Business chapter 6

Active Corps of Executives

composed of executives who are still active in the business world but have volunteered their time and talents

Service Corps of Retired executives

consisting of retired executives who volunteer as consultants to advise small-business people

A entrepreneur would say....

"I want to build a high-growth business"

what are some ways to come up with a business idea?

-simplify an existing product -enhance an existing product -take a product from one market and adapt it to another product -change materials used in a product to make it less expensive -take a product with multiple features and spin off one feature -combine two or more products

Steps to business

1) Read about your business and your prospective business 2) Talk to knowledgeable people - mentors and trade associations 3) get experience 4)

Why do small businesses fail?

1. inadequate management skills 2. lack of financial support - unfavorable economies of scale 3-difficulty hiring and keeping good employees 4-aggressive competition 5-government paperwork

How to keep a small business healthy

1. keep good records and know when to ask for help 2. stay in tune with your customers 3. learn how to manage employees 4.

Eight sources of funds to finance a new business

1. personal savings, credit cards, and second mortgages 2. family and friends 3. supplier and barter arrangements 4. financial institutions 5. small business administration - backed loans 6. angel investors and venture capitalists

When creating a business model, what questions should you ask?

What kind of industry am I entering, and how is my idea different? How will I market to customers? What qualifies me to run this business? How do I propose to finance the business?

business plan

a document that outlines a proposed firm's goals, the methods for achieving them, and the standards for measuring success

incubator

a facility that offers small businesses low-cost offices with basic services

entrepreneurial team

a group of people with different kinds of expertise who form a team to create a new product

enterprise zone

a specific geographic area in which government tries to attract business investment by offering lower taxes and other government support

skunkworks

a team whose members are separated from the normal operation of an organization and asked to produce a new, innovative product

enterprise

an endeavor in which the primary motive is to make a profit

mentor

an experienced person who coaches and guides lesser-experienced people by helping them understand an industry or organization's culture and structure

classic entrepreneur

an individual who sees a new opportunity for a product or service and starts a firm that can lean to a high-growth business

entrepreneurs

business owners who, in the classic meaning of the term, see a new opportunity for a product or service and start firms that may lead to a high-growth business.

Three types of entrepreneurs

classic, intrapreneurs, entrepreneurial team

financial institutions

consists of banks, savings and loans, and credit unions

trade association

consists of individuals and companies in a specific business or industry organized to promote common interests

angel investors

defined as individuals who invest their own money in a private company, typically a start up

small business

defined by the U.S. government as a business that is (a) independently owned and operated, (b) is not dominant in its field of operation, and meets certain criteria set by the SBA for (c) number of employees and (d) annual sales

transcription service

doctors, lawyers, and others hire people to work at home transcribing audio recordings

Challenges of working at home

dress for work, set a routine and stick to it, keep work and family stuff on separate computers, interact with other professionals(networking)

home based business possibilities

freelance work, direct sales, customer service, transcription service, tutoring

venture capitalists

generally companies, not individuals, that invest in new enterprises in return for part ownership for them

4 characteristics of entrepreneur

high self-confidence & belief in personal control, high need for achievement and action orientation, high tolerance for ambiguity and risk, high energy level

Types of small businesses

home-based and web-based

direct sales

many companies have programs for selling from home via the internet

the expression "going public"

means that a privately owned company becomes a publicly owned company by issuing stock for sale to the public

necessity entrepreneurs

people who suddenly must earn a living and are simply trying to replace lost income

economies of scale

refers to the savings realized from buying materials or manufacturing products in large quanities

Contributions of small business

represent most employers and employ half of US workers, provide new jobs, provide more first jobs, often the innovators in their fields

intrapreneur

someone who works inside an existing organization who sees an opportunity for a product or service and mobilizes the organization's resources to try to realize it

What's the basic idea behind my business? What is this business model?

the need the firm will fill, the operations of the business, its components and functions, as well as its expected revenues

Small business administration

the principal U.S. government agency charged with aiding small businesses by providing help in financing, management training, and support in securing government contracts

networking

the process of establishing and maintaining connections with professionals and managers in your field to help you advance in your carreer

entrepreneurship

the process of taking risks to try to create a new business

opportunity entrepreneurs

those who are ambitious and start their own businesses in a voluntary pursuit of opportunity/ driven to purse their own vision of success

micro-preneurs

those who take the risk of starting and managing a business that remains small (often home-based), lets them do the kind of work they want to do, and offers them a balanced lifestyle.

Reasons to buy a small business

to reduce uncertainty, to generate profits more quickly

barter

to trade goods or services without the exchange of money

freelance work

writers, programmers, designers, administrative assistants, even engineers and business professionals can find opportunities by going to certain freelance websites