Entrepreneurship and Starting a Small Business - Chapter 6

INTRAPRENEURS

Creative people who work as entrepreneurs within corporations.

MICROLOANS

amounts ranging from $100 to $50,000 to people such as single mothers and public housing tenants.

SERVICE CORPS OF RETIRED EXECUTIVES

an SBA office with volunteers from industry trade associations and education who counsel small businesses at no cost (except for expenses).

AFFILIATE MARKETING

an internet-based marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to its website.

MICROPRENEURS

entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do and offers them a balanced lifestyle.

504 CERTIFIED DEVELOPMENT COMPANY (CDC) LOANS

loans for purchasing major fixed assets, such as land and buildings for businesses in eligible communities, typically rural communities or urban areas needing revitalization. The program's goal is to expand business ownership by minorities, women and veterans. The maximum guaranteed loan amount is $1.5 million.

GUARANTEED LOANS

loans made by financial institution that the government will repay if the borrower stops making payments. The maximum individual loan guarantee is capped at $5 million.

EXPORT EXPRESS

loans made to small businesses wishing to export. The maximum guaranteed loan amount is $500,000.

COMMUNITY ADJUSTMENT AND INVESTMENT PROGRAM (CAIP)

loans to businesses to create new, sustainable jobs or to preserve existing jobs in eligible communities that have lost jobs due to changing trade patterns with Mexico and Canada following the adoption of NAFTA.

POLLUTION CONTROL LOANS

loans to eligible small businesses for the financing of the planning, design, or installation of a pollution control facility. This facility must prevent, reduce, abate, or control any form of pollution, including recycling.

SECTIONS ON A BUSINESS PLAN OUTLINE

1) Cover Letter 2) Executive Summary 3) Company Background 4) Management Team 5) Financial Plan 6) Capital Required 7)Marketing Plan 8) Location Analysis 9) Manufacturing Plan 10)appendix

CHALLENGES OF A HOME-BASED BUSINESS

1) Getting new customers 2) Managing time 3) Keeping work and family tasks separate 4) Abiding by city ordinances 5) Managing risk

SBA LOANS

1) Guaranteed loans, 2) Microloans, 3) Export Express, 4) Community Adjustment and Investment Program, 5) Pollution control loans, 6) 504 certified development company loans

WHY PEOPLE TAKE THE RISK OF ENTREPRENEURSHIP

1) Opportunity 2) Profit 3) Independence 4) Challenge

ATTRIBUTES OF AN ENTREPRENEUR

1) Self-directed 2) Self-nurturing 3) Action-oriented 3) Highly energetic 4) Tolerant of uncertainty

SMALL BUSINESS

A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size (set by the Small Business Administration) in terms of employees or annual receipts.

INCUBATORS

Centers that offer new businesses low-cost offices with basic business services.

ENTERPRISE ZONES

Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support. (Also called empowerment zones or enterprise communities.)

SMALL BUSINESS ADMINISTRATION (SBA)

a U.S. government agency that advises and assists small businesses by providing management training and financial advice and loans.

BUSINESS PLAN

a detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition and the resources and qualifications of the owner(s).

ENTREPRENEURIAL TEAM

a group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop make, and market a new product.

SMALL BUSINESS INVESTMENT COMPANY

a program through which private investment companies licensed by SBA lend money to small businesses.

ENTREPRENEURSHIP

accepting the risk of starting and running a business

VENTURE CAPITALISTS

individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.

MARKET

people with unsatisfied wants and needs who have both the resources and the willingness to buy.

Angel Investor

private individuals who invest their own money in potentially hot new companies before they go public.