Bus 10 Notes - 1B Entrepreneurship 1/4/2013

1
5-1
Introduction to Business
Entrepreneurship
5-1
5-2
ExploringBusiness 2009 FlatWorld Knowledge
5-2
Are you an Entrepreneur?
someone who identifies a business
opportunity and assumes the risk of
creating and running a business to
take advantage of it.
Video: Student Entrepreneurs (4 mins.)
http://www.youtube.com/watch?v=c6dkU8Vv5i
U
5-3
ExploringBusiness 2009 FlatWorld Knowledge
5-3
Small Business
SBA Classification
Independent Ownership
Little Influence In Industry
Less Than 500 Employees
Economic Impact
20M+ Businesses
50% Of GDP
Bus 10 Notes - 1B Entrepreneurship 1/4/2013
2
5-4
ExploringBusiness 2009 FlatWorld Knowledge
5-4 Net New Jobs
By Firm Size
5-5
ExploringBusiness 2009 FlatWorld Knowledge
5-5
Small Business Ownership
Why pursue it? (Advantages)
Independence
Financial Rewards
Lifestyle
Learning Opportunities
Creative Freedom
Use your own skills
Disadvantages
Financial Risk
Stress
Time
Commitment
Undesirable
Duties
5-6
Explore our !areer Options
What are some of the key
personality
characteristics of an
entrepreneur?
Steve Jobs on the Origin
of the Iphone (5 mins)
http://www.youtube.com/watch
?v=jdbvAdINPPA&feature=rela
ted
Bus 10 Notes - 1B Entrepreneurship 1/4/2013
3
5-8 "esearched #raits o$ Success$ul
Entrepreneurs
5-9
ExploringBusiness 2009 FlatWorld Knowledge
5-9
Entrepreneur%s &or' &ee'
5-10
ExploringBusiness 2009 FlatWorld Knowledge
5-10
Small Business Owners are
usually called Entrepreneurs
Entrepreneurs
Innovators
New/Improved Products
Grow & Expand
Owners
Provide Income
Not Innovative
No Plan For Expansion
High-Potential
Venture
(i.e. Apple,
Starbucks,
Google)
Attitude of Person Types of Start-Up Firms
Home-Based or
Micro-Business
(i.e. roofer,
graphic
designer)
Bus 10 Notes - 1B Entrepreneurship 1/4/2013
4
5-11
ExploringBusiness 2009 FlatWorld Knowledge
5-11
&hy Businesses Fail
(atch #hem )p
A. Bad Business Idea
B. Cash Problems
Undercapitalization
Cash Flow
C. Inexperience or
Incompetence
D. Lack Of Customer
Focus
E. Inability To Handle
Growth
1. A casino with $1,000 in start
up cash
2. A restaurant thats tripled in
size but refuses to add any
waitresses
3. A washing machine repair
shop that refuses to schedule
days on which repairs will be
made
4. A recycling plant powered by
people riding bikes
5. A nursing home led by a
geologist
Reasons for Failure
Businesses
5-13
ExploringBusiness 2009 FlatWorld Knowledge
5-13
Assistance *ro+rams
SBA Loan Guarantee Program
SBDCs Assist with
Business Problems
Free Training & Technical Info.
Service Corps of Retired Executives
Incubators Government Funded sources
for shared office space.
5-14
Source: Rochester, !S"#RE We$ Site, 20%%
&here Small
Businesses ,et Fundin+
Personal savings
Family and friends
Banks
Government guaranteed loans
Venture capitalists (firms)
Angels (individuals)
Microlenders / Crowdfunding
Kiva, YBA, Kickstarter
Bus 10 Notes - 1B Entrepreneurship 1/4/2013
5
5-15
ExploringBusiness 2009 FlatWorld Knowledge
5-15
Business *lan
a document that identifies the
goals of your proposed company and
explains how they will be achieved...
Benefits:
Forces You To Think Critically
Identifies Risks
Analyze Concept/Industry
Needed to get outside Investors
5-16
ExploringBusiness 2009 FlatWorld Knowledge
5-16
Business *lan-
1) Executive Summary
2) Description of Business / Industry
3) Management Plan
4) Goods/Services
5) Development & Production
6) Marketing
7) Global Issues
8) Financial Plan
9) Appendices
Also a
section on
Risks
5-17
ExploringBusiness 2009 FlatWorld Knowledge
5-17
Ownership Options
Start From Scratch
Buy Existing
Buy A Franchise
Bus 10 Notes - 1B Entrepreneurship 1/4/2013
6
5-18
Exploring Business &' 2'0 20%2 FlatWorld Knowledge
5-18
,rowth O$ Franchisin+
5-19
#op #en Franchises
Entrepreneur Magazine Franchise 500
Ranking:
http://www.entrepreneur.com/franchises/franc
hise500/index.html
5-20
Franchise !ontract
Franchisor, Inc.
Franchisee
Branded
Product/Service,
Assigned Territory,
Supplies,
Training/Procedures,
Monitoring,
Financial Aid
Franchise
Fee &
Royalty
$$$$$
Bus 10 Notes - 1B Entrepreneurship 1/4/2013
7
5-21
ExploringBusiness 2009 FlatWorld Knowledge
5-21
Franchise
Advantages
Recognized
Name/Product
Advertising
Help In Start-up
Ongoing Support
Disadvantages
Expensive
Franchise Fee
Royalty Fee
Franchisers Rules
Franchiser May Not
Follow Through
(Fraud)
5-22 Sur.i.al A$ter Startup
Franchise .s/ Independent Firms
0
0
!0
"0
#0
$0
%0
&0
'0
(0
00
st )ear $th )ear 0th )ear
*ndependent
Franchise
5-23
0emo o$ Online #extboo'
http://www.flatworldknowledge.com
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