Business 100 Introduction to Business Dr. Kathy Broneck

Review Types of business owners Mergers Franchises Cooperatives

Preview Entrepreneurship Small businesses Economic impact Operations Start up

Entrepreneurship Accept the risks of starting and running a small business Micropreneurs and Home based Businesses Businesses remain small Intrapreneur Work inside of corporations in an entrepreneurial role

Why Entrepreneurship? Opportunity Profit Independence Challenge

Source: BFIB/VISA Card Primer Why People Start Their Own Businesses

hours 8% hours15% hours23% hours28% hours13% 80 + hours12% Hours per Week Entrepreneurs Worked 1st Year

Entrepreneur Characteristics Self-directed Self-nurturing Action-oriented Highly energetic Tolerant of uncertainty

Government Encouragement Immigration Act of 1990 Encouragement of entrepreneurs to come to the US Enterprise Zones Geographic Areas Lower taxes and incentives Incubators Centers of low-cost offices Basic business services

What is Small Business? Independent Not Dominant in Field of Operation < 500 Employees “Small” is dependent on relation to other businesses’ size in its industry

U.S. Small Businesses  20 Million Full/Part-Time Businesses  75% of New Jobs  45% of Gross Domestic Product  Jobs  80% of Americans = 1 st Job in Small Business  75% of New Jobs = Small Business  Women-Owned Growing Rapidly

Small Business Revival Shift to Services Computer Aided Design (CAD)/Computer Aided Manufacturing (CAM) Lessening Advantages of Big Manufacturing Maturation of Baby Boomers More Women in Workforce

Small Business Advantages  Personalized Service/ Personal Contact  Flexibility  Lower Costs  Innovation Opportunities Disadvantages - Limited Experience - Long Hours - Insufficient Capital - High Failure Rate

Home Office Owners (Subset of Small Businesses) Focus Find Opportunity Results vs. Routine Profit vs. Paycheck New Ideas Long Term vs. Short Term Challenges New Customers Time Management Work vs. Family City Ordinances Risk

Business Plan Adequate Funding Lenders/Investors “Angels” Venture Capitalists (VCs) Professional Advice/Help Know Your Customer Manage Human Resources Keep Good Records Successful Business Management Requirements

Small Business Collaborators Small Business Administration (SBA) Government Agency assisting small businesses Microloan program Small loans from $100 up to $35,000 Small Business Investment Company (SBICs) Program Private investment companies to lend money. SBICs must have $1 million in capital Can borrow up to $4 million per $1 million they have from SBA

Small Business Collaborators Small Business Development Center (SBDCs) Funded by both National and State Government Free services (normally in colleges and universities) Evaluates feasibility Helps develop business plans Helps complete your funding application

PCC Community Campus SBDC Services Consulting is available at no cost Financial support: PCC & SBA Confidential; never shared outside of the SBDC without your authorization. Assist at all business stages Start-up Growth Survival

PCC Community Campus Small Business Development Center PCC Community Campus 401 N. Bonita Ave. Tucson, AZ General Information: Fax: Hours: 8:00am -

Small Business Collaborators Service Corps of Retired Executives (SCORE) SBA office staffed with volunteers retired from business Help at no cost Active Corps of Executives (ACE) Volunteers still in business Help at no cost

Capital Sources of Successful Entrepreneurs SOURCE: FSB, March 2001

Reasons for a Banker To Say “No” $ I don’t know enough about you or your business. $ You haven’t clearly stated why you need the money. $ Your numbers don’t support the loan request. $ Your collateral is lacking. $ Your business does not support the loan on its own merits.

1) Provide Bank With Business Plan, Brochures, Business Cards, etc. 2) Describe Business, Financial Situation, Plans 3) Ask About Scope of Bank Services 4) Express Interest In Banker’s Background- Family, Hobbies, etc. 5) Follow Up With Phone Calls, Visits Source: St. Louis Business Monthly, August 2002 Ways to Improve Banking Relationships

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 Small Business Strategies

Saving A Business In Trouble React/Not Overreact Understand Financial Situation Find Professional Help Develop “Recovery Plan” Be Visible Confident Leader Remind Employees of Stake in Business Don’t Get Stung By Killer “ Bankruptcy”

Small Business & International Prospects Positives 1. World Market 2. Absorb Excess Inventory 3. Soften U.S. Downturns 4. Extend Product Life Negatives 1. Financing Difficult 2. How to Get Started? 3. Lack of Cultural Understanding 4. Paperwork

International Small Business Advantages Deal With Individuals Faster Shipping Variety of Suppliers Professional Service Information Dept. of Commerce- SBA- International- nternat.html nternat.html