1. Small Business and Forms of Business Ownership5
Chapter
Sections 5.1 – 5.5
Small Business and Forms of Business Ownership

2. What is Small Business?
The Small Business Administration defines a small business to be a firm that is independently owned and operated and is not dominant in the field.
Manufacturing business: fewer than 500 workers
Wholesalers: fewer than 100 workers
Retailers: less than $7 million in annual sales
Agricultural business: less than $750,000

3. Most Businesses are Small Businesses
A small business is an independent entity with few than 500 employees that is not dominant it its market
99.7% of all U.S. companies are considered small businesses
These firms have generated 65% of new jobs in the past two decades
They employ half of all private sector workers

4. Typical Small-Business Ventures
Page 129

5. Major Industries Dominated by Small Businesses

6. Advantages and Disadvantages to a Home-based Business
Pros
Cons
Make your own hours – AM, PM, split
Often long hours
Might run business from your home to reduce costs
Difficult to separate personal time from work time

7. Contributions of Small Business
Creating New Jobs
Creating New Industries
Innovation

8. Small Business Failure
3 in 10 businesses close permanently within two years.
50% of businesses fail within five years.
By the 10-year mark, 66% of all small businesses have closed permanently.

9. Reasons Why Small Business Fail
Management Shortcomings
Inadequate Financing
Government Regulation

10. Reasons Why Small Business Fail
Management Shortcomings
Lack of people skills
Inadequate business knowledge (finances, inventory, decision-making)
Poor time management
Poor assessment of customer or competition
Inadequate Financing
Government Regulation

11. Reasons Why Small Business Fail
Management Shortcomings
Inadequate Financing
Start up costs
May take months or years to earn a profit
Government Regulation

12. Reasons Why Small Business Fail
Management Shortcomings
Inadequate Financing
Government Regulation
Taxes (federal, state, social security, worker’s compensation, unemployment)
Employment Laws – businesses with fewer than 50 employees have fewer requirements to ease the burden – FMLA, Affordable Care Act

13. Watch Entrepreneurship Video
The Business Plan
Executive Summary
Introduction
Financial
Marketing
Resume of Principals
Mission & Vision of Founders
Outline on Companies Unique Qualities
Customers
Competition
Assessment of Risks
Watch Entrepreneurship Video

14. Small Business Administration (SBA)
Government agency concerned with helping small business firms
Financial Assistance
Loan Guarantees
Microloans (up to $35, average size is $13,000)
Small Business Investment Companies (SBICs)
Assistance with paperwork and obtaining contracts

15. Opportunities for Women & Minorities
More than 40% of U.S. businesses are owned by women (10 million businesses)
The number of businesses owned by minorities outpaced the growth in the number of U.S. businesses overall.
Women and minorities still face challenges

16. Small Business Assignment
Review Questions – page 156
Read Questions 1-5
Select any four of the first five
Type the question number, the question, and the answer
Don’t forget the assignment title and to be sure to check spelling, grammar, and punctuation.