Chapter 5: Entrepreneurship & Small Business

Learning Objectives 1. Describe an entrepreneurship and a small business. 2. List the advantages and disadvantages of an entrepreneurship. 3. Recognize the advantages and disadvantages of a small business. 4. Explain why small businesses may fail.

Why Is This Important? Entrepreneurships and small businesses bring vital energy and innovation to the economy. The risks involved energize entrepreneurs and small business owners to become successful.

The Ins & Outs Of An Entrepreneurship An entrepreneurship is a business started by someone who notices a need for a product or service. Entrepreneurships soared in the 1990’s due to the Internet. Every year thousands of entrepreneurs start businesses. Many small businesses fail in the first year.

Entrepreneur Traits Risk Taker Decisiveness Action Taker Innovative Passionate Hard working Competitive Perseverance Organized Discipline

Advantages Of An Entrepreneurship Satisfaction from taking a risk and becoming a success. Showing expertise and skills. Working from home. Gain profit.

Disadvantages Of An Entrepreneurship Total responsibility for the business. Long hours. Financial Risks.

Small Business: What You Need To Know Small business – an independently owned business that employs fewer than 500 people. There are 25 million small businesses. Employ more that 50% of the total workforce in the United States. They generate more that half the nation’s income. They are the principal source of new jobs.

Advantages of Small Business Easy to start/form. You are the boss. You are in charge. Opportunity to offer services large companies cannot offer. Income.

Disadvantages of Small Business Sole responsibility. Long hours. Market change. Limited skill availability. Financial responsibility.

Preparing for Your Own Business First step – deciding to start your own business. Second step – analyze what you want to do. Third step – Find a way to do it.

Business Plan A business plan is a written description of a new business venture that describes all aspects of the business. It helps you focus on exactly what you want to do, how you’ll do it, and what you expect to accomplish.

Parts Of A Business Plan 1. Summary – overview of plan. 2. Company Description – describes the type of company you plan to start. 3. Products & Services – describes products or services. 4. Marketing Plan – describes customers and competition. 5. Legal Plan – organization of company. 6. Management Plan & Operating Plan – details of key personnel, daily operations, facilities, etc. 7. Financial Plan – Discuss the company’s financial needs.