1. Today’s Schedule (7/5/05) 1. What’s going on in the world of business? 2. Supply & Demand 3. Ways to Start a Business 4. Legal Forms of Ownership 5. Find a Niche and Developing a USP (unique selling proposition)

2. Business News Today! WalMart Stocks Higher Consumers Confident Housing Market Hot WalMart Stocks Higher Consumers Confident Housing Market Hot WalMart Stocks Higher Consumers Confident Housing Market Hot

3. The Business Cycle, Inflation And the Actions of “The Fed” Fed Lowers rates to “energize” sluggish economy. Inventories at their lowest. Production in full swing. Workers making high incomes. Inventories of finished goods still lag demand. TOO MANY DOLLARS CHASING TOO FEW GOODS. UNEMPLOYMENT LOW. INFLATION HIGH. TOO FEW DOLLARS CHASING TOO MANY GOODS. UNEMPLOYMENT HIGH, INFLATION LOW. Layoffs and fears of an economic slowdown cause workers to spend less. Inventories still high. Fed raises rates to “cool” overheating economy. Companies cease expansion and borrowing. Layoffs of workers begin. Inventories reach highest levels. Companies borrow, hire more workers, expand operations. Inventories at their lowest.

4. Supply & Demand

5. Demand & Supply Curves Price Quantity Demand Supply Equilibrium Point

6. Demand & Supply Curves Price Quantity As demand increases, price goes up.

7. Demand & Supply Curves Price Quantity As supply increases, price goes down.

8. Rent Control Price Quantity Shortage

9. Rent Control Price Quantity

10. Demand & Supply Curves Price Quantity Demand Supply Equilibrium Point

11. Demand & Supply Curves Price Quantity Demand Supply Equilibrium Point How can we increase or decrease demand?

12. Ways to Start a Business

13. 1. Start from Scratch Advantages Do it your way EasiestCheapest Disadvantages May be a bad idea No plan in place

14. Ways to Start a Business 2. Buy Existing Business Buy Advantages Plan in place Customers Track Record Location exists Disadvantages May be a bad idea May no longer be a good idea Bad plan in place Poor reputation Purchase price

15. Ways to Start a Business 3. Buy A Franchise BuyFranchiseBuyFranchiseAdvantages Plan in place Customers Track Record Location exists Training & Support Disadvantages Can’t do it your way Purchase price Monthly Fees No Protection

16. Legal Forms of Ownership

17. 1. Sole Proprietorship Advantages Do it your way Easiest to set up set upset upCheapest You keep profits Tax benefits Disadvantages May be a bad idea No plan in place Personal Liability May be hard to borrow Can’t pass on to kids

18. Legal Forms of Ownership 2. Partnership Advantages Two heads Easy to set up Sources of capital You keep profits Tax benefits Disadvantages Personal Liability Can’t sell easily Incompatible

19. Legal Forms of Ownership 3. Corporation Advantages Limited Liability Can go public to raise funds Disadvantages Hard to set up Personal Liability Double Taxation

20. Legal Forms of Ownership 4. Limited Liability Company Advantages Limited Liability Easier to maintain than corporation. Disadvantages Personal Liability Expense to set up

21. Legal Forms of Ownership More information More information

22. Finding a Niche and Developing a Unique Selling Proposition

23. Murray was beginning to wonder if Frozen Asparagus Desserts! really was the next big thing.

24. “Most small-business owners dive into their niches because they love the product or service they provide. The annals of small business are filled with the tales of founders who cared so deeply about their product or service that they subsequently decided to make it their life’s work so they could enjoy getting up in the morning again.” - Small Business for Dummies

25. What is a Niche? In biological terms, a “niche” is defined as a small ecological space in which an animal can find ample resources to survive, with few predators or competitors. A niche can also be a place that has not seen a kind of animal before. The island of Mauritius, for thousands of years, saw no humans, rats, or other kinds of ground-dwelling predators. A breed of flightless bird evolved to take advantage of the safe, food-rich niche on the ground that other birds had neglected. This bird was the dodo.

26. A Niche can be based on: A new product or service. A new product or service. A new product or service in a particular area. A new product or service in a particular area. A change in a particular product or service to A change in a particular product or service to focus on a sub-group of customers. focus on a sub-group of customers. An existing product or service, but in a new An existing product or service, but in a new area. area.

27. Niche examples: Heatless soldering. Heatless soldering. Chem-dry carpet cleaning. Chem-dry carpet cleaning. A new product or service. Heatless soldering A new product or service. Heatless soldering A new product or service in a particular area. A new product or service in a particular area. Chem-dry carpet cleaning Chem-dry carpet cleaning A change in a particular product or service to A change in a particular product or service to focus on a sub-group of customers. focus on a sub-group of customers. Kalani Coffee Kalani Coffeee An existing product or service, but in a new An existing product or service, but in a new area. Espresso Stand in Houston area. Espresso Stand in Houston

28. Finding a Niche Value Chain Analysis Value Chains are a visual depiction of an industry from producer to consumer. Coffee business: Farmer > Wholesaler > Roaster > Retailer > Customer So what are some possible places where we could enter the value chain?

29. Life of a Chair

30. What is a Unique Selling Proposition? It’s what makes us stand out from competitors within our niche. The search for a niche is connected to the “unique Selling Proposition” because often it is the USP that provides the feature that makes us different or unique; that lets us slip into an existing niche easier, or that helps create a whole new niche.

31. Examples of the Unique Selling Proposition 30 minutes or less 30 minutes or less Pay me now, or pay me later Pay me now, or pay me later Oil change in 20 minutes. Oil change in 20 minutes. 60 minute tune up. 60 minute tune up. 7 – 11 7 – 11 24 hour fitness 24 hour fitness 90 days same as cash 90 days same as cash Rent to own Rent to own Organic Organic Unfinished furniture. Unfinished furniture.

32. Spanish Language Qwest Site Spanish Language Qwest Site Second hand Stores StartUp Journal Ideas Entrepreneur.com Join A Group! How to Create A USP What is A USP? Second hand Stores StartUp Journal Ideas Entrepreneur.com Join A Group! How to Create A USP What is A USP? Spanish Language Qwest Site Second hand Stores StartUp Journal Ideas Entrepreneur.com Join A Group! How to Create A USP What is A USP?

33. Without speaking, organize yourselves around the room in order of birthday. Group in fours based on the above, and find seating for your group. Discuss possible business ideas for 25 minutes. List your top three ideas, and be ready to report to the class (choose a spokesperson). Group Work on Ideas