Back to Table of Contents pp Chapter 5 Entrepreneurship and Small Business

Introduction to Business, Entrepreneurship and Small Business Why It’s Important Entrepreneurs and small businesses bring vital energy and innovation to the economy. The risks involved energize entrepreneurs and small business owners to become successful.

Introduction to Business, Entrepreneurship and Small Business Key Words entrepreneurship virtual business or dot-com company small business entrepreneur risk taker profit

Introduction to Business, Entrepreneurship and Small Business The Ins and Outs of Entrepreneurship Entrepreneurships and small businesses are the majority of business firms. An entrepreneurship is a business started by someone who notices a need for a product or service.

Introduction to Business, Entrepreneurship and Small Business A virtual business or a dot-com company is a business that operates on the Internet. The Ins and Outs of Entrepreneurship

Introduction to Business, Entrepreneurship and Small Business Figure 5.1 ARE YOU ORIGINAL? Take this quiz and see if you would be a good entrepreneur. Below are traits of an entrepreneur. Rate yourself by choosing a number that best describes you. At the end you’ll add up your points to see how you fared (1 is the lowest, 5 is the highest). Rate your score: points= true entrepreneur 30-34= willing to take risks and try something new 25 and under= you take fewer risks

Introduction to Business, Entrepreneurship and Small Business The Ins and Outs of Entrepreneurship An entrepreneur is a person who recognizes a business opportunity and organizes, manages, and assumes the risks of a business enterprise (risk taker), with the intent of increasing the market value of the business.

Introduction to Business, Entrepreneurship and Small Business Want to control destiny Want to control destiny Desire to earn profit Desire to earn profit Are enthusiastic Are enthusiastic Have self- confidence Have self- confidence Are determined Are determined Recognize opportunities Recognize opportunities Desire achievement Desire achievement Take risks Take risks Have high energy Have high energy Successful Entrepreneurs EntrepreneursSuccessful Successful Entrepreneurs Graphic Organizer

Introduction to Business, Entrepreneurship and Small Business Satisfaction from taking a risk and becoming a success Showing expertise and skills Working from home Gaining profit Advantages of Entrepreneurship continued

Introduction to Business, Entrepreneurship and Small Business Disadvantages of Entrepreneurship Total responsibility for the business Long hours Financial risks. Main reason why entrepreneurs fail: they run out of money.

Introduction to Business, Entrepreneurship and Small Business Small Business: What You Need to Know The Small Business Administration (SBA) defines a small business as an independently owned business that usually has the owner as its manager.

Introduction to Business, Entrepreneurship and Small Business Characteristics of Small Business serve a limited geographic area employ fewer than 500 people

Introduction to Business, Entrepreneurship and Small Business Small Business: Interesting numbers employ more than 50 percent of the total workforce in the United States. generate more than half the nation’s income. principal source of new jobs. supply about 38 percent of jobs in high technology.

Introduction to Business, Entrepreneurship and Small Business Figure 5.2 SMALL BUSINESS EMPLOYMENT IN THE UNITED STATES There are 25 million small businesses in the United States. Which three types of small businesses provide the most jobs?

Introduction to Business, Entrepreneurship and Small Business Advantages of Small Business Some of the advantages of owning a small business are: Being the boss Offering services large companies cannot offer Ease of formation

Introduction to Business, Entrepreneurship and Small Business General Disadvantages of Small Business you’re responsible for decisions you often work long hours and have great financial responsibility four out of five small businesses fail in the first 5 years a small business may underprice or overprice going into business with little or no experience may result in the business closing

Introduction to Business, Entrepreneurship and Small Business Why a small business might not work: 1. Effect of Change Consumers’ tastes change. If flexibility and change are not part of the business, then it’s likely to fail. Disadvantages of Small Business (3 slides)

Introduction to Business, Entrepreneurship and Small Business 2. Managerial Skills Needed Financing Employee Relations Production Customer Relations Disadvantages of Small Business

Introduction to Business, Entrepreneurship and Small Business Starting with little money, spending carelessly, borrowing money without planning, and forgetting about taxes and insurance may result in a failure. 3. Inadequate Financial Planning Disadvantages of Small Business

Introduction to Business, Entrepreneurship and Small Business Preparing for Your Own Business A business plan is a written description of a new business venture that describes all aspects of the business.

Introduction to Business, Entrepreneurship and Small Business Checklist for Starting a Venture What will I produce? Who are my main competitors? Why is my product needed? How much will my product cost to produce? How many people will I need to run the business? What physical facilities will I need? Do I need licenses, permits, or other legal documents? How much money will I need to get started?

Introduction to Business, Entrepreneurship and Small Business Parts of a Business Plan Summary Company description Products and services Marketing plan Legal plan Management and operating plan Financial plan

Introduction to Business, Entrepreneurship and Small Business continued What makes a person an entrepreneur? What makes a company successful? continued

Introduction to Business, Entrepreneurship and Small Business Identify some reasons why a small business might be hard to manage. What are some benefits of selling online?