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Entrepreneurship & Small Business

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Presentation on theme: "Entrepreneurship & Small Business"— Presentation transcript:

1 Entrepreneurship & Small Business
Business Ownership Chapter 5 & 6

2 Learning Objectives Describe an entrepreneurship and small business.
List advantages and disadvantages of an entrepreneurship Explain why small businesses fail.

3 Entrepreneurship Business started by a person who notices a need for a product or service. Soared in 1990s Businesses took to online. Internet became the arena to sell products and services.

4 Virtual Business Dot-com company
Business that operates on the Internet. May exist only online May be in addition to a company’s bricks and mortar storefront.

5 Entrepreneur Person who recognizes a business opportunity
Organizes, manages, and assumes risks Many organize businesses that stay small. Many will fail within a few years of opening. Others will be a great company.

6 Entrepreneur qualities
Hard worker Take-charge person Self-directed person They want to work for themselves. Organized individual Likes the thrill of taking risks Energetic and creative!

7 Advantages of an Entrepreneurship
Satisfaction in taking a risk and becoming a success. Shows expertise and skills. Working from home. Receive all the profits Disadvantages Taking a risk Total responsibility for the business. Long work hours! Financial worries.

8 Why do Entrepreneurships Fail?
The main reason why entrepreneurships fail is because they run out of money.

9 Review Questions! What are some characteristics of entrepreneurs?
What are three advantages of an entrepreneurship? What are some disadvantages of an entrepreneurship? What is the main reason entrepreneurships fail?

10 Small Business: What you Need to Know!

11 Small Business Admin SBA Provides assistance to small business
Financial Counseling Guidance Grants Support for success

12 Small Business Independently owned
Usually has the owner as its manager. Serves a limited geographic area Employs fewer than 500 people Is not dominant in its industry. Vital part of our economy Employ more than 50% of the total workforce

13 Advantages of Small Business
Being the Boss Opportunity to offer services large companies can’t. Easy to form

14 Disadvantage of Small Business
About four out of five fail in first 5 years. Effect of Change—consumers wants and needs change. Managerial skills are needed. Financing, employee relations, production, customer relations. Inadequate financial planning

15 Fast Review How does the SBA define a small business?
Give an example of a service that a small business may offer that a large company can’t offer.

16 Preparing for a Business
Once decision to start a business has been made: Analyze what needs to be done. Assess entrepreneurial opportunities Careful planning from the beginning will ensure success! Develop a business plan!

17 Business Plan Written description of a new business venture
Describes all aspects of the business Puts focus on what needs to be done, who it will be done, and expectations Financial agencies and potential investors require one.

18 Questions for developing a plan:
What will I produce. Who are my main competitors. Why is my product needed? How much will my product cost to make? How many employees will I need? What licenses, permits, or other legal docs will I need? How much money do I need to get started?

19 Business Plan The Center for Entrepreneurial Management in New York reports that most business plans take five months to prepare. Must be well organized Easy to read Follow a logical format.

20 Parts of a Business Plan
Summary Company description Products and services section Marketing plan Legal plan Management plan and operating plan Financial plan

21 Fast Review What is a business plan?
Name the essential parts of a business plan.

22 Specialized Business Organization
Franchises Cooperatives Non-profit organizations

23 Franchise Written contract giving permission to sell someone else’s product or service. Can be operated as a proprietorship, partnership, or corporation. Look on page 77

24 Franchise Advantages Relatively easy to start
Franchisor often helps the franchisee get started Franchisor helps in selling product by giving national advertising.

25 Franchise Disadvantages
Require large investments of capital to start Very competitive Often fail because they were not competitive or in a good location.

26 Franchise Agreement States the duties and rights of both parties
Franchisee agrees to run the business in a certain way. Name of the business Products or services offered Design and color of the building Prices of the product or service How employees dress

27 Board of Directors Group of people responsible for guiding the company. Board elects executive officers President (CEO) Vice President Corporate lawyer

28 Cooperatives A co-op is a business that is owned and controlled by the very same customers who use its services. The voice of every person makes a difference. The economic benefits of a cooperative are given back to the members, reinvested in the co-op or used to provide member services.

29 Questions?


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