Entrepreneurship and starting a small Business * * * Entrepreneurship and starting a small Business CHAPTER 6 Nickels McHugh McHugh * * 1-1

Entrepreneurship Accepting the risk of starting and running a business. Entrepreneurs prefer to have more control over their destiny. Bibi Rasel Md. Yunus Walt Disney

Reasons for taking entrepreneurial risks Opportunity Profit Independence Challenge

What you need to be an Entrepreneur Self-directed Self-nurturing Action-oriented Highly energetic Tolerant of uncertainty

Important Terms to Know Entrepreneurial Teams -- A group of experienced people from different areas of business who join to form a managerial team with the skills to develop, make and market a new product. Micro Preneurs -- Entrepreneurs willing to accept the risk of starting and managing a business that remains small, lets them do the work they want to do, and offers a balanced lifestyle.

Reasons for home based business growth Computer technology Corporate downsizing Change in social attitudes Tax benefits

Challenges for home based business Getting new customers Managing your time Separating work and family tasks Government ordinances Managing risk

Web-based business Affiliate Marketing -- An Internet-based marketing strategy in which a business rewards individuals or other businesses for each visitor or customer the affiliate sends to its website.

Intrapreneur A creative person who works as an entrepreneur within a corporation. Intrapreneurs use a company’s existing resources to launch new products for the company.

Small Businesses Independently owned and operated, not dominant in its field of operation and meets certain standards of size. Businesses are “small” in relation to other businesses in their industries.

Small-business success and failure Figure 6.3 (from Text Book) Figure 6.4 (From Text Book)

Learning about small-business operations Learn from Others – Investigate your local colleges for classes on small business and entrepreneurship; talk to and work for successful local entrepreneurs. Get Some Experience – Gain three years experience in the field; then start a part-time small business. Take Over a Successful Firm – Serve as an apprentice and eventually take over once the owner steps down.

Managing a small business Begin with planning Writing business plan Getting money to fund the business Knowing your customers Managing employees Keeping records Looking for help

Business Plan A detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and owners’ qualifications. A business plan forces potential owners to be specific about what they will offer. A business plan is mandatory for talking with bankers or investors.

Sources of Fund/Capital Personal savings Relatives Former employers Banks & finance companies Government agencies Angel investors Venture capitalists -- Individuals or companies that invest in new businesses in exchange for partial ownership.

Knowing your customers Market -- Consumers with unsatisfied wants and needs who have both resources and willingness to buy. Set out to fill the market’s needs by offering top quality and great service at a fair price. One of the great advantages of small businesses is the ability to know the market and quickly adapt to market needs.