intro to business ch3

BUSINESS PLANS

-- A detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and owners'qualifications. •A business plan forces potential owners to be specific about what they will offer. •A business plan is mandatory for talking with bankers or investors.

WHAT is ENTREPRENEURSHIP?

-Accepting the risk of starting and running a business. WHAT DOES IT TAKE to be an ENTREPRENEUR? •Self-directed •Self-nurturing •Action-oriented •Highly energetic •Tolerant of uncertainty

HOME-BASED BUSINESS GROWTH

-Computer technology has leveled the playing field. -Corporate downsizing has led many to venture on their own. •Social attitudes have changed. One of most important reasons for growth in home-based businesses is that technology has made it easier for home-based businesses to compete against their larger competitors.

FIVE STEPS to STARTING YOUR BUSINESS in SCHOOL

1.Find a problem or need. 2.Zero in on specifics. (all focus on it) 3.Do research on campus, test products with students. 4.Move forward with your ideas. Don't wait! 5.Sacrifice.

FUNDING YOUR DREAM

1.Get close to your customers. 2.Make clients pay upfront. 3.Outsource tasks on the cheap. 4.Get in front of customers quickly. 5.Become an expert. 6.Ask for help. 7.Be patient.

WHAT WENT WRONG? Five Mistakes Business Owners Make

1.They're too afraid to take the leap! 2.They hire the wrong people. 3.They don't want to give up control. 4.They become complacent. 5.They fail to see new opportunities.

YOU'RE NEVER TOO YOUNG to be an ENTREPRENEUR (Four reasons to start your business right away:)

1.You don't have a mortgage or kids to take care of. 2.You can survive on little funds and work long hours. 3.No disruption to your career path. It hasn't started yet! 4.Use your alma mater for resources. It's never too early to get started on your business ideas

A FAMILY AFFAIR

1•Clarify Expectations - What will each person contribute? 2•Discuss Work/Family Boundaries - What is the line that separates work from personal relationships? 3•Develop Good Communication - Agree about types of decisions you'll make jointly and on your own. 4•Clarify Long-Term Intentions - Discuss how long everyone will work full time and goals for the business. 5•Have an Escape Hatch - Have a Plan B.

An IDEA is a GOOD OPPORTUNITY IF....

1•It fills customers' needs. 2•You have the skills and resources to start a business. 3•You can sell the product or service at a reasonable price and still profit. 4•You can get your product or service to customers before the window of opportunity closes. 5•You can keep the business going.

WRITING a BUSINESS PLAN

A good plan takes a long time to prepare. A good executive summary catches interest and tempts potential investors to read on. •Getting the plan into the right hands is almost as important as getting the right information in it.

AFFILIATE MARKETING/ BOOST

An online marketing strategy in which a business rewards individuals or other businesses for each visitor or customer the affiliate sends to its website. BOOSTING YOUR BUSINESS'SONLINE PRESENCE: •Establish an identity. •Be easy to find. •Steal good ideas and make them your own. •Look out for opportunities. •Remember other forms of marketing. •Be friendly!

BENEFITS/ DOWNSIDE of HOME-BASED BUSINESSES

BENEFITS: •Ability to start your business immediately •Minimal start-up capital needed •No rent or excessive set-up charges •Comfortable working conditions •Reduced wardrobe expenses •No commuting •Tax benefits •Elimination of office politics •Low risk for trial and error DOWNSIDE: •Difficult to establish work habits •Limited support system •Isolation •Work space may be limited •Clients may be uncomfortable coming to your home •Success is based 100% on your efforts

SHOULD YOU STAY or SHOULD YOU GO?

Suppose you worked in a company for two years and you see signs of it faltering. You and a coworker have ideas about how to succeed and are considering quitting to start your own company. •Should you approach other coworkers about working for your new venture? •Will you try to lure your old boss's customers? •What are the alternatives? •What are the consequences? •What is the most ethical choice?

ENTREPRENEURIAL TEAMS

•A group of experienced people from different areas of business who join to form a managerial team with the skills to develop, make and market a new product. ex Steve Jobs, Steve Wozniak and Mike Markkula) was key to Apple's success.

ACCOUNTING ASSISTANCE

•Computers simplify the process by helping with inventory control, customer records and payroll. •A good accountant can help in: -Deciding whether to buy or lease equipment. -Deciding whether to own or rent a building. -Tax planning. -Financial forecasting. -Choosing sources of financing. -Writing requests for funds.

GOVERNMENT and ENTREPRENEURSHIP

•Enterprise Zones -- Specific geographic areas to which governments attract private business investment by offering lower taxes and other government support. •Incubators -- Offer new businesses low-cost offices with basic services. Business incubator is an organization that helps startup companies and individual entrepreneurs to develop their businesses by providing a fullscale range of services starting with management training and office space and ending with venture capital financing

MICROPRENEURS

•Entrepreneurs willing to accept the risk of starting and managing a business that remains small, lets them do the work they want to do, and offers a balanced lifestyle. -About half of U.S. micropreneurs are home-based business owners (writers, bookkeepers) -60% of home-based micropreneurs are men.

HOME-BASED BUSINESS ISN'T EASY

•Getting new customers is difficult. •Managing your time requires self-discipline. •Work and family tasks are sometimes not separated. •Government regulations may restrict your business. (covid)

MANAGING EMPLOYEES

•Hiring, training and motivating employees is critical. •Employees of small companies are often more satisfied with their jobs - they feel challenged and respected. •Entrepreneurs best serve themselves and the business if they recruit and groom employees for management positions.

SMALL BUSINESSES

•Independently owned and operated, not dominant in its field of operation and meets certain standards of size. •Businesses are "small" in relation to other businesses in their industries. ADVANTAGES: •More personal customer service. •The ability to respond quickly to opportunities.

INTRAPRENEURS

•Intrapreneur -- A creative person who works as an entrepreneur within a corporation. •Intrapreneurs use a company's existing resources to launch new products for the company.

LEARNING ABOUT SMALL BUSINESS

•Learn from Others - Investigate your local colleges for classes on small business and entrepreneurship; talk to and work for successful local entrepreneurs. •Get Some Experience - Gain three years experience in the field; then start a part-time small business. •Take Over a Successful Firm - Serve as an apprentice and work ur way up

KNOWING the MARKET

•Market -- Consumers with unsatisfied wants and needs who have both resources and willingness to buy. •Set out to fill the market's needs by offering top quality and great service at a fair price. •One of the great advantages of small businesses is the ability to know the market and quickly adapt to market needs.

MARKETING RESEARCH

•Marketing decisions need to be made long before introducing a product or opening a store. •A marketing research study can help you: -Determine where to locate. -Whom to select as your target market. -an effective strategy for reaching the market.

WHY TAKE the RISK?

•Opportunity •Profit •Independence •Challenge

BUSINESS FAILURES are LOWER THAN the REPORTS BECAUSE...

•Owner closing a business to start another is reported as a "failure." •Changing forms of ownership is reported as a "failure." •Retirement is reported as a "failure."

LEGAL HELP

•Owners need outside consulting advice early in the process. •Small and medium-sized firms cannot afford to hire experts as employees. •A competent lawyer can help with: -Leases -Contracts -Partnership agreements -Protection against liabilities

SOURCES of CAPITAL

•Personal savings •Relatives •Former employers •Banks & finance companies •Government agencies •Angel investors invest for equity •Venture capitalists -- Individuals or companies that invest in new businesses in exchange for partial ownership.

MAJOR BUSINESS FUNCTIONS

•Planning •Financing •Knowing customers •Managing employees •Keeping records

YOU'RE NEVER TOO OLD to be an ENTREPRENEUR EITHER!

•The highest rate of entrepreneurship activity is in 55-64 age group! •Since 1996, older Americans have opened businesses at a higher rate than 20-34 year olds. •Older entrepreneurs have greater experience and more financial resources.