Ch 5

definition of small business by the Small Business Association

An independently owned business that usually has the owner as his manager

People who start a new business do?

Analyze what they want to do and find a way to do it , assess entrepreneurial opportunities

Why the owner of small business put in more hours of work than an employee

The owner needs to take care of many parts of the business, supervise employees, organize and plan. That takes more time.

How small business help the US economy?

They employ 50% of the US workforce, they generate more than half the nations income, main source of new jobs

Why are so many people staring home-based business?

To be in a position to spend more time with their family

Why is the need for money considered to be the most serious problem an entrepreneur faces?

To have a successful business takes time and the person needs money for expenses.

entrepreneurship disadvantages

Total responsibility for the business, long hours, financial risks

entrepreneurship

a business started by someone who notices a need for a product or service

entrepreneurship advantages

being your own boss, provide great personal service and easy formation

why small business are able to offer services that larger companies can not?

can be flexible and respond fast to the needs of their clients, because there are able to make decisions faster.

virtual business

dot-com company

why may an entrepreneurship fail?

not enough money, take to much credit, have little business experience, not keep adequate records, lack of planning

Profit

the amount of money left over after a business has paid all cost of producing its goods or services

why it is very important for small business owners to be able to keep adequate financial records?

the financial records will help them to plan for the up and downs in the business an avoid failure.

why is important to be aware of consumer trends?

they have a great influence in small business and they fail if not aware of them.

Why is important that entrepreneurs are self direct people?

A business needs people who can take risks and work for themselves.

Why is more satisfying to run your own business than work for someone else?

Nobody wants to be told what to do and is more satisfying to be your own boss