Post on 13-Dec-2015
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Starting YourSmall Business
Business v. Small BusinessBusiness v. Small Business Trends, Challenges, Trends, Challenges,
Opportunities, & Opportunities, & Concerns of Small Concerns of Small BusinessBusiness
Characteristics of Characteristics of EntrepreneursEntrepreneurs
Ch
ap
ter
11
Ryan McVay/Getty Images
1-3McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Rapid SmallRapid SmallBusiness GrowthBusiness Growth
23 Million23 MillionEmploymentEmployment
75% Of New Jobs75% Of New Jobs50% Of Private Employment50% Of Private Employment99% Of Employers99% Of Employers
97% Of Exporters97% Of Exporters
1-4McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Entrepreneurship TodayEntrepreneurship Today
Male- 1.9 Men Per WomanMale- 1.9 Men Per WomanEthnically DiverseEthnically Diverse25-3425-34Specialty ExpertiseSpecialty Expertise$100 B For 3.5 M Startup/Small $100 B For 3.5 M Startup/Small BusinessesBusinesses
Rim Light/PhotoLink/Getty Images
1-5McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Public FavorsPublic FavorsSmall BusinessSmall Business
Black EnterpriseBlack Enterprise- - http://www.blackenterprise.comhttp://www.blackenterprise.com
EntrepreneurEntrepreneurInc.Inc.Hispanic BusinessHispanic Business- -
http://www.hispanicbusiness.comhttp://www.hispanicbusiness.comFamily BusinessFamily BusinessEntrepreneurial WomanEntrepreneurial WomanYour CompanyYour CompanyEtc.Etc.
Royalty-Free/CORBIS
1-6McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Interest At SchoolsInterest At SchoolsCoursesCourses
20 Years Ago- None20 Years Ago- NoneNow- HundredsNow- Hundreds
Ages 13-18 = Positive Ages 13-18 = Positive PotentialPotential
Business CareerBusiness CareerMales = 13%Males = 13%Females = 10%Females = 10%
1-7McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
EntrepreneurialEntrepreneurialStudent Organizations Student Organizations
Association of College Association of College EntrepreneursEntrepreneurs
University Entrepreneurial University Entrepreneurial AssociationAssociation
Students in Free Enterprise - Students in Free Enterprise - http://http://www.sife.orgwww.sife.org
1-8McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Self-Employment TrendSelf-Employment Trend
Increased Investor Increased Investor InterestInterest
Executives Taking Executives Taking Early RetirementEarly Retirement
55% Want To Be Own 55% Want To Be Own BossBoss
Technological AdvancesTechnological Advances
Photodisc Collection/Getty Images
1-9McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Attractive To All AgesAttractive To All AgesMore Than ½ Of Independent More Than ½ Of Independent
Workers In NYCWorkers In NYCCollege-EducatedCollege-Educated25- 40 Years Old25- 40 Years Old
84% Of Entrepreneurs “Not Worried 84% Of Entrepreneurs “Not Worried About Future”About Future”
40% Have Management Experience40% Have Management Experience¼ Managed/Owned Business Before¼ Managed/Owned Business Before
Doug Menuez/Getty Images
1-10McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Small Business?Small Business?
Independent ManagementIndependent ManagementCapital/Ownership = Few Capital/Ownership = Few IndividualsIndividuals
Operations Are LocalOperations Are LocalBusiness = Small But Business = Small But Competitors = LargeCompetitors = Large Hisham F. Ibrahim/Getty Images
1-11McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
SBA DefinitionSBA Definition
“…“…a small business is one a small business is one that is independently owned that is independently owned
and operated and is not and operated and is not dominant in its field of dominant in its field of
operation.”operation.”
1-12McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Classification By SizeClassification By Size
<20 Employees<20 Employees Very SmallVery Small
20 - 9920 - 99 SmallSmall
100 – 499100 – 499 MediumMedium
500 Or More500 Or More LargeLarge
1-13McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
ObjectivesObjectives
VentureVenture
1.1. ProfitProfit
2.2. GrowthGrowth
3.3. Quick SelloutQuick Sellout
Small/MicroSmall/Micro1.1. No New Or No New Or
Innovative Innovative ActivitiesActivities
2.2. Provide Owner Provide Owner LivingLiving
1-14McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Most CommonMost CommonHome-Based BusinessesHome-Based Businesses
Personal Svcs.14%
Bus. Services
27%
Bldg. Trades31%
Financial & Real Estate
5%Sales & Distribution
10%Arts/ Design
Creative13%
Source: Independent Insurance Agents of America
1-15McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Contributions OfContributions OfSmall BusinessSmall Business
Encourage Innovation & FlexibilityEncourage Innovation & FlexibilityClose Relationship With Close Relationship With Customers/CommunityCustomers/Community
Force Large Firms To Be Force Large Firms To Be CompetitiveCompetitive
Provide Employees Provide Employees Learning ExperienceLearning Experience
Develop Risk TakersDevelop Risk TakersNew EmploymentNew EmploymentGreater Employee Job SatisfactionGreater Employee Job Satisfaction
Royalty-Free/CORBIS
1-16McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Problems ForProblems ForSmall BusinessSmall Business
Recession/Current EconomyRecession/Current EconomyRetirement/TransitionRetirement/TransitionCapital/FinancingCapital/FinancingUnexpected GrowthUnexpected GrowthSuccessionSuccessionInadequate FinancingInadequate FinancingInadequate ManagementInadequate ManagementGovernment Regulations/PaperworkGovernment Regulations/Paperwork
Royalty-Free/CORBIS
1-17McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Challenges ToChallenges ToSmall BusinessSmall Business
Exploding TechnologyExploding TechnologyOccupational/Industry Occupational/Industry ShiftsShiftsReinventionReinventionReengineeredReengineeredDownsizing/RightsizingDownsizing/Rightsizing
GlobalGlobal
Chad Baker/Ryan McVay/Getty Images
1-18McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Declining Job TypesDeclining Job Types
1-19McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Why Start AWhy Start ASmall Business?Small Business?
72%
10%
10%
8%
Independence
Control
Satisfaction
Other
1-20McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Why To Not StartWhy To Not StartA Small Business?A Small Business?
13%25%
24%19%
19%
Long Hours
Taxes
Risk
Responsibility
Other
1-21McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Job SatisfactionJob Satisfaction
0%
10%
20%
30%
40%
50%
60%
70%
Self-Employed Working For Others
Great Britain
U.S.
1-22McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Objectives OfObjectives OfSmall Business OwnersSmall Business Owners
Achieve IndependenceAchieve Independence
Additional IncomeAdditional Income
Help FamiliesHelp Families
Products Not AvailableProducts Not Available
Ryan McVay/Getty Images
1-23McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Checklist ForChecklist ForAspiring EntrepreneursAspiring Entrepreneurs
Passion Not Passion Not MoneyMoney
Something You Something You KnowKnow
PatiencePatienceMentorMentorFundingFunding
Cash ManagerCash Manager
Build SalesBuild Sales
Don’t RushDon’t Rush
Wary Of Bad Wary Of Bad
Advice/SuppliersAdvice/Suppliers
1-24McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Business ObjectivesBusiness Objectives
ServiceServiceProfitProfitSocialSocialGrowthGrowthMesh ObjectivesMesh Objectives
Nick Rowe/Getty Images
1-25McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Characteristics OfCharacteristics OfSuccessfulSuccessful Owners Owners
+Desire Desire IndependenceIndependence
+Strong Sense Of Strong Sense Of InitiativeInitiative
+Personal/Family Personal/Family MotivationMotivation
+Quick/Concrete Quick/Concrete ResultsResults
+Able To React Able To React QuicklyQuickly
+Dedicated To Dedicated To BusinessBusiness
+Enter Business Enter Business By Chance By Chance And/Or DesignAnd/Or Design
1-26McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Successful SmallSuccessful SmallBusiness ManagementBusiness Management
Adequate MarketAdequate MarketSufficient CapitalSufficient CapitalRecruit EffectivelyRecruit EffectivelyTimely InformationTimely InformationCope With Gov’t Regs.Cope With Gov’t Regs.ExpertiseExpertiseFlexibleFlexible
Ryan McVay/Getty Images
1-27McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Personal AnalysisPersonal Analysis
ValuesValues
Mental AbilitiesMental Abilities
AttitudesAttitudes Mel Curtis/Getty Images
1-28McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Where Are the New Jobs?Where Are the New Jobs?
1-29McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Factors Affecting Factors Affecting Industry/BusinessIndustry/Business
1)1) EconomicsEconomics
2)2) TechnologyTechnology
3)3) LifestyleLifestyle
4)4) PoliticalPolitical
5)5) DemographicsDemographicsRoyalty-Free/CORBIS
1-30McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Ideas For Small BusinessIdeas For Small Business
Career Career CounselingCounseling
CateringCatering Computer & Computer & Office Machine Office Machine RepairRepair
Day CareDay Care EducationEducation
Financial Financial PlanningPlanning
Home HealthHome Health MarketingMarketing Senior Fitness & Senior Fitness & RecreationRecreation
Specialized Specialized DeliveryDelivery
1-31McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Small Business ConcernsSmall Business Concerns
Poorly Planned GrowthPoorly Planned GrowthLoss Of IndependenceLoss Of IndependenceThreat Of FailureThreat Of FailureDiscontinuanceDiscontinuanceTypesTypesFormalFormalPersonal/InformalPersonal/Informal
Jim Arbogast/Getty Images