1. Entrepreneurship and Small Businesses
Unit 2, Chapter 5
Page 70-83

2. Entrepreneurship and Small Businesses
The Small Business Administration (SBA) defines a small business as an independently owned business that usually has the owner as its manager
AKA “Mom and Pop” stores

3. Entrepreneurship and Small Businesses
A small business:
Serves a limited geographic area
Employs fewer than 500 people
Is not dominant in its industry
What are some examples of local small businesses?

4. Entrepreneurship and Small Businesses
What percentage of the total workforce does small business employ?
Small businesses employ more than 50 percent of the total workforce in the United States

5. Entrepreneurship and Small Businesses
Small businesses generate more than half the nation’s income
They are the principal source of new jobs

6. Entrepreneurship and Small Businesses
Some of the advantages of owning a small business are:
Being the boss
Offering services large companies cannot offer
Ease of formation

7. Entrepreneurship and Small Businesses
Disadvantages
When you’re a small business owner, you’re responsible for decisions
You often work long hours and have great financial responsibility

8. Entrepreneurship and Small Businesses
Key Stat!!!
About ______ out of five small businesses fail in their first five years
Four
Small business owners:
May mistake the freedom of being in business for oneself for the liberty of working or not

9. Entrepreneurship and Small Businesses
Small business owners:
May underprice or overprice goods or services
Going into business with little or no experience may result in the business closing

10. Entrepreneurship and Small Businesses
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

11. Entrepreneurship and Small Businesses
Why a small business might not work:
2. Managerial Skills Needed
Financing
Employee Relations
Production
Customer Relations

12. Entrepreneurship and Small Businesses
3. Inadequate Financial Planning
Starting with little money, spending carelessly, borrowing money without planning, and forgetting about taxes and insurance may result in a failure

13. Entrepreneurship and Small Business
You are going to research failed products
Find two examples of products that failed and explain why they failed and how/if you think they could have been successful if conditions were different

14. Entrepreneurship and Small Businesses
A business plan is:
A written description of a new business venture that describes all aspects of the business

15. Entrepreneurship and Small Businesses
Some questions to consider before starting your own business are:
What will I produce?
Who are my main competitors?
Why is my product needed?

16. Entrepreneurship and Small Businesses
How much will my product cost to produce?
How many people will I need to run the business?
What physical facilities will I need?

17. Entrepreneurship and Small Businesses
What licenses, permits, or other legal documents do I need?
How much money will I need to get started?

18. Entrepreneurship and Small Businesses
The essential parts of the business plan are:
1.) Summary (First in order, last thing to be completed!
2.) Company description
3.) Products and services

19. Entrepreneurship and Small Businesses
4.) Marketing plan
5.) Legal plan
6.) Management and operating plan
7.) Financial plan