putting your business idea into action
means finding the right place or location
O Choosing the right “team” is essential to
business success
O Preparation and research
O About customers, competitors, gov’t
regulations, operations, etc.
Developing a Business Plan
O A business plan is a written description of the
business idea and how it will be carried out
O Key features of a business plan include:
O Description of the company
O Credentials of the owner(s)
O Description of the product or service
O Market analysis (demand, competition,
customers)
O Financial plan
O Figure 6.4, page 138
Financing the Small Business
Types of Financing
O Start-up financing is the amount of money
needed to open the business
O Includes buildings, equipment, inventory,
supplies, licenses, etc.
O Short-term financing is the money needed to
pay for the current operating activities
O Usually for a period less than one year
O Long-term financing is the money needed
for the main resources of a business
O Land, buildings, equipment