1. Nickels
Cover
Nickels
McHugh

2. Starting a Small Business
Chapter 6
Entrepreneurship and
Starting a Small Business
6-2

3. How Did They Begin?
He was selling baking soda & decided to entice customers by putting in two packages of chewing gum with each sale. The excitement over the gum started him thinking.
Two Seattle teenagers pooled their money & came up with $100. They started delivering messages & parcels for local merchants.
Though he didn’t graduate from college, he found out college students eat a lot of pizza. He started his first pizzeria with $900 near a campus with a promise of 3-minute delivery.
OT 6-1 How Did They Begin?
1. This acetate will help in starting the chapter discussion. Students enjoy stories of how companies began and these short vignettes will supplement additional information about the history of successful entrepreneurs in the chapter.
2. See if the students can guess the companies in the short descriptions provided on the acetate. The answers are:
Wrigleys’ chewing Gum ( William Wrigley, Jr.)
United Parcel Service
Domino’s Pizza (Tom Monaghan)

4. Small Business Revival
Shift to Services
CAD/CAM Lessening Advantages of Big Manufacturing
Maturation of Baby Boomers
More Women in Workforce
1970
1980
1990
2000

5. Entrepreneurship Definition
Characteristics of Successful Entrepreneurs
Intrapreneur
Micropreneur vs. Home-Based
Corporation
Entrepreneur

6. Small Business- Advantages
Personalized Service/ Personal Contact
Flexibility
Lower Costs
Innovation Opportunities

7. Small Business-Disadvantages
Limited Experience
Long Hours
Insufficient Capital
High Failure Rate

8. Why People Start Their Own Businesses
Source: BFIB/VISA Card Primer

9. Reasons Women Leave Jobs in Big Companies to Start Business
Source: FSB, March 2001

10. Self- Perception of Small Business Owners
Source: USA Today, 5/20/03

11. Who Starts New Businesses?
AGE AT START-UP % % % % %

12. Entrepreneurial Attributes
Self-Directed & Self-Disciplined
Self-Nurturing
Action-Oriented
Highly Energetic
Tolerant of Uncertainty

13. Hours per Week Entrepreneurs Worked 1st Year

14. Reasons for Growth of Home-Based Businesses
Technology
Downsizing
Attitudes
Tax Advantages

15. Most Common Types of Home-Based Businesses
Source: Independent Insurance Agents of America

16. Home Office Owners Challenges Focus New Customers Find Opportunity
Time Management
Work vs. Family
City Ordinances
Risk
Focus
Find Opportunity
Results vs. Routine
Profit vs. Paycheck
New Ideas
Long Term vs. Short Term

17. Government Efforts Enterprise Zones Incubators
Immigration Act of Investor Visa
Enterprise Zones
Incubators

18. What is Small Business?
Independent
Not Dominant
< 500 Employees

19. U.S. Small Businesses 20 Million Full/Part-Time Businesses
75% of New Jobs
45% of Gross Domestic Product
Jobs
80% of Americans = 1st Job in Small Business
75% of New Jobs = Small Business
Women-Owned Growing Rapidly

20. Small Business Success
Learn from Others
Get Experience
Take Over Successful Firm

21. Successful Business Management Requirements
Business Plan
Adequate Funding
Lenders/Investors
“Angels”
Venture Capitalists
Professional Advice/Help
Know Your Customer
Manage Human Resources
Keep Good Records

22. Small Business Strategies
Examine Marketing & ID Areas for Growth
Profile Best Customers & Market to Similar Prospects
Invest in Sales Training & Technology
Refresh Business Perspective With Outside Views
Streamline Business & Eliminate Waste

23. Saving A Business In Trouble
React/Not Overreact
Understand Financial Situation
Find Professional Help
Develop “Recovery Plan”
Be Visible Confident Leader
Remind Employees of Stake in Business
Don’t Get Stung By Killer “Bankruptcy”

24. Capital Sources of Successful Entrepreneurs
SOURCE: FSB, March 2001

25. Reasons for a Banker To Say “No”
I don’t know enough about you or your business.
You haven’t clearly stated why you need the money.
Your numbers don’t support the loan request.
Your collateral is lacking.
Your business does not support the loan on its own merits.

26. Small Business Collaborators
Small Business Administration (SBA)
Microloan program
SBICs
SBDCs
Service Corps of Retired Executives (SCORE)
Active Corps of Executives (ACE)

27. Ways to Improve Banking Relationships
Provide Bank With Business Plan, Brochures, Business Cards, etc.
Describe Business, Financial Situation, Plans
Ask About Scope of Bank Services
Express Interest In Banker’s Background- Family, Hobbies, etc.
Follow Up With Phone Calls, Visits
Source: St. Louis Business Monthly, August 2002

28. Small Business & International Prospects
Positives
World Market
Absorb Excess Inventory
Soften U.S. Downturns
Extend Product Life
Negatives
Financing Difficult
How to Get Started?
Lack of Cultural Understanding
Paperwork

29. International Small Business
Advantages
Deal With Individuals
Faster Shipping
Variety of Suppliers
Professional Service
Information
Dept. of Commerce-
SBA- International-