Entrepreneurship & Small Business Management

normaldeerΔιαχείριση

20 Νοε 2013 (πριν από 3 χρόνια και 7 μήνες)

57 εμφανίσεις

Entrepreneurship &

Small Business
Management

11/20/2013

1

Characteristics of
entrepreneurs


Entrepreneur


someone who takes a risk in starting a business to
earn a profit



Key factors:


Desire to be your own boss


Develop a good initial plan


Coming up with innovative ideas



Entrepreneurship


Processes of starting, organizing, managing, & assuming the
responsibility for a business



What does it take?


Confidence & capability to turn an idea into a business


Important to have an understanding of business operations and
management



11/20/2013

2

Personal characteristics of
successful entrepreneurs

Entrepreneurs

are more

They have

Persistent

Problem
-
solving skills

Inquisitive

Tolerance

for ambiguity

Energetic

Strong integrity

Goal oriented

Personal initiative

Independent

Ability to secure

resources

Self
-
confident

Capability to learn from
failure

Creative

Willingness to work hard

Reliable

Competitive

11/20/2013

3

Entrepreneurship & the
economy


Nearly one in ten Americans are involved in some
type of entrepreneurship activity.



More than 670,000 new businesses are created
annually.



Risky…Nearly as many small businesses close as begin
each year



Employment


Small business are most responsible for
new employment


Over 60% of new jobs are created by businesses with
fewer than 500 employees




11/20/2013

4

Financing


Most of the money needed to start a new business comes from
the entrepreneur and his or her family & friends



20% of Americans have invested in a business of someone they
know well.



Venture capital


money provided by large investors to finance
new products and new businesses that have a good chance
to be very profitable



Productivity


New & small businesses account for 55% of all innovative
products & services developed


11/20/2013

5

Opportunities & risks


Giving up a regular job & stable income is a difficult
choice.



Innovation


invention or creation that is brand new



Improvement


designed change that increases the
usefulness of a product, service, or process.



Some opportunities come from an improved design,
more effective procedures, or greater attention to
quality

11/20/2013

6

Recognizing risks


1/3 of new businesses are profitable



1/3 do not make a profit but continue to
operate



The remaining third lose money.



Over a 10
-
year period, more than 50% of all
new businesses are discontinued

11/20/2013

7

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

11/20/2013

8

Small business ownership


The greatest percentage of businesses in the U.S. is small business.



Small business employ half of all private sector employees



Small business


an independent business with fewer than 500
employees



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


11/20/2013

9

Small business employment


Small businesses are responsible for
creating 60
-
80 percent of all new jobs.



Many small businesses are professional &
technical.



Many construction companies operate as
small businesses.


11/20/2013

10

Ownership diversity


Women own more than ¼ of all small
businesses



More than 18% of small businesses have
African
-
American, Asian
-
American, or
Hispanic
-
American ownership.



The majority of small business owners are
over 35 years old

11/20/2013

11

Small business advantages


Meeting customer needs



Serve customers where the # of products and
services needed is small or the requirements are
too specialized for large business to make a profit



Small businesses are not able to match the lower
operating costs of larger businesses.



They
can

compete by paying attention to their
customers. They serve fewer customers but have
more frequent contact with them.

11/20/2013

12

Providing unique services


Business representatives must take a special
interest in the customer.



They spend time determining needs & discussing
alternatives.



They have the expertise to plan & deliver the
services that satisfy the customer.



Customers may be willing to pay a little more for
something that they really want

11/20/2013

13

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 for the business



Failure to manage credit offered to customers

11/20/2013

14

Small business assistance


Local groups of businesspeople (chamber
of commerce)



Small business administration
(SBA)


government agency that helps small
business owners develop business plans
and obtain financing and other support



11/20/2013

15

Starting a small business


An idea plus experience


every business begins with an
idea



Right place & time


Find the right location



Team approach


employees must be chosen carefully



Preparation & research


having enough information to
make good decisions about the business. This will save
time & avoid later problems.



Info about customers, competitors, operations,
government regulations, etc.

11/20/2013

16

Developing a business plan


Written description of the business idea and
how it will be carried out.



Even if it’s not needed, a business plan should
be developed to force the owner to think
about important activities and their cost.



May help identify potential problems and
serve as a guide to keep the business on track


11/20/2013

17

Steps in developing the
business plan

1.
Gather & review information


2.
Develop strategic alternatives


Alternative plans for production, marketing,
staffing, & financing should be studied &
identified


3.
Each section of the business plan should be
written


Competition, potential customers, operations,
marketing, & finances.

11/20/2013

18

Financing the small business


Types of financing



Start
-
up financing


amount of money needed to open
the business



Buildings, inventory, supplies, licenses, etc.



Short
-
term financing


money needed to pay for the
current operating activities of a business. (less than one
year)



Long
-
term financing


money needed for main resources
of a business (land, buildings, & equipment)

11/20/2013

19

Sources of financing


Most difficult part of starting a business


Finding the needed money



Money comes from a mixture of owner
-
supplied
& borrowed funds



Owner
-
supplied depends on type of business



Borrowed funds are obtained through loans
from banks & other financial institutions

11/20/2013

20