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1-1

December, 2011

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Entrepreneurshipand Starting

A Home Based Business

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* *

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*** Guess Which Company?

He was selling baking soda & decided to entice customers by putting in two packages of chewing gum with each sale. The excitement over the gum started him thinking.

Two Seattle teenagers pooled their money & came up with $100. They started delivering messages & parcels for local merchants.

Though he didn’t graduate from college, he found out college students eat a lot of pizza. He started his first pizzeria with $900 near a campus with a promise of 3-minute delivery.

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*** Be an Entrepreneur

DefinitionWhy take the entrepreneurial

challenge?Opportunity Profit IndependenceChallenge

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Who Starts New Businesses?

18 - 24 8%25 - 34 71%35 - 44 13%45 - 54 6%55+ 2%

AGE AT START-AGE AT START-UPUP

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*** Entrepreneurial Attributes

• Self-Directed & Self-Disciplined

• Self-Nurturing• Action-Oriented• Highly Energetic• Tolerant of Uncertainty

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*** Entrepreneurship

Entrepreneurial Teams

Micropreneurs and Home-Based Businesses

Web-Based Businesses

Intrapreneurs

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Reasons for Growth of Home-Based Businesses

Technology

Downsizing

Attitudes

Tax Advantages

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*** Home-Based Business

Challenges

New Customers

Time Management

Work vs. Family

City Ordinances

Risk

Focus

Find Opportunity Results vs. Routine Profit vs. Paycheck New Ideas Long Term vs. Short

Term

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Most Common Types ofHome-Based Businesses

Personal Svcs.14%

Bus. Services

27%

Bldg. Trades31%

Financial & Real Estate

5%Sales &

Distribution10%

Arts/ Design Creative

13%

Source: Independent Insurance Agents of America

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Government & Entrepreneurship

• Immigration Act of 1990- Investor Visa

• Enterprise Zones

• Incubators

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1. Utah

2. Nevada

3. Washington

4. Florida

5. Colorado

6. Washington D.C.

7. Maryland

8. Georgia

9. Tennessee

10. Alaska

Source: Investor Business Daily, June 24, 2004

Top Ten States Where Businesses Have Started

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Top Ten States Where Businesses Have Closed

1. Utah

2. Washington

3. New Mexico

4. Nevada

5. Idaho

6. Missouri

7. Arizona

8. Vermont

9. Georgia

10. California

Source: Investor Business Daily, June 24, 2004

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*** What is Small Business?

• Independently Owned

• Not Dominant in Its Field

• Meet Certain Standards of Size (Employees, Annual Receipts)

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*** U.S. Small Businesses

• 20 Million Full/Part-time Businesses

• Account for More Than 50% of Gross Domestic Product (GDP)

• Jobs• 80% of Americans 1st job is in small business

• 75% of new jobs are created by small businesses

• Minority-owned Businesses Growing Rapidly

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Business Ownershipby Gender

Source: USA Today

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Female Owners’ Top Industries

0% 10% 20% 30% 40% 50%

Others

Retail

Services

SOURCE: USA Today

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Small Business – Major Causes of Failure

Plunging in without first testing

Under/over pricing Too little capital Little/no experience Borrowing money without

planning Trying to do too much with

too little Buying too much on credit

Expanding credit too freely and rapidly

Incomplete and/or inaccurate records

Not understanding business cycles

Forgetting about taxes, insurances, etc.

Owner working or not, according to whim

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Small Business – Situations for Success

Personal attention Products not easily

made by mass production

Sales are not large enough for a large firm

Unattractive neighborhood

Franchising Paying attention to new

competitors The business is in a

growth industry

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Learning about Small Business Operations

• Learn from Others

• Get Experience

• Take Over a Successful Firm

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*** Where Did They Start?

Source: World Features Syndicate

Hallmark YMCA room

Williams-Sonoma Abandoned Hardware Store

Estee Lauder Vacant Former Restaurant

Walt Disney Created Mickey in a Garage

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Early Sales of Well-Known Companies

Johnson & Johnson $3,000 Worth of Band-Aids 1st Year

Cyrus McCormick Sold No Reapers 1st 10 Years

Subway 312 Sandwiches 1st Day

Burton’s Snowboards

Sold One 1st Year

Bose Sold 40 Speakers 1st Year (today #1 in market)

Source: World Features Syndicate

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*** Managing a Small Business

• Business Plan• Adequate Funding

• Lenders/Investors• “Angels”• Venture Capitalists

• Professional Advice/Help• SBA and SBIC Program• Lawyers, Loan Officers, Insurance Agents• SCORE• Local College/universities

• Know Your Customer• Manage Human Resources• Keep Good Records

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*** Small Business Collaborators

• Small Business Administration (SBA)• Microloan program• SBICs• SBDCs

• Service Corps of Retired Executives (SCORE)

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Small Business Strategies

Examine Marketing & ID Areas for Growth Profile Best Customers & Market to Similar

Prospects Invest in Sales Training & Technology Refresh Business Perspective With Outside

Views Streamline Business & Eliminate Waste

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Small Business & International Prospects

Positives1. World Market

2. Absorb Excess Inventory

3. Soften U.S. Downturns

4. Extend Product Life

Negatives1. Financing Difficult

2. How to Get Started?

3. Lack of Cultural Understanding

4. Paperwork

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International Small Business

Advantages

Deal With Individuals Begin Shipping Orders

Faster Variety of Suppliers Professional Service

with Undivided Attention

Information

Dept. of Commerce- www.bxa.doc.gov

SBA- International- www.sba.gov/hotlist/internat.html