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Nickels McHugh McHugh

6-2. Guess Which Company?. He was selling baking soda

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Nickels McHugh McHugh

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    1. 6-1 Nickels McHugh McHugh

    2. 6-2 Guess Which Company? 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 didnt 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. Also available on a Transparency Acetate See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. Guess Which Company? This slide will help in starting the chapter discussion. Students enjoy stories about how companies began and these short vignettes will supplement additional information about the history of successful entrepreneurs in the chapter. 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 Dominos Pizza (Tom Monaghan) Ask the students: Do you know of any interesting stories about how some other businesses got started? (This can also be assigned as a team project to generate a good discussion.)Also available on a Transparency Acetate See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. Guess Which Company? This slide will help in starting the chapter discussion. Students enjoy stories about how companies began and these short vignettes will supplement additional information about the history of successful entrepreneurs in the chapter. 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 Dominos Pizza (Tom Monaghan) Ask the students: Do you know of any interesting stories about how some other businesses got started? (This can also be assigned as a team project to generate a good discussion.)

    3. 6-3 Guess Which Company? Wrigleys chewing Gum (William Wrigley, Jr.) United Parcel Service Dominos Pizza (Tom Monaghan) Also available on a Transparency Acetate See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. Guess Which Company? This slide will help in starting the chapter discussion. Students enjoy stories about how companies began and these short vignettes will supplement additional information about the history of successful entrepreneurs in the chapter. 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 Dominos Pizza (Tom Monaghan) Ask the students: Do you know of any interesting stories about how some other businesses got started? (This can also be assigned as a team project to generate a good discussion.)Also available on a Transparency Acetate See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. Guess Which Company? This slide will help in starting the chapter discussion. Students enjoy stories about how companies began and these short vignettes will supplement additional information about the history of successful entrepreneurs in the chapter. 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 Dominos Pizza (Tom Monaghan) Ask the students: Do you know of any interesting stories about how some other businesses got started? (This can also be assigned as a team project to generate a good discussion.)

    4. 6-4 I. The Age of Entrepreneurship Today, young people will not have the traditional 30-year career in one job. This enhances the appeal of starting a small business. Colleges are responding by offering more courses on entrepreneurship. ENTREPRENEURSHIP is accepting the risk of starting and running a business. See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151 See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151

    5. 6-5 Entrepreneurship Definition Why take the entrepreneurial challenge? Opportunity Profit Independence Challenge See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151 See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151

    6. 6-6 II. Job Creating Power The need to CREATE MORE JOBS is one of the major issues in the U.S. today. The success of great American entrepreneurs shows the JOB-CREATING POWER of entrepreneurs. See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151 See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151

    7. 6-7 Who Starts New Businesses? 18 - 24 8% 25 - 34 71% 35 - 44 13% 45 - 54 6% 55+ 2% Also available on a Transparency Acetate See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. Who Starts New Businesses? This slide gives the student a good understanding of the age people start new businesses. 1. Between the ages of 18-24, only 8% of people start a new business, why? (Discuss the lack of resources available to start; the lack of experience and business knowledge; and the individual assessment of career choice.) 2. Between the ages of 25-34, 71% of new businesses are started, why? (Greater business experience; more accumulated capital; physical and mental maturity; experience in a career where they have not been happy.) 3. Only 2% of new business is started after 55+ years of age. Ask the students to 4. Explain why this is low? (Nearing retirement, too much risk at their age; years of their peak earnings in corporate life.)Also available on a Transparency Acetate See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. Who Starts New Businesses? This slide gives the student a good understanding of the age people start new businesses. 1. Between the ages of 18-24, only 8% of people start a new business, why? (Discuss the lack of resources available to start; the lack of experience and business knowledge; and the individual assessment of career choice.) 2. Between the ages of 25-34, 71% of new businesses are started, why? (Greater business experience; more accumulated capital; physical and mental maturity; experience in a career where they have not been happy.) 3. Only 2% of new business is started after 55+ years of age. Ask the students to 4. Explain why this is low? (Nearing retirement, too much risk at their age; years of their peak earnings in corporate life.)

    8. 6-8 III. Why do people take the challenge Reasons why people are WILLING TO TAKE THE RISKS of business ownership include: OPPORTUNITY to share in the American dream. PROFIT: The richest person in the U.S. is Bill Gates, an entrepreneur. INDEPENDENCE Many entrepreneurs dont enjoy working for someone else. Some have found more self-SATISFACTION in starting their own businesses. CHALLENGE Some believe that entrepreneurs are excitement junkies who flourish on taking risks. See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151 See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151

    9. 6-9 Entrepreneurial Attributes Self-Directed & Self-Disciplined Self-Nurturing Action-Oriented Highly Energetic Tolerant of Uncertainty See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 151-152See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 151-152

    10. 6-10 Entrepreneurship Entrepreneurial Teams Micropreneurs and Home-Based Businesses Web-Based Businesses Intrapreneurs See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 154-158See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 154-158

    11. 6-11 Reasons for Growth of Home-Based Businesses Technology Downsizing Attitudes Tax Advantages See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text page: 155See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text page: 155

    12. 6-12 V. Small Business Operations In general, the same principles apply to small and large companies, government, and nonprofits. All organizations demand capital, good ideas, planning, information management, budgets, accounting, marketing, employee relations, and good overall managerial know-how. See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151 See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151

    13. 6-13 V. Small Business Operations As defined by the SBA, SMALL BUSINESS: is independently owned and operated is not dominant in its field of operation meets certain standards in terms of employees or annual receipts (set by the Small Business Administration) in terms of employees or annual receipts; for example, less than $2 million a year for service companies See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151 See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151

    14. 6-14 V. Small Business Operations Seventy-five percent of the NATIONS NEW JOBS are in small businesses. SMALL BUSINESSES HAVE advantages over big companiesthey give more personal customer service and are able to respond quickly to opportunities See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entreprene1. Seventy-five percent of the NATIONS NEW JOBS are in small businesses. 2. SMALL BUSINESSES HAVE advantages over big companiesthey give more personal customer service and are able to respond quickly to opportunitiesurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151 See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entreprene1. Seventy-five percent of the NATIONS NEW JOBS are in small businesses. 2. SMALL BUSINESSES HAVE advantages over big companiesthey give more personal customer service and are able to respond quickly to opportunitiesurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151

    15. 6-15 What is Small Business? Independently Owned Not Dominant in Its Field Meet Certain Standards of Size (Employees, Annual Receipts) See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160

    16. 6-16 Home-Based Business Challenges New Customers Time Management Work vs. Family City Ordinances Risk Focus Find Opportunity Results vs. Routine Profit vs. Paycheck New Ideas Long Term vs. Short Term See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 155-156 See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 155-156

    17. 6-17 Most Common Types of Home-Based Businesses Also available on a Transparency Acetate See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. Most Common Types of Home-Based Business 1. This slide identifies the most common types of home-based businesses. 2. A study conducted by the Economic Quarterly Developer, using 899 respondents in nine states, revealed some interesting facts: 59% of home-based businesses are owned by men. Average age of home-based workers is 44. Total income generated represented 3% of total personal income in those nine states. In Ohio, home-based business contributes more income than farming. 3. Some tips on becoming successful with a home-based business are: Most people start a business based on their interest or passion for an activity; you need to examine the market potential, competition, and resources required. Prepare a well-written business plan outlining your strategic goals. Do not be resistant to outside help when getting started. Utilize free services such as the Small Business Administration. Make sure you have adequate funds.Also available on a Transparency Acetate See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. Most Common Types of Home-Based Business 1. This slide identifies the most common types of home-based businesses. 2. A study conducted by the Economic Quarterly Developer, using 899 respondents in nine states, revealed some interesting facts: 59% of home-based businesses are owned by men. Average age of home-based workers is 44. Total income generated represented 3% of total personal income in those nine states. In Ohio, home-based business contributes more income than farming. 3. Some tips on becoming successful with a home-based business are: Most people start a business based on their interest or passion for an activity; you need to examine the market potential, competition, and resources required. Prepare a well-written business plan outlining your strategic goals. Do not be resistant to outside help when getting started. Utilize free services such as the Small Business Administration. Make sure you have adequate funds.

    18. 6-18 Government & Entrepreneurship Immigration Act of 1990- Investor Visa Enterprise Zones Incubators See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text page: 159See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text page: 159

    19. 6-19 Utah Nevada Washington Florida Colorado Washington D.C. Maryland Georgia Tennessee Alaska Top Ten States Where Businesses Have Started Also available on a Transparency Acetate See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. Top Ten States/Districts Where Businesses Have Started This slide presents the top ten states/districts where businesses have started. If you were to ask a question to the students where would they locate their business, they may give answers such as close to home, or wherever the need is, or a location where they have good memories, etc. SBAs statistics through 2002 suggests that Utah is the number 1 state to draw startups. The top factor in the SBAs Small Business Survival Index is taxes (13 out of 21 measures are tax-related). The states are also assessed on the size of local government to determine the bureaucracy. Nevada tops the list on this measure with only 4.13 bureaucrats per 1,000 people. Kevin Stolarick, a Carnegie Mellon Lecturer, offers these four factors that make a place attractive: technology, talent, tolerance and diversity, and territory assets. (Source: IBD, June 24, 2004)Also available on a Transparency Acetate See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. Top Ten States/Districts Where Businesses Have Started This slide presents the top ten states/districts where businesses have started. If you were to ask a question to the students where would they locate their business, they may give answers such as close to home, or wherever the need is, or a location where they have good memories, etc. SBAs statistics through 2002 suggests that Utah is the number 1 state to draw startups. The top factor in the SBAs Small Business Survival Index is taxes (13 out of 21 measures are tax-related). The states are also assessed on the size of local government to determine the bureaucracy. Nevada tops the list on this measure with only 4.13 bureaucrats per 1,000 people. Kevin Stolarick, a Carnegie Mellon Lecturer, offers these four factors that make a place attractive: technology, talent, tolerance and diversity, and territory assets. (Source: IBD, June 24, 2004)

    20. 6-20 Top Ten States Where Businesses Have Closed Utah Washington New Mexico Nevada Idaho Missouri Arizona Vermont Georgia California Also available on a Transparency Acetate See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. Top Ten States Where Businesses Have Closed This slide complements the previous slide on top ten states where businesses have started. Interestingly, Utah tops both of these lists. In addition to drawing most startups, Utah is also the leader in bankruptcies. Also available on a Transparency Acetate See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. Top Ten States Where Businesses Have Closed This slide complements the previous slide on top ten states where businesses have started. Interestingly, Utah tops both of these lists. In addition to drawing most startups, Utah is also the leader in bankruptcies.

    21. 6-21 U.S. Small Businesses 20 Million Full/Part-time Businesses Account for More Than 50% of Gross Domestic Product (GDP) Jobs 80% of Americans 1st job is in small business 75% of new jobs are created by small businesses Minority-owned Businesses Growing Rapidly See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160

    22. 6-22 U.S. Small Businesses According to the SBA, 90% of all small business failures are a result of POOR MANAGEMENT. This may involve poor planning, poor record keeping, poor inventory control, poor promotion, or poor employee relations. The most likely cause is poor capitalization. This section explores the major functions of business as they pertain to small business: PLANNING your business FINANCING your business KNOWING your customers (marketing.) MANAGING your employees (human resource development.) KEEPING RECORDS (accounting) See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160

    23. 6-23 Small Business Failures There is some debate about how many new small businesses fail each year. Conventional wisdom says that half of businesses fail in their first five years. An SBA study found a 60% death rate within six years. However, another study by economist Bruce Kirchhoff found that data misinterpretation overestimated the failure rate. Kirchhoffs data showed that the failure rate is only 18% over the first eight years. It now seems that business failures are much lower than traditionally reported. See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160

    24. 6-24 U.S. Small Businesses Home office entrepreneurs should focus on: Finding opportunity instead of accepting security. Getting results instead of following routines. Earning a profit instead of earning a paycheck. Trying new ideas instead of avoiding mistakes. Creating a long-term vision instead of seeking a short-term payoff. See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160

    25. 6-25 U.S. Small Businesses MICROPRENEURS are entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle. Although some entrepreneurs eagerly seek growth, micropreneurs can be happy with little expansion. See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160

    26. 6-26 Small Businesses A BUSINESS PLAN is a detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualifications of the owner(s). A business plan forces potential small-business owners to be specific about the products and services they intend to offer. See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160

    27. 6-27 Small Businesses A business plan forces potential small-business owners to be specific about the products and services they intend to offer. See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160

    28. 6-28 Small Businesses When talking with bankers or other investors, a business plan is mandatory. Michael Celello, president of the Peoples Commercial Bank, says that fewer than 10% of prospective borrowers come to a bank adequately prepared. See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160

    29. 6-29 U.S. Small Businesses SELF-DIRECTED and self-disciplined SELF-NURTURING, believing in your own ideas ACTION-ORIENTED, having a desire to build the dream into reality HIGHLY ENERGETIC, willing to work long hours to succeed TOLERANT OF UNCERTAINTY, the ability to take calculated risks See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 160

    30. 6-30 Business Ownership by Gender Also available on a Transparency Acetate See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. Percentage of Ownership This slide presents an interesting picture about business ownership by gender. Ask the students: Why are more women starting their own businesses? (Some of the reasons may be: fighting or getting tired of the glass ceiling, balancing work with family life, opportunity, profit, independence, and/or challenge.) Ask the students: Would you prefer working for a male-owned or female-owned business? Why? Also available on a Transparency Acetate See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. Percentage of Ownership This slide presents an interesting picture about business ownership by gender. Ask the students: Why are more women starting their own businesses? (Some of the reasons may be: fighting or getting tired of the glass ceiling, balancing work with family life, opportunity, profit, independence, and/or challenge.) Ask the students: Would you prefer working for a male-owned or female-owned business? Why?

    31. 6-31 Female Owners Top Industries Also available on a Transparency Acetate See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. Female Owners Top Industries Top sectors for female-owned companies are: Services (45%) and retail (16%). Ask the students: If you were to start your own business, in what sector would it be? (Most likely it would be a service or retail establishment. A critical reason for the growth of small businesses is the decline in manufacturing segment and relative ease of starting or establishing a service business.)Also available on a Transparency Acetate See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. Female Owners Top Industries Top sectors for female-owned companies are: Services (45%) and retail (16%). Ask the students: If you were to start your own business, in what sector would it be? (Most likely it would be a service or retail establishment. A critical reason for the growth of small businesses is the decline in manufacturing segment and relative ease of starting or establishing a service business.)

    32. 6-32 Small Business Major Causes of Failure Plunging in without first testing Under/over pricing Too little capital Little/no experience Borrowing money without planning Trying to do too much with too little Buying too much on credit Expanding credit too freely and rapidly Incomplete and/or inaccurate records Not understanding business cycles Forgetting about taxes, insurances, etc. Owner working or not, according to whim See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 162 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 162

    33. 6-33 Small Business Situations for Success Personal attention Products not easily made by mass production Sales are not large enough for a large firm Unattractive neighborhood Franchising Paying attention to new competitors The business is in a growth industry See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 163 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 163

    34. 6-34 Small Business Small businesses have several ADVANTAGES OVER LARGE BUSINESSES: Overseas buyers enjoy dealing with individuals rather than with large corporate bureaucracies. Small companies can usually begin shipping much faster. Small companies provide a wide variety of suppliers. Small companies can give more personal service and more attention. See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 163 See Learning Objective 2: Discuss the importance of small business to the American economy and summarize the major causes of small-business failure. See text pages: 163

    35. 6-35 Learning about Small Business Operations Learn from Others Get Experience Take Over a Successful Firm See Learning Objective 3: Summarize ways to learn about how small businesses operate. See text pages: 163-165 See Learning Objective 3: Summarize ways to learn about how small businesses operate. See text pages: 163-165

    36. 6-36 Where Did They Start? Also available on a Transparency Acetate See Learning Objective 3: Summarize ways to learn about how small businesses operate. Where Did They Start? This slide presents the humble beginnings of these major companies. This slide can also be used with the previous slide Early sales of well-known companies. Ask the students: What can be learned from this slide and such beginnings of these corporations? (Business startups are always difficult but good planning, hard work, and perseverance certainly pays.)Also available on a Transparency Acetate See Learning Objective 3: Summarize ways to learn about how small businesses operate. Where Did They Start? This slide presents the humble beginnings of these major companies. This slide can also be used with the previous slide Early sales of well-known companies. Ask the students: What can be learned from this slide and such beginnings of these corporations? (Business startups are always difficult but good planning, hard work, and perseverance certainly pays.)

    37. 6-37 Early Sales of Well-Known Companies Also available on a Transparency Acetate See Learning Objective 3: Summarize ways to learn about how small businesses operate. Early Sales of Well-Known Companies This is an interesting slide which should generate good reactions from students. Ask the student: If you sold only one snowboard in the whole year, would you stay in business? Why or why not? How can businesses survive such poor performances? (Determination and passion of the owners and founders plays a big role.) As can be seen from the slide, the best performance has been from Subway, which is typical of starting a restaurant type businesses.Also available on a Transparency Acetate See Learning Objective 3: Summarize ways to learn about how small businesses operate. Early Sales of Well-Known Companies This is an interesting slide which should generate good reactions from students. Ask the student: If you sold only one snowboard in the whole year, would you stay in business? Why or why not? How can businesses survive such poor performances? (Determination and passion of the owners and founders plays a big role.) As can be seen from the slide, the best performance has been from Subway, which is typical of starting a restaurant type businesses.

    38. 6-38 VI. Small Business Management VENTURE CAPITALISTS are individuals or companies that invest in new businesses in exchange for partial ownership of those businesses. Venture capitalists may demand a large share (as much as 60%) in your company in exchange for the start-up cash. Since the dot.com bubble burst, venture capitalists have slowed their investments See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151 See Learning Objective 1: Explain why people are willing to take the risks of entrepreneurship, list the attributes of successful entrepreneurs, describe the benefits of entrepreneurial teams and intrapreneurs, and explain the growth of home-based and web-based businesses. See text pages: 150-151

    39. 6-39 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 See Learning Objective 4: Analyze what it takes to start and run a small business. See text pages: 165-172 Small Business Strategies This acetate gives additional advice for entrepreneurs to examine when starting a new business. Investment in sales training and technology will pay significant dividends in the future. Cost will be lower, and training will lead to greater performance. When Federal Express introduced their ground division in 1985, they invested in new Material Handling Equipment reducing their labor cost by two-thirds. Remember to examine every process within the organization for performance; Eliminate waste and look for continuous improvement. A recommended time period for review is every six months. See Learning Objective 4: Analyze what it takes to start and run a small business. See text pages: 165-172 Small Business Strategies This acetate gives additional advice for entrepreneurs to examine when starting a new business. Investment in sales training and technology will pay significant dividends in the future. Cost will be lower, and training will lead to greater performance. When Federal Express introduced their ground division in 1985, they invested in new Material Handling Equipment reducing their labor cost by two-thirds. Remember to examine every process within the organization for performance; Eliminate waste and look for continuous improvement. A recommended time period for review is every six months.

    40. 6-40 Managing a Small Business Business Plan Adequate Funding Lenders/Investors Angels Venture Capitalists Professional Advice/Help SBA and SBIC Program Lawyers, Loan Officers, Insurance Agents SCORE Local College/universities Know Your Customer Manage Human Resources Keep Good Records See Learning Objective 4: Analyze what it takes to start and run a small business. See text pages: 165-172 See Learning Objective 4: Analyze what it takes to start and run a small business. See text pages: 165-172

    41. 6-41 Reasons for a Banker To Say No I dont know enough about you or your business. You havent clearly stated why you need the money. Your numbers dont support the loan request. Your collateral is lacking. Your business does not support the loan on its own merits. Also available on a Transparency Acetate See Learning Objective 4: Analyze what it takes to start and run a small business. See text pages: 165-172 Reasons for a Banker to Say NO The information provided should support the material in the book. Financial problems continue to be the number-one reason why businesses fail. The key to dealing with bankers is to be prepared and have a very sound business plan. Develop a relationship with your banker to help negotiations during start-up and in the future. The Small Business Administration offers a detailed Business Plan on their Website: www.sba.gov. The plan offers over 30 pages of information of what is required to have a detailed plan.Also available on a Transparency Acetate See Learning Objective 4: Analyze what it takes to start and run a small business. See text pages: 165-172 Reasons for a Banker to Say NO The information provided should support the material in the book. Financial problems continue to be the number-one reason why businesses fail. The key to dealing with bankers is to be prepared and have a very sound business plan. Develop a relationship with your banker to help negotiations during start-up and in the future. The Small Business Administration offers a detailed Business Plan on their Website: www.sba.gov. The plan offers over 30 pages of information of what is required to have a detailed plan.

    42. 6-42 Questions that a Banker will ask What do you want the money for (Purpose) How much money do you need How are you going to re-pay What is your back up What is your credit background (success or failures ) Also available on a Transparency Acetate See Learning Objective 4: Analyze what it takes to start and run a small business. See text pages: 165-172 Reasons for a Banker to Say NO The information provided should support the material in the book. Financial problems continue to be the number-one reason why businesses fail. The key to dealing with bankers is to be prepared and have a very sound business plan. Develop a relationship with your banker to help negotiations during start-up and in the future. The Small Business Administration offers a detailed Business Plan on their Website: www.sba.gov. The plan offers over 30 pages of information of what is required to have a detailed plan.Also available on a Transparency Acetate See Learning Objective 4: Analyze what it takes to start and run a small business. See text pages: 165-172 Reasons for a Banker to Say NO The information provided should support the material in the book. Financial problems continue to be the number-one reason why businesses fail. The key to dealing with bankers is to be prepared and have a very sound business plan. Develop a relationship with your banker to help negotiations during start-up and in the future. The Small Business Administration offers a detailed Business Plan on their Website: www.sba.gov. The plan offers over 30 pages of information of what is required to have a detailed plan.

    43. 6-43 Small Business Collaborators Small Business Administration (SBA) Microloan program SBICs SBDCs Service Corps of Retired Executives (SCORE) See Learning Objective 4: Analyze what it takes to start and run a small business. See text pages: 165-172See Learning Objective 4: Analyze what it takes to start and run a small business. See text pages: 165-172

    44. 6-44 Saving a Business In Trouble React/Not Overreact Understand Financial Situation Find Professional Help Develop Recovery Plan Be a Visible, Confident Leader Remind Employees of Stake in Business Dont Get Stung By Killer Bankruptcy Also available on a Transparency Acetate See Learning Objective 4: Analyze what it takes to start and run a small business. Saving a Business in Trouble 1. This slide offers many suggestions for dealing with a severe crisis with your business. 2. Additional tips that experts suggest you do to save your business: Work with a turnaround expert. Do not ignore how the economy or overall market conditions are negatively affecting your business. Prepare a short-term cash projection. Prioritize payments to keep cash flow. Review staffing levels. (Source: Entrepreneur.com)Also available on a Transparency Acetate See Learning Objective 4: Analyze what it takes to start and run a small business. Saving a Business in Trouble 1. This slide offers many suggestions for dealing with a severe crisis with your business. 2. Additional tips that experts suggest you do to save your business: Work with a turnaround expert. Do not ignore how the economy or overall market conditions are negatively affecting your business. Prepare a short-term cash projection. Prioritize payments to keep cash flow. Review staffing levels. (Source: Entrepreneur.com)

    45. 6-45 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 See Learning Objective 5: Outline the advantages and disadvantages small businesses have in entering global markets. See text pages: 173-174 See Learning Objective 5: Outline the advantages and disadvantages small businesses have in entering global markets. See text pages: 173-174

    46. 6-46 International Small Business Advantages Deal With Individuals Begin Shipping Orders Faster Variety of Suppliers Professional Service with Undivided Attention Information Dept. of Commerce- www.bxa.doc.gov SBA- International- www.sba.gov/hotlist/internat.html See Learning Objective 5: Outline the advantages and disadvantages small businesses have in entering global markets. See text pages: 173-174See Learning Objective 5: Outline the advantages and disadvantages small businesses have in entering global markets. See text pages: 173-174

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