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Small Business, Entrepreneurship, and
Franchising

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areat demand for new, unique artisan cheeses.

A mother-son operation in Connecticut is serving
that need.

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Small Business, Entrepreneurship & Franchising

  
 








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Business students have many options upon

graduation ʹ some choose to start their own
businesses, find employment in small
businesses, or perhaps, join a franchise.

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Entrepreneurship & Small Business

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The process of creating and managing a business

to achieved desired objectives is our working
definition for entrepreneurship.

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Entrepreneurship & Small Business

3
 
3
 

Ability to see emerging trends & create company that satisfies

those consumer needs. (Dell Computers)

Create new markets (Amazon.com)

Improve or re-package existing products (Starbucks)

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Entrepreneurship & Small Business


     

͞Smallness͟ is relative. º , small business is

any independently owned and operated
business, not dominant in its competitive area,
employing less than 500 people.
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Entrepreneurship & Small Business


     

The Small Business Administration (SBA) is an

independent agency of the federal government
that offers managerial and financial assistance to
small businesses.
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Impact of Small Business

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Impact of Small Business

60-80% of all new jobs, annually, created by small

business in the last 10 years.

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Small Business & Innovation
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aAirplane
aAudio tap recorder
aDouble-knit fabric
aFiber-optic examining equipment
aHeart valve
aOptical scanner
aPersonal computer
aSoft contact lenses
aZipper

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Small Business

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Retailing and wholesaling, services,

manufacturing and high technology are especially
attractive to entrepreneurs.

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Retailing & Wholesaling
  


   

a àusic stores
a Sporting-goods shops
a Dry cleaners
a Boutiques
a Drugstores
a Restaurants
a Hardware stores

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Small Business ʹ retailers/wholesalers

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aAnnual sales $50 million

a2007 #1 baby product in the nation

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Small Business



a66% of the economy

aEmploys 70% of workforce
aThe aeek Squad ʹ one-man service firm, 1994

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Small business advantage over large firms ʹ

product customization

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ax9% of high-tech jobs are in small business
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Small Business Ownership

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aPersonal advantages
aBusiness advantages

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Advantages of Small Business Ownership

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Advantages of Small Business Ownership

aCosts
aFlexibility
aFocus
aReputation

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Disadvantages of Small-Business Ownership

aHigh Stress Level

aHigh Failure Rate

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aondercapitalization
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Disadvantages of Small-Business Ownership

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Starting the Small Business

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The Business Plan

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  a precise statement of the rationale for the

business and a step-by-step explanation of how it will
achieve its goals. Acts as a guide and reference document

aExplanation of the business

aAnalysis of competition
aIncome/Expense estimates

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Forms of Business Ownership

a $

a$

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Financial Resources

aProvide your own personal capital (money)

aObtain capital (Financing options)

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Financial Resources

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   ʹ selling or borrowing against

the value of an asset (automobile, insurance
policy, savings account) to obtain funds to
operate a business.
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Financial Resources


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ʹ persons/organizations that
agree to provide funding for a new business in
exchange for an ownership interest or stock.
osually requires a sharing of ownership/control.
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Financial Resources

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   ʹ borrowing financial resources

typically from a bank or lending institution The
SBA (Small Business Administration) offers
financial assistance to qualifying businesses.
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Financial Resources

A 
ʹ an agreement by which a financial

institution promises to lend a business a
predetermined sum on demand.

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Starting a Small Business

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Franchise ʹ j 

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Training & support Fees and profit sharing

Brand name appeal Standardized operations
National advertising Restrictions on purchasing
Financial assistance Limited product line
Proven products Possible market saturation
areater chance for success Less freedom in decisions

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Small-Business -- Franchises

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Entrepreneurs ʹ !  !

Eco-responsible entrepreneurial companies ʹ

viable new products utilizing recycling in some
way. ·  ʹ products from recycled
materials.

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The Future for Small Business

aº   

aBoomers, echo boomers (millennials), aeneration Y
aImmigrants (12% of o.S. population)

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The Future for Small Business

a   3  

aInternet usage continues to increase

aIncrease in service exports
aEconomic turbulence
aDeregulation of the energy market & alternative fuels
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Future for Small Business

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Big Businesses Acting ͞small͟
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1. Large firms emulate smaller ones to improve bottom

line

2. Downsizing or rightsizing

x. Acting small from inception ʹ Southwest Airlines

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ʹ individuals in large firms who take
responsibility for the development of innovations
within the organization

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