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Chapter: 6 Entrepreneurship and Small Business Management

Chapter: 6 Entrepreneurship and Small Business Management. Becoming an Entrepreneur. Essential Questions 1. What are characteristics of successful entrepreneurs? 2. Recognize the importance of entrepreneurship in the economy. 3. Describe opportunities and risks of entrepreneurship. .

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Chapter: 6 Entrepreneurship and Small Business Management

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  1. Chapter: 6Entrepreneurship andSmall Business Management

  2. Becoming an Entrepreneur • Essential Questions 1. What are characteristics of successful entrepreneurs? 2. Recognize the importance of entrepreneurship in the economy. 3. Describe opportunities and risks of entrepreneurship. • Key Terms • Entrepreneur • Entrepreneurship • Venture Capital • Innovation • Improvement

  3. DO NOW What skills do you think an entrepreneur must have to turn their idea into a business?

  4. What is an Entrepreneur? An entrepreneur is someone who takes a risk in starting a business to earn a profit.

  5. Characteristics of Entrepreneurs Desire to be your own boss Having special skills and abilities Coming up with innovative ideas

  6. Entrepreneurs Are More • Persistent • Inquisitive • Energetic • Goal-oriented • Independent • Self-confident • Creative • Reliable • Competitive

  7. Entrepreneurs Have Problem-solving skills Strong Integrity Personal Initiative Ability to secure resources Capability to learn from failure Willingness to work hard

  8. Entrepreneurship Entrepreneurship is the process of starting, organizing, managing, and assuming the responsibility for a business.

  9. What Does It Take? Entrepreneurs come from all age categories and racial and ethnic groups. They represent both genders as well as varied amounts of education. Many entrepreneurs own their first business while in their teens.

  10. Entrepreneurship And The Economy Entrepreneurship is a key part of the U.S. economy. Nearly one in ten of all Americans 18-64 years old is involved in some type of entrepreneurship activities. More than 670,000 new businesses are created yearly. Entrepreneurship is also risky.

  11. Employment Small businesses are responsible for most new employment. Over 60 percent of new jobs are created by businesses with fewer than 500 employees.

  12. BFM – APRIL 10, 2014 • DO NOW: • Assigned seats & complete ½ sheet • LESSON: • Finish notes on 6-1 • Bigger Business, Better Lives article • EXIT TICKET: • 3-2-1

  13. Financing Most of the money needed to start a new business comes from the entrepreneur and his or her family. One in five Americans has invested in a business of someone they knew. More than 50 percent lend financial support to the business of a family member. Twenty nine percent give money to neighbors and friends.

  14. Venture capital A Venture capital is money provided by large investors to finance new products and new businesses that have a good chance to be profitable.

  15. Venture capital In the late 1990s, many venture capital companies were formed. They supplied more than $100 billion each year to new businesses. Many of those businesses were e-commerce and high-tech start-ups. When many of those companies failed, the amount of venture capital declined to less than $22 million in 2005.

  16. Productivity New and small businesses produce a large volume of goods and services for the economy. Businesses with just a single owner and no staff account for more than $600 billion in sales annually. Small businesses are responsible for more than half of the U.S. gross domestic product each year.

  17. Opportunities and Risks Before deciding to start a business, you need to think about the opportunities and risks.

  18. New Business Opportunities The American private enterprise economy promotes innovation and new business development. Individuals are able to take risks to start a newbusiness. Consumers are always looking for new and better choices to meet their wants and needs.

  19. Innovation An innovation is an invention or creation that is brand new.

  20. Improvement An improvement is a design change that increases the usefulness of a product, service, or process.

  21. Inventors • Inventors often develop innovations. Those innovations may become the basis of a new business. • The inventor may sell them to another company for development and sale. • Examples of well-known innovations: • Steve Jobs and Stephen Wozniak (Apple Computer) • Arthur Fray and Spencer Silver (Post-it Notes)

  22. Recognizing Risks The National Federation of Independent Business reports that of all new businesses, about one-third are profitable, one-third do not make a profit, but continue to operate, and the remaining third lose money.

  23. Recognizing Risks Over a 10-year period, more than 50 percent of all new businesses are discontinued.

  24. Reasons why businesses close Lack of adequate capital Low sales Higher than expected expenses Competitive pressure An owner unprepared to manage a growing business Operations requiring more time than the owner is willing to commit

  25. Check Point Answer the questions included in your study guide packet.

  26. 6-2 Small Business Basics

  27. Small Business Basics • Essential Questions 1. Identify important characteristics of small businesses. 2. Recognize the competitive advantages of small businesses. 3. Identify problems faced by many small businesses. • Key Terms • Small business • Small Business Administration (SBA)

  28. DO NOW Why might people enjoy owning a business but decide to sell it?

  29. Small Business Basics The greatest percentage of businesses in the United States is small businesses. Small businesses employ half of all private sector employees.

  30. Small Business A small business is an independent business with fewer than 500 employees. Using that standard, 99.9 percent of the roughly 26million U.S. businesses are small businesses.

  31. Small Business A more precise description of a small business includes the following points. The owner is usually the manager It operates in one or very few locations It typically serves a small market It is not dominant in its field

  32. Common Types of Small Businesses as Percent of All Small Businesses

  33. Small Business Employment On average, small businesses are responsible for creating 60-80 percent of all new jobs. It is not surprising that there are a large number of service businesses. Many small business services are professional and technical.

  34. Ownership Diversity Women own more than one-fourth of all small businesses. More than 18 percent of small businesses have African-American, Asian-American, or Hispanic- American ownership. The majority of small business owners are over 35 years old, but nearly 25 percent are under 35.

  35. Small Business Advantages • Suppose you need someone to: • Mow your lawn • Make a gourmet meal in y our home • Build a custom display case for a model train • Repair hardware on your home computer. • You would seek the assistance of a small business.

  36. Meeting Customer Needs Small businesses play a vital role in the economy. They serve customers where the number of products and service is small or the requirements are too specialized for a large business to make a profit.

  37. April 28, 2014 • DO NOW: • Assigned seats • LESSON: • Finish notes for 6-2 • Finish Teen Entrepreneurship Project #1 • Create a cover page • Your name, block, class • Picture that represents your business • Teen Entrepreneurship Projects

  38. Providing Unique Services Small businesses are especially suited to provide unique services for customers. They may plan a wedding or design a customized sound system for your home. Providing these services means that business representatives must take special interest in the customer.

  39. Providing Unique Services They spend time determining needs and discussing alternatives. They have the expertise to plan and deliver the services.

  40. Common Small Business Problems Not all small businesses succeed. In fact, their failure rate is much higher than large businesses. Many failures result from the inability to pay expenses.

  41. Reasons for Failure The following are the most common reasons for small business failure: Not keeping adequate records Not having enough start-up money Lack of management experience Lack of experience with the type of business Not controlling operating expenses Poor location of the business Failure to manage credit offered to customers

  42. Small Business Administration The Small Business Administration (SBA) is a government agency that helps small business owners develop business plans and obtain financing and other support for their companies. Information about the SBA and its services can be obtained by visiting www.sba.gov

  43. Small Business Administration The SBA offers information, publications, counseling, and many other forms of support. The SBA sponsors the Service Corps of Retired Executives (SCORE). Members of SCORE are retired local businesspeople who volunteer their services to counsel and mentor new business owners.

  44. Check Point Answer the questions included in your study guide packet.

  45. BFM – April 16, 2014 • DO NOW: • Assigned seats with a pencil or pen; ready to learn • Lesson: • Bigger Business, Better Lives article • Teen Entrepreneur – Project 1

  46. BFM – April 30, 2014 • DO NOW: • Find a computer • ReadSave Chocolatevillearticle • Lesson: • Finish Teen Entrepreneur – Project 1 • Create a cover page • Name, block, class • Teen Entrepreneurship Projects • Picture that represents your service • Print in color – GHS-215-3130cn

  47. BFM – May 5, 2014 • DO NOW: • Find a computer • Lesson: • Create a cover page • Name, block, class • Teen Entrepreneurship Projects • Picture that represents your service • Print – GHS-215-2330dn • TE Project #2 – Naming Your Business • Type the Company Description outline

  48. BFM – May 9, 2014 • DO NOW: • Pick up your folder, find a computer • Lesson: • Create a cover page • Name, block, class • Teen Entrepreneurship Projects • Picture that represents your service • Print – GHS-215-2330dn • TE Project #2 – Naming Your Business • Type the Company Description outline – Page 36 CHAPTER 6-1 & 6-2 QUIZ Tuesday

  49. BFM – May 9, 2014 • DO NOW: • Pick up your folder, find a computer • Lesson: • Quiz 6-1 & 6-2 • TE Project #2 – Naming Your Business • Type the Company Description outline – Page 36 • TE #3 – Tagline (slogan) and Logo

  50. BFM – May 12, 2014 • DO NOW: • Pick up your folder, DO NOW paper, and find a computer • Lesson: • Quiz 6-1 & 6-2 • TE Project #2 – Naming Your Business • Type the Company Description outline – Page 36 • TE #3 – Tagline (slogan) and Logo

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