1. SMALL BUSINESS MANAGEMENT Chapter 2 The Small Business Decision

2. CHAPTER OBJECTIVES • 1. To discuss the ___________ and disadvantages of small business ownership as a starting point in making the small business decision. • 2. To review the personal and organizational attributes of a successful small business owner. • 3. To explain the reasons some ___________ succeed and others fail. • 4. To discuss entrepreneurial development in large business. • 5. To identify the differences between an ___________ and a manager.

3. The Small Business Decision • Personal Evaluation • Self evaluation exercise

4. Advantages of Small Business Ownership • More personal ___________ with people • Independence • Skill ___________ • Potential ___________ Rewards • Challenge • ___________

6. Disadvantages of Small Business Ownership • Risk • ___________ • Need for Many Abilities • Limited Financial Rewards • People ___________ • Time Demands

7. Entrepreneur Defined • A person who ___________ and/or operates a business. • All active owner-managers and second generation ___________ of family owned firms and owner-managers which buy out founders of existing firms. • Also includes ___________ managers of larger corporations who have a flair for innovation and risk.

8. Demographic Characteristics of Entrepreneurs • Parents ___________ business • Foreign parents • High school degree or less • ___________ or more • Age 31 and under • ___________ 40 or more

9. Personality Characteristics Required by Successful Entrepreneurs • Achievement Orientation • Risk Taking • Independence, Self ___________, Self Assurance • Innovativeness • Strong Verbal and ___________ Skills • Selling Skills

10. Personality Characteristics Required by Successful Entrepreneurs (cont) • Problem ___________ Abilities • Strategic Planning ___________

11. The Small Business Decision • Organizational Evaluation

12. Small Business Successes • Alertness to ___________ • Ability to ___________ and Hold Competent Employees • Staying ___________ to the Consumer

13. Small Business Successes • Thoroughness with Operating Details • Ability to Obtain Needed Capital • Effective Handling of Laws, Rules, and Regulations

14. Small Business Successes • Entrepreneurial Success in a Large Business • Ten Commandments for Intrapreneur Success

15. Small Business Failures • Bankruptcies

16. Entrepreneurialship and Small Business Management • Entrepreneurial Skills • Characteristics • creativity, ___________, independence, risk-taking, idea oriented • Situations • generating ideas and solutions to problems, starting a new business, expanding or opening new products

17. Characteristics ofArtisan Entrepreneurs • Technical ___________ • ___________ approach • Reluctance to delegate • Narrow view of strategy • Personal sales effort • Short ___________ horizon • Simple record keeping

18. Characteristics ofOpportunistic ( Promoter) Entrepreneurs • Broad-based education • Scientific approach to problems • Willing to ___________ • Broad view of strategy • Diversified ___________ approach • Longer planning horizon • Sophisticated accounting and financial control

19. Entrepreneurialship and Small Business Management • Managerial Skills • Characteristics • develops ___________ and goal setting, • prefers to know outcomes of actions or activities, • team player, • works through others, • skills in finance, marketing, personnel, operations • Situations • reaching ___________ objectives, • maintaining control of operations

20. Bright Lights, Deep Waters • Discuss the difference between an entrepreneur and a manager using David Green and Carmanah Lights as examples. • What dangers of obtaining equity financing are illustrated in this example?

21. Concept Checks • 1. List the advantages of owning a small business. • 2. List the disadvantages of owning a small business. • 3. What are the characteristics of successful small business owners?

22. Concept Checks • 4. What are the major cases of business failure? • 5. What is the difference between an entrepreneur and a manager?