B. OVERVIEW OF SMALL BUSINESS 2.00 Explain the basic concepts leading to success in small business entrepreneurship Explain the factors and personality traits that contribute to the success of a small business entrepreneur.

Entrepreneur: An individual who undertakes the risk associated with creating, organizing, and owning a business.

Entrepreneurship: The process of starting and operating one’s own business.

Venture: A business undertaking involving risk.

Small business: “Mom and Pop” businesses generally started to create jobs for the owners.

Mission Statement: A written description of the goals of a company.

Opportunity: An idea that has commercial value.

Manager: An employee who coordinates people, processes, and other resources of a business in order for the business to achieve success and make a profit.

Major factors contributing to the success of a small business Competence of the entrepreneur Product/service Financing Planning Management Resources Image

Basic characteristics of successful entrepreneurs Persistent Creative Responsible Inquisitive Goal-oriented Independent Self-demanding Self-confident Risk-taker Action-oriented

Skills necessary for the entrepreneur Communication skills Human relations skills Math skills Problem-solving and decision-making skills Technical skills Basic business skills

B. OVERVIEW OF SMALL BUSINESS 2.00 Explain the basic concepts leading to success in small business entrepreneurship Explain the purposes and components of a business plan.

Business Plan A proposal that describes a new business. It is presented to potential investors and lenders.

Purposes of a business plan To obtain financing To serve as a living guide to the business To provide a start- up blueprint

The components of a business plan Executive summary Product/service plan Management team plan Industry/market analysis Operational plan Organizational plan Marketing plan Financial plan Growth plan

 The executive summary is a brief description of the key points of the business plan. It should be no longer than two pages and should include the most important information from each section of the business plan.  The product/service plan presents the product or service you are offering, the nature of your business, the unique features of the product/service, and additional products or services that may be offered once the business becomes established.

◦ Management team plan: The management team plan presents the qualifications of the entrepreneurs and any partners who may be involved in the business venture. If there are areas of expertise that may be missing in the business, a plan must be shown for solving that problem. In addition, this section describes an advisory board that will assist in getting the business started. ◦ Industry/market analysis: This section analyzes the customers, the competition, and the industry in addition to demographic, geographic, and economic data.

 Operational plan: This section includes all processes involved in producing and/or delivering the product or service to the customer. It may include product development and channels of distribution.  Organizational plan: The organizational plan includes the management philosophy of the business, the legal form of the company, key management personnel, and key employment policies.

◦ Marketing plan: The marketing plan describes how the business will make its customers aware of its products or services. It includes the market being served, the pricing policy, the company image, the marketing strategies that will be used to reach the customer, a promotional plan, and a marketing budget. ◦ Financial plan: This section includes financial statements that will help forecast the future financial health of the business. ◦ Growth plan: The growth plan presents plans for future expansion of the business.

B. OVERVIEW OF SMALL BUSINESS 2.00 Explain the basic concepts leading to success in small business entrepreneurship Discuss the importance of ethical behavior in business.

Ethics Guidelines for human behavior; the study of moral choices and values; choosing between right and wrong.

Ethical behavior Knowing the difference between right and wrong and consciously choosing to do right.

Code of ethics A systematic set of rules and procedures used to guide the behavior of an individual, a business, or a culture.

Business ethics Applying principles of right and wrong to situations in the workplace.

Ethical responsibility towards customers Treat all customers with respect. Be honest. Do not exaggerate the merits of your products/services. Inform customers of possible dangers of your products/services. Handle all disputes fairly.

Ethical responsibility towards employees Establish an ethical workplace. Create a written code of ethics to set guidelines to help the business owner and employees make ethical decisions. Establish company policies and procedures to let business owners and employees know how to act in certain situations. Treat all employees fairly.

Ethical responsibility towards the community Contribute money to charities, cultural institutions, and other reputable causes. Get involved. Donate products and services.