****************** Part 1: The Dynamic Role of Small Business 1.Starting Your Small Business...
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Transcript of ****************** Part 1: The Dynamic Role of Small Business 1.Starting Your Small Business...
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Part 1: The DynamicPart 1: The DynamicRole of Small BusinessRole of Small Business
1.1.Starting Your Small BusinessStarting Your Small Business2.2.Family-Owned BusinessesFamily-Owned Businesses3.3.Forms of Ownership of Small Forms of Ownership of Small
BusinessBusiness4.4.Maintaining Good Government Maintaining Good Government
Relations and Business EthicsRelations and Business Ethics
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Chapter 1Chapter 1
Starting Your Starting Your Small Small
BusinessBusiness
SW Productions/Getty Images
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
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Starting YourSmall Business
Business v. Small BusinessBusiness v. Small BusinessTrends, 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
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Rapid SmallRapid SmallBusiness GrowthBusiness Growth
23 Million23 MillionEmploymentEmployment
o75% Of New Jobs75% Of New Jobs
o50% Of Private 50% Of Private EmploymentEmployment
o99% Of Employers99% Of Employers
97% Of Exporters97% Of Exporters
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Entrepreneurship TodayEntrepreneurship Today
Male- 1.9 Men Per WomanMale- 1.9 Men Per Woman
Ethnically DiverseEthnically Diverse
25-3425-34
Specialty ExpertiseSpecialty Expertise
$100 B For 3.5 M $100 B For 3.5 M Startup/Small BusinessesStartup/Small Businesses
Rim Light/PhotoLink/Getty Images
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Public FavorsPublic FavorsSmall BusinessSmall Business
Black EnterpriseBlack Enterprise- - http://www.blackenterprise.comhttp://www.blackenterprise.com
EntrepreneurEntrepreneurInc.Inc.Hispanic BusinessHispanic Business- -
http://www.hispanicbusiness.cohttp://www.hispanicbusiness.comm
Family BusinessFamily BusinessEntrepreneurial WomanEntrepreneurial WomanYour CompanyYour CompanyEtc.Etc. Royalty-Free/CORBIS
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Interest At SchoolsInterest At SchoolsCoursesCourses
o20 Years Ago- None20 Years Ago- None
oNow- HundredsNow- Hundreds
Ages 13-18 = Positive Ages 13-18 = Positive Potential Potential
Business CareerBusiness CareeroMales = 13%Males = 13%
oFemales = 10%Females = 10%
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EntrepreneurialEntrepreneurialStudent Organizations Student Organizations
Association of College Association of College EntrepreneursEntrepreneurs
University Entrepreneurial University Entrepreneurial AssociationAssociation
Students in Free Students in Free Enterprise - Enterprise - http://http://www.sife.orgwww.sife.org
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Self-Employment TrendSelf-Employment Trend
Increased Investor Increased Investor Interest Interest
Executives Taking Executives Taking Early Retirement Early Retirement
55% Want To Be Own 55% Want To Be Own Boss Boss
Technological Technological AdvancesAdvances
Photodisc Collection/Getty Images
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Attractive To All AgesAttractive To All AgesMore Than ½ Of Independent More Than ½ Of Independent
Workers In NYCWorkers In NYC
oCollege-EducatedCollege-Educated
o25- 40 Years Old25- 40 Years Old84% Of Entrepreneurs “Not 84% Of Entrepreneurs “Not
Worried About Future”Worried About Future”40% Have Management 40% Have Management
ExperienceExperience¼ Managed/Owned Business ¼ Managed/Owned Business
BeforeBefore
Doug Menuez/Getty Images
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Small Business?Small Business?Independent Independent
ManagementManagement
Capital/Ownership = Capital/Ownership = Few IndividualsFew Individuals
Operations Are LocalOperations Are Local
Business = Small But Business = Small But Competitors = LargeCompetitors = Large Hisham F. Ibrahim/Getty Images
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SBA DefinitionSBA Definition
“…“…a small business is a small business is one that is one that is
independently owned independently owned and operated and is not and operated and is not dominant in its field of dominant in its field of
operation.”operation.”
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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
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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 Provide Owner LivingOwner Living
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Most CommonMost CommonHome-Based BusinessesHome-Based Businesses
Source: Independent Insurance Agents of America
Personal Svcs.14%
Bus. Services
27%
Bldg. Trades31%
Financial & Real Estate
5%Sales & Distribution
10%
Arts/ Design Creative
13%
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Unique to Small BusinessUnique to Small Business
Encourage Innovation & Encourage Innovation & FlexibilityFlexibility
Close 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 Greater Employee Job
SatisfactionSatisfaction
Royalty-Free/CORBIS
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Problems ForProblems ForSmall BusinessSmall Business
Recession/Current EconomyRecession/Current EconomyRetirement/TransitionRetirement/TransitionCapital/FinancingCapital/FinancingUnexpected GrowthUnexpected GrowthSuccessionSuccessionInadequate FinancingInadequate FinancingInadequate ManagementInadequate ManagementGovernment Government
Regulations/PaperworkRegulations/Paperwork
Royalty-Free/CORBIS
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Challenges ToChallenges ToSmall BusinessSmall Business
Exploding TechnologyExploding Technology
Occupational/Industry Occupational/Industry Shifts Shifts
oReinventionReinvention
oReengineeredReengineered
oDownsizing/RightsizingDownsizing/Rightsizing
GlobalGlobal
Chad Baker/Ryan McVay/Getty Images
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Declining Job TypesDeclining Job Types
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Why Start AWhy Start ASmall Business?Small Business?
72%
10%
10%
8%
Independence
Control
Satisfaction
Other
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Why To Not StartWhy To Not StartA Small Business?A Small Business?
12%23%
22%17%
17%
Long Hours
Taxes
Risk
Responsibility
Other
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Job SatisfactionJob Satisfaction
0%
10%
20%
30%
40%
50%
60%
70%
Self-Employed Working For Others
GreatBritain
U.S.
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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
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Checklist ForChecklist ForAspiring EntrepreneursAspiring Entrepreneurs
Passion Not Passion Not MoneyMoney
Something Something You KnowYou Know
PatiencePatienceMentorMentorFundingFunding
Cash ManagerCash Manager
Build SalesBuild Sales
Don’t RushDon’t Rush
Wary Of Bad Wary Of Bad
Advice/SuppliersAdvice/Suppliers
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Business ObjectivesBusiness Objectives
ServiceService
ProfitProfit
SocialSocial
GrowthGrowth
Mesh ObjectivesMesh ObjectivesNick Rowe/Getty Images
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Characteristics OfCharacteristics OfSuccessful OwnersSuccessful 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
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Successful SmallSuccessful SmallBusiness ManagementBusiness ManagementAdequate MarketAdequate MarketSufficient CapitalSufficient CapitalRecruit EffectivelyRecruit EffectivelyTimely InformationTimely InformationCope With Government Cope With Government
RegulationsRegulationsExpertiseExpertiseFlexibleFlexible
Ryan McVay/Getty Images
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Personal AnalysisPersonal Analysis
ValuesValues
Mental AbilitiesMental Abilities
AttitudesAttitudesMel Curtis/Getty Images
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Where AreWhere Arethe New Jobs?the New Jobs?
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Factors AffectingFactors Affecting Industry/BusinessIndustry/Business
1)1)EconomicsEconomics
2)2)TechnologyTechnology
3)3)LifestyleLifestyle
4)4)Political/LegalPolitical/Legal
5)5)DemographicsDemographics Royalty-Free/CORBIS
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Ideas ForIdeas ForSmall BusinessSmall 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
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SmallSmallBusiness ConcernsBusiness Concerns
Poorly Planned GrowthPoorly Planned GrowthLoss Of IndependenceLoss Of IndependenceThreat Of FailureThreat Of Failure
oDiscontinuanceDiscontinuance
oTypesTypes• FormalFormal• Personal/InformalPersonal/Informal
Jim Arbogast/Getty Images