1-1 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

1-2 Starting Your Small Business Business v. Small Business Business v. Small Business Trends, Challenges, Opportunities, & Concerns of Small Business Trends, Challenges, Opportunities, & Concerns of Small Business Characteristics of Entrepreneurs Characteristics of Entrepreneurs Chapter 1 Ryan McVay/Getty Images

1-3 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Rapid Small Business Growth 23 Million 23 Million Employment Employment 75% Of New Jobs 75% Of New Jobs 50% Of Private Employment 50% Of Private Employment 99% Of Employers 99% Of Employers 97% Of Exporters 97% Of Exporters

1-4 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Entrepreneurship Today Male- 1.9 Men Per Woman Male- 1.9 Men Per Woman Ethnically Diverse Ethnically Diverse Specialty Expertise Specialty Expertise $100 B For 3.5 M Startup/Small Businesses $100 B For 3.5 M Startup/Small Businesses Rim Light/PhotoLink/Getty Images

1-5 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Public Favors Small Business Black Enterprise- Black Enterprise- Entrepreneur Entrepreneur Inc. Inc. Hispanic Business- Hispanic Business- Family Business Family Business Entrepreneurial Woman Entrepreneurial Woman Your Company Your Company Etc. Etc. Royalty-Free/CORBIS

1-6 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Interest At Schools Courses Courses 20 Years Ago- None 20 Years Ago- None Now- Hundreds Now- Hundreds Ages = Positive Potential Ages = Positive Potential Business Career Business Career Males = 13% Males = 13% Females = 10% Females = 10%

1-7 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Entrepreneurial Student Organizations Association of College Entrepreneurs Association of College Entrepreneurs University Entrepreneurial Association University Entrepreneurial Association Students in Free Enterprise - Students in Free Enterprise -

1-8 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Self-Employment Trend Increased Investor Interest Increased Investor Interest Executives Taking Early Retirement Executives Taking Early Retirement 55% Want To Be Own Boss 55% Want To Be Own Boss Technological Advances Technological Advances Photodisc Collection/Getty Images

1-9 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Attractive To All Ages More Than ½ Of Independent Workers In NYC More Than ½ Of Independent Workers In NYC College-Educated College-Educated Years Old Years Old 84% Of Entrepreneurs “Not Worried About Future” 84% Of Entrepreneurs “Not Worried About Future” 40% Have Management Experience 40% Have Management Experience ¼ Managed/Owned Business Before ¼ Managed/Owned Business Before Doug Menuez/Getty Images

1-10 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Small Business? Independent Management Independent Management Capital/Ownership = Few Individuals Capital/Ownership = Few Individuals Operations Are Local Operations Are Local Business = Small But Competitors = Large Business = Small But Competitors = Large Hisham F. Ibrahim/Getty Images

1-11 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. SBA Definition “…a small business is one that is independently owned and operated and is not dominant in its field of operation.”

1-12 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Classification By Size <20 Employees Very Small Small 100 – 499 Medium 500 Or More Large

1-13 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Objectives Venture 1.Profit 2.Growth 3.Quick Sellout Small/Micro 1.No New Or Innovative Activities 2.Provide Owner Living

1-14 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Most Common Home-Based Businesses Source: Independent Insurance Agents of America

1-15 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Contributions Of Small Business Encourage Innovation & Flexibility Encourage Innovation & Flexibility Close Relationship With Customers/Community Close Relationship With Customers/Community Force Large Firms To Be Competitive Force Large Firms To Be Competitive Provide Employees Learning Experience Provide Employees Learning Experience Develop Risk Takers Develop Risk Takers New Employment New Employment Greater Employee Job Satisfaction Greater Employee Job Satisfaction Royalty-Free/CORBIS

1-16 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Problems For Small Business Recession/Current Economy Recession/Current Economy Retirement/Transition Retirement/Transition Capital/Financing Capital/Financing Unexpected Growth Unexpected Growth Succession Succession Inadequate Financing Inadequate Financing Inadequate Management Inadequate Management Government Regulations/Paperwork Government Regulations/Paperwork Royalty-Free/CORBIS

1-17 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Challenges To Small Business Exploding Technology Exploding Technology Occupational/Industry Shifts Occupational/Industry Shifts Reinvention Reinvention Reengineered Reengineered Downsizing/Rightsizing Downsizing/Rightsizing Global Global Chad Baker/Ryan McVay/Getty Images

1-18 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Declining Job Types

1-19 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Why Start A Small Business?

1-20 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Why To Not Start A Small Business?

1-21 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Job Satisfaction

1-22 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Objectives Of Small Business Owners Achieve Independence Achieve Independence Additional Income Additional Income Help Families Help Families Products Not Available Products Not Available Ryan McVay/Getty Images

1-23 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Checklist For Aspiring Entrepreneurs Passion Not Money Passion Not Money Something You Know Something You Know Patience Patience Mentor Mentor Funding Funding Cash Manager Cash Manager Build Sales Build Sales Don’t Rush Don’t Rush Wary Of Bad Advice/Suppliers Wary Of Bad Advice/Suppliers

1-24 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Business Objectives Service Service Profit Profit Social Social Growth Growth Mesh Objectives Mesh Objectives Nick Rowe/Getty Images

1-25 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Characteristics Of Successful Owners +Desire Independence +Strong Sense Of Initiative +Personal/Family Motivation +Quick/Concrete Results +Able To React Quickly +Dedicated To Business +Enter Business By Chance And/Or Design

1-26 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Successful Small Business Management Adequate Market Adequate Market Sufficient Capital Sufficient Capital Recruit Effectively Recruit Effectively Timely Information Timely Information Cope With Gov’t Regs. Cope With Gov’t Regs. Expertise Expertise Flexible Flexible Ryan McVay/Getty Images

1-27 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Personal Analysis Values Values Mental Abilities Mental Abilities Attitudes Attitudes Mel Curtis/Getty Images

1-28 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Where Are the New Jobs?

1-29 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Factors Affecting Industry/Business 1)Economics 2)Technology 3)Lifestyle 4)Political 5)Demographics Royalty-Free/CORBIS

1-30 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Ideas For Small Business  Career Counseling  Catering  Computer & Office Machine Repair  Day Care  Education  Financial Planning  Home Health  Marketing  Senior Fitness & Recreation  Specialized Delivery

1-31 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. Small Business Concerns  Poorly Planned Growth  Loss Of Independence  Threat Of Failure  Discontinuance  Types  Formal  Personal/Informal Jim Arbogast/Getty Images