Welcome to Unit 7 If you can see this slide, share with your classmates how your week is going so far. Audio will start promptly at 8 pm. Please stay connected if the Instructor experiences technical difficulty!

AGENDA Review Classroom Reminders Review Highlights Chapter 8, 19, and 20 Review Assignment

Managing and Organizing the Business The competencies of a new business exist only in the individual competencies of the founders, key managers, advisors, mentors, or professionals enlisted in the start-up process. It is therefore important to carefully consider the match of available skills against those needed to successfully launch and grow the new business. The way in which a business is organized is also important to how it is managed, operated, and ultimately how it provides value for its customers. Both the human resources needs and the organizational structure of the new business are outlined in the Management and Organization section of the Business Plan.

The Management Team! ). One of the most important considerations for a new business is assembling the key management team! Note that this team includes both those internal as well as those external to the new business who will provide start-up expertise as well as on-going management once the venture is launched.

Supplying the Essential Skills! ). Since the small business founder is initially the only source of managerial skills that are essential for the survival of the venture, he or she must endeavor to acquire these necessary skills either internally in the assembled management team or externally through the use of others outside the business, or in some combination of both!

). Building a Management Team Management Team Managers and other key persons who give a company its general direction Characteristics of a Strong Management Team Capable of securing the resources needed to make business a success Reassures investors about the their investment and the continuity of business Diversity of talent makes the team stronger than an individual entrepreneur © 2010 South-Western, Cengage Learning, Inc. All rights reserved.

). Building a Management Team (Continued) Team Building and Structure The required combination of education and experience depends on the type of business and the nature of its operations The key: achieving a balance of skills and competencies in functional areas Designing an internal management structure that defines relationships and responsibilities Outside professional support can supplement the skills of a management team An active board of directors can provide counsel and guidance. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.

). Outside Resources Advisory Boards, Boards of Directors Mentors, Experienced Business Friends Professional Attorneys, Bankers, Insurance Brokers Venture Capitalists University Business Incubators Small Business Administration SCORE Volunteers Consultants, etc.  Question: Can you list other external resources available to the entrepreneur? © 2010 South-Western, Cengage Learning, Inc. All rights reserved.

General Organization Forms for Business: ). 1.Sole Proprietorship 2. Partnerships 3.Corporations

The Sole Proprietorship Option: ). Sole Proprietorship A business owned by one person, who bears unlimited liability for the enterprise. Advantages Receives all of the firm’s profits. Holds title to all of the firm’s assets. Can easily sell or transfer ownership of the company name and assets. Requires no registration or filing fee. Has absolute freedom from interference by other stakeholders.  Question: Can you think of some disadvantages of the sole proprietorship? © 2010 South- Western, Cengage Learning, Inc. All rights reserved.

The Partnership Option: ). © 2010 South- Western, Cengage Learning, Inc. All rights reserved. A partnership is simply an agreement among two or more individuals agreeing to own and operate a business together. These vary depending on the content of the legal agreement.  Question: Why would you want to be careful in choosing a partner?

Exhibit 8.3The Advantages and Disadvantages of Partnerships © 2010 South-Western, Cengage Learning, Inc. All rights reserved.

Entrepreneurial Leadership What is Leadership? -Involves pointing the way: creating and communicating the entrepreneur’s vision of the firm. -Varies in a business as it grows larger and more mature. Leadership Qualities of Founders -A tolerance for ambiguity -A capacity for adaptation Question: What are the qualities of the best leader you’ve ever had?

. Entrepreneurial Leadership (cont’d) What Makes an Effective Leader? -One who is focused intently on attaining the firm’s business goals. -One who creates a significant personal relationship with employees based on loyalty and respect. -One who directly influences employees’ understanding of how the firm operates (e.g., its ethics). -One who makes the firm attractive to new employees.

Entrepreneurial Leadership (cont’d) Leadership Styles -Visionary leaders mobilize people toward a vision. -Coaching leaders develop people, establishing a relationship and trust. -Affiliative leaders create emotional bonds. -Democratic leaders build consensus through participation. -Pacesetting leaders set high standards and expect excellence. -Commanding leaders demand immediate compliance. Question: Which leadership style is the most challenging for you? Why?

Question About Organizational Forms?

Unit 7 Assignment Using the MT209 Project Template and MT209 Project Instructions, complete the Management and Organization section in the Descriptive Business Plan. This should include the following elements: 1. Who will manage the business on a day-to-day basis. 2. The experience and special competences that these individuals bring to the business. 3. Any outside professional advisors such as boards of directors, advisory boards, attorneys, accountants, insurance agents, bankers, consultants, mentors, or other advisors.

Thank you for joining me today! I look forward to joining you next week!