****** 1 1-1 December, 2011 ** Entrepreneurship and Starting A Home Based Business * **
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Transcript of ****** 1 1-1 December, 2011 ** Entrepreneurship and Starting A Home Based Business * **
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December, 2011
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Entrepreneurshipand Starting
A Home Based Business
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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